EXHIBIT 10.2 - U.S.$150 MILLION
DEBENTURE AGREEMENT
9
XXXX ATLANTIC INTERNATIONAL, INC.
0000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
July 25, 1997
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
3rd Floor
Col. Lomas de Chapultepec
Deleg. Xxxxxx Xxxxxxx, C.P.
11000 Mexico, D.F.
Re: Debenture Purchase Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement"), together with the exhibits
attached hereto, is intended to confirm the commitment of Xxxx Atlantic
International, Inc., a Delaware corporation ("BAII"), to lend to Grupo Iusacell,
S.A. de C.V., a limited liability stock corporation organized under the laws of
Mexico (the "Company"), up to U.S.$150,000,000 upon the terms and subject to the
conditions set forth in this Agreement and in the Debentures (as defined below).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Debentures.
In consideration of the sum of U.S.$10 in hand paid by each of BAII and
the Company to the other, the mutual promises set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, BAII and the Company hereby agree as follows:
1. Borrowings. (a) BAII agrees, subject to the terms and conditions set
forth in this Agreement and in the Debentures, to make one or more loans (each,
individually, a "Loan" and, collectively, the "Loans") to the Company during the
period commencing on (and including) the date hereof and ending on (and
including) September 30, 1999. The maximum aggregate principal amount of all
Loans made pursuant to this Agreement shall be U.S.$150,000,000. Each Loan shall
be in a minimum principal amount of the lesser of (x) U.S.$3,500,000 and (y) an
amount equal to U.S.$150,000,000 minus the aggregate principal amount of all
other
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Loans made on or prior to the applicable Funding Date (as defined below)
pursuant to this Agreement. Each Loan in a principal amount in excess of
U.S.$3,500,000 shall be in an integral multiple of U.S.$100,000.
(b) Each Loan to be made hereunder shall require advance written notice (a
"Borrowing Notice") to BAII from the Company delivered in accordance with the
provisions contained in Section
of the Debentures, which Borrowing Notice shall (i) be irrevocable, (ii)
specify the requested funding date of such Loan, which shall be a Business Day
(the "Funding Date"), (iii) be received not later than five (5) Business Days
prior to such Funding Date, (iv) specify the principal amount of the Loan
requested, (v) specify the location and number of the Company's account with a
bank in New York City to which funds are to be disbursed, (vi) specify the
use(s) of the proceeds and (vii) be accompanied by the Officer's Certificate
referred to in Section 5(b)(vii) hereof.
(c) Subject to the conditions set forth in this Paragraph 1 and Paragraph
hereof, BAII shall make available, on the Funding Date specified for such Loan
in the Borrowing Notice therefor, the amount of such Loan by wire transfer of
U.S. Dollars in immediately available funds to such account of the Company as
shall be designated in such Borrowing Notice.
2. Debentures. (a) Each Loan shall be evidenced by one or more debentures
of the Company substantially in the form of Exhibit A hereto (the "Original
Debentures").
(b) On each Interest Payment Date prior to the Maturity Date, the Company
shall, as provided in the Debentures, (unless and to the extent BAII elects
otherwise) pay interest on the Debentures through the issuance of additional
debentures substantially in the form of Exhibit B hereto (the "Additional
Debentures"; the Original Debentures and the Additional Debentures are
hereinafter sometimes referred to individually as a "Debenture" and,
collectively, as the "Debentures") in an aggregate principal amount equal to all
or a portion of (as designated by BAII) the amount of interest that would be
payable with respect to the Debentures if such interest were paid in cash or, at
BAII's option, pay such interest in whole or in part in cash. The Company, at
its expense, shall issue and deliver to the applicable Holders any such
Additional Debentures on the applicable Interest Payment Dates.
3. Repayment of Loans. The Company will pay the principal of and interest
on the Loans in accordance with the terms of the Debentures.
4. Representations and Warranties. (a) The Company hereby represents and
warrants to BAII as follows (subject to BAII taking the actions contemplated by
Section hereof), each of which representations and warranties shall, by the
Company's requesting a Loan and accepting the proceeds thereof, be deemed
automatically
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to have been re-made in all material respects as of each date on which the
Company requests such Loan and accepts the proceeds thereof, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations or warranties shall be true and correct in
all material respects as of such earlier date:
(i) Authorization. Except as set forth on Schedule 4(a)(i) hereto,
the Company has the full corporate power and authority to execute and
deliver this Agreement and to issue the Debentures and to perform all of
its obligations hereunder and under the Debentures. The execution,
delivery and performance of the terms of this Agreement and the Debentures
by the Company have been duly authorized by all necessary corporate and
stockholder action, except as set forth on Schedule 4(a)(i).
(ii) Consents. The execution and delivery by the Company of this
Agreement, the issuance of the Debentures and performance of the Company's
obligations under this Agreement and the Debentures do not require any
consent, approval, authorization or order of, notice to, or declaration,
filing or registration with, any Governmental Authority or stock exchange,
except those (if any) that have been obtained and are in full force and
effect and have been disclosed in writing to BAII, and except further for
such notices as may be required to be filed with the Mexican Comision
Federal de Competencia (the "Competition Commission") and the Mexican
Registro Nacional de Inversiones Extranjeras upon conversion of the
Debentures into Series A Shares.
(iii) Compliance with Other Instruments. Neither the execution and
delivery of this Agreement or the Debentures, nor the fulfillment of the
terms set forth in this Agreement or the Debentures and the consummation
of the transactions contemplated by this Agreement or the Debentures,
will: (A) conflict with or constitute a breach of, or constitute a default
under or an event which, with or without notice or lapse of time or both,
would be a breach of or default under or violation of the estatutos
sociales or other organizational documents of the Company or any
agreement, document, indenture, permit, mortgage or other instrument or
undertaking by which the Company or any of its subsidiaries is bound or to
which any of their properties are subject, or give rise to a right
thereunder to require any payment to be made by the Company or its
subsidiaries, or would be a violation of any law, administrative
regulation, judgment, order or decree applicable to the Company or any of
its subsidiaries; (B) result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries; (C) result in the loss of any license, certificate,
legal privilege or legal right enjoyed or possessed by the Company or any
of its subsidiaries; (D) give any party to any agreement to which the
Company or any of its
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subsidiaries is a party a right of termination; or (E) except those that
have been obtained and disclosed to BAII in writing, require the consent
of any other Person under any agreement, indenture, mortgage, document or
other instrument or undertaking by which the Company or any of its
subsidiaries is bound or to which any of their properties are subject.
(iv) Enforceable Obligation. This Agreement constitutes, and the
Debentures, when executed and delivered by the Company will constitute, a
legal, valid and binding obligation of the Company enforceable in
accordance with their respective terms, subject, as to enforcement, only
to bankruptcy, insolvency, reorganization, moratorium, or similar laws at
the time in effect affecting the enforceability of the rights of creditors
generally.
(v) Organization; Powers. The Company and each of its subsidiaries
is duly organized and validly existing under the laws of its jurisdiction
of incorporation, has all requisite power and authority, and has all
material governmental licenses, authorizations, consents and approvals
necessary to own its assets and to carry on its business as now 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 such qualification is required.
(vi) Litigation. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Company, threatened against or affecting the Company 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 matters disclosed in writing to BAII
on or prior to the date of this Agreement) or (ii) that involve this
Agreement or any Debenture.
(vii) Use of Proceeds. The proceeds of the Debentures will be used
only to refinance existing indebtedness of the Company and its
subsidiaries, to fund Capital Expenditures and/or for other general
corporate purposes.
(viii) Conversion Shares. The Company has reserved out of its
authorized but unissued stock, free from preemptive rights and solely for
issuance and delivery upon the conversion of the Debentures, such number
of its duly authorized Series A Shares or other securities as from time to
time shall be issuable upon the conversion of the Debentures. No further
corporate action shall be required for the valid issuance of such
securities upon the conversion of the
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Debentures, except that following any conversion of the Debentures, the
Board of Directors of the Company has been authorized and instructed to
amend the Company's estatutos sociales to reflect the corresponding
increase in capital and number of Series A Shares resulting from any such
conversion, and to take customary action to formalize and register any
such amendment. The Series A Shares or other securities as from time to
time shall be issuable upon the conversion of the Debentures are not, and
shall continue not to be, subject to preemptive or similar rights of any
Person, and when issued upon conversion of the Debentures in accordance
with the terms of this Agreement and the Debentures, shall be duly and
validly issued, fully paid and nonassessable.
(b) BAII hereby represents and warrants to the Company as follows (each of
which representations and warranties shall, by BAII's making a Loan and
accepting a Debenture, be deemed automatically to have been re-made in all
material respects as of each date on which BAII makes such Loan and accepts such
Debenture, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations or warranties
shall be true and correct in all material respects as of such earlier date):
(i) Authorization. BAII has the full corporate power and authority
to execute and deliver this Agreement and to perform all of its
obligations hereunder. The execution, delivery and performance of the
terms of this Agreement by BAII have been duly authorized by all necessary
corporate and stockholder action.
(ii) Consents. The execution and delivery by BAII of this Agreement
and performance of BAII's obligation under this Agreement do not require
any consent, approval, authorization or order of, notice to, or
declaration, filing or registration with, any Governmental Authority,
except those (if any) that have been obtained and are in full force and
effect, and have been disclosed in writing to the Company and except for
such notices as may be required to be filed with the Competition
Commission.
(iii) Compliance with Other Instruments. Neither the execution and
delivery of this Agreement, nor the fulfillment of the terms set forth in
this Agreement and the consummation of the transactions contemplated by
this Agreement, will: (A) conflict with or constitute a breach of, or
constitute a default under or an event which, with or without notice or
lapse of time or both, would be a breach of or default under or violation
of the certificate of incorporation or other organizational documents of
BAII or any agreement, document, indenture, permit, mortgage or other
instrument or undertaking by which BAII or any of its subsidiaries is
bound or to which any of their properties are subject, or give rise to a
right thereunder to require any payment to be made by BAII or its
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subsidiaries, or would be a violation of any law, administrative
regulation, judgment, order or decree applicable to BAII or any of its
subsidiaries; (B) result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of BAII or any of its
subsidiaries; (C) result in the loss of any license, certificate, legal
privilege or legal right enjoyed or possessed by BAII or any of its
subsidiaries; (D) give any party to any agreement to which BAII or any of
its subsidiaries is a party a right of termination; or (E) except those
that have been obtained and disclosed to the Company in writing, require
the consent of any other Person under any agreement, indenture, mortgage,
document or other instrument or undertaking by which BAII or any of its
subsidiaries is bound or to which any of their properties are subject.
(iv) Enforceable Obligation. This Agreement constitutes a legal,
valid and binding obligation of BAII enforceable in accordance with its
terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
(v) Organization; Powers. BAII is duly organized and validly
existing under the laws of the jurisdiction of its organization, has all
requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and to
carry on its business as now conducted.
(vi) Accredited Investor. BAII is an accredited investor as such
term is defined in Rule 501(a)(3) promulgated under the Act.
(vii) Acquiring for Own Account. BAII is acquiring the Debentures
for its own account for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution thereof.
(viii) Restrictions on Transfer. BAII expressly understands and
acknowledges that the Debentures have not been registered under the Act
and, accordingly, agrees to offer, sell or otherwise transfer the
Debentures only pursuant to a registration under the Act and any other
applicable securities law, or an exemption therefrom.
5. Conditions to Borrowing. (a) The obligation of BAII to make the initial
Loan on the initial Funding Date is subject to the following conditions:
(i) BAII shall have received a counterpart of this Agreement
executed by the Company in the space indicated below evidencing the
Company's agreement with the terms herein contained;
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(ii) BAII shall have received the following documents, all in form
and substance reasonably satisfactory to BAII:
(A) A certified copy of the estatutos sociales of the Company;
(B) A certificate of the Secretary or General Counsel of the
Company as to enabling resolutions and incumbency of officers of the
Company; and
(C) A favorable written opinion addressed to BAII of De Xxxxxx
x Xxxxxxxx del Xxxxx, S.C., special Mexican counsel to the Company,
substantially in the form of Exhibit C hereto; and
(iii) Prior to or simultaneously with the funding of the initial
Loan on the initial Funding Date, (A) the Company shall have received (x)
the net proceeds of the offering of the Senior Notes and (y) the proceeds
of the initial loans under the Senior Credit Agreement, and (B) the
Company shall have repaid all outstanding principal and interest owed by
the Company to Xxxx Atlantic New Zealand Holdings, Inc.
(b) The obligation of BAII to make each Loan on the Funding Date therefor
is subject to the following conditions:
(i) BAII shall have received the Borrowing Notice with respect to
such Loan required by Paragraph hereof in accordance with the provisions
of said paragraph;
(ii) The representations and warranties of the Company set forth in
Section hereof shall be true and correct in all material respects on and
as of the Funding Date of such Loan with the same effect as though such
representations and warranties had been made on and as of such Funding
Date, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations or
warranties shall be true and correct in all material respects as of such
earlier date;
(iii) On and as of the Funding Date of such Loan and immediately
after giving effect to such Loan, no event which would constitute a
Default or an Event of Default shall have occurred and be continuing;
(iv) The Company shall be in compliance with the covenants set forth
in Section 4 of the Debentures, which Section is incorporated herein by
reference whether or not a Debenture is outstanding;
(v) The Debenture or Debentures evidencing such Loan shall have been
duly executed and completed by the Company;
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(vi) On or before the Funding Date of such Loan, the Company shall
have taken all action necessary to enable the Company to comply with
Section of the Debentures; and
(vii) The Company shall have delivered to BAII a certificate of its
chief financial officer dated as of the Funding Date of such Loan,
certifying as to satisfaction of the conditions precedent set forth in
clauses (ii) and (vi) of this Section 5(b) and, if applicable, clauses
(iii) and (iv) of this Section 5(b).
Notwithstanding the forgoing, clauses (iii) and (iv) of this Section shall not
be effective at any time that Senior Obligations (as defined in the
Subordination Agreement) are outstanding; provided, however, that clause (iii)
of this Section shall be effective irrespective of whether Senior Obligations
are outstanding if the Default or Event of Default is the failure of the Company
to pay all or any portion of principal or interest under a Debenture and such
failure to pay is not a result of the Company's compliance with the
Subordination Agreement.
6. Expiration or Termination of Commitment. The commitment of BAII to make
Loans hereunder shall terminate automatically and all obligations of BAII to
make Loans hereunder shall forthwith be void and of no effect on and after
October 1, 1999.
7. Certain Agreements of BAII. BAII shall take such actions in its
capacity as an owner of equity securities of the Company, and shall cause its
designees as directors of the Company to take such actions, as are necessary to
permit the Company to comply with Section 6.6 of the Debentures, including,
without limitation, the notice that may be required to be filed with the
Competition Commission and the Mexican Registro Nacional de Inversiones
Extranjeras (the "National Registry") upon conversion of the Debentures into
Series A Shares (or other securities).
