EXHIBIT 10.1
CREDIT AGREEMENT
among
TELEREUNION S.A. de C.V.,
TELEREUNION INTERNATIONAL, S.A. de C.V.,
TELSCAPE INTERNATIONAL, INC.,
and
THE OTHER BORROWERS PARTY HERETO
and
THE ADDITIONAL BORROWERS FROM
TIME TO TIME A PARTY HERETO
collectively, as Borrowers
and
THE LENDERS PARTY HERETO,
and
LUCENT TECHNOLOGIES INC.,
as Administrative Agent
Dated as of August 27, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I INTERPRETATION OF THIS AGREEMENT; DEFINITIONS ............... 1
Section 1.1 Defined Terms ...................................... 1
Section 1.2 Time Periods ....................................... 20
Section 1.3 Accounting Terms and Determinations ................ 21
Section 1.4 Construction ....................................... 21
Section 1.5 Schedules and Exhibits ............................. 21
Section 1.6 UCC Terms .......................................... 21
Section 1.7 Administrative Agent's Discretion .................. 21
ARTICLE II LOANS ...................................................... 21
Section 2.1 Agreement to Lend .................................. 21
Section 2.2 Procedure for Borrowing ............................ 22
Section 2.3 Commitment and Other Fees .......................... 23
Section 2.4 Termination or Reduction of Commitments ............ 23
Section 2.5 The Notes .......................................... 23
Section 2.6 Proceeds ........................................... 25
Section 2.7 Amortization of Loans .............................. 25
Section 2.8 Optional and Mandatory Prepayments ................. 25
Section 2.9 Interest Rates and Payment Dates ................... 27
Section 2.10 Computation of Interest and Fees ................... 27
Section 2.11 Inability to Determine Interest Rate ............... 28
Section 2.12 Pro Rata Treatment and Payments .................... 28
Section 2.13 Illegality ......................................... 29
Section 2.14 Requirements of Law ................................ 30
Section 2.15 Taxes .............................................. 31
Section 2.16 Indemnity .......................................... 34
Section 2.17 Change of Lending Office; Filing
of Certificates or Documents .................... 35
Section 2.18 Replacement Lenders ............................... 35
ARTICLE III REPRENTATIONS AND WARRANTIES .............................. 35
Section 3.1 Financial Condition ................................ 35
Section 3.2 No Change .......................................... 36
Section 3.3 Existence; Compliance with Law
and Agreements ................................... 36
Section 3.4 Power; Authorization; Enforceable
Obligations ...................................... 36
Section 3.5 No Legal Bar ....................................... 36
Section 3.6 No Litigation ...................................... 37
Section 3.7 No Default ......................................... 37
Section 3.8 Ownership of Property; Liens ....................... 37
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Section 3.9 Intellectual Property .............................. 37
Section 3.10 No Burdensome Restrictions ......................... 37
Section 3.11 Taxes ............................................. 37
Section 3.12 Federal Regulations ............................... 37
Section 3.13 Availability and Transfer of
Foreign Currency ................................ 38
Section 3.14 Investment Company Act; Other
Regulations ..................................... 38
Section 3.15 Purpose of Loans .................................. 38
Section 3.16 Environmental Matters ............................. 38
Section 3.17 Mexican Security Documents ........................ 39
Section 3.18 True and Complete Disclosure ...................... 39
Section 3.19 Submission to Law and Jurisdiction ................ 39
Section 3.20 Supply Contract ................................... 39
Section 3.21 Permits and Approvals ............................. 39
Section 3.22 U.S. Security Documents ........................... 40
Section 3.23 ERISA ............................................. 40
Section 3.24 Solvency .......................................... 40
Section 3.25 Subsidiaries ...................................... 41
Section 3.26 Year 2000 Compliance .............................. 41
Section 3.27 Insurance ......................................... 41
Section 3.28 Accounts .......................................... 41
Section 3.29 Servicio Corporativos ............................. 41
ARTICLE IV CONDITIONS PRECEDENT ....................................... 41
Section 4.1 Conditions to Initial Loans ........................ 41
Section 4.2 Condition to Each Loan ............................. 46
Section 4.3 Subsequent Loans ................................... 47
(a) Extension of Concession ............................... 47
(b) Political Risk Insurance .............................. 47
(c) Third Party Consents .................................. 47
ARTICLE V AFFIRMATIVE COVENANTS ....................................... 48
Section 5.1 Financial Statements ............................... 48
Section 5.2 Certificates; Other Information .................... 48
Section 5.3 Payment of Obligations ............................. 49
Section 5.4 Conduct of Business; Maintenance of
Existence; Compliance with Laws .................. 49
Section 5.5 Maintenance of Property; Insurance ................. 50
Section 5.6 Inspection of Property; Books and Records;
Discussions ...................................... 50
Section 5.7 Notices ............................................ 50
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Section 5.8 Environmental Laws ................................. 51
Section 5.9 Maintenance of Liens of the Security
Documents ........................................ 51
Section 5.10 Pledge of After Acquired Property; Additional
Borrowers ........................................ 52
Section 5.11 Maintenance of Permits and Approvals .............. 53
Section 5.12 Supply Contract ................................... 53
Section 5.13 Use of Proceeds ................................... 53
Section 5.14 Political Risk Insurance .......................... 54
Section 5.15 Cash Trust Agreements ............................. 54
ARTICLE VI NEGATIVE COVENANTS ......................................... 54
Section 6.1 Limitation on Liens ................................ 54
Section 6.2 Limitation on Fundamental Changes .................. 56
Section 6.3 Limitation on Investments, Loans and Advances ...... 56
Section 6.4 Limitation on Optional Payments and
Modifications of Debt Instruments and other
Obligations ........................................ 56
Section 6.5 Limitation on Transactions with Affiliates ......... 57
Section 6.6 Limitation of Restricted Payments .................. 57
Section 6.7 Limitation on Changes in Fiscal Year ............... 57
Section 6.8 Limitation on Issuance of Capital Stock ............ 58
Section 6.9 Conduct of Business ................................ 58
Section 6.10 Amendment of Material Contracts ................... 58
Section 6.11 Equity Documents .................................. 58
Section 6.12 Additional Bank Accounts .......................... 58
ARTICLE VII FINANCIAL CONDITION COVENANTS ............................. 58
Section 7.1 Ratio of Consolidated Total Debt
to Total Capitalization .......................... 58
Section 7.2 Ratio of Consolidated Total Debt to
Consolidated EBITDA .............................. 58
Section 7.3 Capital Expenditures ............................... 59
Section 7.4 1999 Consolidated EBITDA ........................... 59
Section 7.5 Ratio of Consolidated EBITDA to
Consolidated Debt Service Obligations ............ 59
ARTICLE VIII SUBORDINATION; WAIVER .................................... 59
Section 8.1 Subordination ...................................... 59
Section 8.2 Turnover of Improper Payments ...................... 60
Section 8.3 Obligations Absolute; Waivers ...................... 60
Section 8.4 Subrogation ........................................ 62
Section 8.5 Limitation on Actions .............................. 63
Section 8.6 Proceedings ........................................ 63
Section 8.7 Termination ........................................ 65
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Section 8.8 Understanding of Waivers ........................... 65
Section 8.9 Unlimited Liability ................................ 65
ARTICLE IX EVENTS OF DEFAULT .......................................... 65
ARTICLE X THE ADMINISTRATIVE AGENT .................................... 68
Section 10.1 Appointment ....................................... 68
Section 10.2 Delegation of Duties .............................. 68
Section 10.3 Exculpation Provisions ............................ 68
Section 10.4 Reliance by Administrative Agent .................. 69
Section 10.5 Notice of Default ................................. 69
Section 10.6 Non-Reliance on Administrative
Agent and Other Lenders ......................... 69
Section 10.7 Indemnification ................................... 70
Section 10.8 Administrative Agent in Its
Individual Capacity ............................. 70
Section 10.9 Successor Administrative Agent .................... 71
ARTICLE XI MISCELLANEOUS .............................................. 71
Section 11.1 Amendments and Waivers ............................ 71
Section 11.2 Notices ........................................... 72
Section 11.3 No Waiver; Cumulative Remedies .................... 72
Section 11.4 Survival .......................................... 72
Section 11.5 Payment, Expenses and Taxes ....................... 72
Section 11.6 Successors and Assigns;
Participations and Assignments .................. 73
Section 11.7 Adjustments; Set-off .............................. 76
Section 11.8 Counterparts ...................................... 76
Section 11.9 Severability ...................................... 76
Section 11.10 Integration ...................................... 77
Section 11.11 Governing Law .................................... 77
Section 11.12 Submission to Jurisdiction; Waivers .............. 77
Section 11.13 Acknowledgements ................................. 78
Section 11.14 Waivers of Jury Trial ............................ 78
Section 11.15 Confidentiality .................................. 78
Section 11.16 Judgment Currency ................................ 79
Section 11.17 Use of English Language .......................... 79
Section 11.18 Headings ......................................... 79
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CREDIT AGREEMENT, dated as of August 27, 1999, among TELEREUNION
S.A. de C.V., a Mexican corporation ("Telereunion"), TELEREUNION INTERNATIONAL,
S.A. de C.V., a Mexican corporation ("Telereunion International"), TELSCAPE
INTERNATIONAL, INC., a Texas corporation ("Holdings") and the other Borrowers
listed on Schedule 1.0 hereto and the Additional Borrowers from time to time
party hereto (jointly and severally with Telereunion, Telereunion International
and Holdings, the "Borrowers and each a "Borrower"), the several lending
institutions that from time to time are party to this Agreement (collectively
the "Lenders" and individually, a "Lender") and LUCENT TECHNOLOGIES INC., a
Delaware corporation, in its capacity as Administrative Agent (the
"Administrative Agent").
WITNESSETH:
WHEREAS, the Borrowers have requested that the Lenders enter into
certain financing arrangements with the Borrowers pursuant to which the Lenders
may make loans and provide other financial accommodations to the Borrowers;
WHEREAS, the Lenders are willing to make such loans and provide
such financial accommodations on the terms and conditions set forth herein;
WHEREAS, the Administrative Agent is willing to administer such
loans on behalf of the Lenders and in accordance with the terms and conditions
set forth herein;
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
INTERPRETATION OF THIS AGREEMENT; DEFINITIONS
Section 1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, the greater of:
(a) the floating commercial loan rate announced from time to time by
Bank of America, N.A., as its prime rate, or equivalent, for United States
dollar loans made in the United States, in effect on such day, with any
change in the ABR resulting from a change in such announced rate to be
effective on the day of the relevant change, plus the relevant Applicable
Margin; and
(b) the sum of (i) the Federal Funds Effective Rate plus (ii) 1/2 of
1% (0.50%).
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.
"ACCESSION AGREEMENT": the Accession Agreement substantially in the
form of EXHIBIT N.
"ACCOUNT CONTROL AGREEMENT": the Account Control Agreement
substantially in the form of EXHIBIT T, with such changes therein as the
Administrative Agent shall approve.
"ACCOUNTANTS": BDO Xxxxxxx, LLP or any other internationally
recognized firm of independent certified public accountants selected by the
Borrowers and acceptable to the Administrative Agent in its reasonable
discretion.
"ADDITIONAL BORROWERS": each Borrower party to the Accession
Agreement.
"ADMINISTRATIVE AGENT": Lucent, together with its affiliates and
successors, as the Administrative Agent for the Lenders under this Agreement and
the other Loan Documents, and any successor thereto pursuant to Section 10.9.
"AFFILIATE": as to any Person, any other Person who directly or
indirectly Controls, is under common Control with, or is Controlled by such
Person; provided that, in any event: (a) any Person who owns directly or
indirectly ten percent (10%) or more of the securities having ordinary voting
power for the election of directors or other governing body of a corporation or
ten percent (10%) or more of the partnership or other ownership interests of any
other such Person (other than as a limited partner of such other Person) will be
deemed an Affiliate of such corporation or other Person; and (b) each director
and officer of a Loan Party shall be deemed to be an Affiliate of the other Loan
Parties.
"AFTER-ACQUIRED MORTGAGE PROPERTY": any parcel of (or adjoining
parcel) of real property (including any leaseholds) acquired by any Loan Party
after the Closing Date.
"AGENTS": the Administrative Agent and the Collateral Agents.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"APPLICABLE MARGIN": means for each period, as set forth below:
PERIOD APPLICABLE MARGIN
------ -----------------
Year 1 5.75%
Year 2 6.00%
Year 3 6.25%
Year 4 6.75%
Year 5 7.25%
"ASSIGNEE": as defined in Section 11.6(c).
"ASSIGNMENT AND ACCEPTANCE": an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.6(c)), and accepted by the Administrative Agent, in the
form of EXHIBIT F or any other form approved by the Administrative Agent.
"BANKRUPTCY CODE": the Ley de Quiebras y Suspension de Pagos and any
successor statute thereto with respect to Mexico and otherwise any insolvency,
reorganization, moratorium or similar law for the general relief of debtors in
any relevant jurisdiction and, in each case, the rules and regulations issued
thereunder, as in effect from time to time.
"BENEFITED LENDER": as defined in Section 11.7(a).
"BLOCKED ACCOUNT AGREEMENT": the Blocked Account Agreement
substantially in the form of EXHIBIT O, with such changes therein as the
Administrative Agent shall approve.
"BOARD OF GOVERNORS": the Board of Governors of the Federal Reserve
System and any Governmental Authority which succeeds to the powers and functions
thereof.
"BORROWERS": as defined in the Preamble to this Agreement.
"BORROWING DATE": shall mean with respect to any Loan, the date that
the amount of such Loan is made available to the applicable Borrowers pursuant
to Section 2.2.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or Mexico, D.F., Mexico are authorized
or required by law to close.
"CALIFORNIA CONSENT": the Consent substantially in the form of
EXHIBIT Q.
"CALIFORNIA LANDLORD'S WAIVER AGREEMENTS": the Landlord's Waiver
Agreement (Mountain View) and the Landlord's Waiver Agreement (Sunnyvale).
"CAPITAL EXPENDITURES": as to any Person for any period, the
aggregate amount incurred by such Person and its Subsidiaries for the rental,
lease, purchase (including by way of the acquisition of securities of a Person),
construction or use of any property during such period, the value or cost of
which, in accordance with GAAP, would appear on such Person's consolidated
balance sheet in the category of property, plant or equipment at the end of such
period, excluding: any such expenditure made to restore, replace or rebuild
property to the condition of such property immediately prior to any damage,
loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds or condemnation awards relating to
any such damage, loss, destruction or condemnation.