8. Consents. The Company covenants and agrees to use its reasonable best
efforts to obtain all authorizations, consents, orders, permits or approvals of,
or notices to, or filings, registrations or qualifications with, any
Governmental Authority or any other Person that are required to be obtained in
connection with the issuance of the Series A Shares (or other securities) to
BAII upon conversion of the Debentures, including, without limitation, the
notice that may be required to be filed with the Competition Commission and the
National Registry upon conversion of the Debentures into Series A Shares (or
other securities).
9. Amendments and Waivers. Except as otherwise provided herein or in the
Subordination Agreement, no amendment, modification, termination or waiver of
any provision of this Agreement, or consent to any departure here from, shall in
any event be effective unless the same shall be in writing and signed by BAII
and the Company. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for
17
the specific purpose for which it was given and shall not be construed as a bar
to any right or remedy which the applicable party would otherwise have on any
other occasion.
10. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any party hereto in the exercise of any power, right or
privilege hereunder shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies provided by law or otherwise available.
11. Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Agreement shall not
affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Agreement or such provision or obligation
in any other jurisdiction. The parties agree to negotiate in good faith to
replace any such invalid, illegal or unenforceable provision with a new valid,
legal and enforceable provision the economic effect of which comes as close as
possible to that of such invalid, illegal or unenforceable provision.
12. Headings. Sections, paragraphs, and headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
13. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.
14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
except that the Company may not assign its rights or obligations hereunder (or
any portion hereof or thereof) without the prior written consent of BAII. Any
attempted assignment or transfer by the Company 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) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
15. Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.
16. Notices, etc. All notices and other communications required or
permitted to be given hereunder shall be in writing and
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shall be delivered personally, telegraphed, sent by telecopier (provided that
any telecopied transmission is promptly followed by a mailed or courier copy) or
sent by certified, registered mail, or recognized express courier (postage
prepaid), to the parties at the addresses set forth below (or to such other
persons and/or addresses as the parties may specify by due notice to the
others). Notices or other communications given by certified or registered mail
shall be deemed given ten (10) Business Days after the date of mailing. Notices
or other communications sent in any other manner shall be deemed given only when
actually received.
(i) If to the Company, to:
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
3rd Floor
Colonia Lomas de Chapultepec
Deleg. Xxxxxx Xxxxxxx, X.X.
00000, Xxxxxx, D.F.
Facsimile No.: 011 525 104 41 57
Attention: Xxxxxx X. Xxxxxxxxx, Vice President - Finance and
Audit and Chief Financial Officer
with copies to:
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
2nd Floor
Colonia Lomas de Chapultepec
Deleg. Xxxxxx Xxxxxxx, X.X.
00000, Xxxxxx, D.F.
Facsimile: 011 525 104 4172
Attention: Xxxxx Xxxxxxxxxx, Vice President - Mergers and
Acquisitions and General Counsel
and
Xx Xxxxxx x Xxxxxxxx xxx Xxxxx, X.X.
Bosque de Alisos 47B
Suite 101
Col. Bosque de las Xxxxx
X.X. 00000 Xxxxxx, D.F.
Facsimile No.: 000-000-000-0000
Attention: Lic. Xxxxxx Xxxxxxxx del Xxxxx
(ii) If to BAII, to:
Xxxx Atlantic International, Inc.
0000 Xxxxx Xxxxx Xxxxx Xxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: President and Chief Executive Officer
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with copies to:
Xxxx Atlantic Corporation
0000 Xxxx Xxxxxx - 00X
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
and
Xxxx Atlantic International, Inc.
0000 Xxxx Xxxxxx - 00X
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx, Vice President
17. Expenses. The Company shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by BAII in connection with the negotiation
execution and delivery of this Agreement and any Debenture not to exceed
U.S.$2,500, (ii) all reasonable and documented out-of-pocket expenses incurred
by BAII, including the reasonable fees, charges and disbursements of counsel for
BAII, in connection with any amendments, modifications or waivers of the
provisions of this Agreement or any Debenture not to exceed U.S.$2,500 in each
instance, and (iii) all reasonable and documented out-of-pocket expenses
incurred by BAII or any Holder, including the fees, charges and disbursements of
counsel for BAII or any Holder, in connection with the enforcement or protection
of its rights in connection with this Agreement, any Debenture or the Loans.
18. Integration. This Agreement and the Schedule and Exhibits hereto which
constitute part hereof and any Debentures issued pursuant hereto 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.
19. Jurisdiction. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
TO THE COURTS OF ITS OWN CORPORATE DOMICILE IN RESPECT OF ACTIONS BROUGHT
AGAINST IT AS A DEFENDANT IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY DEBENTURE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
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20. Venue. THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DEBENTURE IN ANY COURT
REFERRED TO IN PARAGRAPH 19 ABOVE. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
21. Service of Process. The Company hereby irrevocably designates,
appoints and empowers CT Corporation having its address at the date hereof at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. as its process agent to receive
for and on its behalf service of process in New York in any legal action or
proceeding with respect to this Agreement or any Debenture. It is understood
that a copy of any such process served on such process agent shall be promptly
forwarded by air mail by the Person commencing such proceeding to the Company at
its address specified in Paragraph 16 above, but the failure of the Company to
receive such copy shall not affect in any way the service of such process as
aforesaid. Nothing in this Agreement or in the Debentures will affect the right
of any party hereto to service of process in any other manner permitted by law.
22. 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 ANY DEBENTURE (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.
23. Waiver of Sovereign Immunity. The Company acknowledges and agrees that
the activities contemplated by the provisions of this Agreement and any
Debenture are commercial in nature rather than governmental or public, and
therefore acknowledges and agrees that it is not entitled to any right of
immunity on the grounds of sovereignty or otherwise with respect to such
activities or in any legal action or proceeding arising out of or relating to
this Agreement or any Debenture in respect of itself and its properties and
revenues, expressly and irrevocably waives any such right of immunity which may
now or hereafter exist (including any immunity from any legal process, from the
jurisdiction of any court or from any attachment prior to judgment, attachment
in aid or execution, or otherwise) or claim thereto which may now or hereafter
exist, and agrees not to assert any such right or claim in any such action or
proceeding, whether in the United States of America or otherwise.
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24. 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 certificated English translation thereof. Except
in the case of laws or official communications of Mexico, 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.
25. Survival of Representations. The representations and warranties of the
parties made or deemed made under this Agreement and any Debenture shall survive
the execution and delivery of this Agreement and the Debentures.
26. Miscellaneous. In addition to the terms and provisions contained
herein, the agreements contained herein are subject to the provisions, terms and
conditions set forth in the Debentures.
Very truly yours,
XXXX ATLANTIC INTERNATIONAL,
INC.
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Title: Vice President
ACCEPTED AND AGREED as of July 25, 1997:
GRUPO IUSACELL, S.A. DE C.V.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: Vice President and
Chief Financial Officer
By: /s/ Xxxxxx Xxxxxxxxx Xxxxxxx
-------------------------------------
Title: General Counsel
22
Schedule 4(a)(i)
As of the date of this Agreement, the Company's stockholders have not approved
the following terms of this Agreement and the Debentures: (1) the minimum
principal amount of U.S.$3,500,000 referred to in Section 1(a) of this
Agreement; (2) the Interest Payment Dates of the first day of January and July
of each year; (3) the Conversion Price for the Additional Debentures; and (4)
the ending date of the period during which BAII is obligated to make Loans. The
Company agrees to use its best reasonable efforts to cause such terms to be
ratified by the stockholders of the Company at the next meeting of such
stockholders. If such terms are not ratified by May 31, 1998, the following
terms shall apply to this Agreement and the Debentures without any action by the
Company, BAII or any other Holder:
1. If the minimum principal amount of U.S.$3,500,000 referred to twice in
Section 1(a) of this Agreement is not so ratified, such amount shall be deleted
from Section 1(a) and replaced in both places with U.S.$25,000,000.
2. If the Interest Payment Dates of the first day of January and July of each
year referenced in the first paragraph of Exhibit A and Exhibit B are not so
ratified, the words "the first day of January and July" shall be deleted from
the first paragraph of Exhibit A, Exhibit B, and any then-outstanding
Debentures, and replaced with the words "the last day of June and December".
3. If the Conversion Price for the Additional Debentures is not so ratified, the
words "day period ending with five trading days remaining before" shall be
deleted from Section 6.1 of Exhibit B and of any then-outstanding Additional
Debentures, and replaced with the words "days immediately preceding".
4. If the September 30, 1999 date in Section 1(a) of the Agreement and the
October 1, 1999 date in Section 6 of the Agreement are not so ratified, such
dates shall be deleted and replaced with the dates "June 30, 1999" and "July 1,
1999", respectively.
EXHIBIT A
[FORM OF ORIGINAL DEBENTURE]
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH
QUALIFIES AS A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, NEITHER THE PRINCIPAL
OF NOR THE CASH INTEREST ON THE INDEBTEDNESS CREATED OR EVIDENCED BY THIS
INSTRUMENT OR RECORD SHALL BECOME DUE OR BE PAID OR PAYABLE EXCEPT TO THE EXTENT
PERMITTED UNDER THE SUBORDINATION AGREEMENT DATED AS OF JULY 25, 1997, AMONG
XXXX ATLANTIC INTERNATIONAL, INC., GRUPO IUSACELL, S.A. DE C.V., THE CHASE
MANHATTAN BANK AND FIRST UNION NATIONAL BANK (THE "SUBORDINATION AGREEMENT"),
WHICH SUBORDINATION AGREEMENT IS INCORPORATED HEREIN WITH THE SAME EFFECT AS IF
FULLY SET FORTH HEREIN.
Convertible Subordinated Debenture
R-__ U.S.$_________
______________, 19__
GRUPO IUSACELL, S.A. DE C.V., a corporation duly organized and existing
under the laws of Mexico (the "Company"), for value received, hereby
unconditionally promises to pay to the order of XXXX ATLANTIC INTERNATIONAL,
INC. ("BAII"), or its permitted transferees (BAII or any Eligible Transferee (as
hereinafter defined) to which this Debenture is transferred being the "Holder"),
the principal sum of _______ U.S. DOLLARS ($________) on December 31, 1999 (the
"Maturity Date") (subject to Sections and 1 and 5.1 hereof) in immediately
available funds to BAII c/x Xxxx Atlantic Financial Services, Inc. at Mellon
Bank West - Pittsburgh, PA, or at such other place as may be designated in
writing by the Holder, or its assigns, and to pay interest at said office in
like money in respect of each Interest Period at a rate per annum equal to LIBOR
for such Interest Period plus five percent (5%) per annum, from the date hereof
on the unpaid principal amount hereof until payment in full thereof. Interest
shall accrue daily and, subject to the terms of the Subordination Agreement
shall be payable prior to the Maturity Date by issuance of Additional Debentures
(as defined in the Agreement referred to below) or, at the option of the Holder,
in part or in whole, in cash, semi-annually in arrears on the first day of
January and July in each year (each, an "Interest Payment Date") commencing with
the first such Interest Payment Date next succeeding the date hereof and upon
each payment of principal (whether upon maturity, acceleration, prepayment or
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otherwise). All computations of interest under this Debenture shall be made on
the basis of a year of 360 days and actual days elapsed. If the Holder elects to
have accrued interest on the unpaid principal amount hereof that is payable at
any time prior to the Maturity Date be paid, in whole or in part, in cash, it
shall so notify the Company in writing not less than ten (10) Business Days
prior to the date on which such interest payment is scheduled to be made. The
Company hereby expressly waives (to the maximum extent permitted by law) any
requirements of demand, presentment, notice of protest and dishonor and all
other demands or notices of any kind or nature with respect to this Debenture.
This Debenture is one of the Debentures issued pursuant to (and as defined
in) the Debenture Purchase Agreement (the "Agreement"), dated July 25, 1997, by
and between the Company and BAII, and is subject to the provisions, terms and
conditions thereof as well as the following additional provisions, terms and
conditions:
1. NO REDEMPTION. The Company shall not have the right to redeem this
Debenture prior to maturity without the written consent of the Holder.
2. ADDITIONAL AMOUNTS.
2.1 Tax Gross-Up. All payments by the Company in respect of this
Debenture will be made after withholding or deduction for any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by Mexico or any political subdivision thereof
or taxing authority therein. The Company will pay any such amounts to the
relevant taxing or other authority prior to the date on which penalties attach
thereto, such payment to be made (if liability to pay is imposed on the Company)
for its own account, or (if liability is imposed on the Holder) on behalf of and
in the name of such Holder. The sum payable by the Company in respect of which
the relevant deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of such deduction,
withholding or payment, the Holder receives on the due date and retains (free
from any liability in respect of any such deduction, withholding or payment) a
net sum equal to what it would have received and so retained had no such
deduction, withholding or payment been required or made (the amount of any such
increase being referred to herein as an "Additional Amount"). Any reference
herein to principal, premium or interest, or any other payment in respect of
this Debenture, will be deemed also to refer to any Additional Amounts which may
be payable.
2.2 Documentation. The Company will provide the Holder with
documentation evidencing the payment of Mexican taxes in respect of which the
Company has paid any Additional Amounts, which documentation shall be legally
sufficient to obtain foreign tax credits for U.S. Federal income tax purposes,
within 60 days after payment thereof.
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3. MAXIMUM INTEREST RATE. Anything herein to the contrary notwithstanding,
the obligation of the Company to make payments of interest shall be subject to
the limitation that payments of interest shall not be required to be made to the
Holder hereof to the extent that the receipt thereof by the Holder hereof would
not be permissible under the law or laws applicable to the such Holder limiting
rates of interest which may be charged or collected by such Holder. Any such
payments of interest which are not made as a result of the limitation referred
to in the preceding sentence shall be made by the Company to such Holder on the
earliest Interest Payment Date or dates on which the receipt thereof would be
permissible under such laws applicable to such Holder limiting rates of interest
which may be charged or collected by such Holder.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby covenants to the
Holder that, so long as this Debenture shall be outstanding:
4.1 Compliance with Senior Credit Agreement and Senior Note
Indenture. It will comply in all material respects with all of its agreements,
covenants and other undertakings set forth in the Senior Credit Agreement and
the Senior Note Indenture, which agreements, covenants and other undertakings
are, by this reference, hereby incorporated herein as if they were fully set
forth herein. Notwithstanding the forgoing, in the event that any inconsistency
arises between any of the covenants under the Senior Credit Agreement and under
the Senior Note Indenture, then the covenant or covenants that are less
restrictive on the Company shall apply for purposes of this Section.