"CAPITAL STOCK": any and all shares, interests, participations,
social parts or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": (a) securities issued or directly and fully
guaranteed or insured by the United States Government, or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (b) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality or agency thereof maturing within one year from the
date of acquisition thereof and, at the time of acquisition thereof having a
credit rating of "A" or better from either Standard & Poor's Ratings Group or
Xxxxx'x Investors Service, Inc.; (c) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof of any
Lender, or of any U.S. domestic commercial bank the long-term debt of which is
rated at the time of acquisition thereof at least A or the equivalent thereof by
Standard & Poor's Ratings Group or A or the equivalent thereof by Xxxxx'x
Investors Service, Inc., and having capital and surplus in excess of
$500,000,000; (d) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (a), (b) and (c)
above entered into with any bank meeting the qualifications specified in
clause (c) above; (e) commercial paper rated at the time of acquisition thereof
at least A-2 or the equivalent thereof by Standard & Poor's Ratings Group or P-2
or the equivalent thereof by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of investments, and in either
case maturing within 270 days after the date of acquisition thereof; (f)
interests in any investment company which invests solely in instruments of the
type specified in clauses (a) through (e) above; and (g) other investment
installments approved in writing by the Required Lenders and offered by any
Lender or by any financial institution which has a combined capital and surplus
of not less than $500,000,000.
"CFE": Comision Federal de Electricidad, a Mexican federal
governmental agency.
"CFE CONSENT": evidence satisfactory to the Administrative Agent in
its reasonable discretion of the consent by CFE to the assignment of the rights
of way it grants to the Borrowers in connection with the operation of the
Network by the Borrowers, to the Administrative Agent or its designee and
further assignment of such rights of way upon an exercise of remedies by the
Lenders following the occurrence of an Event of Default.
"CHANGE IN CONTROL": (a) the acquisition by another Person of more
than five (5%) percent, with respect to any Borrower other than Interlink and
Holdings, of the Capital Stock of such Borrower or of the Capital Stock of such
Borrower having the ordinary voting power to elect the Board of Directors or the
governing body of such Borrower, (b) with respect to Interlink, the acquisition
by another Person of Capital Stock owned beneficially or of record by a Borrower
and, (c) with respect to Holdings, either (i) the acquisition by another Person
of forty (40%) percent of such Capital Stock or (ii) such lesser amount of such
Capital Stock by any Person which would result in a change of Control or upon
the occurrence of specified events would result in a change in Control and, in
any case, the entering into of contractual or other arrangements which would
have the effect of a change of Control in any Borrower, except as permitted
pursuant to Section 6.8.
"CLOSING DATE": the date on which the conditions precedent set forth
in Section 4.1 and 4.2 shall be satisfied or waived and the Initial Loans shall
be made.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COFETEL": Comision Federal de Telecomunicaciones, a Mexican federal
governmental agency.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COLLATERAL ASSIGNMENT OF LEASE": each Collateral Assignment of
Lease substantially in the form of EXHIBIT L.
"COLLATERAL AGENCY AGREEMENT": the Collateral Agency Agreement which
appoints the U.S. Collateral Agent and the Mexican Collateral Agent,
substantially in the form of EXHIBIT H.
"COLLATERAL AGENTS": collectively, the U.S. Collateral Agent and the
Mexican Collateral Agent.
"COMMITMENT": with respect to any Lender, that Lender's commitment
to make Loans to the Borrowers in an amount not to exceed the amount set forth
opposite such Lender's name on Schedule 1.1, as such
amount may be reduced from time to time pursuant to this Agreement; collectively
with all Lenders, "Commitments". The aggregate amount of the Lenders' Commitment
is $40,000,000.
"COMMITMENT PERCENTAGE": as to any Lender at any time, the
percentage which (a) the sum of (i) such Lender's then unused Commitment plus
(ii) the principal amount of such Lender's Loans then outstanding constitutes of
(b) the sum of (x) the aggregate unused Commitments of all Lenders plus (y) the
aggregate principal amount of all Loans of all Lenders then outstanding.
"COMMITMENT PERIOD": the period from the Closing Date to the
Commitment Termination Date or such earlier date on which the Commitments shall
terminate as provided herein.
"COMMITMENT TERMINATION DATE": the date which is the first
anniversary of the Closing Date.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common Control with each of the Borrowers within
the meaning of Section 4001 of ERISA or is part of a group which includes the
Borrowers and which is treated as a single employer under Section 414(b) or (c)
of the Code or, solely for purposes of determining liabilities under Section 412
of the Code, which is treated as a single employer under Section 4 14(b), (c),
(m) or (o) of the Code.
"CONCESSION": the concession to install, operate and exploit a
public telecommunications network in the Xxxxxxx Xxxxxxxx xxx xxx Xxxxxx xx
Xxxxxxxxxx, Xxxxxxx, Xxxxxx D.F., Nuevo Leon, Puebla, Tamaulipas and Veracruz,
granted to Telereunion by the Government of Mexico through the SCT, as evidenced
by that certain Concession Title (Titulo de Concesion), dated June 3, 1998
issued by the SCT.
"CONSENT AND AGREEMENT": each Consent and Agreement substantially in
the form of EXHIBIT S, with such changes as the Administrative Agent shall
approve.
"CONSOLIDATED DEBT SERVICE OBLIGATIONS": as of the last day of any
quarter of Holdings and its Subsidiaries, the sum of (a) Consolidated Interest
Expense for the next PRIOR four consecutive quarters of Holdings and its
Subsidiaries commencing immediately after such date, plus (b) scheduled
principal payments in respect of Indebtedness of Holdings and its Subsidiaries
for prior four consecutive quarters of Holdings commencing immediately after
such date.
"CONSOLIDATED EBITDA": for any period, the Consolidated Net Income
for such period, plus, to the extent deducted in determining such Consolidated
Net Income (without duplication), (a) Consolidated Interest Expense, (b) all
federal, state, local and foreign income and corporate withholding taxes, (c)
depreciation and amortization (including amortization of debt discount and
deferred financing costs), (d) other non-cash charges, and (e) any extraordinary
and unusual losses, and, minus, to the extent added in determining such
Consolidated Net Income, (i) any non-cash income or non-cash gains and (ii) any
extraordinary and unusual gains, all as determined, to the extent applicable, on
a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE": for any period, the net interest
expense of Holdings and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME": for any period, the net income of
Holdings and its Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED TOTAL DEBT": at any date of determination, the sum
(without duplication) of all Indebtedness of Holdings and its Subsidiaries at
such date of determination that would be included in the liabilities on a
consolidated balance sheet of Holdings and its Subsidiaries as at such date,
prepared in accordance with GAAP.
"CONSOLIDATED TOTAL EQUITY": as of any date, the sum of the
consolidated paid-in capital, and including irrevocable capital contributions,
any preferred stock and accumulated retained earnings of Holdings and its
Subsidiaries as of such date, all as determined in accordance with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument, or other
material undertaking to which such Person is a party or by which it or any of
its property is bound.
"CONTROL": the possession, directly or indirectly, of power to
direct (or cause the direction of) management or policies of another Person
(whether though ownership of securities or partnership or other ownership
interests, by contract or otherwise). "Controlled by" and "under common Control
with" have meanings correlative thereto.
"COOPERATION AND FEE LETTER": the letter agreement among the
Borrowers and Lucent dated the date hereof.
"CW": Xxxxxx, Xxxxxxx Strategic Partners Fund, L.P.
"DEFAULT": any of the events specified in Article IX, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition that would be necessary in order to constitute such event as an
Event of Default, has occurred or been satisfied.
"DOLLAR" or "$": the lawful currency of the United States of
America.
"DRAWDOWN CERTIFICATE": a request by the Borrowers for a Borrowing
and executed by the relevant Borrower(s) using the proceeds of such Borrowing
pursuant to Section 2.6, substantially in the form of EXHIBIT D.
"ENDORSEMENT": each Endorsement to the U.S. Collateral Agent of the
loss payable clause under any insurance policy substantially in the form of
EXHIBIT K.
"ENVIRONMENTAL LAWS": any and all Federal, state, local, municipal
or foreign laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having the force of law or
other Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning the protection of the
environment or the protection of human health as it relates to the protection of
the environment, as now or at any time hereafter in effect.
"ENVIRONMENTAL PERMITS": all permits, licenses, registrations,
notifications, exemptions, and other authorizations required by or from any
Governmental Authority under Environmental Laws.
"EQUIPMENT": as defined in the Supply Contract.
"EQUITY DOCUMENTS": the Investment Agreement among REI, CW, SA and
Holdings; the Statement of Resolution; the Consulting Agreement; the
Stockholders Agreement; and the Registration Rights Agreement among REI, CW, SA
and Holdings.
"EQUITY INVESTORS": REI, CW, SA and any other investor who acquires
Series C Preferred Stock created pursuant to the Statement of Resolution.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which
is based upon LIBOR.
"EVENT OF DEFAULT": any of the events specified in Article IX,
provided that all requirements for the giving of notice, the lapse of time, or
both, and any other conditions, have been satisfied.
"EXCESS CASH FLOW": for any period, the result (without duplication)
of:
(a) Consolidated EBITDA; minus
(b) Capital Expenditures for such period; minus
(c) the aggregate amount of all scheduled repayments and voluntary
and mandatory prepayments of Indebtedness of the Borrowers and their
subsidiaries for borrowed money (excluding (i) payments on revolving
credit facilities if such amounts remain available to be reborrowed, (ii)
mandatory prepayment of the Loans, and (iii) repayments and prepayments of
Indebtedness pursuant to refinancings); minus
(d) income tax payments accrued or paid for such period; minus
(e) equity investments in Telecommunications companies.
"EXTENSION OF CONCESSION": a letter from the Cofetel in form and
substance satisfactory to the Administrative Agent, in its sole discretion,
granting an extension to Telereunion of the June 3, 1999 deadline for
commencement of the exploitation of the Concession.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of nationally recognized standing selected by
it.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"FINANCING LEASE OBLIGATIONS": as to any Person, the obligations of
such Person to pay rent or other amounts under any Financing Lease; the amount
of such obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEE OBLIGATION": as to any Person (the "Guaranteeing
Person"), any obligation of (a) the Guaranteeing Person or (b) another Person
(including, without limitation, any bank under any letter of credit) pursuant to
which the Guaranteeing Person has issued a reimbursement, counter indemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, lease, dividend or other obligation (the "Primary Obligations") of
any other third Person (the "Primary Obligor") in any manner, whether directly
or indirectly, including, without limitation, any obligation of the Guaranteeing
Person, whether or not contingent, (i) to purchase any such Primary Obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of any such Primary
Obligation or (B) to maintain working capital or equity capital of the Primary
Obligor or otherwise to maintain the net worth or solvency of the Primary
Obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such Primary Obligation of the ability of
the Primary Obligor to make payment of such Primary Obligation or (iv) otherwise
to assure or hold harmless the owner of any such Primary Obligation against loss
in respect thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business or normal and customary indemnification pursuant to
any transaction heretofore or hereafter entered into by the Borrowers, or any of
the Borrowers' Subsidiaries in the ordinary course of business permitted
hereunder, or in connection with any purchase or sale of assets permitted
hereunder. The amount of any Guarantee Obligation of any Guaranteeing Person
shall be deemed to be the lower of (x) an amount equal to the stated or
determinable amount of the Primary Obligation in respect of which such Guarantee
Obligation is made and (y) the maximum amount for which such Guaranteeing Person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such Primary Obligation and the maximum amount for which such
Guaranteeing Person may be liable with respect thereto are not stated or
determinable, in which case the amount of such Guarantee Obligation shall be
such Guaranteeing Person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrowers in good faith.
"GUARANTEEING PERSON": as defined in the definition of "Guarantee
Obligation" contained in this Section 1.1.
"HAZARDOUS MATERIALS": any petroleum (including crude oil or any
fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos and asbestos-containing materials,
pollutants, contaminants, and all other materials and substances including but
not limited to radioactive materials regulated pursuant to any Environmental
Laws or the handling or disposal of which could result in liability under any
Environmental Law.
"HOLDINGS": as defined in the Preamble to this Agreement.
"INDEFEASIBLY PAID": means, with respect to the making of any
payment on any Obligation, a payment of such Obligation in full that is not
subject to avoidance under Section 547 of the U.S. Bankruptcy Code or any
similar law or equitable principle.
"INCREASED AMOUNTS": as defined in Section 2.15.
"INDEBTEDNESS": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business payable in accordance with customary practices
and not more than 90 days past due, unless being contested in good faith by
appropriate proceedings, and compensation, pension obligations and other
obligations arising from employee benefits and employee arrangements), (b) any
other indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument, (c) all Financing Lease Obligations of such Person in an
amount outstanding at any time not to exceed $2,750,000, (d) all obligations of
such Person under Interest Rate Protection Agreements, (e) all obligations of
such Person in respect of letters of credit (whether or not drawn), acceptances
and similar obligations issued or created for the account of such Person, (f)
all Guarantee Obligations of such Person and (g) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof (the amount of such
indebtedness with respect to such Person being deemed to be the lesser of the
fair market value of such property or the amount of indebtedness of others so
secured).
"INDEMNIFIED LIABILITIES": as defined in Section 11.5.
"INITIAL LOANS": the first Loan made under the Commitments pursuant
to the terms of this Agreement.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": as defined in Section 3.9.
"INTEREST PAYMENT DATE": (a) with respect to any ABR Loan, the last
day of each quarter and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to such Eurodollar Loan and, in the case of a
Eurodollar Loan with an Interest Period of more than three months' duration,
each day which is three months, or a whole multiple thereof, after the first day
of such Interest Period.
"INTEREST PERIOD": (a) with respect to an ABR Loan, the period
commencing with the incurrence of such ABR Loan (or conversion from an
Eurodollar Loan) and ending on the next succeeding Interest Payment Date and,
thereafter, from the last day of the immediately preceding Interest Period
applying to such ABR Loan and ending on the next succeeding Interest Payment
Date and, (b) with respect to an Eurodollar Loan, initially, the period
commencing on the Borrowing Date and ending on the numerically corresponding day
in the calendar month that is six (6) months after such Borrowing Date, and
thereafter, each period commencing on the last day of the immediately preceding
Interest Period and ending six (6) months thereafter, provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month
in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Maturity Date or beyond the date final payment is otherwise due on
the Loans shall end on the Maturity Date or such date final payment
is due;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) if an Interest Period shall be a period other than one of
equal length to that of the Interest Period which is concluding, the
Borrowers shall issue and deliver to the Administrative Agent a new
Note as required pursuant to the provisions of Section 2.5 and, if
such new Note or Notes is not provided to the Administrative Agent,
the Interest Period shall be deemed to be equal to six months.
"INTEREST RATE PROTECTION AGREEMENTS": as to any Person, all
interest rate swaps, caps or collar agreements or similar arrangements entered
into by such Person providing for protection against fluctuations in interest
rates or the exchange of nominal interest obligations, either generally or under
specific contingencies.
"INTERLINK": Interlink Communications, Inc., a Delaware corporation
and a U.S. Borrower.
"INVESTMENT": as defined in Section 6.3.
"LANDLORD CONSENT": each Landlord Consent substantially in the form
of EXHIBIT M or in such other form as is mutually acceptable to the
Administrative Agent and the Borrowers.
"LANDLORD'S WAIVER AGREEMENT (MOUNTAIN VIEW)": the Landlord's Waiver
Agreement substantially in the form of EXHIBIT P-1.
"LANDLORD'S WAIVER AGREEMENT (SUNNYVALE)": the Landlord's Waiver
Agreement substantially in the form of EXHIBIT P-2.
"LENDERS": as defined in the Preamble to the Agreement.
"LIBOR": with respect to any Interest Period pertaining to a
Eurodollar Loan, the rate PER ANNUM (expressed as a decimal) for deposits in
Dollars equal or approximately equal to the principal amount of such Eurodollar
Loan and for a period equal or comparable to such Interest Period which (a)
appears on the Bridge Telerate Page 3750 (or such other page as may replace such
Telerate Page 3750 for the purpose of displaying London interbank offered rates
for Dollar deposits), as of approximately 11:00 A.M. London time on the date two
(2) London business days prior to the first day of such Interest Period or (b)
in the event that the Bridge Telerate Service or Telerate Page 3750 (or any
replacement page therefor) shall be unavailable on any such date, the rate per
annum at which such deposits in Dollars are offered on such date by Bank of
America, N.A. to prime banks in the London interbank market at 11:00 A.M. London
time on the date two (2) London business days prior to the first day of such
Interest Period.
"LIEN": any mortgage, pledge, hypothecation, assignment for
security, deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
"LOAN DOCUMENTS": collectively, this Agreement, any Note or Notes,
the Mexican Security Documents, the U.S. Security Documents, the Cooperation and
Fee Letter, the Accession Agreement, and any other material agreement or
material document entered into by any Loan Party in connection herewith.
"LOAN PARTICIPANTS": as defined in Section 11.6(b).
"LOAN PARTIES": each of the Borrowers and each other direct or
indirect subsidiary of each of the Borrowers which is a party to a Loan
Document.
"LOANS": as defined in Section 2.1(a).
"LUCENT": Lucent Technologies Inc., a Delaware corporation.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property, assets, prospects, or condition (financial or
otherwise) of Holdings and its Subsidiaries taken as a whole or of Telereunion
or Telereunion International individually (b) the ability of the Borrowers or
any other Loan Party to perform in a timely manner their respective Material
Obligations under any of the Loan Documents, (c) the validity or enforceability
of this Agreement or any of the other Loan Documents, (d) the rights or remedies
of the Collateral Agents (or any other collateral agent under the Mexican
Security Documents and the U.S. Security Documents) or the Lenders under any of
the Loan Documents or (e) the Liens, including the enforceability or validity
thereof, provided to the Collateral Agents (or any other collateral agent under
the Mexican Security Documents and the U.S. Security Documents) or any Lender
under any of the Loan Documents.
"MATURITY DATE": the date which is the fifth anniversary of the
Closing Date.
"MEXICAN BORROWER OBLIGATIONS": the unpaid principal of and interest
on the Loans to the Mexican Borrowers, the proceeds of any Loan to any U.S.
Borrower which are received by a Mexican Borrower either directly or indirectly
in the form of loans or capital contributions from such U.S. Borrower to pay
invoices pursuant to the Supply Contract, and all other obligations and
liabilities of the Mexican Borrowers to the Administrative Agent, the Collateral
Agents and the Lenders (including, without limitation, interest accruing at the
then applicable rate provided in this Agreement after the maturity of the Loans
and interest accruing at the then applicable rate provided in this Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Mexican
Borrowers, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, the other Loan Documents,
any cash management services agreement entered into by the Mexican Borrowers
with any Lender or any Affiliate of any Lender or any other document made,
delivered or given in connection herewith or therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all reasonable fees
and disbursements of counsel to the Administrative Agent or to the Lenders that
are required to be paid by the Mexican Borrowers
pursuant to the terms of this Agreement, any other Loan Document or any such
cash management services agreement entered into by the Mexican Borrowers with
any Lender or any Affiliate of any Lender).
"MEXICAN BORROWERS": each Borrower incorporated under the laws of
Mexico.
"MEXICAN COLLATERAL AGENT": Citibank Mexico, S.A., Grupo Financiero
Citibank, a Mexican banking corporation, in its capacity as collateral agent for
the Lenders under the Mexican Security Documents, except with respect to each of
the Telereunion Cash Trust Agreement, the Vextro Cash Trust Agreement and the
Trust Agreement of Stock, and in the case of such agreements, in its capacity as
collateral trustee for the Lenders, and any successor thereto.
"MEXICAN INDUSTRIAL MORTGAGE": each floating mortgage on the assets
of the Mexican Borrower which is a party thereto, substantially in the form of
EXHIBIT B-2.
"MEXICAN LANDOWNER CONSENTS": each Landowner Consent with respect to
the consent to the collateral assignment of certain real property interests in
connection with the Network.
"MEXICAN MORTGAGES": the Mexican Telecommunications Mortgage and the
Mexican Industrial Mortgage.
"MEXICAN SECURITY DOCUMENTS": collectively, the Mexican Mortgages,
the Trust Agreement of Stock, the Telereunion Cash Trust Agreement, the Vextro
Cash Trust Agreement, the SCT Letter, the CFE Consent, the SCT Authorization and
the Mexican Landowner Consents and each other agreement or document granting a
security interest in any property in Mexico for the benefit of the Lenders.
"MEXICAN TELECOMMUNICATIONS MORTGAGE": the floating mortgage on the
Network and other assets of Telereunion provided for by Articles 92 and 93 of
the Ley de Vias Generales de Comunicacion, substantially in the form of EXHIBIT
B-1.
"MORTGAGES": collectively, each Mexican Mortgage and each U.S.
Mortgage, if any.
"MSN": M.S. Noticias y Telecomunicaciones, S.A. de C.V., a Mexican
corporation and a Mexican Borrower.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NETWORK": the telecommunications network to be built and operated
by the Borrowers in order to provide telecommunications services pursuant to the
Concession.
"NEW LENDING OFFICE": as defined in Section 2.15(b)(i)(A).
"NEW NOTE CIRCUMSTANCE": as defined in Section 2.5(c).
"NET PROCEEDS": with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of
a casualty, insurance proceeds, and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by any Borrower to third
parties (other than Affiliates) in connection with such event, (ii) in the case
of a sale or other disposition of an asset (including pursuant to a casualty or
condemnation), the amount of all payments required to be made by any Borrower as
a result of such event to repay Indebtedness (other than Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event,
and (iii) the amount of all taxes paid (or reasonably estimated to be payable)
by any Borrower and the amount of any reserves established by any Borrower to
fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of each of the Borrowers).
"NON-EXCLUDED TAXES": as defined in Section 2.15.
"NON-U.S. LENDER": as defined in Section 2.15.
"NOTES": as defined in Section 2.5(a).
"OBLIGATIONS": collectively, the Mexican Borrower Obligations and
the U.S. Borrower Obligations.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any Governmental Authority which
succeeds to the powers and functions thereof.
"PERMITS": the permit No. 42-STVA-946495 dated November 29, 1994 to
render value added services granted to Vextro and the registry No. 05-SVA-95
dated July 25, 1995 to render value added services granted to MSN, each granted
by the Federal Government of Mexico, through the SCT.
"PERMITTED LIENS": as defined in Section 6.1.
"PERSON": any individual, corporation, partnership, joint venture,
trust or unincorporated organization, joint stock company, limited liability
company or other similar organization, government or any political subdivision
thereof, a court, or any other legal entity, whether acting in an individual,
fiduciary, or other capacity.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which each of the Borrowers or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PLEDGE AGREEMENT": the Pledge Agreement substantially in the form
of EXHIBIT G.
"PRIMARY OBLIGOR": as defined in the definition of "Guarantee
Obligation" contained in this Section 1.1.
"PRIMARY OBLIGATIONS": as defined in the definition of "Guarantee
Obligation" contained in this Section 1.1.
"PROCEEDING": means any:
(a) insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition, or other similar proceeding
relating to any Borrower, its property, or its creditors as such;
(b) proceeding for any liquidation, dissolution, or other winding-up
of any Borrower, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings;
(c) assignment for the benefit of creditors of any Borrower;
(d) other marshalling of the assets of any Borrower under any law
relating to proceedings of the type referred to in the preceding clause
(a) or (b); or
(e) event described in Section (g) of Article IX of this Agreement
with respect to any Borrower.
"PROPERTIES": as defined in Section 3.16(a).
"PROCESS AGENT": as defined in Section 11.12(c).
"REFERENCE BANK": shall mean the London office of the Lender
selected by the Required Lenders.
"REGISTER": as defined in Section 11.6(d).
"REGULATION D": Regulation D of the Board of Governors as in effect
from time to time.
"REGULATION G": Regulation G of the Board of Governors as in effect
from time to time.
"REGULATION H": Regulation H of the Board of Governors as in effect
from time to time.
"REGULATION U": Regulation U of the Board of Governors as in effect
from time to time.
"REGULATION X": Regulation X of the Board of Governors as in effect
from time to time.
"REI": Recovery Equity Investors II, L.P.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under the regulations adopted by PBGC.
"REQUIRED LENDERS": (a) at any time that Lucent's Commitment
Percentage is in excess of 50%, both (i) Lucent and (ii) Lenders, the Commitment
Percentage of which aggregate more than 50% of the Lenders' (other than
Lucent's) Commitment Percentages, and (b) at any other time, Lenders, the
Commitment Percentages of which aggregate more than 50%.
"REQUIREMENTS OF LAW": as to any Person, (a) the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and (b) any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER": as to any Person, the chief financial
officer, the chief executive officer or the president of such Person or, with
respect to financial matters, the chief financial officer of such Person or, in
either case, such other executive officers as may be designated from time to
time by such Person in writing to the Administrative Agent.
"RESTRICTED PAYMENT": means (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of Capital Stock of the Borrowers, (b) any payment (whether in cash,
securities or other property) in respect of any Subordinated Claim, whether on
account of principal, interest or otherwise, or (c) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Subordinated Claim or any shares of any class
of Capital Stock of any Borrower or any option, warrant or other right to
acquire any such shares of Capital Stock of any Borrower.
"SA": Strategic Associates, L.P.
"SCT": the Secretaria de Communications y Transports, a Mexican
federal government agency.
"SCT AUTHORIZATION": an authorization from the SCT authorizing the
pledge of the Permit of Vextro de Mexico, S.A. de C.V.
"SCT LETTER": a letter from SCT, substantially in the form of
EXHIBIT B-3.
"SEC": the Securities and Exchange Commission or any Governmental
Authority which succeeds to the powers and functions thereof.
"SECURED PARTY": any Lender, the Administrative Agent, and the
Collateral Agents or other holder of any Obligation.
"SECURITY AGREEMENT": the Security Agreement, dated the date hereof,
executed and delivered by each of the Borrowers in favor of the U.S. Collateral
Agent, for the benefit of the Lenders, substantially in the form of EXHIBIT C.
"SECURITY DOCUMENTS": the Mexican Security Documents and the U.S.
Security Documents.
"SERVICIOS CORPORATIVOS": Servicios Corporativos Telscape de Mexico
S.A. de C.V., a Mexican corporation and a Mexican Borrower.
"SETTLORS": Telscape International, Inc., Telscape U.S.A., Inc.,
Telereunion, Inc., Commercializadora Lufravic, S.A. de C.V., Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx Xxxx Xxxxxx, and Xxxxx Xxxxxx Xxxx.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount that will
be required to pay all "liabilities of such Person, contingent or otherwise", as
of such date (as such quoted terms are determined in accordance with applicable
Federal and state laws governing determinations of the insolvency of debtors) as
such debts become absolute and matured, (b) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its
business, and (c) such Person will be able to pay its debts as they mature,
taking into account the timing of and amounts of cash to be received by such
Person and the timing of and amounts of cash to be payable on or in respect of
indebtedness of such Person; in each case after giving effect to (A) as of the
Closing Date the making of the Loans to be made on the Closing Date and the
application of the proceeds of such Loans and (B) on any date after the Closing
Date, the making of any Loan to be made on such date and the application of the
proceeds of such Loan. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent matured, unmatured, disputed, undisputed, legal equitable, secured or
unsecured.
"STATEMENT OF RESOLUTION": the Statement of Resolution Establishing
Series of Shares filed with the Secretary of State of Texas pursuant to Article
2.13 of the Texas Business Corporation Act by Holdings to establish the Series C
Preferred Stock.
"SUBORDINATED AGREEMENT": any agreement, document, or instrument
evidencing or governing any Subordinated Claim, or any other agreement or
instrument executed pursuant thereto or in connection therewith, whether direct
or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred.
"SUBORDINATED CLAIMS": all amounts owed by any Borrower to any other
Borrower, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred.
"SUBORDINATION PROVISIONS": as defined in Article VIII of this
Agreement.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
Controlled, directly or indirectly though one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to direct or indirect Subsidiary
of Holdings.
"SUPPLY CONTRACT": the Agreement, dated May 31, 1999, between
Telereunion and Vendor.
"TELECOMMUNICATIONS": voice, video, data and internet services.
"TELEREUNION": as defined in the Preamble to this Agreement.
"TELEREUNION CASH TRUST AGREEMENT": the Irrevocable Administration
and Security Trust Agreement of Cash Funds, among the Administrative Agent on
its behalf and on behalf of the Lenders, the Mexican Collateral Agent acting as
trustee, and Telereunion, substantially in the form of EXHIBIT R-1.
"TELEREUNION INTERNATIONAL": as defined in the Preamble to this
Agreement.
"THIRD PARTY CONSENTS": each Consent and Agreement of each of the
contracting parties listed on SCHEDULE 4.3(C) and SCHEDULE 5.9(B).
"TOTAL CAPITALIZATION": at any date, the sum of (a) Consolidated
Total Debt plus (b) Consolidated Total Equity as at such date.