4.2 Compliance with Shareholders Agreement. It will comply in all
material respects with all of its agreements, covenants and other undertakings
set forth in the Amended and Restated Shareholders Agreement, dated as of
February 18, 1997, among Xxxx Atlantic Latin America Holdings, Inc., Xxxxx
Xxxxxxx y Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx Xxxxxxxx, Iusa Grupo Comunicaciones,
S.A. de C.V., Fiusa Pasteje, S.A. de C.V., Xxxxxxxx Investments Limited,
Commander Mexicana, S.A. de C.V., Inmobiliaria Reforma Lomas Altas, S.A. de
C.V., Fraccionadora y Constructora Mexicana, S.A. de C.V., Confecciones Pasteje,
S.A. de C.V., Interelec, S.A. de C.V. and the Company (as such agreement may be
amended, supplemented, restated or otherwise modified from time to time) which
agreements, covenants and other undertakings are, by this reference, hereby
incorporated herein as if they were fully set forth herein.
4.3 Governmental Approvals; Concessions. (a) It will promptly obtain
from time to time at its own expense all such governmental licenses,
authorizations, consents, permits and approvals as may be required for the
Company to comply with its obligations under the Agreement and this Debenture.
(b) It will, and will cause each of its subsidiaries to,
preserve and keep in full force and effect all
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Concessions and shall comply with the Material Terms and Conditions of all
Concessions.
4.4 Existence; Conduct of Business. It will, and will cause each of
its subsidiaries to, do or 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, franchises, concessions, permits, patents,
copyrights, trademarks and trade names material to the conduct of its business,
including all material permits relating to the Concessions; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution of the type permitted under Section 6.04. of the Senior Credit
Agreement as in effect on the date of the Agreement.
4.5 Payment of Obligations. It will, and will cause each of its
subsidiaries to, pay its Indebtedness and other obligations, including
liabilities in respect of Taxes, 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 Company or such subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and Mexican GAAP, (c) such contest effectively suspends collection of the
contested obligation and the enforcement of any Lien securing such obligation
and (d) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
4.6 Maintenance of Properties. It will, and will cause each of its
subsidiaries to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and to maintain, develop and operate such property in accordance with prudent
industry standards.
4.7 Insurance. It will, and will cause each of its subsidiaries to,
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.
4.8 Compliance with Laws and Material Contractual Obligations. It
will, and will cause each of its subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property and with all material contractual obligations and obligations arising
from the concessions and permits under which the Company and its subsidiaries
provide their services), except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
4.9 Use of Proceeds. The proceeds of the Debentures will be used
only to repay existing Indebtedness of the Company and
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its subsidiaries, to fund Capital Expenditures and for other general corporate
purposes. 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 of Governors of the Federal Reserve System of the United States of
America, including Regulations G, U and X.
5. EVENTS OF DEFAULT.
5.1 Events of Default. "Event of Default," wherever used herein,
means any of the following events:
(a) (i) Failure of the Company or any of its subsidiaries to pay
within three (3) Business Days after the date when due any principal of or
interest on any indebtedness owing under this Debenture, or (ii) failure of the
Company or any of its subsidiaries to pay when due or within any applicable
grace period, any principal, interest, fee, or other amounts payable on any one
or more items of Indebtedness (other than this Debenture) owing to any bank or
other creditor with an individual or aggregate principal amount outstanding of
the equivalent of U.S.$5,000,000 (or its foreign-currency equivalent) or more,
or (iii) any event or condition occurs that results in any such Indebtedness of
the Company or any of its subsidiaries 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 indebtedness or any
trustee or agent on its or their behalf to cause any such indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity;
(b) The Company or any of its Significant Subsidiaries admits in
writing its present or prospective inability to pay its debts as they become due
or is otherwise generally not paying its debts as such debts become due unless
such debts are the subject of a bona fide dispute;
(c) Failure by the Company to comply with or to perform any
provision of this Debenture or the Agreement (and not constituting an Event of
Default under any of the other provisions of this Section ) and continuance of
such failure for thirty (30) days after knowledge thereof by an officer of the
Company;
(d) (i) A court enters a decree or order for relief with respect to
the Company or any of its Significant Subsidiaries in an involuntary case under
any provision of Title 11 of the United States Code entitled "Bankruptcy", as
amended and in effect from time to time, or any successor statute (the
"Bankruptcy Code") (including provisions for reorganization) or any applicable
bankruptcy, insolvency, reorganization, receivership or other similar law now or
hereafter in effect, which decree or order is not vacated or stayed or any other
similar relief is granted under any applicable federal or state law; or (ii) an
involuntary proceeding shall be commenced or an involuntary petition shall be
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filed seeking (A) liquidation, reorganization, suspension of payments or other
relief in respect of the Company or any Significant Subsidiary or its debts, or
a substantial part of its assets, under any bankruptcy, insolvency, receivership
or similar law now or hereafter in effect (including without limitation the Ley
de Quiebra y Suspension de Pagos), or (B) the appointment of a receiver,
trustee, sindico, custodian, sequestrator, conservator or similar official for
the Company or any Significant Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or
(e) The Company or any of its Significant Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization, suspension of payments or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in effect including without limitation the Ley de Quiebra y Suspension de Pagos,
(ii) consent to the institution of, or fails to contest in a timely and
appropriate manner, any proceeding or petition described in clause (d) of this
Section 5.1, (iii) apply for or consents to the appointment of a receiver,
trustee, sindico, custodian, sequestrator, conservator or similar official for
the Company or any Significant Subsidiary 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;
(f) Any representation or warranty made or deemed by or on behalf of
the Company in connection with the Agreement, this Debenture, or any amendment
or modification thereto or waiver thereunder, or in any certificate or other
document furnished pursuant thereto or in connection therewith, shall have been
incorrect in any material respect when made or deemed made and shall continue to
be incorrect in any material respect for thirty (30) days after knowledge
thereof by an officer of the Company;
(g) Any order, judgment or decree shall be entered against the
Company or any of its Significant Subsidiaries decreeing the dissolution or
split up of the Company or such Significant Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30 days;
(h) Any Governmental Authority shall take any action to condemn,
seize, nationalize or appropriate any substantial portion of the assets of the
Company or any of its Significant Subsidiaries (either with or without payment
of compensation) or shall take any action that, in the good faith opinion of
BAII, adversely affects the ability of the Company to perform its obligations
under the Agreement or this Debenture; or the Company or any of the Significant
Subsidiaries shall be prevented from exercising normal
A - 6
control over all or a substantial part of its assets (and the same shall have
continued for 30 or more days);
(i) After the execution and delivery of this Debenture by the
Company, (i) Mexico or any competent authority thereof shall declare a
moratorium on the payment of Indebtedness by Mexico or any Governmental
Authority thereof or corporations therein, or Mexico shall cease to be a member
in good standing of the International Monetary Fund or shall cease to be
eligible to utilize the resources of the International Monetary Fund under the
Articles of Agreement thereof, or the International monetary reserves of Mexico
shall become subject to any Lien and (ii) the Company has not delivered to BAII
evidence in form and substance satisfactory to BAII that the Company is
permitted under all applicable laws, rules and regulations to pay its
obligations under this Debenture in accordance with its terms from the assets or
revenues of the Company and/or its affiliates that are located in the United
States of America and denominated in U.S. Dollars;
(j) Either (i) the government of Mexico shall take any action,
including a moratorium, having an effect on the schedule of payments of the
Company under this Debenture or otherwise, the currency in which the Company may
pay its obligation under this Debenture or the availability of foreign
currencies in exchange for Mexican Pesos or otherwise or (ii) the Company shall,
voluntarily or involuntarily, participate or take any action to participate in
any facility or exercise involving the rescheduling of the Company's debts or
the restructuring of the currency in which the Company may pay its obligations
under the Debenture;
(k) The Company or any of its Significant Subsidiaries shall fail to
pay when due any and all applicable taxes, amounts payable as Sistema de Ahorro
para el Retiro, Instituto Mexicano del Seguro Social or Instituto del Fondo
Nacional de la Vivienda para los Trabajadores quotes, except those contested in
good faith by appropriate proceedings;
(l) The failure by the Company to comply with Section 4.2 of this
Debenture or to convert this Debenture into Series A Shares or other securities
in accordance with the terms hereof and of the Agreement;
(m) The rendering of one or more judgments or decrees for the
payment of money in an aggregate amount in excess of U.S.$10,000,000 or its
foreign currency equivalent against the Company, any of its Significant
Subsidiaries or any combination thereof if (A) an enforcement proceeding thereon
is commenced or (B) such judgment or decree remains outstanding for a period of
60 days following such judgment or decree and is not effectively discharged,
waived or stayed; or
(n) The initiation of proceedings for any revocation, appropriation,
termination or cancellation of any Concession or
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material permit of the Company or any of its subsidiaries or any adverse
modification of the terms thereof.
Notwithstanding the foregoing, so long as Senior Notes are outstanding, in the
event that any of the cure periods in this Section are shorter than those in the
Senior Note Indenture, then in interpreting the Events of Default, the longer
cure periods contained in the Senior Note Indenture shall apply.
5.2 Acceleration; Rescission and Annulment. (a) If there shall occur
an Event of Default under Section , (b), (c), (f), (g), (h), (i), (j), (k), (l),
(m) or (n) above which shall not have been waived by the Holder in writing, the
Holder may, by notice to the Company, declare the unpaid principal amount of and
accrued interest on this Debenture and interest accrued thereon and all
liabilities of the Company hereunder to be forthwith due and payable; and if
there shall be an Event of Default under Section or Section above, then the
unpaid principal amount of and accrued interest on this Debenture and all
liabilities of the Company hereunder to the Holder shall become automatically
forthwith due and payable; and, in each case, the same shall thereupon become
due and payable without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived.
(b) At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained (or before this Debenture shall be converted pursuant to Section hereof
by the Holder), the Holder, by written notice to the Company, may rescind and
annul such declaration and its consequences. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
(c) The Holder shall not be deemed to have actual knowledge of an
Event of Default until such Holder has been notified in writing thereof by the
Company (the Company hereby agreeing to notify the Holder in writing promptly
upon becoming aware of any Default (as defined in Section of this Debenture) or
Event of Default).
5.3 Holder May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Company or
the property or assets of the Company, the Holder (irrespective of whether the
principal of this Debenture shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Holder shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of this Debenture and to file such other
papers or documents as may be necessary or advisable in order
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to have the claims of the Holder allowed in such judicial proceeding.
5.4 Restoration of Rights and Remedies. If the Holder has instituted
any proceeding to enforce any right or remedy under this Debenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company and such Holder shall be restored
severally and respectively to their former positions hereunder and, thereafter,
all rights and remedies of such Holder shall continue as though no such
proceeding had been instituted.
5.5 Rights and Remedies Cumulative. Except as otherwise provided in
Section of this Debenture with respect to the replacement or payment of this
Debenture in the event it is mutilated, destroyed, lost or stolen, no right or
remedy herein conferred upon or reserved to the Holder 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.
5.6 Delay or Omission Not Waiver. No delay or omission of the 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 acquiescence therein. Every right and remedy given by this Section or by law
to the Holder may be exercised from time to time, and as often as may be deemed
expedient, by such Holder.
5.7 Waiver of Defaults. The Holder may waive, in writing, any Event
of Default or an event which, with the giving of notice or lapse of time or
both, as specified in Section hereof, would become an Event of Default (a
"Default") and its consequences; provided that no such waiver shall extend to
any other Event of Default or Default or impair any right consequent thereon.
6. CONVERSION OF SECURITIES.
6.1 Conversion Privilege and Conversion Price. Subject to the
provisions of this Section , at the option of the Holder hereof, the principal
amount of this Debenture may, at any time and from time to time prior to the
Maturity Date, be converted in whole or in part into shares of fully paid and
nonassessable Series A Shares at a conversion price (the "Conversion Price") of
U.S.$0.70 per Series A Share, which conversion price and type and number of
securities shall be subject to adjustment as provided in Section hereof.
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6.2 Exercise of Conversion Privilege. In order to exercise the
conversion privilege, the Holder shall surrender this Debenture to the Company
at its office specified in Section hereof, accompanied by a fully executed
written notice to the Company that the Holder hereof elects to convert this
Debenture or, if less than the entire principal amount of this Debenture is to
be converted, the portion thereof to be converted. Such notice shall also state
the name or names in which the certificate or certificates for shares of Series
A Shares shall be issued. As promptly as practicable after the receipt of such
notice and the surrender of this Debenture as aforesaid, the Company shall issue
and deliver at such office to such Holder a certificate or certificates for the
number of full shares of Series A Shares issuable on such conversion of this
Debenture in accordance with the provisions of this Section and cash, as
provided in Section , in respect of any fraction of a share of Series A Shares
otherwise issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the date (the "Date
of Conversion") on which such notice shall have been received by the Company and
this Debenture shall have been surrendered as aforesaid, and the person or
entity or persons or entities in whose name or names any certificate or
certificates for shares of Series A Shares shall be issuable upon such
conversion shall be deemed to have become on the Date of Conversion the holder
or holders of record of the shares represented thereby, and shall be treated for
all purposes as the record holder or holders of such shares of Series A Shares
on such date. Unless required by applicable law, the Company shall not close its
stock transfer book or stock register at any time in a manner which would
interfere with the conversion of the Debenture as provided herein. In the case
of conversion of a portion, but less than all, of this Debenture, the Company
shall execute and deliver to the Holder, at the expense of the Company, a new
Debenture registered in the Holder's name in the aggregate principal amount of
the unconverted portion of this Debenture surrendered.
6.3 Fractional Interests. The Company shall not issue fractions of
shares of Series A Shares upon conversion of this Debenture or scrip in lieu
thereof. If any fraction of a share of Series A Shares would, except for the
provisions of this Section , be issuable upon conversion of this Debenture, the
Company shall in lieu thereof pay to the person or entity entitled thereto an
amount in cash equal to the value of such fractional interest, calculated to the
nearest one-hundredth (1/100) of a share, to be computed on the basis of the
Conversion Price then in effect.
6.4 Conversion Adjustments. (a) Dividends, Etc. The number of
securities issuable upon conversion of this Debenture and the Conversion Price
of the Debentures shall be subject to adjustment from time to time upon certain
events, as follows:
(i) If the Company pays a dividend in shares of Series A Shares,
makes a distribution to all Holders of shares of any
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class of its capital stock in Series A Shares, subdivides or splits its
outstanding Series A Shares into a greater number of shares or combines
its outstanding Series A Shares into a smaller number of shares of Series
A Shares, otherwise reclassifies or recapitalizes the Series A Shares, or
in the case of a merger or consolidation of the Company with or into any
other Person, then the number of shares of Series A Shares into which this
Debenture is convertible ("Conversion Shares") shall be adjusted so that
the Holder hereof shall be entitled to receive the kind and number of
shares or other securities of the Company that it would have owned and/or
been entitled to receive as a result of any of the events described above,
had this Debenture been converted immediately before such event, effective
immediately after the effective date of such event.
(ii) Whenever the number of Conversion Shares is adjusted pursuant
to this paragraph (a), the Conversion Price per share shall also be
adjusted (to the nearest cent) by multiplying the Conversion Price per
share immediately before such adjustment by a fraction, the numerator of
which is the number of Conversion Shares immediately before such
adjustment, and the denominator of which is the number of Conversion
Shares immediately thereafter.
(iii) In the event that at any time, as a result of an adjustment
made pursuant to this paragraph (a), this Debenture shall become
convertible for any securities of the Company other than Series A Shares,
thereafter the number of such other securities so issuable upon conversion
of this Debenture and the Conversion Price with respect to such securities
shall be subject to adjustment from time to time in a manner and on terms
as equivalent as practicable to the provisions of this paragraph (a) with
respect to the Series A Shares.
(b) Preservation of Conversion Rights Upon Reclassification,
Recapitalization, Consolidation, etc. In case of any reclassification,
recapitalization or change of the outstanding Series A Shares or other
securities issuable upon conversion of this Debenture (other than a change in
par value or as a result of a subdivision or combination of Series A Shares),
any dividend or distribution not described in paragraph (a) of this Section or
any consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the Company is the surviving corporation that
does not result in any reclassification of, recapitalization of, or change in
the outstanding Series A Shares), or any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety (other than by mortgage or pledge), then the Company or such successor
or purchasing corporation, as the case may be, shall undertake that: (i) this
Debenture shall be convertible, upon payment of the Conversion Price in effect
immediately before such action multiplied by the number of shares of Series A
Shares into which this Debenture was convertible, for the kind and amount of
A - 11
shares and other securities and property that the Holder hereof would have been
entitled to receive after such action had this Debenture been converted
immediately before such action; and (ii) this Debenture, and the Conversion
Price, shall be subject to adjustments, which shall, to the greatest extent
practicable, be equivalent to, and subject to the same terms and provisions as,
the adjustments provided for in paragraph (a) of this Section . The provisions
of this paragraph shall similarly apply to successive reclassifications,
recapitalizations, consolidations, mergers, sales and conveyances.
(c) Post-Adjustment References. Following an adjustment under this
Section 6, all references in this Section 6 to the number of Series A Shares or
Conversion Shares, the kind of securities subject thereto and the Conversion
Price thereof shall be deemed to refer to such number, kind and price as
adjusted.
(d) Subordination. Notwithstanding anything to the contrary
contained herein, if, by operation of this Section 6.4 or any other provision
hereof, the Holder hereof shall receive any securities other than capital stock
of the Company, the payment and performance by the Company of all its
obligations under, and the rights and benefits of the Holder with respect to,
such securities shall be expressly subordinated to the prior indefeasible
payment in full in cash or cash equivalents of all amounts owing to the Senior
Creditors pursuant to the Senior Obligations (as defined in the Subordination
Agreement), to the same extent and in the same manner as set forth in the
Subordination Agreement with respect to the Debentures.
6.5 No Dilution or Impairment. The Company will not, by amendment of
its charter or through reorganization, consolidation, merger, dissolution, sale
of assets or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Debenture, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the conversion of this Debenture above the
amount payable therefor upon such conversion, and at all times will take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable stock upon the exercise
of this Debenture and all other Debentures at the time outstanding.
6.6 Reservation of Stock Issuable on Conversion of Debenture, Etc.
(a) The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued stock, solely for the
issuance and delivery upon the conversion of this Debenture, such number of its
duly authorized shares of Series A Shares or other securities as from time to
time
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shall be issuable upon the exercise of this Debenture and all other Debentures
at the time outstanding.
(b) If any shares of Series A Shares or other securities to be
reserved for the purpose of conversion of this Debenture hereunder require
registration with or approval of any governmental authority under any United
States or Mexican Federal or State law before such shares may be validly issued
or delivered upon conversion, then the Company covenants that it will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be; provided, however, that nothing in this Section
shall be deemed to affect in any way the obligations of the Company to convert
this Debenture into Series A Shares or other securities as provided in this
Section .
(c) Before taking any action which would cause an adjustment
increasing the Conversion Price to such a level that the then effective
conversion rate would be below the then par value, if any, of the Series A
Shares, (or other securities into which this Debenture is convertible) the
Company will take all corporate and other action which may, as stated in an
opinion of counsel, be necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of Series A Shares (or such
other securities) at such adjusted Conversion Price.
(d) The Company covenants that all shares of Series A Shares (or
other securities) which may be issued upon conversion of this Debenture will
upon issue be duly authorized, validly issued, fully paid and nonassessable by
the Company and free of preemptive rights.
6.7 Taxes on Conversion. The issuance and delivery of certificates
for shares of Series A Shares (or other securities into which this Debenture is
convertible) on conversion of this Debenture shall be made without charge to the
converting Holder for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or this Debenture represented thereby
(which shall be paid by the Company).
7. SUBORDINATION. The Company, for itself, its successors and assigns, and
each Holder by its acceptance hereof, covenants and agrees that the payment and
performance by the Company of all of its obligations under this Debenture,
including, without limitation, the payment of principal of, interest on, and all
other amounts owing in respect of, or pursuant to the terms of, this Debenture,
are expressly subordinated to the prior indefeasible payment in full in cash or
cash equivalents of all amounts owing to the Senior Creditors pursuant to the
Senior Obligations (as defined in the Subordination Agreement), to the extent
and in the manner set forth in the Subordination Agreement, and the Company, for
itself, its successors and assigns, and each Holder agrees to and accept such
other terms and conditions as are set forth in the Subordination Agreement.
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8. JUDGMENT CURRENCY. (a) If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum owing hereunder in one currency into
another currency, the Company and, by its acceptance hereof, the Holder each
agrees, to the fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.
(b) The obligations of the Company in respect of any sum due to the Holder
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than U.S. Dollars, be discharged only to the extent that, on the Business
Day following receipt by the Holder any sum adjudged to be so due in the
Judgment Currency, the Holder may in accordance with normal banking procedures
in the official currency market in the relevant jurisdiction purchase U.S.
Dollars with the Judgment Currency; if the amount of U.S. Dollars so purchased
is less than the sum originally due to the Holder in U.S. Dollars, the Company
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Holder against such loss. The obligations of the Company contained
in this Section 8 shall survive the cancellation of this Debenture and the
payment of all amounts owing hereunder.
9. MISCELLANEOUS.
9.1 Notices, etc. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be delivered
personally, telegraphed, sent by telecopier (provided that any telecopied
transmission is promptly followed by a mailed or courier copy) or sent by
certified, registered mail, or recognized express courier (postage prepaid), to
the parties at the addresses set forth below (or to such other addresses as the
parties may specify by due notice to the others). Notices or other
communications shall be deemed given only when actually received.
(a) If to the Company, to:
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
3rd Floor
Colonia Lomas de Chapultepec
Deleg. Xxxxxx Xxxxxxx, X.X.
00000, Xxxxxx, D.F.
Facsimile No.: 011 525 104 41 57
Attention: Xxxxxx X. Xxxxxxxxx, Vice President - Finance and
Audit and Chief Financial Officer
with copies to:
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
2nd Floor
A - 14
Colonia Lomas de Chapultepec
Deleg. Xxxxxx Xxxxxxx, X.X.
00000, Xxxxxx, D.F.
Facsimile: 011 525 104 4172
Attention: Xxxxx Xxxxxxxxxx, Vice President - Mergers and
Acquisitions and General Counsel
and
Xx Xxxxxx x Xxxxxxxx xxx Xxxxx, X.X.
Bosque de Alisos 47B
Suite 101
Col. Bosque de las Xxxxx
X.X. 00000 Xxxxxx, D.F.
Facsimile No.: 000-000-000-0000
Attention: Lic. Xxxxxx Xxxxxxxx del Xxxxx
(b) If to BAII, to:
Xxxx Atlantic International, Inc.
0000 Xxxxx Xxxxx Xxxxx Xxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: President and Chief Executive Officer
with copies to:
Xxxx Atlantic Corporation
0000 Xxxx Xxxxxx - 00X
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
and
Xxxx Atlantic International, Inc.
0000 Xxxx Xxxxxx - 00X
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx, Vice President
(c) If to another Holder, to its address set forth in the
Company's Register (as defined below).
or to such other address or addresses as the party to whom such notice is
directed may have designated in writing to the other parties hereto.
9.2 Amendments and Waivers. Except as otherwise provided herein or
in the Subordination Agreement, no amendment, modification, termination or
waiver of any provision of this Debenture, or consent to any departure by the
Company therefrom,
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shall in any event be effective unless the same shall be in writing and signed
by the Holder and the Company. Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given and shall not be construed as a bar to any right
or remedy which the Holder hereof would otherwise have on any other occasion. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances.
9.3 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or, partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Debenture are cumulative to, and not
exclusive of, any rights or remedies provided by law or otherwise available.
9.4 Severability. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Debenture shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Debenture or such provision or obligation
in any other jurisdiction. The parties agree to negotiate in good faith to
replace any such invalid, illegal or unenforceable provision with a new valid,
legal and enforceable provision the economic effect of which comes as close as
possible to that of such invalid, illegal or unenforceable provision.
9.5 Headings. Sections and headings in this Debenture are included
herein for convenience of reference only and shall not constitute a part of this
Debenture for any other purpose or be given any substantive effect.
9.6 APPLICABLE LAW. THIS DEBENTURE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
9.7 Successors and Assigns; Subsequent Holders. This Debenture shall
be binding upon and inure to the benefit of the Company and BAII and their
respective successors and permitted assigns except that the Company may not
assign its rights or obligations hereunder (or any portion hereof or thereof)
without the prior written consent of Holder. Any attempted assignment or
transfer by the Company without such consent shall be null and void. Nothing in
this Debenture, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby), any legal or equitable right, remedy or claim under or by
reason of this Debenture.
A - 16
9.8 Replacement Debentures. If this Debenture shall become
mutilated, destroyed, lost or stolen, the Company shall, upon the written
request of the Holder of this Debenture, execute and deliver in replacement
hereof a new Debenture in the same form, in the same original principal amount
and dated the same date as the Debenture so mutilated, destroyed, lost or
stolen.
9.9 Transfer and Exchange of Debenture; Persons Deemed Owners. (a)
This Debenture will be transferable only to Affiliates of BAII and to any Person
to whom BAII or an Affiliate thereof transfers ownership of 20% or more of the
economic interest in the Company, provided that such Person expressly agrees in
writing to assume the obligations of BAII and Holder under the Agreement, this
Debenture and the Subordination Agreement (such Affiliate and other Persons
being referred to herein as "Eligible Transferees").
(b) The Company shall keep at its principal office a register (the
"Register") in which it shall provide for the registration of this Debenture and
for the registration of transfer of this Debenture to an Eligible Transferee.
Upon due presentation at such office for registration of transfer of this
Debenture to an Eligible Transferee, the Company will execute, register and
deliver in exchange therefor a Debenture at such office for the same aggregate
unpaid principal amount as the Debenture or Debentures so presented for
registration of transfer, dated the date from which unpaid interest has then
accrued thereon and registered in the name or names of the transferee or
transferees. Each Debenture presented or surrendered for registration or notice
of transfer or exchange shall (if so requested by the Company) be duly endorsed
by, or accompanied by a written instrument or instrument of transfer in form
reasonably satisfactory to the Company duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing. All transfers of Debentures
shall be made in compliance with the applicable provisions of the Act. All
exchanges, transfers and registrations of transfer of Debentures shall be at the
expense of the Company (other than stamp and transfer taxes, and attorneys' fees
and expenses of the transferor, if any).
(c) Prior to due presentment for registration of transfer of any
Debenture, the Company may treat the Holder thereof as the absolute owner
thereof for the purpose of receiving payment of principal of and interest on
such Debenture and for all other purposes whatsoever, whether or not such
Debenture shall be overdue, and the Company shall not be affected by notice to
the contrary.
9.10 Expenses. Each party hereby agrees to pay all expenses,
including fees and disbursements of counsel, incurred by the other party in
connection with the settlement of any dispute arising out of or relating to this
Debenture to the extent that the dispute is judicially determined in favor of
the other party. The Company also agrees to pay, and save Holder harmless
against
A - 17
liability for the payment of, (a) reasonable fees and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) incurred with
respect to any amendments or waivers requested by the Company (whether or not
the same become effective) under or in respect of this Debenture and the
Agreement and the transactions contemplated hereby and thereby, (b) stamp and
other transfer taxes which may be payable in respect of the execution and
delivery of this Debenture and the Agreement or the issuance of securities to
the Holder upon conversion of this Debenture and (c) any costs of collection and
enforcement (including reasonable attorneys' fees and disbursements) under this
Debenture after the occurrence and during the continuance of an Event of
Default.
9.11 Right of Setoff. If an Event of Default shall have occurred and
be continuing, the Holder and each of its Affiliates 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 obligations at any time owing by the Holder and such
Affiliates to or for the credit or the account of the Company or any of its
subsidiaries against any of and all the obligations of the Company now or
hereafter existing under this Agreement held by the Holder, irrespective of
whether or not the Holder shall have made any demand under this Debenture and
although such obligations may be unmatured. The rights of each Holder under this
Section are in addition to other rights and remedies (including other rights of
setoff) which the Holder may have.
9.12 Jurisdiction. Each of the Company and, by its acceptance
hereof, the Holder hereby irrevocably and unconditionally submits to the
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, and to the courts of its own
corporate domicile in respect of actions brought against it as a defendant in
any action or proceeding arising out of or relating to this Debenture, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such court. Each of the
Company and, by its acceptance hereof, the Holder agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
9.13 Venue. The Company hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Debenture in any court
referred to in Section 9.12 above. Each of the Company and, by its acceptance
hereof, the Holder hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
A - 18
9.14 Service of Process. The Company hereby irrevocably designates,
appoints and empowers CT Corporation having its address at the date hereof at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. as its process agent to receive
for and on its behalf service of process in New York in any legal action or
proceeding with respect to this Debenture. It is understood that a copy of any
such process served on such process agent shall be promptly forwarded by air
mail by the Person commencing such proceeding to the Company at its address
specified in Section 9.01 above, but the failure of the Company to receive such
copy shall not affect in any way the service of such process as aforesaid. This
means of service of process shall be in addition to service of process in any
other manner permitted by law.
9.15 Waiver of Jury Trial. EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE HOLDER HEREOF 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
DEBENTURE (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH OF THE
COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREOF (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.
9.16 Waiver of Sovereign Immunity. The Company acknowledges and
agrees that the activities contemplated by the provisions of this Debenture are
commercial in nature rather than governmental or public, and therefore
acknowledges and agrees that it is not entitled to any right of immunity on the
grounds of sovereignty or otherwise with respect to such activities or in any
legal action or proceeding arising out of or relating to this Debenture in
respect of itself and its properties and revenues, expressly and irrevocably
waives any such right of immunity which may now or hereafter exist (including
any immunity from any legal process, from the jurisdiction of any court or from
any attachment prior to judgment, attachment in aid or execution, or otherwise)
or claim thereto which may now or hereafter exist, and agrees not to assert any
such right or claim in any such action or proceeding, whether in the United
States of America or otherwise.