"TRADEMARK SECURITY AGREEMENT": the Trademark Security Agreement
substantially in the form of EXHIBIT J.
"TRANSACTIONS": the execution, delivery and performance by each of
the Loan Parties of the Loan Documents to which it is to be a party, the
borrowing of the Loans and the use of the proceeds thereof.
"TRUST AGREEMENT OF STOCK": the Irrevocable Administration and
Security Trust Agreement of Stock, dated the date hereof, among Lucent, the
Lenders represented by the Administrative Agent, the Mexican Collateral Agent
acting as trustee, the Mexican Borrowers and the Settlors, substantially in the
form of EXHIBIT I.
"TRANSFEREE": as defined in Section 11.6(f).
"UCC": the Uniform Commercial Code as from time to time in effect in
the State of New York.
"U.S. BORROWER OBLIGATIONS": the unpaid principal of and interest on
the Loans and all other obligations and liabilities of the Borrowers to the
Administrative Agent, the Collateral Agents and the Lenders (including, without
limitation, interest accruing at the then applicable rate provided in this
Agreement after the maturity of the Loans and interest accruing at the then
applicable rate provided in this Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrowers, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, the other Loan Documents, any cash management services agreement
entered into by the Borrowers with any Lender or any Affiliate of any Lender or
any other document made, delivered or given in connection herewith or therewith,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all reasonable fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by the
Borrowers pursuant to the terms of this Agreement, any other Loan Document or
any such cash management services agreement entered into by the Borrowers with
any Lender or any Affiliate of any Lender).
"U.S. BORROWERS": each Borrower incorporated under the laws of the
United States of America.
"U.S. COLLATERAL AGENT": State Street Bank and Trust Company, a
Massachusetts banking corporation, in its capacity as collateral agent for the
Lenders under the Collateral Agency Agreement and any successor thereto.
"U.S. MORTGAGE": each Mortgage to be executed and delivered by any
Loan Party, which shall be satisfactory to the Administrative Agent in form and
substance, with respect to each parcel of After-Acquired Mortgage Property
located in the United States for which a mortgage is granted pursuant to Section
5.10.
"U.S. SECURITY DOCUMENTS": the Collateral Agency Agreement, the
Security Agreement, the Pledge Agreement, the Collateral Assignment of Lease,
each Landlord Consent, the California Landlord's Waiver Agreements, the
California Consent, the Trademark Security Agreement, each Account Control
Agreement, each Endorsement, each Blocked Account Agreement, each Third Party
Consent and each U.S. Mortgage, if any, and each other agreement or document
granting a security interest in any property in the United States for the
benefit of the Lenders.
"VENDOR": Lucent Technologies World Services Inc. and Lucent
Technologies de Mexico, S.A. de C.V., in their joint capacity as vendor.
"VEXTRO": Vextro de Mexico, S.A. de C.V., a Mexican corporation and
a Mexican Borrower.
"VEXTRO CASH TRUST AGREEMENT": the Irrevocable Administration and
Security Trust Agreement of Cash Funds, among the Administrative Agent on its
behalf and on behalf of the Lenders, the Mexican Collateral Agent acting as
trustee, and Vextro, substantially in the form of EXHIBIT R-2.
"YEAR": any one of the consecutive twelve-month periods following
the Closing Date, each of which shall end on an anniversary of the Closing Date.
"YEAR 2000 PROBLEM": as defined in Section 3.26.
Section 1.2 TIME PERIODS. In this Agreement and the other Loan
Documents, in the computation of periods of time from a specified date to a
later specified date, (a) the word "from" means "from and including", (b) the
words "to" and "until" each mean "to, but excluding", and (c) the words
"through", "end of", and "expiration" each mean "through and including". Unless
otherwise specified, all references in this Agreement and the other Loan
Documents to (i) a "month" shall be deemed to refer to a calendar month, (ii) a
"quarter" shall be deemed to refer to a calendar quarter, and (iii) a "year"
shall be deemed to refer to a calendar year.
Section 1.3 ACCOUNTING TERMS AND DETERMINATIONS. All accounting
terms not specifically defined herein shall be construed, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered pursuant hereto shall be prepared, in accordance with GAAP. When
used herein, the term "financial statements" shall include the notes and
schedules thereto.
Section 1.4 CONSTRUCTION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular, and
the singular include the plural. The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. The words
"include," "includes," and "including" mean include, includes and including
"without limitation" and "without limitation by specification." All references
in this Agreement to "Article", "Section", "subsection", "subparagraph",
"clause" or "Exhibit", unless otherwise indicated, shall be deemed to refer to
an Article, Section, subsection, subparagraph, clause or Exhibit, as applicable,
of this Agreement. Unless otherwise expressly provided herein, any reference in
this Agreement to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time.
Section 1.5 SCHEDULES AND EXHIBITS. All of the schedules and
exhibits attached to this Agreement shall be deemed incorporated herein by
reference.
Section 1.6 UCC TERMS. Terms defined in the UCC and not defined
herein shall have the respective meanings given to them in the UCC.
Section 1.7 ADMINISTRATIVE AGENT'S DISCRETION. Whenever the terms
"satisfactory to Administrative Agent", "determined by Administrative Agent",
"acceptable to Administrative Agent", "consent of Administrative
Agent", "Administrative Agent shall elect", "Administrative Agent shall
request", or similar terms are used in the Loan Documents, except as otherwise
specifically provided therein, such terms shall mean satisfactory to, at the
election of, determined by, acceptable to, consented to by, elected by, or
requested by, as applicable, the Administrative Agent in its sole and unlimited
discretion.
ARTICLE II
LOANS
Section 2.1 AGREEMENT TO LEND.
(a) Subject to the terms and conditions hereof and relying upon the
representations and warranties of each of the Borrowers herein, each
Lender severally agrees to make loans (the "LOANS") to the Borrowers,
jointly and severally, from time to time during the Commitment Period in
the amount of its pro rata share of such Loans as the Borrowers may
request under Section 2.2, in an aggregate principal amount not to exceed
such Lender's Commitment.
(b) All Loans shall be Eurodollar Loans except as provided in
Sections 2.11, 2.13 and 2.14.
(c) The obligations of each U.S. Borrower hereunder and under each
Note evidencing amounts from time to time advanced hereunder to a U.S.
Borrower shall be joint and several obligations of all U.S. Borrowers. The
obligations of each Mexican Borrower hereunder and under each Note
evidencing amounts from time to time advanced hereunder constituting
Mexican Borrower Obligations shall be joint and several obligations of all
Borrowers.
Section 2.2 PROCEDURE FOR BORROWING.
(a) Subject to the terms and conditions hereof, any Borrower or
Borrowers may borrow under the Commitments during the Commitment Period on
any Business Day, PROVIDED, except as set forth in Section 2.2(b), that
such Borrower or Borrowers shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to
12:00 Noon, New York City time, three Business Days prior to the requested
Borrowing Date, specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date. If any Drawdown Certificate requests that a
borrowing be made on the Borrowing Date specified therein to finance
amounts then due under invoices submitted to any Borrower by the Vendor
pursuant to the Supply Contract, such Drawdown Certificate shall identify
such invoices and the amounts being paid thereunder pursuant to such
Borrowing. Upon receipt of any such Drawdown Certificate from the relevant
Borrower(s), the Administrative Agent shall promptly notify each Lender
thereof. Each Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account(s) of the
relevant Borrower(s) at the office of the Administrative Agent specified
in Section 11.2 prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower(s) in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower(s) by the Administrative Agent (x) with respect to amounts to be
used to pay invoices pursuant to the Supply Contract, by crediting the
account of the Vendor designated in its borrowing notice prior to 1:00
P.M., New York City time, on such Borrowing Date with the lesser of the
(1) aggregate of the amounts made available to the Administrative Agent by
the Lenders and (2) the aggregate amount of such invoices and (y) with
respect to proceeds to be used for any other permitted use, by crediting
the account(s) of the relevant Borrower(s) designated in the Drawdown
Certificate prior to 1:00 P.M., New York time, on such Borrowing Date;
PROVIDED, HOWEVER, if Lucent or any Affiliate thereof is a Lender and
Loans are to be used to pay invoices pursuant to the Supply Contract, then
such Lender may make its Loan or Loans by crediting the amount thereof
against the account of the Vendor and such Lender shall be deemed to have
made a Loan in the amount of such credit. The Borrowers may borrow no more
than once in any month.
(b) Subject to the terms and conditions hereof, on any Interest
Payment Date occurring prior to the first anniversary of the Closing Date,
the Borrowers may borrow under the Commitments the aggregate amount of
interest due and payable on such Interest Payment Date. During such
period, unless the Borrowers who are obligated on outstanding Loans
provide a notice to the Administrative Agent at least four business days
prior to such Interest Payment Date that they intend to pay interest due
and payable on such Interest Payment Date, subject to the terms and
conditions hereof, the Lenders shall make Loans to such Borrowers by
increasing the outstanding principal amount of the Loans in the amount of
such interest due on such date and such Borrowers shall deliver the Notes
required to be delivered by Section 4.2(h) on such Interest Payment Date.
Section 2.3 COMMITMENT AND OTHER FEES. The U.S. Borrowers, jointly
and severally, agree to pay to the Administrative Agent for the account of each
Lender a commitment fee for the period from and including the date hereof to the
Commitment Termination Date, computed at the rate of three-quarters of one
percent per annum (0.75%) on the average daily amount of the unutilized and
undrawn Commitment of such Lender during such period, payable quarterly in
arrears on the last day of each quarter and on the Commitment Termination Date
or such earlier date as the Commitment shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof.
Section 2.4 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrowers
shall have the right, upon not less than one Business Day's prior notice to the
Administrative Agent (who shall notify the Lenders), to terminate the
Commitments or, from time to time, to reduce the amount of the Commitments. Any
such reduction shall be in an amount equal to $1,000,000 or a whole multiple of
$100,000 in excess thereof and shall reduce permanently the Commitments then in
effect. In addition, the Commitments shall be permanently reduced as set forth
in Sections 2.8(b)(iii) and (iv).
Section 2.5 THE NOTES.
(a) The obligation of the U.S. Borrowers to repay Loans and to pay
interest thereon at the rates provided herein shall be further evidenced
by promissory notes in the form of EXHIBIT A-1, payable to the order of
such Lender and in the principal amount of the respective Loan evidenced
thereby, and in each case executed by the U.S. Borrowers representing the
joint and several obligation of the U.S. Borrowers to pay the aggregate
unpaid principal amount of all of the promissory notes (plus any accrued
interest thereon) until paid in full as provided below. The obligation of
the Borrowers to repay Loans and to pay interest thereon at the rates
provided herein shall be further evidenced by promissory notes in the
forms of EXHIBIT A-2 (in the case of each Eurodollar Loan for Mexican
Borrower Obligations), and EXHIBIT A-3 (in the case of each ABR Loan for
Mexican Borrower Obligations), each payable to the order of such Lender
and in the principal amount of the respective Loan evidenced thereby, and
in each case executed by all Borrowers representing the joint and several
obligation of all Borrowers to pay the aggregate unpaid principal amount
of all of the promissory notes (plus any accrued interest thereon) until
paid in full as provided below. The promissory notes referenced in this
Section 2.5(a) shall be collectively referred to herein as the "NOTES". A
U.S. Borrower shall be jointly and severally liable for each Note executed
by all other Borrowers under this Agreement even if the Note is issued
prior to the addition of such particular U.S. Borrower as a Borrower
hereunder and such U.S. Borrower is not a maker of the Note. A Mexican
Borrower shall be jointly and severally liable for each Note executed by
all other Mexican Borrowers under this Agreement even if the Note is
issued prior to the addition of such particular Mexican Borrower as a
Borrower hereunder and such Mexican Borrower is not a maker of a Note;
PROVIDED, FURTHER, that such additional Mexican Borrower shall immediately
execute and endorse ("POR AVAL") all the outstanding Notes and all
subsequent Notes. Each Borrower acknowledges that an Event of Default
under any Note issued under this Agreement shall constitute an Event of
Default under all Notes issued hereunder.
(b) With respect to the Notes executed by the Mexican Borrowers,
such Notes evidencing any Loan shall specify the applicable Interest
Periods then in effect in accordance with the provisions of this
Agreement.
(c) The Borrowers shall issue a new Note to any Lender, in exchange
for the outstanding Note theretofore issued to such Lender to evidence the
corresponding Loan for Mexican Borrowers
Obligations, in accordance with the procedure set forth below in paragraph (d)
of this Section 2.5, upon any of the following circumstances (any such
circumstance is a "NEW NOTE CIRCUMSTANCE"): (i) if the length of the Interest
Period for such Loan shall differ from the length of the Interest Period then in
effect and specified in the outstanding Note, in which case the new Note for
such Loan shall specify the length of the applicable Interest Period to be in
effect; (ii) if the Applicable Margin with respect to such Loan shall change
from that specified in the outstanding Note pursuant to the terms of this
Agreement, in which case the new Note for such Loan shall specify such change in
the Applicable Margin and the date of such change; (iii) if the Maturity Date
for such Loan shall change from that specified in the outstanding Note pursuant
to the terms of this Agreement, in which case the new Note for such Loan shall
specify the Maturity Date then in effect under this Agreement; or (iv) the Loan
shall convert from a Eurodollar Loan to an ABR Loan.
(d) If the Borrowers shall be required pursuant to paragraph (c)
above to issue and deliver a new Note to any Lender, such Borrowers shall
execute and deliver to the Administrative Agent for the account of each
such Lender a new Note evidencing each applicable Loan made by such
Lender, dated the date of the applicable New Note Circumstance, payable to
the order of such Lender and in an amount equal to the outstanding
principal amount of such Loan. Upon receipt by the Administrative Agent
(i) from the Borrowers of any such new Note, and (ii) from the respective
Lender of the corresponding Note to be replaced by such new Note, then the
Administrative Agent shall promptly deliver to such Lender the new Note
and deliver to the Borrowers the corresponding Note thereby replaced, it
being understood and agreed that the Note so delivered to the Borrowers
shall then be marked "cancelled" by the relevant Borrowers.