9.17 Use of English Language. This Debenture has been negotiated and
executed in the English language. All certificates, reports, notices and other
documents and communications given or delivered pursuant to this Debenture
(including any modifications or supplements hereto) shall be in the English
language, or accompanied by a certificated English translation thereof. Except
in the case of laws or official communications of Mexico, in the case of any
document originally issued in a language other than English, the English
language version of any such document shall
A - 19
for purposes of this Debenture, and absent manifest error, control the meaning
of the matters set forth therein.
9.18 Defined Terms. As used herein the following terms shall have
the following meanings:
(a) "Act" shall have the meaning given in the first legend paragraph
on the first page of this Debenture.
(b) "Affiliate" means as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person except that the Company and its subsidiaries shall be
deemed not to be Affiliates of Holder for purposes of this definition. As used
in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
(c) "Business Day" means any day (i) other than a Saturday, Sunday
or other day on which commercial banks in New York City or Mexico are authorized
or required to close under the laws of the State of New York or Mexico, and (ii)
on which dealings in U.S. Dollar deposits are carried out in the London
interbank market.
(d) "Capital Expenditures" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company and
its consolidated subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Company for such period prepared in accordance
with Mexican GAAP.
(e) "Concession" means the Company's right to provide cellular
service pursuant to concessions and authorizations granted by the Mexican
Ministry of Communications and Transportation (Secretaria de Comunicaciones y
Transportes) (a) in any of the following Mexican cellular regions: (i) in Region
5 through Comunicaciones Celulares de Occidente, S.A. de C.V., (ii) in Region 6
through Sistemas Telefonicos Portatiles Celulares, S.A. de C.V., (iii) in Region
7 through Telecomunicaciones del Golfo, S.A. de C.V. and (iv) in Region 9
through S.O.S. Telecomunicaciones, S.A. de C.V., or (b) in any other cellular
region in which the Company or of its subsidiaries shall obtain the right to
provide cellular service.
(f) "GAAP" means generally accepted accounting principles in the
United States of America.
(g) "Governmental Authority" means any sovereign government or any
political subdivision thereof, whether state, local or foreign, any legislative
or judicial body, and any agency, authority, instrumentality, regulatory body,
court, central bank,
A - 20
including, without limitation, the Central Bank of Mexico or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
(h) "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 evidences by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (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 incurred in the ordinary course of business), (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 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;
provided, however, "Indebtedness" shall not include any of the foregoing owed
(i) by the Company to any of its subsidiaries, (ii) by any of the Company's
subsidiaries to the Company or (iii) by any of the Company's subsidiaries to
another of its subsidiaries.
(i) "Interest Period" means initially, the period commencing on the
date of this Debenture and ending on the first Interest Payment Date thereafter,
and subsequently, each successive six-month period beginning on an Interest
Payment Date and ending on the next Interest Payment Date thereafter.
(j) "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.
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(k) "LIBOR" means, with respect to any Interest Period, the rate of
interest determined on the basis of the rate for deposits in U.S. Dollars for a
period equal to such Interest Period, commencing on the first day of such
Interest Period, appearing on Page 3750 of the Telerate Service as of 11:00
a.m., London time, five Business Days prior to the beginning of such Interest
Period ("Page 3750"); provided, however, that if the initial Interest Period is
not a period for which a rate appears on Page 3750, then "LIBOR" with respect to
such initial Interest Period shall mean the weighted average of the rates of the
immediately shorter and immediately longer interest periods that appear on Page
3750. In the event that a rate for an Interest Period (or with respect to the
initial Interest Period, rates for the immediately shorter and longer periods)
does not appear on Page 3750 of the Telerate Service (or otherwise on such
Service), "LIBOR" shall mean the rate per annum (rounded upwards, if necessary,
to the nearest 1/16 of 1%) (the "Alternate Rate") quoted by the Senior Agent or
its successor at or about 11:00 a.m., London time (or as soon thereafter as is
practicable), four Business Days prior to the beginning of such Interest Period
for the offering by the Senior Agent to leading banks in the London interbank
market of deposits in U.S. Dollars for delivery on the first day of such
Interest Period, for a period equal to such Interest Period, and in an amount
comparable to the outstanding principal amount of this Debenture; provided,
however, that if the initial Interest Period is not a period for which an
Alternate Rate is quoted, then the LIBOR Rate shall be the weighted average of
the rates of the immediately shorter and immediately longer interest periods for
which an Alternate Rate is quoted.
(l) "Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations or condition, financial or otherwise, of the
Company and its subsidiaries, taken as a whole, (b) the ability of the Company
to perform any of its obligations under the Agreement or any Debenture to
perform any of its obligations under the Agreement or any Debenture or (c) the
rights of or benefits available to BAII or any other Holder under the Agreement
or any Debenture.
(m) "Material Terms and Conditions" means, with respect to any
Concession, the terms and conditions of such Concession the violation of which,
or non-compliance with which, could cause the Company or any of its subsidiaries
to (a) lose such Concession, (b) lose any material rights relating to such
Concession, (c) incur materially increased costs to provide the service under
such Concession or (d) suffer a material restriction of any right to provide
service under such Concession.
(n) "Mexican GAAP" means generally accepted accounting principles in
Mexico.
(o) "Mexico" means the United Mexican States.
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(p) "Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
(q) "Senior Agent" means The Chase Manhattan Bank, as administrative
agent for the Senior Banks.
(r) "Senior Banks" means the lenders from time to time parties to
the Senior Credit Agreement.
(s) "Senior Credit Agreement" means the Credit Agreement, dated as
of July 25, 1997, among the Company, the Senior Banks and the Senior Agent, as
amended, supplemented, restated or otherwise modified from time to time.
(t) "Senior Note Indenture" means the Indenture, dated of July 25,
1997 between the Company and the Senior Note Trustee, as amended, supplemented,
restated or otherwise modified from time to time.
(u) "Senior Note Trustee" means First Union National Bank, as
Trustee for the holders of the Senior Notes.
(v) "Senior Notes" means the 10% Senior Notes due 2004 of the
Company in the aggregate original principal amount of U.S.$150,000,000 issued
pursuant to the Senior Note Indenture.
(w) "Series A Shares" means ordinary, nominative Series A Shares of
the Company, without par value, that are authorized by the estatutos sociales of
the Company.
(x) "Significant Subsidiary" shall have the meaning set forth in
Rule 405 under the Act.
(y) "Subordination Agreement" means the Subordination Agreement,
dated as of July 25, 1997, among BAII, the Senior Agent and the Senior Note
Trustee, as amended, supplemented, restated or otherwise modified from time to
time.
(z) "Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed as of the date set forth below.
Dated: [_________ __, 19__]
GRUPO IUSACELL, S.A. DE C.V.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Attest:
By:
------------------------------
Name:
Title:
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EXHIBIT B
[FORM OF ADDITIONAL DEBENTURE]
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH
QUALIFIES AS A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, NEITHER THE PRINCIPAL
OF NOR THE CASH INTEREST ON THE INDEBTEDNESS CREATED OR EVIDENCED BY THIS
INSTRUMENT OR RECORD SHALL BECOME DUE OR BE PAID OR PAYABLE EXCEPT TO THE EXTENT
PERMITTED UNDER THE SUBORDINATION AGREEMENT DATED AS OF JULY 25, 1997, AMONG
XXXX ATLANTIC INTERNATIONAL, INC., GRUPO IUSACELL, S.A. DE C.V., THE CHASE
MANHATTAN BANK AND FIRST UNION NATIONAL BANK (THE "SUBORDINATION AGREEMENT"),
WHICH SUBORDINATION AGREEMENT IS INCORPORATED HEREIN WITH THE SAME EFFECT AS IF
FULLY SET FORTH HEREIN.
Convertible Subordinated Debenture
R-__ U.S.$_________
______________, 19__
GRUPO IUSACELL, S.A. DE C.V., a corporation duly organized and existing
under the laws of Mexico (the "Company"), for value received, hereby
unconditionally promises to pay to the order of XXXX ATLANTIC INTERNATIONAL,
INC. ("BAII"), or its permitted transferees (BAII or any Eligible Transferee (as
hereinafter defined) to which this Debenture is transferred being the "Holder"),
the principal sum of _______ U.S. DOLLARS ($________) on December 31, 1999 (the
"Maturity Date") (subject to Sections and
hereof) in immediately available funds to BAII c/x Xxxx Atlantic Financial
Services, Inc. at Mellon Bank West - Pittsburgh, PA, or at such other place as
may be designated in writing by the Holder, or its assigns, and to pay interest
at said office in like money in respect of each Interest Period at a rate per
annum equal to LIBOR for such Interest Period plus five percent (5%) per annum,
from the date hereof on the unpaid principal amount hereof until payment in full
thereof. Interest shall accrue daily and, subject to the terms of the
Subordination Agreement shall be payable prior to the Maturity Date by issuance
of Additional Debentures (as defined in the Agreement referred to below) or, at
the option of the Holder, in part or in whole, in cash, semi-annually in arrears
on the first day of January and July in each year (each, an "Interest Payment
Date") commencing with the first such Interest Payment Date next succeeding the
date hereof and upon each payment of principal (whether upon maturity,
acceleration, prepayment or
B - 1
otherwise). All computations of interest under this Debenture shall be made on
the basis of a year of 360 days and actual days elapsed. If the Holder elects to
have accrued interest on the unpaid principal amount hereof that is payable at
any time prior to the Maturity Date be paid, in whole or in part, in cash, it
shall so notify the Company in writing not less than ten (10) Business Days
prior to the date on which such interest payment is scheduled to be made. The
Company hereby expressly waives (to the maximum extent permitted by law) any
requirements of demand, presentment, notice of protest and dishonor and all
other demands or notices of any kind or nature with respect to this Debenture.
This Debenture is one of the Debentures issued pursuant to (and as defined
in) the Debenture Purchase Agreement (the "Agreement"), dated July 25, 1997, by
and between the Company and BAII, and is subject to the provisions, terms and
conditions thereof as well as the following additional provisions, terms and
conditions:
1. NO REDEMPTION. The Company shall not have the right to redeem this
Debenture prior to maturity without the written consent of the Holder.
2. ADDITIONAL AMOUNTS.
2.1 Tax Gross-Up. All payments by the Company in respect of this
Debenture will be made after withholding or deduction for any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by Mexico or any political subdivision thereof
or taxing authority therein. The Company will pay any such amounts to the
relevant taxing or other authority prior to the date on which penalties attach
thereto, such payment to be made (if liability to pay is imposed on the Company)
for its own account, or (if liability is imposed on the Holder) on behalf of and
in the name of such Holder. The sum payable by the Company in respect of which
the relevant deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of such deduction,
withholding or payment, the Holder receives on the due date and retains (free
from any liability in respect of any such deduction, withholding or payment) a
net sum equal to what it would have received and so retained had no such
deduction, withholding or payment been required or made (the amount of any such
increase being referred to herein as an "Additional Amount"). Any reference
herein to principal, premium or interest, or any other payment in respect of
this Debenture, will be deemed also to refer to any Additional Amounts which may
be payable.
2.2 Documentation. The Company will provide the Holder with
documentation evidencing the payment of Mexican taxes in respect of which the
Company has paid any Additional Amounts, which documentation shall be legally
sufficient to obtain foreign tax credits for U.S. Federal income tax purposes,
within 60 days after payment thereof.
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3. MAXIMUM INTEREST RATE. Anything herein to the contrary notwithstanding,
the obligation of the Company to make payments of interest shall be subject to
the limitation that payments of interest shall not be required to be made to the
Holder hereof to the extent that the receipt thereof by the Holder hereof would
not be permissible under the law or laws applicable to the such Holder limiting
rates of interest which may be charged or collected by such Holder. Any such
payments of interest which are not made as a result of the limitation referred
to in the preceding sentence shall be made by the Company to such Holder on the
earliest Interest Payment Date or dates on which the receipt thereof would be
permissible under such laws applicable to such Holder limiting rates of interest
which may be charged or collected by such Holder.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby covenants to the
Holder that, so long as this Debenture shall be outstanding:
4.1 Compliance with Senior Credit Agreement and Senior Note
Indenture. It will comply in all material respects with all of its agreements,
covenants and other undertakings set forth in the Senior Credit Agreement and
the Senior Note Indenture, which agreements, covenants and other undertakings
are, by this reference, hereby incorporated herein as if they were fully set
forth herein. Notwithstanding the forgoing, in the event that any inconsistency
arises between any of the covenants under the Senior Credit Agreement and under
the Senior Note Indenture, then the covenant or covenants that are less
restrictive on the Company shall apply for purposes of this Section.
4.2 Compliance with Shareholders Agreement. It will comply in all
material respects with all of its agreements, covenants and other undertakings
set forth in the Amended and Restated Shareholders Agreement, dated as of
February 18, 1997, among Xxxx Atlantic Latin America Holdings, Inc., Xxxxx
Xxxxxxx y Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx Xxxxxxxx, Iusa Grupo Comunicaciones,
S.A. de C.V., Fiusa Pasteje, S.A. de C.V., Xxxxxxxx Investments Limited,
Commander Mexicana, S.A. de C.V., Inmobiliaria Reforma Lomas Altas, S.A. de
C.V., Fraccionadora y Constructora Mexicana, S.A. de C.V., Confecciones Pasteje,
S.A. de C.V., Interelec, S.A. de C.V. and the Company (as such agreement may be
amended, supplemented, restated or otherwise modified from time to time) which
agreements, covenants and other undertakings are, by this reference, hereby
incorporated herein as if they were fully set forth herein.
4.3 Governmental Approvals; Concessions. (a) It will promptly obtain
from time to time at its own expense all such governmental licenses,
authorizations, consents, permits and approvals as may be required for the
Company to comply with its obligations under the Agreement and this Debenture.
(b) It will, and will cause each of its subsidiaries to,
preserve and keep in full force and effect all
B - 3
Concessions and shall comply with the Material Terms and Conditions of all
Concessions.
4.4 Existence; Conduct of Business. It will, and will cause each of
its subsidiaries to, do or 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, franchises, concessions, permits, patents,
copyrights, trademarks and trade names material to the conduct of its business,
including all material permits relating to the Concessions; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution of the type permitted under Section 6.04. of the Senior Credit
Agreement as in effect on the date of the Agreement.
4.5 Payment of Obligations. It will, and will cause each of its
subsidiaries to, pay its Indebtedness and other obligations, including
liabilities in respect of Taxes, 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 Company or such subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and Mexican GAAP, (c) such contest effectively suspends collection of the
contested obligation and the enforcement of any Lien securing such obligation
and (d) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
4.6 Maintenance of Properties. It will, and will cause each of its
subsidiaries to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and to maintain, develop and operate such property in accordance with prudent
industry standards.
4.7 Insurance. It will, and will cause each of its subsidiaries to,
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.
4.8 Compliance with Laws and Material Contractual Obligations. It
will, and will cause each of its subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property and with all material contractual obligations and obligations arising
from the concessions and permits under which the Company and its subsidiaries
provide their services), except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
4.9 Use of Proceeds. The proceeds of the Debentures will be used
only to repay existing Indebtedness of the Company and
B - 4
its subsidiaries, to fund Capital Expenditures and for other general corporate
purposes. 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 of Governors of the Federal Reserve System of the United States of
America, including Regulations G, U and X.
5. EVENTS OF DEFAULT.
5.1 Events of Default. "Event of Default," wherever used herein,
means any of the following events:
(a) (i) Failure of the Company or any of its subsidiaries to pay
within three (3) Business Days after the date when due any principal of or
interest on any indebtedness owing under this Debenture, or (ii) failure of the
Company or any of its subsidiaries to pay when due or within any applicable
grace period, any principal, interest, fee, or other amounts payable on any one
or more items of Indebtedness (other than this Debenture) owing to any bank or
other creditor with an individual or aggregate principal amount outstanding of
the equivalent of U.S.$5,000,000 (or its foreign-currency equivalent) or more,
or (iii) any event or condition occurs that results in any such Indebtedness of
the Company or any of its subsidiaries 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 indebtedness or any
trustee or agent on its or their behalf to cause any such indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity;
(b) The Company or any of its Significant Subsidiaries admits in
writing its present or prospective inability to pay its debts as they become due
or is otherwise generally not paying its debts as such debts become due unless
such debts are the subject of a bona fide dispute;
(c) Failure by the Company to comply with or to perform any
provision of this Debenture or the Agreement (and not constituting an Event of
Default under any of the other provisions of this Section ) and continuance of
such failure for thirty (30) days after knowledge thereof by an officer of the
Company;
(d) (i) A court enters a decree or order for relief with respect to
the Company or any of its Significant Subsidiaries in an involuntary case under
any provision of Title 11 of the United States Code entitled "Bankruptcy", as
amended and in effect from time to time, or any successor statute (the
"Bankruptcy Code") (including provisions for reorganization) or any applicable
bankruptcy, insolvency, reorganization, receivership or other similar law now or
hereafter in effect, which decree or order is not vacated or stayed or any other
similar relief is granted under any applicable federal or state law; or (ii) an
involuntary proceeding shall be commenced or an involuntary petition shall be
B - 5
filed seeking (A) liquidation, reorganization, suspension of payments or other
relief in respect of the Company or any Significant Subsidiary or its debts, or
a substantial part of its assets, under any bankruptcy, insolvency, receivership
or similar law now or hereafter in effect (including without limitation the Ley
de Quiebra y Suspension de Pagos), or (B) the appointment of a receiver,
trustee, sindico, custodian, sequestrator, conservator or similar official for
the Company or any Significant Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or
(e) The Company or any of its Significant Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization, suspension of payments or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in effect including without limitation the Ley de Quiebra y Suspension de Pagos,
(ii) consent to the institution of, or fails to contest in a timely and
appropriate manner, any proceeding or petition described in clause (d) of this
Section 5.1, (iii) apply for or consents to the appointment of a receiver,
trustee, sindico, custodian, sequestrator, conservator or similar official for
the Company or any Significant Subsidiary 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;
(f) Any representation or warranty made or deemed by or on behalf of
the Company in connection with the Agreement, this Debenture, or any amendment
or modification thereto or waiver thereunder, or in any certificate or other
document furnished pursuant thereto or in connection therewith, shall have been
incorrect in any material respect when made or deemed made and shall continue to
be incorrect in any material respect for thirty (30) days after knowledge
thereof by an officer of the Company;
(g) Any order, judgment or decree shall be entered against the
Company or any of its Significant Subsidiaries decreeing the dissolution or
split up of the Company or such Significant Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30 days;
(h) Any Governmental Authority shall take any action to condemn,
seize, nationalize or appropriate any substantial portion of the assets of the
Company or any of its Significant Subsidiaries (either with or without payment
of compensation) or shall take any action that, in the good faith opinion of
BAII, adversely affects the ability of the Company to perform its obligations
under the Agreement or this Debenture; or the Company or any of the Significant
Subsidiaries shall be prevented from exercising normal
B - 6
control over all or a substantial part of its assets (and the same shall have
continued for 30 or more days);
(i) After the execution and delivery of this Debenture by the
Company, (i) Mexico or any competent authority thereof shall declare a
moratorium on the payment of Indebtedness by Mexico or any Governmental
Authority thereof or corporations therein, or Mexico shall cease to be a member
in good standing of the International Monetary Fund or shall cease to be
eligible to utilize the resources of the International Monetary Fund under the
Articles of Agreement thereof, or the International monetary reserves of Mexico
shall become subject to any Lien and (ii) the Company has not delivered to BAII
evidence in form and substance satisfactory to BAII that the Company is
permitted under all applicable laws, rules and regulations to pay its
obligations under this Debenture in accordance with its terms from the assets or
revenues of the Company and/or its affiliates that are located in the United
States of America and denominated in U.S. Dollars;
(j) Either (i) the government of Mexico shall take any action,
including a moratorium, having an effect on the schedule of payments of the
Company under this Debenture or otherwise, the currency in which the Company may
pay its obligation under this Debenture or the availability of foreign
currencies in exchange for Mexican Pesos or otherwise or (ii) the Company shall,
voluntarily or involuntarily, participate or take any action to participate in
any facility or exercise involving the rescheduling of the Company's debts or
the restructuring of the currency in which the Company may pay its obligations
under the Debenture;
(k) The Company or any of its Significant Subsidiaries shall fail to
pay when due any and all applicable taxes, amounts payable as Sistema de Ahorro
para el Retiro, Instituto Mexicano del Seguro Social or Instituto del Fondo
Nacional de la Vivienda para los Trabajadores quotes, except those contested in
good faith by appropriate proceedings;
(l) The failure by the Company to comply with Section 4.2 of this
Debenture or to convert this Debenture into Series A Shares or other securities
in accordance with the terms hereof and of the Agreement;
(m) The rendering of one or more judgments or decrees for the
payment of money in an aggregate amount in excess of U.S.$10,000,000 or its
foreign currency equivalent against the Company, any of its Significant
Subsidiaries or any combination thereof if (A) an enforcement proceeding thereon
is commenced or (B) such judgment or decree remains outstanding for a period of
60 days following such judgment or decree and is not effectively discharged,
waived or stayed; or
(n) The initiation of proceedings for any revocation, appropriation,
termination or cancellation of any Concession or
B - 7
material permit of the Company or any of its subsidiaries or any adverse
modification of the terms thereof.
Notwithstanding the foregoing, so long as Senior Notes are outstanding, in the
event that any of the cure periods in this Section are shorter than those in the
Senior Note Indenture, then in interpreting the Events of Default, the longer
cure periods contained in the Senior Note Indenture shall apply.
5.2 Acceleration; Rescission and Annulment. (a) If there shall occur
an Event of Default under Section , (b), (c), (f), (g), (h), (i), (j), (k), (l),
(m) or (n) above which shall not have been waived by the Holder in writing, the
Holder may, by notice to the Company, declare the unpaid principal amount of and
accrued interest on this Debenture and interest accrued thereon and all
liabilities of the Company hereunder to be forthwith due and payable; and if
there shall be an Event of Default under Section
or Section above, then the unpaid principal amount of and accrued interest on
this Debenture and all liabilities of the Company hereunder to the Holder shall
become automatically forthwith due and payable; and, in each case, the same
shall thereupon become due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived.
(b) At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained (or before this Debenture shall be converted pursuant to Section hereof
by the Holder), the Holder, by written notice to the Company, may rescind and
annul such declaration and its consequences. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
(c) The Holder shall not be deemed to have actual knowledge of an
Event of Default until such Holder has been notified in writing thereof by the
Company (the Company hereby agreeing to notify the Holder in writing promptly
upon becoming aware of any Default (as defined in Section of this Debenture) or
Event of Default).
5.3 Holder May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Company or
the property or assets of the Company, the Holder (irrespective of whether the
principal of this Debenture shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Holder shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of this Debenture and to file such other
papers or documents as may be necessary or advisable in order
B - 8
to have the claims of the Holder allowed in such judicial proceeding.
5.4 Restoration of Rights and Remedies. If the Holder has instituted
any proceeding to enforce any right or remedy under this Debenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company and such Holder shall be restored
severally and respectively to their former positions hereunder and, thereafter,
all rights and remedies of such Holder shall continue as though no such
proceeding had been instituted.
5.5 Rights and Remedies Cumulative. Except as otherwise provided in
Section of this Debenture with respect to the replacement or payment of this
Debenture in the event it is mutilated, destroyed, lost or stolen, no right or
remedy herein conferred upon or reserved to the Holder 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.
5.6 Delay or Omission Not Waiver. No delay or omission of the 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 acquiescence therein. Every right and remedy given by this Section or by law
to the Holder may be exercised from time to time, and as often as may be deemed
expedient, by such Holder.
5.7 Waiver of Defaults. The Holder may waive, in writing, any Event
of Default or an event which, with the giving of notice or lapse of time or
both, as specified in Section hereof, would become an Event of Default (a
"Default") and its consequences; provided that no such waiver shall extend to
any other Event of Default or Default or impair any right consequent thereon.
6. CONVERSION OF SECURITIES.
6.1 Conversion Privilege and Conversion Price. Subject to the
provisions of this Section , at the option of the Holder hereof, the principal
amount of this Debenture may, at any time and from time to time prior to the
Maturity Date, be converted in whole or in part into shares of fully paid and
nonassessable Series A Shares at a conversion price (the "Conversion Price") of
U.S.$___ per Series A Share, which Conversion Price is equal to one-tenth of the
average closing market price on the New York Stock Exchange of the American
Depository Receipts evidencing the Series D American Depository Shares and the
Series L American Depository Shares of
B - 9
the Company over the ten trading day period ending with five trading days
remaining before the Interest Payment Date in respect of which this Debenture
was issued, which conversion price and type and number of securities shall be
subject to adjustment as provided in Section 6.4 hereof.
6.2 Exercise of Conversion Privilege. In order to exercise the
conversion privilege, the Holder shall surrender this Debenture to the Company
at its office specified in Section hereof, accompanied by a fully executed
written notice to the Company that the Holder hereof elects to convert this
Debenture or, if less than the entire principal amount of this Debenture is to
be converted, the portion thereof to be converted. Such notice shall also state
the name or names in which the certificate or certificates for shares of Series
A Shares shall be issued. As promptly as practicable after the receipt of such
notice and the surrender of this Debenture as aforesaid, the Company shall issue
and deliver at such office to such Holder a certificate or certificates for the
number of full shares of Series A Shares issuable on such conversion of this
Debenture in accordance with the provisions of this Section and cash, as
provided in Section , in respect of any fraction of a share of Series A Shares
otherwise issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the date (the "Date
of Conversion") on which such notice shall have been received by the Company and
this Debenture shall have been surrendered as aforesaid, and the person or
entity or persons or entities in whose name or names any certificate or
certificates for shares of Series A Shares shall be issuable upon such
conversion shall be deemed to have become on the Date of Conversion the holder
or holders of record of the shares represented thereby, and shall be treated for
all purposes as the record holder or holders of such shares of Series A Shares
on such date. Unless required by applicable law, the Company shall not close its
stock transfer book or stock register at any time in a manner which would
interfere with the conversion of the Debenture as provided herein. In the case
of conversion of a portion, but less than all, of this Debenture, the Company
shall execute and deliver to the Holder, at the expense of the Company, a new
Debenture registered in the Holder's name in the aggregate principal amount of
the unconverted portion of this Debenture surrendered.
6.3 Fractional Interests. The Company shall not issue fractions of
shares of Series A Shares upon conversion of this Debenture or scrip in lieu
thereof. If any fraction of a share of Series A Shares would, except for the
provisions of this Section , be issuable upon conversion of this Debenture, the
Company shall in lieu thereof pay to the person or entity entitled thereto an
amount in cash equal to the value of such fractional interest, calculated to the
nearest one-hundredth (1/100) of a share, to be computed on the basis of the
Conversion Price then in effect.
B - 10
6.4 Conversion Adjustments. (a) Dividends, Etc. The number of
securities issuable upon conversion of this Debenture and the Conversion Price
of the Debentures shall be subject to adjustment from time to time upon certain
events, as follows:
(i) If the Company pays a dividend in shares of Series A Shares,
Series D Shares or Series L Shares, makes a distribution to all Holders of
shares of any class of its capital stock in Series A Shares, Series D
Shares or Series L Shares, subdivides or splits its outstanding Series A
Shares, Series D Shares or Series L Shares into a greater number of shares
or combines its outstanding Series A Shares, Series D Shares or Series L
Shares into a smaller number of shares of Series A Shares, Series D Shares
or Series L Shares, respectively, otherwise reclassifies or recapitalizes
the Series A Shares, Series D Shares or Series L Shares or in the case of
a merger or consolidation of the Company with or into any other Person,
then the number of shares of Series A Shares into which this Debenture is
convertible ("Conversion Shares") shall be adjusted so that the Holder
hereof shall be entitled to receive the kind and number of shares or other
securities of the Company that it would have owned and/or been entitled to
receive as a result of any of the events described above, had this
Debenture been converted immediately before such event, effective
immediately after the effective date of such event.
(ii) Whenever the number of Conversion Shares is adjusted pursuant
to this paragraph (a), the Conversion Price per share shall also be
adjusted (to the nearest cent) by multiplying the Conversion Price per
share immediately before such adjustment by a fraction, the numerator of
which is the number of Conversion Shares immediately before such
adjustment, and the denominator of which is the number of Conversion
Shares immediately thereafter.
(iii) In the event that at any time, as a result of an adjustment
made pursuant to this paragraph (a), this Debenture shall become
convertible for any securities of the Company other than Series A Shares,
thereafter the number of such other securities so issuable upon conversion
of this Debenture and the Conversion Price with respect to such securities
shall be subject to adjustment from time to time in a manner and on terms
as equivalent as practicable to the provisions of this paragraph (a) with
respect to the Series A Shares.
(b) Preservation of Conversion Rights Upon Reclassification,
Recapitalization, Consolidation, etc. In case of any reclassification,
recapitalization or change of the outstanding Series A Shares or other
securities issuable upon conversion of this Debenture (other than a change in
par value or as a result of a subdivision or combination of Series A Shares),
any dividend or distribution not described in paragraph (a) of this Section or
any consolidation or merger of the Company with another corporation
B - 11
(other than a consolidation or merger in which the Company is the surviving
corporation that does not result in any reclassification of, recapitalization
of, or change in the outstanding Series A Shares), or any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety (other than by mortgage or pledge), then the
Company or such successor or purchasing corporation, as the case may be, shall
undertake that: (i) this Debenture shall be convertible, upon payment of the
Conversion Price in effect immediately before such action multiplied by the
number of shares of Series A Shares into which this Debenture was convertible,
for the kind and amount of shares and other securities and property that the
Holder hereof would have been entitled to receive after such action had this
Debenture been converted immediately before such action; and (ii) this
Debenture, and the Conversion Price, shall be subject to adjustments, which
shall, to the greatest extent practicable, be equivalent to, and subject to the
same terms and provisions as, the adjustments provided for in paragraph (a) of
this Section . The provisions of this paragraph shall similarly apply to
successive reclassifications, recapitalizations, consolidations, mergers, sales
and conveyances.