(e) The new promissory notes so executed and delivered pursuant to
paragraph (d) above, shall constitute "Notes" for all purposes of this
Agreement and of any instruments or documents delivered by the Borrowers
pursuant hereto and shall be deemed issued, in each instance, in partial
substitution for, and to evidence a portion of the same indebtedness
formerly evidenced by, the corresponding Note theretofore issued to, and
held by, the corresponding Lender, except that interest accrued and unpaid
on the indebtedness outstanding under the Note theretofore issued to such
Lender shall, from and after the date of the issuance of the new Note, be
deemed to be payable under such new Note, and interest shall accrue on
each such new Note from and including the date of issuance thereof
(f) In the case of any assignment by a Lender of its Loan pursuant
to Section 11.6, the corresponding exchange of Notes shall be governed by
the applicable Assignment and Acceptance and not by paragraphs (c), (d)
and (e) of this Section 2.5.
Section 2.6 PROCEEDS. The proceeds of the Loans to the Borrowers shall be
used (a) for an amount up to $34,000,000, (i) to repay the Demand Note issued to
Lucent on July 20, 1999 in the amount of $3,000,000, (ii) to purchase or license
Equipment, software and services pursuant to the Supply Contract, (iii) to pay
import duties and taxes in connection with the Supply Contract, (iv) to pay
interest due on Loans hereunder to the extent permitted by Section 2.2(b), (v)
to finance loans and capital contributions from one Borrower to another Borrower
for the purposes set forth in clauses (i) through (iv) above, and (vi) to pay or
reimburse any fees or disbursements of counsel then due and payable as set forth
in Section 11.5 and (b) for an amount not to exceed $6,000,000, to repay
outstanding debt obligations of Holdings.
Section 2.7 AMORTIZATION OF LOANS. Each of the Borrowers, jointly and
severally, hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the principal amount of the Loans made by such
Lender, in the case of a U.S. Borrower, to any Borrower, and in the case of a
Mexican Borrower, with respect to any Mexican Borrower Obligations, in nine
installments with the first such installment due on the first anniversary of the
Closing Date with each succeeding payment due six months thereafter with the
final installment due on the fifth anniversary of the Closing Date. The
aggregate amount of the payments of each installment shall be the percentage of
the total aggregate amount of the Loans set forth opposite such installment
below:
INSTALLMENT PERCENTAGE
----------- ----------
1 5.0%
2 5.0%
3 10.0%
4 10.0%
5 12.5%
6 12.5%
7 15.0%
8 15.0%
9 15.0%
The Borrowers hereby further, jointly and severally, agree to pay to the
Administrative Agent for the account of each Lender interest on the unpaid
principal amount of the Loans, in the case of a U.S. Borrower, to any Borrower,
and in the case of a Mexican Borrower for any Mexican Borrower Obligations, from
time to time outstanding from the Closing Date until payment in full thereof at
the rates per annum, and on the dates, set forth in Section 2.9(c).
Section 2.8 OPTIONAL AND MANDATORY PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrowers may at any time and from
time to time prepay the Loans, in whole or in part, without premium or
penalty, on any Interest Payment Date, upon three Business Days'
irrevocable notice to the Administrative Agent, prior to such prepayment,
specifying the date and amount of prepayment. Upon receipt of any such
notice the Administrative Agent shall notify each Lender thereof on the
date of receipt of such notice. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to Section 2.16 and,
accrued interest to such date on the amount prepaid. Partial prepayments
pursuant to this subsection shall be in an aggregate principal amount of
at least $1,000,000 and increments of $100,000 in excess thereof.
(b) MANDATORY PREPAYMENTS.
(i) The Borrowers shall prepay the outstanding principal
amount of all Loans hereunder upon the closing of any financing
which is intended by the Borrowers to refinance the Loans hereunder.
(ii) Following the end of each fiscal year of Holdings,
commencing with the year ending December 31, 2000, the Borrowers
shall prepay Loans in an aggregate amount equal to 50% of Excess
Cash Flow of such year. Each prepayment pursuant to this subsection
shall be made within 90 days after the year for which Excess Cash
Flow is being calculated and such prepayment shall be in a minimum
amount of $50,000.
(iii) If and on each occasion that any Net Proceeds are received
by or on behalf of the Borrowers in respect of any sale,
disposition, casualty or condemnation of any Collateral, the
Borrowers shall, to the extent such Net Proceeds are not reinvested
in Collateral of at least substantially similar nature and value
and, in the case of any Collateral acquired from the Vendor pursuant
to the Supply Contract, purchased from the Vendor in each case
within 90 day period, prepay Loans outstanding (or if no Loans are
then outstanding, reduce the Commitments) in an aggregate amount
equal to such Net Proceeds.
(iv) If and to the extent any prepayments are to be made on (A)
any other vendor financing, (B) any bank credit facilities (other
than revolving credit facilities) or any other Indebtedness of the
Borrowers, or (C) any Guarantee Obligation of the Borrowers, the
Borrowers shall make a pro rata prepayment in an amount equivalent
to such prepayment of all Loans outstanding (or if no Loans are then
outstanding, a reduction of the Commitments) under this Agreement;
PROVIDED, HOWEVER, that the foregoing shall not apply (W) with
respect to any prepayment of Indebtedness owed by a Borrower to
another Borrower, (X) with respect to repayment of Indebtedness of
any Borrower pursuant to Section 2.6(b), (Y) with respect to
repayment of Indebtedness of any Borrower (1) to Deere Park Capital
Management, Inc. in an amount not to exceed $1,000,000, (2) to
Cahill, Warnock, Strategic Partners Fund, L.P., in an amount not to
exceed $2,000,000, (3) to MDNH Partners, L.P. in an amount not to
exceed
$288,000, (4) to Xxxxxxx Options, Inc. in an amount not to exceed
$288,000, and (5) to Xxxxx Xxxxx in an amount not to exceed $850,000
so long as the repayment of such Indebtedness comes from investments
of the Equity Investors, or (Z) with respect to any prepayment of an
amount that is equal to or less than $50,000.
(c) If any optional or mandatory prepayment would trigger compliance
with reserve requirements imposed by the Mexican Central Bank, the Borrowers
shall make such required deposit.
(d) All prepayments of Loans (except payments pursuant to Section
2.7) shall reduce the remaining scheduled payments of principal of such Loans in
the inverse order of maturity. Amounts prepaid on account of the Loans may not
be reborrowed.
Section 2.9 INTEREST RATES AND PAYMENT DATES.
(a) Each Eurodollar Loan shall bear interest during each Interest
Period with respect thereto at a rate per annum equal to LIBOR determined
for such Interest Period plus the prevailing Applicable Margin. Each ABR
Loan shall bear interest during each Interest Period with respect thereto
at a rate per annum equal to the ABR determined for such Interest Period
plus the prevailing Applicable Margin.
(b) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any commitment fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise) such overdue amount shall bear
interest at a rate per annum which is (x) in the case of overdue
principal, that rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section 2.9 plus three (3%) percent
per annum until the end of the Interest Period of such Loan and
thereafter, at a rate per annum equal to the sum of three (3%) percent per
annum plus the ABR plus the Applicable Margin from time to time in effect,
computed on the basis of a 365 or 366 day year, as the case may be, or (y)
in the case of overdue interest, commitment fees or other amounts due and
payable hereunder, the ABR plus the Applicable Margin plus three (3%)
percent per annum in each case from the date of such non-payment until
such amount is paid in full (after as well as before judgment).
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date with respect to such Loan and the Maturity Date,
provided that interest accruing pursuant to Section 2.9(b) shall be
payable from time to time on demand.
(d) Subject to the terms and conditions hereof, the Borrowers may
pay interest due and payable on any Interest Payment Date that occurs
during the Commitment Period in accordance with Section 2.2(b).
Section 2.10 COMPUTATION OF INTEREST AND FEES.
(a) Commitment fees and interest on Loans shall be calculated on the
basis of a 360-day year for the actual days elapsed except that, whenever
interest is calculated on the basis of the ABR, interest shall be
calculated on the basis of a 365 or 366 day year, as the case may be for
the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrowers and the affected Lenders of each
determination of LIBOR.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of the Borrowers, deliver
to the Borrowers a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.10(a).
Section 2.11 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining LIBOR for such Interest
Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that LIBOR determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period, the
Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrowers and the affected Lenders as soon as practicable thereafter.
If such notice is given (x) any Eurodollar Loans requested to be made on
the first day of such Interest Period shall be made as ABR Loans and (y)
any outstanding Eurodollar Loans shall be converted, on the last day of
such Interest Period, to ABR Loans. Until such notice has been withdrawn
by the Administrative Agent, no further Eurodollar Loans shall be made or
continued as such. The Borrowers shall deliver Notes in the form of
EXHIBIT A-3, in the amount of the Mexican Borrowers Obligations being
converted and the Notes representing the Eurodollar Loans shall be
cancelled.
Section 2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise,
shall be made without set off or counterclaim and shall be made prior to
12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders at the Administrative
Agent's office specified in Section 11.2, in Dollars and in immediately
available funds. Payments received by the Administrative Agent after such
time shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute such payments to the Lenders
entitled to receive the same promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar
Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day
(and, with respect to payments of principal, interest shall be payable
thereon at the then applicable rate during such extension) unless the
result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the
immediately preceding Business Day. If, and to the extent that, on any
Business Day the Administrative Agent receives any payment hereunder or
under the other Loan Documents (including any such payment representing a
realization upon the Collateral), and such payment is not sufficient to
pay in full all principal, interest and fees then due and payable
hereunder, the Administrative Agent shall apply such payment in the
following order of priority:
(i) First, interest and fees due hereunder;
(ii) Second, installments of principal due; and
(iii) Third, all other amounts due under this Agreement and not
otherwise provided for in this Section 2.12(a).
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its portion of such borrowing available
to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption, make
available to the Borrowers a corresponding amount. If such amount is not
made available to the Administrative Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to the
daily average Federal Funds Effective Rate for the period until such
Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender
with respect to any amounts owing under this Section shall be conclusive
in the absence of manifest error.
(c) Each borrowing by the Borrowers of Loans shall be made ratably
from the Lenders, respectively, in accordance with their respective
Commitment Percentages. Any reduction of the Commitments or prepayment of
Loans shall be made ratably among the Lenders, in accordance with their
respective Commitment Percentages.
Section 2.13 ILLEGALITY. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirements of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, then such
Lender shall give notice of such illegality to the Administrative Agent and the
Borrowers. Upon such adoption or change, (a) the commitment of such Lender
hereunder to make Eurodollar Loans shall forthwith be converted into a
commitment to make ABR Loans until such time as it shall no longer be unlawful
for such Lender to make or maintain Eurodollar Loans as contemplated by this
Agreement and (b) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to ABR Loans on the respective last days
of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. Any Lender giving notice pursuant to the
first sentence of this Section 2.13 shall notify the Administrative Agent and
the Borrowers at such time as the circumstances giving rise to the initial
notice shall cease to exist.
Section 2.14 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirements of Law or
in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority in each case made
subsequent to the date hereof or, in the case of a Transferee, to the same
extent as that of the transferor prior to the transfer or subsequent to
the date of transfer:
(i) shall subject any Lender to any Non-Excluded Tax of any
kind whatsoever with respect to this Agreement, any Note, any
Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.15 and changes in the basis of tax on the
overall net income of such Lender and taxes imposed as a result of
any future, present or former connection between such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein other
than any such connection arising solely from such Lender having
executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note or any other
Loan Document);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of LIBOR hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender reasonably deems to be material, of
making, continuing or maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the
Borrowers shall, within 20 Business Days after receipt by the Borrowers of
such Lender's written demand (with a copy to the Administrative Agent),
pay such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
has demanded compensation under this Section 2.14 with respect to any
Eurodollar Loan, the Borrowers shall have the option to convert
immediately such Eurodollar Loan into an ABR Loan until the circumstances
giving rise to such demand for compensation no longer apply; PROVIDED,
that (x) no such conversion shall affect the Borrowers' obligation to pay
compensation as provided herein which is due with respect to the period
prior to such conversion and (y) on the date of such conversion the
Borrowers shall pay to the Administrative Agent for the benefit of the
relevant Lender accrued interest on such Eurodollar Loan to the date of
conversion.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirements of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation Controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any Governmental Authority, in each case made subsequent to the date
hereof, shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder to a level below which that which such Lender or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount material to such
Lender, or such corporation, then from time to time, within 20 Business
Days after receipt by the Borrowers of such Lender's written demand
therefor (with a copy to the Administrative Agent) the Borrowers shall pay
to such Lender such additional amount or amounts as will compensate such
Lender or such corporation for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to Section 2.14(a) or (b), it shall promptly give written notice
to the Borrowers (with a copy to the Administrative Agent) specifying in
reasonable detail the event by reason of which it has become so entitled
and the method of calculating the amounts to which it claims to be
entitled. A certificate as to any additional amounts payable pursuant to
this Section 2.14 submitted by such Lender to the Borrowers (with a copy
to the Administrative Agent) shall be conclusive in the absence of
manifest error. The agreements in this Section 2.14 shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
Section 2.15 TAXES.
(a) All payments made by the Borrowers under this Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes,
franchise taxes and capital taxes imposed on the Administrative Agent or
any Lender (or Transferee) as a result of any future, present or former
connection between the Administrative Agent or such Lender (or Transferee)
and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or
such Lender (or Transferee) having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or
any Note or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender (or Transferee)
hereunder or under any Note, the amounts so payable to the Administrative
Agent or such Lender (or Transferee) shall be increased by the amounts
("INCREASED AMOUNTS") necessary so that after making all required
deductions and withholdings (including, without limitation, the payment of
all Non-Excluded Taxes) the Administrative Agent or such Lender (or
Transferee) receives the amounts equal to the interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; PROVIDED, HOWEVER, that the Borrowers shall not be required to
increase any such amounts payable to any Lender that is not organized
under the laws of the United States of America or a state thereof (a
"NON-U.S. LENDER") if such Lender fails to comply with the requirements of
paragraph (b) or (c) of this subsection. Whenever any Non-Excluded Taxes
are payable by any Borrower, such Borrowers shall promptly send to the
Administrative Agent for its own account or for the account of such Lender
(or Transferee), as the case may be, a certified copy of an original
official receipt received by such Borrower showing payment thereof or
other evidence of remittance of Non-Excluded Taxes reasonably acceptable
to the Administrative Agent. If such Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fail to
remit to the Administrative Agent the required receipts or other
reasonably acceptable evidence, the Borrowers or, in the case of such
failure by a U.S. Borrower, the U.S. Borrowers shall jointly and severally
indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative
Agent or any Lender as a result of any such failure. The Borrowers or in
the case of Non-Excluded Taxes paid in connection with Loans to U.S.