(c) Post-Adjustment References. Following an adjustment under this
Section 6, all references in this Section 6 to the number of Series A Shares or
Conversion Shares, the kind of securities subject thereto and the Conversion
Price thereof shall be deemed to refer to such number, kind and price as
adjusted.
(d) Subordination. Notwithstanding anything to the contrary
contained herein, if, by operation of this Section 6.4 or any other provision
hereof, the Holder hereof shall receive any securities other than capital stock
of the Company, the payment and performance by the Company of all its
obligations under, and the rights and benefits of the Holder with respect to,
such securities shall be expressly subordinated to the prior indefeasible
payment in full in cash or cash equivalents of all amounts owing to the Senior
Creditors pursuant to the Senior Obligations (as defined in the Subordination
Agreement), to the same extent and in the same manner as set forth in the
Subordination Agreement with respect to the Debentures.
6.5 No Dilution or Impairment. The Company will not, by amendment of
its charter or through reorganization, consolidation, merger, dissolution, sale
of assets or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Debenture, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the conversion of this Debenture above the
amount payable therefor upon such conversion, and at all times will take all
such action as may be necessary or
B - 12
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable stock upon the exercise of this Debenture and all other
Debentures at the time outstanding.
6.6 Reservation of Stock Issuable on Conversion of Debenture, Etc.
(a) The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued stock, solely for the
issuance and delivery upon the conversion of this Debenture, such number of its
duly authorized shares of Series A Shares or other securities as from time to
time shall be issuable upon the exercise of this Debenture and all other
Debentures at the time outstanding.
(b) If any shares of Series A Shares or other securities to be
reserved for the purpose of conversion of this Debenture hereunder require
registration with or approval of any governmental authority under any United
States or Mexican Federal or State law before such shares may be validly issued
or delivered upon conversion, then the Company covenants that it will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be; provided, however, that nothing in this Section
shall be deemed to affect in any way the obligations of the Company to convert
this Debenture into Series A Shares or other securities as provided in this
Section .
(c) Before taking any action which would cause an adjustment
increasing the Conversion Price to such a level that the then effective
conversion rate would be below the then par value, if any, of the Series A
Shares, (or other securities into which this Debenture is convertible) the
Company will take all corporate and other action which may, as stated in an
opinion of counsel, be necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of Series A Shares (or such
other securities) at such adjusted Conversion Price.
(d) The Company covenants that all shares of Series A Shares (or
other securities) which may be issued upon conversion of this Debenture will
upon issue be duly authorized, validly issued, fully paid and nonassessable by
the Company and free of preemptive rights.
6.7 Taxes on Conversion. The issuance and delivery of certificates
for shares of Series A Shares (or other securities into which this Debenture is
convertible) on conversion of this Debenture shall be made without charge to the
converting Holder for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or this Debenture represented thereby
(which shall be paid by the Company).
7. SUBORDINATION. The Company, for itself, its successors and assigns, and
each Holder by its acceptance hereof, covenants and agrees that the payment and
performance by the Company of all of its obligations under this Debenture,
including, without
B - 13
limitation, the payment of principal of, interest on, and all other amounts
owing in respect of, or pursuant to the terms of, this Debenture, are expressly
subordinated to the prior indefeasible payment in full in cash or cash
equivalents of all amounts owing to the Senior Creditors pursuant to the Senior
Obligations (as defined in the Subordination Agreement), to the extent and in
the manner set forth in the Subordination Agreement, and the Company, for
itself, its successors and assigns, and each Holder agrees to and accept such
other terms and conditions as are set forth in the Subordination Agreement.
8. JUDGMENT CURRENCY. (a) If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum owing hereunder in one currency into
another currency, the Company and, by its acceptance hereof, the Holder each
agrees, to the fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.
(b) The obligations of the Company in respect of any sum due to the Holder
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than U.S. Dollars, be discharged only to the extent that, on the Business
Day following receipt by the Holder any sum adjudged to be so due in the
Judgment Currency, the Holder may in accordance with normal banking procedures
in the official currency market in the relevant jurisdiction purchase U.S.
Dollars with the Judgment Currency; if the amount of U.S. Dollars so purchased
is less than the sum originally due to the Holder in U.S. Dollars, the Company
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Holder against such loss. The obligations of the Company contained
in this Section 8 shall survive the cancellation of this Debenture and the
payment of all amounts owing hereunder.
9. MISCELLANEOUS.
9.1 Notices, etc. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be delivered
personally, telegraphed, sent by telecopier (provided that any telecopied
transmission is promptly followed by a mailed or courier copy) or sent by
certified, registered mail, or recognized express courier (postage prepaid), to
the parties at the addresses set forth below (or to such other addresses as the
parties may specify by due notice to the others). Notices or other
communications shall be deemed given only when actually received.
(a) If to the Company, to:
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
3rd Floor
Colonia Lomas de Chapultepec
B - 14
Deleg. Xxxxxx Xxxxxxx, X.X.
00000, Xxxxxx, D.F.
Facsimile No.: 011 525 104 41 57
Attention: Xxxxxx X. Xxxxxxxxx, Vice President - Finance and
Audit and Chief Financial Officer
with copies to:
Grupo Iusacell, S.A. de X.X.
Xxxxxx Urales 460
2nd Floor
Colonia Lomas de Chapultepec
Deleg. Xxxxxx Xxxxxxx, X.X.
00000, Xxxxxx, D.F.
Facsimile: 011 525 104 4172
Attention: Xxxxx Xxxxxxxxxx, Vice President - Mergers and
Acquisitions and General Counsel
and
Xx Xxxxxx x Xxxxxxxx xxx Xxxxx, X.X.
Bosque de Alisos 47B
Suite 101
Col. Bosque de las Xxxxx
X.X. 00000 Xxxxxx, D.F.
Facsimile No.: 000-000-000-0000
Attention: Lic. Xxxxxx Xxxxxxxx del Xxxxx
(b) If to BAII, to:
Xxxx Atlantic International, Inc.
0000 Xxxxx Xxxxx Xxxxx Xxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: President and Chief Executive Officer
with copies to:
Xxxx Atlantic Corporation
0000 Xxxx Xxxxxx - 00X
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
and
Xxxx Atlantic International, Inc.
0000 Xxxx Xxxxxx - 00X
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx, Vice President
B - 15
(c) If to another Holder, to its address set forth in the
Company's Register (as defined below).
or to such other address or addresses as the party to whom such notice is
directed may have designated in writing to the other parties hereto.
9.2 Amendments and Waivers. Except as otherwise provided herein or
in the Subordination Agreement, no amendment, modification, termination or
waiver of any provision of this Debenture, or consent to any departure by the
Company therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Holder and the Company. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given and shall not be construed as a bar
to any right or remedy which the Holder hereof would otherwise have on any other
occasion. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
9.3 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or, partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Debenture are cumulative to, and not
exclusive of, any rights or remedies provided by law or otherwise available.
9.4 Severability. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Debenture shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Debenture or such provision or obligation
in any other jurisdiction. The parties agree to negotiate in good faith to
replace any such invalid, illegal or unenforceable provision with a new valid,
legal and enforceable provision the economic effect of which comes as close as
possible to that of such invalid, illegal or unenforceable provision.
9.5 Headings. Sections and headings in this Debenture are included
herein for convenience of reference only and shall not constitute a part of this
Debenture for any other purpose or be given any substantive effect.
9.6 APPLICABLE LAW. THIS DEBENTURE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
9.7 Successors and Assigns; Subsequent Holders. This Debenture shall
be binding upon and inure to the benefit of the
B - 16
Company and BAII and their respective successors and permitted assigns except
that the Company may not assign its rights or obligations hereunder (or any
portion hereof or thereof) without the prior written consent of Holder. Any
attempted assignment or transfer by the Company without such consent shall be
null and void. Nothing in this Debenture, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby), any legal or equitable
right, remedy or claim under or by reason of this Debenture.
9.8 Replacement Debentures. If this Debenture shall become
mutilated, destroyed, lost or stolen, the Company shall, upon the written
request of the Holder of this Debenture, execute and deliver in replacement
hereof a new Debenture in the same form, in the same original principal amount
and dated the same date as the Debenture so mutilated, destroyed, lost or
stolen.
9.9 Transfer and Exchange of Debenture; Persons Deemed Owners. (a)
This Debenture will be transferable only to Affiliates of BAII and to any Person
to whom BAII or an Affiliate thereof transfers ownership of 20% or more of the
economic interest in the Company, provided that such Person expressly agrees in
writing to assume the obligations of BAII and Holder under the Agreement, this
Debenture and the Subordination Agreement (such Affiliate and other Persons
being referred to herein as "Eligible Transferees").
(b) The Company shall keep at its principal office a register (the
"Register") in which it shall provide for the registration of this Debenture and
for the registration of transfer of this Debenture to an Eligible Transferee.
Upon due presentation at such office for registration of transfer of this
Debenture to an Eligible Transferee, the Company will execute, register and
deliver in exchange therefor a Debenture at such office for the same aggregate
unpaid principal amount as the Debenture or Debentures so presented for
registration of transfer, dated the date from which unpaid interest has then
accrued thereon and registered in the name or names of the transferee or
transferees. Each Debenture presented or surrendered for registration or notice
of transfer or exchange shall (if so requested by the Company) be duly endorsed
by, or accompanied by a written instrument or instrument of transfer in form
reasonably satisfactory to the Company duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing. All transfers of Debentures
shall be made in compliance with the applicable provisions of the Act. All
exchanges, transfers and registrations of transfer of Debentures shall be at the
expense of the Company (other than stamp and transfer taxes, and attorneys' fees
and expenses of the transferor, if any).
(c) Prior to due presentment for registration of transfer of any
Debenture, the Company may treat the Holder thereof as the absolute owner
thereof for the purpose of receiving payment
B - 17
of principal of and interest on such Debenture and for all other purposes
whatsoever, whether or not such Debenture shall be overdue, and the Company
shall not be affected by notice to the contrary.
9.10 Expenses. Each party hereby agrees to pay all expenses,
including fees and disbursements of counsel, incurred by the other party in
connection with the settlement of any dispute arising out of or relating to this
Debenture to the extent that the dispute is judicially determined in favor of
the other party. The Company also agrees to pay, and save Holder harmless
against liability for the payment of, (a) reasonable fees and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred with respect to any amendments or waivers requested by the Company
(whether or not the same become effective) under or in respect of this Debenture
and the Agreement and the transactions contemplated hereby and thereby, (b)
stamp and other transfer taxes which may be payable in respect of the execution
and delivery of this Debenture and the Agreement or the issuance of securities
to the Holder upon conversion of this Debenture and (c) any costs of collection
and enforcement (including reasonable attorneys' fees and disbursements) under
this Debenture after the occurrence and during the continuance of an Event of
Default.
9.11 Right of Setoff. If an Event of Default shall have occurred and
be continuing, the Holder and each of its Affiliates 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 obligations at any time owing by the Holder and such
Affiliates to or for the credit or the account of the Company or any of its
subsidiaries against any of and all the obligations of the Company now or
hereafter existing under this Agreement held by the Holder, irrespective of
whether or not the Holder shall have made any demand under this Debenture and
although such obligations may be unmatured. The rights of each Holder under this
Section are in addition to other rights and remedies (including other rights of
setoff) which the Holder may have.
9.12 Jurisdiction. Each of the Company and, by its acceptance
hereof, the Holder hereby irrevocably and unconditionally submits to the
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, and to the courts of its own
corporate domicile in respect of actions brought against it as a defendant in
any action or proceeding arising out of or relating to this Debenture, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such court. Each of the
Company and, by its acceptance hereof, the Holder agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
B - 18
9.13 Venue. The Company hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Debenture in any court
referred to in Section 9.12 above. Each of the Company and, by its acceptance
hereof, the Holder hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
9.14 Service of Process. The Company hereby irrevocably designates,
appoints and empowers CT Corporation having its address at the date hereof at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. as its process agent to receive
for and on its behalf service of process in New York in any legal action or
proceeding with respect to this Debenture. It is understood that a copy of any
such process served on such process agent shall be promptly forwarded by air
mail by the Person commencing such proceeding to the Company at its address
specified in Section 9.01 above, but the failure of the Company to receive such
copy shall not affect in any way the service of such process as aforesaid. This
means of service of process shall be in addition to service of process in any
other manner permitted by law.
9.15 Waiver of Jury Trial. EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE HOLDER HEREOF 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
DEBENTURE (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH OF THE
COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREOF (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.
9.16 Waiver of Sovereign Immunity. The Company acknowledges and
agrees that the activities contemplated by the provisions of this Debenture are
commercial in nature rather than governmental or public, and therefore
acknowledges and agrees that it is not entitled to any right of immunity on the
grounds of sovereignty or otherwise with respect to such activities or in any
legal action or proceeding arising out of or relating to this Debenture in
respect of itself and its properties and revenues, expressly and irrevocably
waives any such right of immunity which may now or hereafter exist (including
any immunity from any legal process, from the jurisdiction of any court or from
any attachment prior to judgment, attachment in aid or execution, or otherwise)
or claim thereto which may now or hereafter exist, and agrees not to assert any
such right or claim in any such action or proceeding, whether in the United
States of America or otherwise.
B - 19
9.17 Use of English Language. This Debenture has been negotiated and
executed in the English language. All certificates, reports, notices and other
documents and communications given or delivered pursuant to this Debenture
(including any modifications or supplements hereto) shall be in the English
language, or accompanied by a certificated English translation thereof. Except
in the case of laws or official communications of Mexico, 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 Debenture, and
absent manifest error, control the meaning of the matters set forth therein.
9.18 Defined Terms. As used herein the following terms shall have
the following meanings:
(a) "Act" shall have the meaning given in the first legend paragraph
on the first page of this Debenture.
(b) "Affiliate" means as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person except that the Company and its subsidiaries shall be
deemed not to be Affiliates of Holder for purposes of this definition. As used
in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
(c) "Business Day" means any day (i) other than a Saturday, Sunday
or other day on which commercial banks in New York City or Mexico are authorized
or required to close under the laws of the State of New York or Mexico, and (ii)
on which dealings in U.S. Dollar deposits are carried out in the London
interbank market.
(d) "Capital Expenditures" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company and
its consolidated subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Company for such period prepared in accordance
with Mexican GAAP.