Borrowers, the U.S. Borrowers will jointly and severally indemnify each
Lender (or Transferee) and the Administrative Agent for the amount of
Non-Excluded Taxes paid by
such Lender (or Transferee) or the Administrative Agent, as the case may
be, and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. The agreements in this Section 2.15
shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder; PROVIDED, HOWEVER, that the
Borrowers shall not be required to indemnify any Non-U.S. Lender that
fails to comply with the requirements of paragraph (b) or (c) of this
subsection to the extent amounts would not be payable had such Lender so
complied.
(b) Each Non-U.S. Lender shall:
(i) in the case of a Lender (or Transferee) that is a "bank"
under Section 881(c)(3)(A) of the Code;
(A) on or before the date on which the first payment
becomes payable to it hereunder or under any Note (or, in the
case of a Loan Participant, on or before the date such Loan
Participant becomes a Loan Participant hereunder) and on or
before the date, if any, such Lender (or Transferee) changes
its applicable lending office by designating a different
lending office (a "NEW LENDING OFFICE") deliver to the
Borrowers and the Administrative Agent (y) two properly
completed and duly executed copies of United States Internal
Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, and (z) an Internal Revenue Service
Form W-8 or W-9, or successor applicable form, as the case may
be;
(B) deliver to the Borrowers and the Administrative
Agent two further properly completed and duly executed copies
of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrowers
or upon the request of the Borrowers or the Administrative
Agent; and
(C) obtain such extensions of time for filing and
completing such forms or certifications as may reasonably be
requested by the Borrowers;
(ii) in the case of a Lender or a Transferee that is not a
"bank" under Section 881(c)(3)(A) of the Code:
(A) on or before the date on which the first payment
becomes payable to it under any Note (or, in the case of a
Loan Participant, on or before the date such Loan Participant
becomes a Loan Participant hereunder) deliver to the Borrowers
and the Administrative Agent (I) a statement under penalties
of perjury that such Lender (x) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or
other legal requirements as a bank in any jurisdiction, and
has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any
Governmental Authority, any application made to a rating
agency or qualification for any exemption from tax, securities
law or other legal requirements, (y) is not a 10-percent
shareholder of any Borrower within the meaning of Section
881(c)(3)(B) of the Code and (z) is not a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code and (II) a
properly completed and duly executed Internal Revenue Service
Form W-8 or applicable successor form;
(B) deliver to the Borrowers and the Administrative
Agent two further properly completed and duly executed copies
of said Form W-8, or any successor applicable form on or
before the date that any such Form W-8 expires or becomes
obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to
the Borrowers or upon the request of the Borrowers; and
(C) obtain such extensions of time for filing and
completing such forms or certifications as may be reasonably
requested by the Borrowers or the Administrative Agent;
unless in any such case any change in treaty, law or regulation has occurred
subsequent to the date such Lender (or Transferee) became a party to this
Agreement (or in the case of a Loan Participant, the date such Loan Participant
became a Loan Participant hereunder) which renders all such forms inapplicable
or which would prevent such Lender from properly completing and executing any
such form with respect to it and such Lender so advises the Borrowers and the
Administrative Agent in writing no later than 15 days before any payment
hereunder or under any Note is due. Each such Lender (and each Transferee) shall
certify (i) in the case of a Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9 delivered
pursuant to subsection 2.15(b)(i), that it is entitled to an exemption from
United States backup withholding tax. Each Person that shall become a Lender or
a Loan Participant pursuant to Section 11.6 shall, upon the effectiveness of the
related transfer, provide all of the forms and statements required pursuant to
this subsection, PROVIDED that, in the case of a Loan Participant, such Loan
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
(c) Each Lender (and the Administrative Agent with respect to
payments to the Administrative Agent for its own account) agrees that it
will (i) take all reasonable actions by all usual means to maintain all
exemptions, if any, available to it from United States withholding taxes
(whether available by treaty, existing administrative waiver, by virtue of
the location of any Lender's applicable lending office or otherwise) and
(ii) otherwise cooperate with the Borrowers to minimize amounts payable by
the Borrowers under this subsection provided such measures or actions
would not, in such Lender's determination, cause such Lender to suffer any
material economic, legal or regulatory disadvantage.
Section 2.16 INDEMNITY. The U.S. Borrowers agree jointly and severally to
indemnify each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a direct consequence of (a) default by
any Borrower in making a borrowing of, or continuation of Eurodollar Loans after
such Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by any Borrower in making any
prepayment of Eurodollar Loans after such Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loan on a day which is not the last day of any Interest
Period with respect thereto. The Mexican Borrowers agree jointly and severally
to indemnify each Lender and to hold each Lender harmless from any loss or
expense which such Lender may sustain or incur as a direct consequence to (a)
default in making a borrowing of, or continuation of Eurodollar Loans
constituting a Mexican Borrower Obligation after the relevant Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default in making any prepayment of Eurodollar Loans constituting
a Mexican Borrower Obligation after the relevant Borrower has given a notice
thereof in accordance with the provisions of this Agreement or (c) the making of
a prepayment of Eurodollar Loan which constitutes a Mexican Borrower Obligation
on a day which is not the last day of any Interest Period with respect thereto.
In each case, such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, for the period from the date of such prepayment or
of such failure to borrow to the last day of such Interest Period (or, in the
case of a failure to borrow, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding the Applicable Margin) over (ii) the
amount of interest (as reasonably determined by such Lender) which would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
Section 2.17 CHANGE OF LENDING OFFICE; FILING OF CERTIFICATES OR
DOCUMENTS. Each Lender agrees that if it makes any demand for payment, or
becomes entitled to any increased amounts, under Section 2.13, 2.14 or 2.15 or
if any adoption or change of the type described in Section 2.14 shall occur with
respect to it, it will use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion) to designate a different lending office or
file any certificate or document reasonably requested in writing by the
Borrowers if such action would reduce or obviate the need for the Borrowers to
make payments under Section 2.13, 2.14 or 2.15 or would eliminate or reduce the
effect of any adoption or change described in Section 2.14.
Section 2.18 REPLACEMENT LENDERS. In the event that (a) the Borrowers
become obligated to pay additional amounts or increased amounts to, or receives
notice from, any Lender pursuant to Sections 2.13, 2.14 or 2.15, or (b) any
Lender has defaulted in its obligation to make Loans hereunder, then the
Borrowers may, on ten Business Days' prior written notice to the Administrative
Agent and such Lender, cause such Lender to (and such Lender shall) assign
pursuant to Section 11.6(c) all of its rights and obligations under this
tAgreement to another bank or financial institution of its selection which is
willing to become a Lender and is acceptable (which acceptance shall not be
unreasonably withheld) to the Administrative Agent, for a purchase price equal
to the outstanding principal amount of the Loans payable to such Lender plus any
accrued but unpaid interest on such Loans, any accrued but unpaid commitment
fees in respect of such Lender's Commitment and any other amounts payable to
such Lender under this Agreement (including, without limitation, amounts payable
under Sections 2.13, 2.14 or 2.15).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans, Holdings with respect to itself and each
of its Subsidiaries and each of the Borrowers with respect to itself (except for
Section 3.1) hereby represent and warrant to the Administrative Agent and each
Lender that:
Section 3.1 FINANCIAL CONDITION. The consolidated audited balance sheet of
Holdings as at December 31, 1998 and the related consolidated statements of
income and cash flows for the fiscal year ended on such date, audited by the
Accountants, a copy of which has heretofore been furnished to each Lender,
present fairly in accordance with GAAP the consolidated financial condition of
Holdings and its Subsidiaries as at such date, and the consolidated results of
operations and cash flows of Holdings and its Subsidiaries for the fiscal year
then ended. All such financial statements have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants and as disclosed therein). Holdings did not have at the date of
the balance sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any material
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto or expressly
permitted to be incurred hereunder.
Section 3.2 NO CHANGE. Since December 31, 1998, except as disclosed in
Holding's Form l0-Q, dated March 31, 1999, there has been no development, event
or circumstance which has, had or could reasonably be expected to have a
Material Adverse Effect.
Section 3.3 EXISTENCE; COMPLIANCE WITH LAW AND AGREEMENTS. Such Borrower
(a) is duly organized and validly existing under the laws of the jurisdiction of
its organization, (b) has the power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified or licensed
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except where
the failure to be so qualified in the aggregate could not reasonably be expected
to have a Material Adverse Effect; and (d) is in compliance with all
Requirements of Law and all Contractual Obligations binding upon it or its
property (including the Supply Contract), except where the failure to be in
compliance could not reasonably be expected to have a Material Adverse Effect.
Section 3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Such Borrower
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents and to borrow and obtain the making of the Loans. Such
Borrower has taken all necessary action to authorize the execution, delivery and
performance by it of
the Loan Documents. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required to be obtained or made by such Borrower in connection with, the making
of the Loans, or by such Borrower in connection with the execution, delivery or
performance by such Borrower of the Loan Documents or the validity or
enforceability with respect to or against it of the Loan Documents or in
connection with the continuing operations of such Borrower other than (a) the
recordation of the Mortgages, (b) consents, authorizations and filings in
connection with enforcement of the Loan Documents, (c) consents, permits and
authorizations specified on SCHEDULES 3.4 OR 3.21 or related to those Loan
Documents identified in Sections 5.9(a) and (b), and (d) consents the absence of
which could not reasonably be expected to have a Material Adverse Effect. This
Agreement has been, and each other Loan Document will be, duly executed and
delivered on behalf of such Borrower which is a party. This Agreement
constitutes, and each other Loan Document to which such Borrower is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Borrower which is a party enforceable against such Person in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
Section 3.5 NO LEGAL BAR. The execution, delivery and performance of the
Loan Documents by such Borrower, the making of the Loans hereunder and the use
of the proceeds thereof by such Borrower will not violate any Requirements of
Law or Contractual Obligation of such Borrower which could reasonably be
expected to have a Material Adverse Effect and will not result in, or require,
the creation or imposition of any Lien on any of its respective properties or
revenues pursuant to any such Requirements of Law or Contractual Obligation
other than as contemplated in or permitted by the Loan Documents.
Section 3.6 NO LITIGATION. Except as set forth in SCHEDULE 3.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of such Borrower
threatened by or against such Borrower or against any of its or their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby or (b) which has a reasonable
likelihood of an adverse determination, and if adversely determined, could
reasonably be expected to have a Material Adverse Effect nor is there any basis
for any such litigation, investigation or proceeding.
Section 3.7 NO DEFAULT. Such Borrower is not in default under or with
respect to any of its Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
Section 3.8 OWNERSHIP OF PROPERTY; LIENS. Such Borrower has or will have
good, marketable and unencumbered title to, and a full ownership interest or a
valid leasehold interest in, all its real property except for such matters as do
not materially adversely affect the use of such property in the conduct of the
business as currently conducted, and own, or hold a valid leasehold interest in,
all its other material property, and none of such property is subject to any
Lien except as permitted by Section 6.1. SCHEDULE 3.8 sets forth a true and
complete list of all real property owned by such Borrower or in which it has a
leasehold interest.
Section 3.9 INTELLECTUAL PROPERTY. Such Borrower owns or has the right to
use all patents, trademarks, permits, service marks, trade names, copyrights,
franchises, formulas, licenses and other rights with respect thereto
("INTELLECTUAL PROPERTY") which are material in the operation of its business.
SCHEDULE 3.9 accurately and completely lists all such Intellectual Property
owned or possessed by or licensed to any Borrower.
Section 3.10 NO BURDENSOME RESTRICTIONS. No Requirements of Law or
Contractual Obligation applicable to such Borrower could reasonably be expected
to have a Material Adverse Effect.
Section 3.11 TAXES. Except as set forth on SCHEDULE 3.11, such Borrower
has filed or caused to be filed all tax returns which, to the knowledge of such
Borrower, are required to be filed and have paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property in respect of such periods and all other material taxes imposed on it
or any of its property by any Governmental Authority (other than any taxes the
amount or validity of which are being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of such Borrower), in respect of such periods.
Section 3.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U, as now
and from time to time hereafter in effect. If requested by any Lender or the
Administrative Agent, such Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in Regulation G or
Regulation U, as the case may be.
Section 3.13 AVAILABILITY AND TRANSFER OF FOREIGN CURRENCY. All requisite
foreign exchange control approvals and other authorizations, if any, of the
Mexican Central Bank and all other Governmental Authorities, where applicable,
have been validly obtained and will be kept current and in full force and
effect, to the extent permitted by Mexican law, in order to allow each of the
Borrowers to purchase Dollars for the servicing through the banking system of
its obligations under the Loan Documents in accordance with their respective
terms.
Section 3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. Such Borrower is
not an "investment company" within the meaning of the Investment Company Act of
1940, as amended. Such Borrower nor any Subsidiary of such Borrower is a
"holding company" or a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended. No Loan
Party is subject to regulation under any Federal or State statute or regulation
(other than Regulation X) which limits its ability to incur Indebtedness as
contemplated herein.
Section 3.15 PURPOSE OF LOANS. The proceeds of the Loans shall be used in
the manner set forth in Section 2.6.
Section 3.16 ENVIRONMENTAL MATTERS. Except to the extent that the
inaccuracy of any of the following (or the circumstances giving rise to such
inaccuracy), individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by such
Borrower (the "PROPERTIES") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute a violation of, or (ii)
could give rise to any material liability under, any Environmental Law or
could materially interfere with the continued operation of the Properties
or could reasonably be expected to impair the fair saleable value thereof;
(b) Such Borrower and the Properties is in compliance with and to
the knowledge of such Borrower have since the date of incorporation of
such Borrower been in compliance with, all applicable Environmental Laws
and applicable Environmental Permits, and each of the Borrowers reasonably
believe that they will be able to comply with all applicable Environmental
Laws in the future and renew or obtain all Environmental Permits necessary
for their operations in the future;
(c) Such Borrower has not received any written notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of its properties, nor to the knowledge of such Borrower,
has any such notice been threatened;
(d) Hazardous Materials have not been transported, disposed of,
emitted, discharged, or otherwise released or threatened to be released by
such Borrower, nor has their disposal been arranged for by such Borrower,
(i) in violation of, or (ii) in a manner or to a location which could
reasonably be expected to give rise to liability under, any applicable
Environmental Law; nor have any Hazardous Materials been generated,
treated, stored, emitted, discharged or otherwise released or threatened
to be released or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give
rise to liability under, any applicable Environmental Law; and
(e) No judicial proceeding or governmental or administrative action
is pending or to the knowledge of such Borrower, threatened under any
Environmental Law to which such Borrower is or to the knowledge of such
Borrower will be named as a party, nor are there any consent decrees or
other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to such Borrower or the Properties.
Section 3.17 MEXICAN SECURITY DOCUMENTS. The Mexican Mortgages, when duly
executed and delivered by each of the Borrowers party thereto will be effective
to create in favor of the Mexican Collateral Agent, for the ratable benefit of
the Lenders, a legal, valid and enforceable security interest in all the
Collateral described therein and will, when duly notarized and recorded, grant a
legal, valid and enforceable security interest in all the Collateral described
therein and shall constitute fully perfected, first priority liens, subject to
applicable law and Permitted Liens, on, and security interests in, all right,
title and interest of each of the Borrowers party thereto in the Collateral
described therein superior in right to any other Person.
Section 3.18 TRUE AND COMPLETE DISCLOSURE. All factual information
including all periodic reports filed with the SEC heretofore or
contemporaneously furnished by or on behalf of such Borrower in writing to the
Administrative Agent or any Lender was or is, and all other factual information
(taken as a whole) hereafter furnished by or on behalf of such Borrower will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and shall not omit to state any material fact
necessary to make such the statements therein not misleading.
Section 3.19 SUBMISSION TO LAW AND JURISDICTION. The choice of governing
law for each of the Loan Documents governed by New York or other state law will
be recognized in the courts of the Republic of Mexico, and those courts will
recognize and give effect to any judgment in respect of any Loan Document
obtained against such Borrower in the courts to which such Borrower has
submitted to the jurisdiction thereof
Section 3.20 SUPPLY CONTRACT. Holdings or any Borrower to which it has
been assigned in whole or part is in compliance in all material respects with
all its obligations pursuant to the Supply Contract, the Supply Contract is in
full force and effect and no default or event of default has occurred and is
existing thereunder.
Section 3.21 PERMITS AND APPROVALS. Except as otherwise set forth in
SCHEDULE 3.21, such Borrower has all permits, authorizations, approvals, and
licenses of any Governmental Authority or other Persons necessary with respect
to the Network. Such Borrower has all material authorizations, permits, consents
or approvals required in the conduct of its business as currently conducted.
SCHEDULE 3.21 A sets forth all material permits, authorizations, approvals and
licenses to any Governmental Authority necessary in the conduct of its business
as currently conducted. SCHEDULE 3.21 sets forth all material permits,
authorizations, approvals and licenses of any Governmental Authority or other
Persons necessary to construct the Network. Unless otherwise specified on
SCHEDULE 3.21, each such material permit, authorization, approval or license on
SCHEDULE 3.21 either (a) has been duly obtained by such Borrower and is in full
force and effect and is not subject to any appeal, restriction, condition,
limitation or other provision that may allow modification or revocation thereof
and that would reasonably be expected to have a Material Adverse Effect or (b)
in light of the status of the construction of the Network is not yet required to
be obtained and no Borrower has any reason to believe such material permit,
authorization, approval or license will not be obtained by the dates by which
they are required. Such Borrower is in compliance in all material respects with
all conditions of any such material authorization, permit, consent or approval
and has received no notification and has no reason to believe that any such
material authorization, permit, consent or approval will be revoked, terminated,
modified or amended in any material way.
Section 3.22 U.S. SECURITY DOCUMENTS. Each of the U.S. Security Documents
are effective to create in favor of the U.S. Collateral Agent, for the ratable
benefit of the Lenders, a legal, valid and enforceable security interest in all
the Collateral described therein and Proceeds thereof and, upon completion of
the filings and other actions specified in the U.S. Security Documents, the U.S.
Security Documents shall constitute fully perfected, first priority Liens on,
and security interests in, all right, title and interest of the relevant
Borrowers in the Collateral described therein and in Proceeds thereof superior
in right to any other Person other than Permitted Liens.
Section 3.23 ERISA. Except as set forth in SCHEDULE 3.23, neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code, except where, in
connection with any such event or noncompliance, the liability which would be
likely to
result could not be reasonably expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred except where, in connection
with any such termination, the liability which would be likely to result could
not be reasonably expected to have a Material Adverse Effect, and no Lien which
remains unsatisfied in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount in excess of $1,000,000. None of the
Borrowers nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan; none of the Borrowers nor any Commonly
Controlled Entity would become subject to any liability under ERISA if the
Borrowers or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made; and no such
Multiemployer Plan is in Reorganization or Insolvent, except where, in any such
case, the liability which would be likely to result could not be reasonably
expected to have a Material Adverse Effect.
Section 3.24 SOLVENCY. As of the Closing Date, after giving effect to the
initial Loan hereunder and the other transactions contemplated to occur on the
Closing Date such Borrower is Solvent.
Section 3.25 SUBSIDIARIES. SCHEDULE 3.25 sets forth the jurisdiction of
incorporation and the location of the principal executive office of such
Borrower.
Section 3.26 YEAR 2000 COMPLIANCE. Holdings and each of its Subsidiaries
have (a) initiated a review and assessment of all areas within its business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the risk that computer applications used by such Borrower
(or its suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999 (the "YEAR 2000 PROBLEM"), (b) developed a plan and timetable
for addressing the Year 2000 Problem on a timely basis, and (c) to date,
implemented such plan in accordance with such timetable in all material
respects. Holdings and each of its Subsidiaries reasonably believe that all
computer applications (including those of suppliers and vendors) that are
material to its business, condition (financial or otherwise), operations,
properties, results of operations, value or prospects, will on a timely basis be
able to perform properly date-sensitive functions for all dates prior to, on and
after January 1, 2000, except where such inability to perform would not have a
Material Adverse Effect.
Section 3.27 INSURANCE. SCHEDULE 3.27 contains a description of all
insurance which each of the Borrowers maintains on its behalf as of the date of
this Agreement. All of such insurance is in full force and effect as of the date
of this Agreement.
Section 3.28 ACCOUNTS. All of the deposit accounts, investment accounts or
other accounts in the name of or used by any Borrower maintained by any bank or
other financial institution are set forth in SCHEDULE 3.28, subject to the right
of the Borrowers to establish new accounts in accordance with Section 6.12.
Section 3.29 SERVICIO CORPORATIVOS. Servicio Corporativos represents and
warrants that its sole assets are contracts between it and the other Mexican
Borrowers for the provision of services with respect to the management and
administration of employment and human resources matters of the other Mexican
Borrowers.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 CONDITIONS TO INITIAL LOANS. The agreement of each Lender to
make the initial Loans requested to be made hereunder is subject to the
satisfaction, immediately prior to or concurrently with the making of such
Loans, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of
each of the Borrowers with a counterpart for each Lender, (ii) for the
account of each Lender, Notes conforming to the requirements hereof and
executed by a
duly authorized officer of each of the Borrowers, as applicable, (iii) the
Pledge Agreement together with the original stock certificates for the
U.S. Borrowers other than Holdings, together with undated stock powers
endorsed in blank by a duly authorized officer of the relevant U.S.
Borrower, (iv) a Blocked Account Agreement for each U.S. bank account, (v)
the Security Agreement, executed and delivered by a duly authorized
officer of each U.S. Borrower, (vi) the Trademark Security Agreement,
executed and delivered by a duly authorized officer of each U.S. Borrower,
(vii) the Landlord Consents and the California Landlord's Waiver
Agreements, for each lease, wherever located, (viii) the Collateral
Assignment of Lease, executed and delivered by a duly authorized officer
of MSN Communications, Inc., (ix) the California Consent, (x) the
Collateral Agency Agreement, executed and delivered by a duly authorized
officer of each Borrower, (xi) each of the Mexican Mortgages, each
executed and delivered by a duly authorized officer of each Mexican
Borrower, (xii) the Trust Agreement of Stock, together with the original
stock certificates for the Mexican Borrowers and with other required
instruments, executed and delivered by a duly authorized officer of each
Mexican Borrower and each Settlor, (xiii) the Account Control Agreement
executed by Xxxxxxx Xxxxx, (xiv) each Endorsement with respect to any
insurance of the Borrowers, and (xv) for the account of each Lender, each
other Loan Document (other than those Loan Documents identified in
Sections 5.9(a) and (b)) executed and delivered by a duly authorized
officer of each of the Borrowers;
(b) DRAWDOWN CERTIFICATE. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of the relevant
Borrowers, dated the date of the initial Loans, substantially in the form
of EXHIBIT D, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent, executed
by the President or any Vice President or any authorized signatory of each
of the relevant Borrowers;
(c) CORPORATE PROCEEDINGS OF THE U.S. BORROWERS. The Administrative
Agent shall have received, with a copy for each Lender, copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each of the U.S.
Borrowers authorizing (i) the execution, delivery and performance by each
of the U.S. Borrowers of this Agreement and the other Loan Documents, (ii)
the consummation of the transactions contemplated thereby, and (iii) the
granting by it of the Liens created pursuant to the U.S. Security
Documents, certified by the Secretary or an Assistant Secretary of each
U.S. Borrower as of the Closing Date, which certificate shall be in form
and substance reasonably satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded and are in full force and effect;
(d) EACH U.S. BORROWER'S INCUMBENCY CERTIFICATE. The Administrative
Agent shall have received, with a copy for each Lender, a certificate of
each of the U.S. Borrowers, dated the Closing Date, as to the incumbency
and signature of the officers of each of the U.S. Borrowers executing any
Loan Document, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President and the Secretary or any
Assistant Secretary of each of the U.S.
Borrowers;
(e) CORPORATE PROCEEDINGS OF EACH OF THE MEXICAN BORROWERS. The
Administrative Agent shall have received, with a copy for each Lender, a
copy of the resolutions, in form and substance reasonably satisfactory to
the Administrative Agent, of the Board of Directors of each of the Mexican
Borrowers authorizing (i) the execution, delivery and performance by each
of the Mexican Borrowers of this Agreement and the other Loan Documents
and (ii) the granting by it of the Liens created pursuant to the Mexican
Security Documents, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked
or rescinded and are in full force and effect;
(f) EACH MEXICAN BORROWER INCUMBENCY CERTIFICATE. The Administrative
Agent shall have received, with a copy for each Lender, a certificate of
each of the Mexican Borrowers, dated the Closing Date, as to the
incumbency and signature of the officers of each of the Mexican Borrowers
executing any Loan Document, reasonably satisfactory in form and substance
to the Administrative Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of each of the
Mexican Borrowers, including the appropriate powers of attorney notarized
by a Mexican notary authorizing such officers to sign the Loan Documents
on behalf of such Mexican Borrower;
(g) ORGANIZATIONAL DOCUMENTS. The Administrative Agent shall have
received, with a copy for each Lender, (i) true and complete copies of the
certificate of incorporation and by-laws (ESTATUTOS SOCIALES) of each
Borrower, certified as of a recent date as complete and correct copies
thereof by the Secretary of State of the State of Incorporation for each
U.S. Borrower and by a Mexican notary with respect to each Mexican
Borrower and (ii) with respect to each U.S. Borrower, certificates of good
standing, certified as of the Closing Date by the Secretary of State of
the State of Incorporation for such U.S. Borrower;
(h) FEES. The Administrative Agent shall have received the fees,
costs, expenses, and charges then due and payable by the Borrowers under
this Agreement and each Loan Document, including, reimbursement for any
fees and disbursements of counsel then due and payable as set forth in
Section 11.5 and the fee to be received by it pursuant to the Cooperation
and Fee Letter;
(i) LEGAL OPINIONS. The Administrative Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions
dated the Closing Date and addressed to the Administrative Agent, the U.S.
Collateral Agent, the Mexican Collateral Agent and each Lender:
(i) the executed legal opinion of Xxxxxx, Xxxxxx & Xxxxxxxxx,
special New York counsel to the Borrowers, in form and substance
satisfactory to the Administrative Agent and covering the matters
set forth on EXHIBIT E-1 with such changes therein as the
Administrative Agent shall approve;
(ii) the executed legal opinion of Gallastegui y Xxxxxx,
Mexican counsel for Loan Documents to the Borrowers, in form and
substance satisfactory to the Administrative Agent and covering the
matters set forth on EXHIBIT E-2 with such changes therein as the
Administrative Agent shall approve;
(iii) the executed legal opinion of Xxxxxxxx Xxxxxxxx y
Forastieri, S.C., Mexican counsel for corporate legal opinions to
the Borrowers, in form and substance satisfactory to the
Administrative Agent and covering the matters set forth on EXHIBIT
E-3 with such changes therein as the Administrative Agent shall
approve;
(iv) the executed legal opinion of Gardere Xxxx Xxxxxx & Xxxxx,
LLC, Texas counsel to Holdings, Telscape USA, Inc., TSCP
International, Inc., Telereunion, Inc. and Interlink Communications,
Inc., in form and substance satisfactory to the Administrative Agent
and covering the matters set forth in EXHIBIT E-4 with such changes
therein as the Administrative Agent shall approve;
(v) the executed legal opinion of Nida & Xxxxxxx, P.C.,
California counsel to MSN Communications, Inc. and Interlink
Communications, Inc., in form and substance satisfactory to the
Administrative Agent and covering the matters set forth in EXHIBIT
E-5 with such changes therein as the Administrative Agent shall
approve;
(vi) the executed legal opinion of Xxxxxxx Berlin Shereff
Xxxxxxxx, LLP, special U.S. telecommunications regulatory counsel to
the U.S. Borrowers, in form and substance satisfactory to the
Administrative Agent and covering the matters set forth in EXHIBIT
E-6 with such changes therein as the Administrative Agent shall
approve;
(j) LIEN SEARCHES/ACTIONS TO PERFECT LIENS. (i) The Lenders shall
have received the results of a recent lien search in each of the
jurisdictions and offices where assets of the Borrowers are located or
recorded, and such search shall reveal no liens on any of the assets of
the Borrowers except for Permitted Liens or liens for which the
Administrative Agent has received duly executed termination statement and
(ii) the Administrative Agent shall have received evidence in form and
substance reasonably satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the filing
of duly executed financing statements on Form UCC- 1, necessary or, in the
reasonable opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Security Documents (other than the Third Party Consents) shall have been
completed (or, to the extent that any such filings, recordings,
registrations and other actions shall not have been completed,
arrangements reasonably satisfactory to the Administrative Agent for the
completion thereof shall have been made);
(k) FINANCIAL STATEMENTS. The Administrative Agent shall have
received, with a copy for each Lender (i) the audited consolidated
financial statements of Holdings for December 31, 1998, and (ii) the
unaudited interim combined and consolidating financial statements of
Holdings for each quarterly period ended subsequent to the date of the
latest financial statements delivered pursuant to clause (i) of this
subsection;
(l) MATERIAL ADVERSE CHANGE. There shall have occurred no material
adverse change in the financial and capital markets for international
issues emanating from Mexico which could impair the participation of
financial institutions hereunder;
(m) NO LITIGATION. No action, suit, proceeding or investigation of
any kind, including arbitration proceedings and actions or proceedings of
or before any Governmental Authority, shall have been instituted or, to
the knowledge of each of the Borrowers, threatened, to which each of the
Borrowers is a party or is subject, or by which any of them or any of
their Properties are bound that, if determined adversely to or against any
such Person could reasonably be expected to have a Material Adverse Effect
nor to each of the Borrowers' knowledge, shall there be any reasonable
basis for any such action, suit, proceeding or investigation except as
identified in SCHEDULE 3.6;
(n) COOPERATION AND FEE LETTER. The Administrative Agent shall have
received from the Borrowers the executed, valid and enforceable
Cooperation and Fee Letter;
(o) SCT LETTER. The Administrative Agent shall have received the
executed, valid and enforceable SCT Letter;
(p) PURCHASE ORDER. The Administrative Agent shall have received a
copy of a purchase order for a Lucent switch between the Vendor and the
relevant Borrower;
(q) SERVICE OF PROCESS. The Administrative Agent shall have received
evidence that each of the Borrowers has appointed an agent for service of
process in New York, New York, U.S.A.;
(r) POLITICAL RISK INSURANCE. The Administrative Agent shall have
received a commitment for political risk insurance in connection with the
Network in compliance with Section 5.14;
(s) PREFERRED STATUS LETTER. The Administrative Agent shall have
received a copy of a preferred status letter between the Vendor and the
Borrowers;
(t) INTELLIGENT NETWORK LETTER. The Administrative Agent shall have
received a copy of a substitution letter between the Vendor and the
Borrowers with respect to Intelligent Network and Pre-Paid Application;
(u) DUE DILIGENCE. The Administrative Agent shall be satisfied with
its due diligence;
(v) DOCUMENTATION. All documentation in connection with any Loan
Document and the transactions contemplated in any such Loan Document shall
be in form and substance satisfactory to the Administrative Agent; and
(w) OTHER CERTIFICATES. The Administrative Agent shall have received
such other documents, evidence, or opinions as it may reasonably request
in connection with the transactions contemplated hereby.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied at or prior to 3:00 p.m., New York City time, on August 31, 1999 (and,
in the event such conditions are not satisfied, the Commitments shall terminate
at such time).