(e) "Concession" means the Company's right to provide cellular
service pursuant to concessions and authorizations granted by the Mexican
Ministry of Communications and Transportation (Secretaria de Comunicaciones y
Transportes) (a) in any of the following Mexican cellular regions: (i) in Region
5 through Comunicaciones Celulares de Occidente, S.A. de C.V., (ii) in Region 6
through Sistemas Telefonicos Portatiles Celulares, S.A. de C.V., (iii) in Region
7 through Telecomunicaciones del Golfo, S.A. de C.V. and (iv) in Region 9
through S.O.S. Telecomunicaciones, S.A. de C.V., or (b) in any other cellular
region in which the
B - 20
Company or of its subsidiaries shall obtain the right to provide cellular
service.
(f) "GAAP" means generally accepted accounting principles in the
United States of America.
(g) "Governmental Authority" means any sovereign government or any
political subdivision thereof, whether state, local or foreign, any legislative
or judicial body, and any agency, authority, instrumentality, regulatory body,
court, central bank, including, without limitation, the Central Bank of Mexico
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
(h) "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 evidences by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (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 incurred in the ordinary course of business), (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 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;
provided, however, "Indebtedness" shall not include any of the foregoing owed
(i) by the Company to any of its subsidiaries, (ii) by any of the Company's
subsidiaries to the Company or (iii) by any of the Company's subsidiaries to
another of its subsidiaries.
(i) "Interest Period" means initially, the period commencing on the
date of this Debenture and ending on the first Interest Payment Date thereafter,
and subsequently, each successive six-month period beginning on an Interest
Payment Date and ending on the next Interest Payment Date thereafter.
B - 21
(j) "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.
(k) "LIBOR" means, with respect to any Interest Period, the rate of
interest determined on the basis of the rate for deposits in U.S. Dollars for a
period equal to such Interest Period, commencing on the first day of such
Interest Period, appearing on Page 3750 of the Telerate Service as of 11:00
a.m., London time, five Business Days prior to the beginning of such Interest
Period ("Page 3750"); provided, however, that if the initial Interest Period is
not a period for which a rate appears on Page 3750, then "LIBOR" with respect to
such initial Interest Period shall mean the weighted average of the rates of the
immediately shorter and immediately longer interest periods that appear on Page
3750. In the event that a rate for an Interest Period (or with respect to the
initial Interest Period, rates for the immediately shorter and longer periods)
does not appear on Page 3750 of the Telerate Service (or otherwise on such
Service), "LIBOR" shall mean the rate per annum (rounded upwards, if necessary,
to the nearest 1/16 of 1%) (the "Alternate Rate") quoted by the Senior Agent or
its successor at or about 11:00 a.m., London time (or as soon thereafter as is
practicable), four Business Days prior to the beginning of such Interest Period
for the offering by the Senior Agent to leading banks in the London interbank
market of deposits in U.S. Dollars for delivery on the first day of such
Interest Period, for a period equal to such Interest Period, and in an amount
comparable to the outstanding principal amount of this Debenture; provided,
however, that if the initial Interest Period is not a period for which an
Alternate Rate is quoted, then the LIBOR Rate shall be the weighted average of
the rates of the immediately shorter and immediately longer interest periods for
which an Alternate Rate is quoted.
(l) "Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations or condition, financial or otherwise, of the
Company and its subsidiaries, taken as a whole, (b) the ability of the Company
to perform any of its obligations under the Agreement or any Debenture to
perform any of its obligations under the Agreement or any Debenture or (c) the
rights of or benefits available to BAII or any other Holder under the Agreement
or any Debenture.
(m) "Material Terms and Conditions" means, with respect to any
Concession, the terms and conditions of such Concession the violation of which,
or non-compliance with which, could cause the Company or any of its subsidiaries
to (a) lose such Concession, (b) lose any material rights relating to such
Concession, (c) incur
B - 22
materially increased costs to provide the service under such Concession or (d)
suffer a material restriction of any right to provide service under such
Concession.
(n) "Mexican GAAP" means generally accepted accounting principles in
Mexico.
(o) "Mexico" means the United Mexican States.
(p) "Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
(q) "Senior Agent" means The Chase Manhattan Bank, as administrative
agent for the Senior Banks.
(r) "Senior Banks" means the lenders from time to time parties to
the Senior Credit Agreement.
(s) "Senior Credit Agreement" means the Credit Agreement, dated as
of July 25, 1997, among the Company, the Senior Banks and the Senior Agent, as
amended, supplemented, restated or otherwise modified from time to time.
(t) "Senior Note Indenture" means the Indenture, dated of July 25,
1997 between the Company and the Senior Note Trustee, as amended, supplemented,
restated or otherwise modified from time to time.
(u) "Senior Note Trustee" means First Union National Bank, as
Trustee for the holders of the Senior Notes.
(v) "Senior Notes" means the 10% Senior Notes due 2004 of the
Company in the aggregate original principal amount of U.S.$150,000,000 issued
pursuant to the Senior Note Indenture.
(w) "Series A Shares" means ordinary, nominative Series A Shares of
the Company, without par value, that are authorized by the estatutos sociales of
the Company.
(x) "Series D Shares" means ordinary, nominative Series D Shares of
the Company, without par value, that are authorized by the estatutos sociales of
the Company.
(y) "Series L Shares" means ordinary, nominative Series L Shares of
the Company, without par value, that are authorized by the estatutos sociales of
the Company.
(z) "Significant Subsidiary" shall have the meaning set forth in
Rule 405 under the Act.
(aa) "Subordination Agreement" means the Subordination Agreement,
dated as of July 25, 1997, among BAII, the Senior Agent
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and the Senior Note Trustee, as amended, supplemented, restated or otherwise
modified from time to time.
(bb) "Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
[balance of page intentionally left blank]
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IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed as of the date set forth below.
Dated: [_________ __, 19__]
GRUPO IUSACELL, S.A. DE C.V.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Attest:
By: ___________________
Name:
Title:
B - 25
EXHIBIT C TO DEBENTURE PURCHASE AGREEMENT
July 25, 0000
Xxxx Xxxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxx of America
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5(a)(ii)(C) of the
Debenture Purchase Agreement dated July 25, 1997 (the "Agreement") by and
between Xxxx Atlantic International, Inc. ("BAII") and Grupo Iusacell, S.A. de
C.V. (the "Company").
Terms used herein and not otherwise defined herein shall have the meanings set
forth in the Agreement.
We have acted as special Mexican counsel to the Company in connection with the
preparation, authorization, execution and delivery of the Agreement and the
Debentures.
In such capacity, we have examined originals or copies of the Agreement, the
Debentures and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives as we have deemed relevant and necessary as
a basis for the opinions hereinafter set forth.
In connection with facts material to this opinion that we did not independently
establish or verify we have relied upon certificates of public officials, and
upon statements and certifications of officers and other representatives of the
Company.
Based on the above, subject to the qualifications set forth herein, we are of
the opinion that:
(1) The Company has the full corporate power and authority to execute and
deliver the Agreement and to issue the Debentures and to perform all of
its obligations under the Agreement and under the Debentures. The
execution, delivery and performance of the terms of the Agreement and the
Debentures by the Company have been duly authorized by all necessary
corporate and stockholder action.
C - 1
(2) The execution and delivery by the Company of the Agreement, the issuance
of the Debentures and performance of the Company's obligations under the
Agreement and the Debentures do not require any consent, approval,
authorization or order of, notice to, or declaration, filing or
registration with, any Governmental Authority or stock exchange, except
those that have been obtained and are in full force and effect, and except
further for such notices as may be required to be filed with the Mexican
Comision Federal de Competencia and the Mexican Registro Nacional de
Inversiones Extranjeras upon conversion of the Debentures into Series A
Shares.
(3) Neither the execution and delivery of the Agreement or the Debentures, nor
the fulfillment of the terms set forth in the Agreement or the Debentures
and the consummation of the transactions contemplated by the Agreement or
the Debentures, will- (A)(i) conflict with or constitute a breach of, or
constitute a default under or an event which, with or without notice or
lapse of time or both, would be a breach of or default under or violation
of the Estatutos Sociales or other organizational documents of the Company
or (ii) would be a breach of or default under or violation of any
agreement, document, indenture, permit, mortgage or other instrument or
undertaking by which the Company is bound or to which any of its
properties are subject of which we are aware, or (iii) would be a
violation of any law or of any administrative regulation, or (iv) would be
a violation of any judgment, order or decree applicable to the Company of
which we are aware; or (B) result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries.
(4) The Agreement constitutes, and the Debentures, when executed and delivered
for value by the Company will constitute, a legal, valid and binding
obligation of the Company enforceable in accordance with their respective
terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
(5) The Company and each of its subsidiaries is duly organized and validly
existing under the laws of the jurisdiction of its organization, and to
our knowledge has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary to
own its assets and to carry on its business as now conducted.
(6) All of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and nonassessable.
(7) The Company's agreement to the choice of law provisions set forth in
Section 13 of the Agreement and Section 9.6 of the Debentures will be
recognized by Mexican courts; the Company
C - 2
can xxx and be sued in its own name; the Company has validly appointed CT
Corporation System as its authorized agent for the purpose described in
Section 21 of the Agreement and Section 9.14 of the Debentures; the
irrevocable submission by the Company to the jurisdiction of the Supreme
Court of the! State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, the waiver by the Company of any
objection to the venue of a proceeding in any such courts and the
agreement of the Company that the Agreement and the Debentures shall be
governed by and construed in accordance with the laws of the State of New
York are legal, valid and binding; service of process effected in the
manner set forth in the Agreement and the Debentures, assuming its
validity under New York law, will be effective, insofar as Mexican law is
concerned, to confer valid personal jurisdiction over the Company; and
judgment obtained in any such New York Court arising out of or in relation
to the obligations of the Company under the Agreement or the Debentures
will be recognized in Mexico.
(8) The Company has reserved out of its authorized but unissued stock, free
from preemptive rights and solely for issuance and delivery upon the
conversion of the Debentures, such number of its duly authorized Series A
Shares or other securities as from time to time shall be issuable upon the
conversion of the Debentures. No further corporate action shall be
required for the valid issuance of such securities upon the conversion of
the Debentures. The Series A Shares or other securities as from time to
time shall be issuable upon the conversion of the Debentures are not, and
shall continue not to be, subject to preemptive or similar rights of any
Person, and when issued upon conversion of the Debentures in accordance
with the terms of the Agreement and the Debentures, shall be duly and
validly issued, full) paid and nonassessable.
(9) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority of which we are aware pending against or affecting
the Company that involve the Agreement or any Debenture.
The above opinions are subject to the following qualifications:
1. In our examination of the documents referred to above, we have assumed the
authenticity of all such documents, the genuineness of all signatures and the
due execution and delivery thereof by all parties involved, and the conformity
to their respective originals of copies submitted to us.
2. In the event of proceedings against the Company in a Mexican court, in
connection with any document that is not executed in Spanish which is sought to
be enforced, a Spanish translation thereof prepared by a court-appointed
translator would have to be approved by such court after the defendant had been
given an
C - 3
opportunity for a hearing as to the accuracy of such translation, and
proceedings would thereafter be based on such translation.
3. Enforcement of foreign judgments by a Mexican court will be subject to the
determination by such Mexican court that (i) such judgment is strictly for the
payment of a certain sum of money and has not resulted from an action in rem;
(ii) the court rendering such judgment was a competent court therefor in
accordance with recognized rules of international law and which are compatible
with Mexican procedural laws; (iii) service of process was made personally on
the Company or on the process agent appointed by the Company; (iv) such judgment
is final and may not be appealed through ordinary proceedings in its country of
origin; (v) the action that gave rise to such judgment is not the matter of
proceedings in Mexico between the same parties; (vi) such judgment does not
contravene Mexican public policy or law or international treaties binding upon
Mexico (and we have no reason to believe that such enforcement of the Agreement
would violate Mexican law or public policy); (vii) the applicable procedures
under Mexican law with respect to the enforcement of foreign judgments,
including, the issuance of a letter rogatory, are complied with; (viii) the
courts of such jurisdiction recognize the principles of reciprocity in
connection with the enforcement of Mexican judgments in such jurisdiction; and
(ix) such judgment satisfies the conditions required to be considered as
authentic.
4. It should be noted that service of process on the Company or its process
agent by mail does not constitute personal service for purposes of enforcing a
foreign judgment in Mexico.
5. Covenants of the Company which purport to bind the Company on matters
reserved by law to shareholders, or which purport to bind shareholders to vote
or refrain from voting their shares in the Company, are not specifically
enforceable under Mexican Law.
6. Certain terms of the Agreement and the Debentures, inasmuch as they vary from
the original terms approved by the shareholders of the Company, will require
shareholder approval.
7. Pursuant to Article 8 of the Monetary Law (Ley Monetaria) of Mexico, if
collection of amounts payable by the Company in foreign currency outside Mexico
under the Agreement is sought in Mexico, Mexican courts might render a judgment
in Mexican currency or, if such judgment is rendered in foreign currency but is
payable in Mexico, such judgment may be discharged in Pesos, at the rate of
exchange in effect at the date and place where payment is made, as determined by
the Central Bank of Mexico (Banco de Mexico). Therefore, we express no opinion
with respect to Section 8 of the Debentures.
8. In any bankruptcy or liquidation proceeding initiated in Mexico pursuant to
the laws of Mexico, labor claims, claims of tax authorities for unpaid taxes and
claims of secured creditors or
C - 4
creditors with a special privilege under law will have priority over claims of
unsecured creditors.
9. Following any conversion of the Debentures, the Board of Directors of the
Company has been authorized and instructed to amend the Company's Estatutos
Sociales to reflect the corresponding increase in capital and number of Series A
Shares resulting from any such conversion, and to take customary action to
formalize and register any such amendment. Such amendment would normally be
accomplished through a resolution adopted at a meeting of the Company's Board.
Under the Estatutos Sociales of the Company, a Board meeting may be validly held
when a majority of the Board members are present, but including at least one of
the members appointed by the holders of Series A Shares and one member appointed
by the holders of series B shares of the Company. The resolutions adopted by
such a meeting would be valid when adopted by the favorable vote of a majority
of the directors present thereat, but including at least one of the members
appointed by the holders of the Series A Shares and one member appointed by the
holders of the series B shares of the Company.
10. We do not purport to be experts on and do not purport to be generally
familiar with or qualified to express legal opinions based on any law other than
the laws of Mexico and accordingly express no legal opinion herein based upon or
related to any law other than the laws of Mexico.
This opinion is furnished solely for your benefit in connection with the
transactions described above. This opinion is not to be used, circulated, quoted
or otherwise referred to for any other purpose without our prior written consent
in each instance.
Very truly yours,
Xx Xxxxxx x Xxxxxxxx xxx Xxxxx, X.X.
By: Xxxxxx Xxxxxxxx del Campo L.
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