Section 4.2 CONDITION TO EACH LOAN. Subject to Section 4.3, the agreement
of each Lender to make any Loan requested to be made by it on any date
(including, without limitation, its initial Loan), is subject to the
satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrowers in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
(and, in the case of the representations and warranties made on the
Closing Date, after giving effect to the transactions contemplated hereby)
after giving effect to any written updates to information provided to the
Lenders in compliance with the terms hereof as if made on and as of such
date, except to the extent such representations and warranties expressly
relate to an earlier date in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date;
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loan
requested to be made on such date;
(c) DRAWDOWN CERTIFICATES AND APPLICATIONS. Unless the Loans are to
be used to pay interest in accordance with Section 2.2(b), the
Administrative Agent shall have received a Drawdown Certificate with
respect to such Loan and Notes duly executed by the Borrowers in
accordance with Section 2.5 hereof;
(d) LIENS. At any time after each of the Borrowers is required to
satisfy the requirement set forth in Section 5.9, the Administrative Agent
shall have a first priority security interest in the Collateral to the
extent permitted by applicable law and subject to Permitted Liens after
obtaining and duly recording the Mexican Mortgages;
(e) SUPPLY CONTRACT. The Supply Contract shall be in full force and
effect and no default or event of default shall have occurred and be
continuing thereunder;
(f) PERMITS AND APPROVALS. Except as otherwise set forth in Section
3.21, the Borrowers shall have the Concession and all consents, permits,
approvals and licenses of any Governmental Authority or other Persons
necessary on such date in connection with the Network. The Borrowers shall
also have received no notice from any Governmental Authority or other
Persons that any such consent, permit, approval or license is subject to
revocation, termination or modification which, would have a Material
Adverse Effect on the ability of the Borrowers to operate Network;
(g) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent shall
have received with a copy for each Lender, a certificate of a Responsible
Officer of the Borrowers (i) attaching copies, if copies have not been
provided on an earlier date pursuant to this Section, of all material
consents and authorizations of and filings with any Governmental Authority
or any other Person that are set forth on SCHEDULE 3.21 (as obtained), and
each other material consent, license, permit or authorization that is
required to be obtained on or prior to such date or made by the Borrowers
in connection with (A) the Loans hereunder, (B) the execution, delivery or
performance by each of the Borrowers of the Loan Documents or (C) the
validity or enforceability with respect to or against the Borrowers of the
Loan Documents or (D) the continuing material business operations of the
Borrowers as are reasonably requested by the Administrative Agent, and
(ii) stating that such material consents, authorizations and filings, and
any other consent, authorization or filing previously submitted pursuant
to this Section, (A) are in full force and effect and that all applicable
waiting periods under any Requirements of Law shall have expired without
any action being taken or threatened by any competent Governmental
Authority which would restrain, prevent or otherwise impose material
adverse conditions on the transactions contemplated hereby, and (B)
constitute all of the consents, licenses, permits or authorizations then
required to be obtained by the Borrowers in connection
with their material business operations. Each such material consent,
authorization and filing shall be in form and substance reasonably
satisfactory to the Administrative Agent;
(h) NOTES. The Administrative Agent shall have received for the
account of each Lender a Note in the amount of the Loan it shall make with
respect to any Mexican Borrower Obligation on the Borrowing Date; and
(i) TRANSFER RESTRICTION. There shall be no moratorium or other
action by a Governmental Authority which restricts the ability of the
Borrowers to make payments when due under any Loan Document and to
transfer Dollars to the United States, except for administrative
requirements which can be routinely satisfied.
Each borrowing of a Loan by the Borrowers hereunder shall constitute a
representation and warranty by the Borrowers as of the date thereof that the
conditions contained in clauses (a) and (b) of this Section 4.2 have been
satisfied.
Section 4.3 SUBSEQUENT LOANS. Notwithstanding the satisfaction of the
provisions of Sections 4.1 and 4.2, following the Initial Loans, the obligation
of each Lender to make a Loan is subject to the satisfaction of all of the
following additional conditions:
(a) EXTENSION OF CONCESSION. The Administrative Agent shall have
received the executed, valid and enforceable Extension of Concession;
(b) POLITICAL RISK INSURANCE. The Administrative Agent shall have
received an Endorsement with respect to political risk insurance for the
Network in compliance with Section 5.14; and
(c) THIRD PARTY CONSENTS. The Administrative Agent shall have
received the executed, valid and enforceable Consent and Agreement for
each Contractual Obligation listed on SCHEDULE 4.3(C).
ARTICLE V
AFFIRMATIVE COVENANTS
Holdings with respect to itself and each of its Subsidiaries and
each of the Borrowers with respect to itself hereby agree that, so long as the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document, unless the
Required Lenders shall otherwise consent in writing:
Section 5.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 105 days after the
end of each fiscal year of Holdings, (i) a copy of the audited
consolidated balance sheet of Holdings as at the end of such year and the
related audited consolidated statements of income and retained earnings
and of cash flows for such year, setting forth in each case, in
comparative form the figures as of the end of and for the previous year,
reported on without a "going concern" or like qualification or exception,
or a qualification arising out of the scope of the audit, by the
Accountants and (ii) a copy of the consolidating balance sheet of Holdings
as at the end of such year and the related consolidating statements of
income and retained earnings and of cash flows for such year, setting
forth in each case, in comparative form the figures as of the end of and
for the previous year;
(b) as soon as available, but in any event not later than 50 days
after the end of each of the first three quarterly periods of each fiscal
year of Holdings, (i) the unaudited consolidated and consolidating balance
sheet of Holdings as at the end of such quarter and (ii) the related
unaudited consolidated and consolidating statements of income and retained
earnings and of cash flows of Holdings
for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case, in comparative form the figures
as of the end of and for the corresponding period in the previous year,
certified by a Responsible Officer of Holdings as being fairly stated in
all material respects (subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail, in accordance with GAAP
(subject to the addition, in the case of clause (b) of year end audit
adjustments) applied consistently throughout the periods reflected therein and
with prior periods (except as approved by such Accountants or Responsible
Officer as the case may be, and disclosed therein).
Section 5.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) and (b), a certificate of the Accountants
reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or
Event of Default having occurred as of the end of the fiscal year covered
by such financial statements, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Section 5.1, a certificate of a Responsible Officer of each
of the Borrowers stating that each of the Borrowers during such period has
observed or performed in all material respects all of its covenants and
other agreements, and satisfied every condition in all material respects,
contained in this Agreement and the other Loan Documents to be observed,
performed or satisfied by it during such period, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate;
(c) promptly upon receipt thereof, copies of all reports submitted
to any of the Borrowers by independent certified public accountants in
connection with each annual, interim or special audit of the books of each
of the Borrowers made by such accountants, including, without limitation,
any management letter commenting on each of the Borrowers' internal
controls submitted by such accountants to management in connection with
their annual audit;
(d) promptly upon filing thereof, copies of any filing that Holdings
or any of its Subsidiaries files with the SEC;
(e) promptly, such additional financial and other information within
the possession of any of the Borrowers as any Lender may from time to time
reasonably request through the Administrative Agent; and
(f) on the last day of each quarter, a certificate of a Responsible
Officer of each of the Mexican Borrowers (other than a Mexican Borrower
who has entered into a Cash Trust Agreement) representing and certifying
that the consolidated account balance for all accounts of such Mexican
Borrower were not in excess of $250,000 for such quarter then ending.
Section 5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they became delinquent, as the case may be, all its
material obligations of whatever nature including taxes and fees, except as
contemplated by this Agreement or where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
any of the Borrowers or the failure to pay the same could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, as the case may be.
Section 5.4 CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE; COMPLIANCE WITH
LAWS. Continue to engage in business of the same general type as now conducted
by or as contemplated in the Supply Contract and preserve, renew and keep in
full force and effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or desirable, in any
material respect in the normal conduct of its business except
as otherwise permitted pursuant to Section 6.2; comply in all material respects
with all Contractual Obligations and Requirements of Law (excluding, for
purposes of this Section 5.4, Requirements of Law and Contractual Obligations
specifically addressed elsewhere in this Article V) except where (a) any such
Contractual Obligation is being contested in good faith, a bona fide dispute
exists with respect to any such Contractual Obligation or failure to comply
therewith could not in the aggregate, reasonably be expected to have a Material
Adverse Effect and (b) the failure to comply with any such Requirements of Law
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
material to the conduct of its business in good working order and condition
(normal wear and tear and obsolescence excepted); (b) maintain insurance with
financially sound and reputable insurance companies with an A.M. Best rating of
A- or better on such of its property and in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and (c) furnish to the
Administrative Agent, upon written request, full information as to the insurance
carried. In addition, as soon as reasonably practicable after receipt from the
relevant insurers of any payment of any claim under any insurance policy for
loss or damage to the Collateral, the Borrowers shall deposit all such proceeds
that any Borrower receives into a separate segregated account with the U.S.
Collateral Agent for the benefit of the Lenders in accordance with the
Collateral Agency Agreement. Subject to the Collateral Agency Agreement, the
Borrowers shall be permitted to withdraw any amount on deposit in such account
for the sole purpose of acquiring equipment of at least substantially similar
nature or value to the affected Collateral from the Vendor or otherwise or to
prepay Loans outstanding in accordance with Section 2.8(b). If at any time
following the Closing Date, any insurance company providing insurance pursuant
to clause (b) of this Section falls to a level below the required rating, the
Borrowers shall, as soon as possible and in no event later than 30 days after
such downgrading of the required rating, replace such insurance with insurance
from an insurance company with the required rating acceptable to the
Administrative Agent.
Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper financial records in conformity with GAAP and all Requirements of Law;
and permit (a) representatives of the Administrative Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time during normal business hours,
upon advance written notice, and as often as may reasonably be desired;
PROVIDED, that except during the continuance of an Event of Default, no advance
notice shall be required, and (b) upon advance written notice during normal
business hours, representatives of the Administrative Agent or any Lender to
discuss the business, operations, properties and financial and other condition
of the Borrowers with officers and employees of the Borrowers and with their
Accountants.
Section 5.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default by any Borrower under any
Contractual Obligation to which any Borrower is bound and of which it has
knowledge or notice or (ii) litigation, investigation or proceeding which
may exist at any time between any Borrower and any Governmental Authority
of which any of them has knowledge or notice, which in either case, if not
cured or resolved or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any pending or threatened claim, litigation or proceeding
affecting any Borrower, of which any Borrower has knowledge or notice, in
which the amount involved is not covered by insurance or in which
injunctive or similar relief is sought and which, in either case, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after any Borrower knows or has reason to know thereof (i)
the occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan, in each of cases (i) and (ii), where such event
could reasonably be expected to have a Material Adverse Effect; and
(e) any other development or event of which any Borrower has
knowledge or notice which could reasonably be expected to have a Material
Adverse Effect.
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action such Borrower proposes to take with respect
thereto.
Section 5.8 ENVIRONMENTAL LAWS.
(a) Comply with and use reasonable efforts to ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental
Laws and obtain and comply with and maintain, and use reasonable efforts
to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all Environmental Permits required by applicable
Environmental Laws, except where the failure to so comply with such laws
or permits or obtain and maintain such permits could not reasonably be
expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required by any
Governmental Authority under Environmental Laws and promptly comply with
all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that the failure to do any of the
foregoing could not reasonably be expected to have a Material Adverse
Effect.
Section 5.9 MAINTENANCE OF LIENS OF THE SECURITY DOCUMENTS.
(a) As soon as possible but in any event no more than ninety (90)
days after the Closing Date, each of the Borrowers must (i) do all acts
necessary in order that each Mexican Mortgage granted by the Mexican
Borrowers creates a first priority security interest on the assets secured
by each such Mortgage to the extent permitted by applicable law; (ii)
deliver to the Administrative Agent the Extension of Concession; (iii)
deliver to the Administrative Agent an Endorsement with respect to
political risk insurance for the Network in compliance with Section 5.14;
(iv) deliver to the Administrative Agent the Third Party Consents listed
on SCHEDULE 4.3(C); and (v) deliver to the Administrative Agent favorable
written opinions of counsel (addressed to the Administrative Agent, the
U.S. Collateral Agent, the Mexican Collateral Agent and the Lenders and
dated no later than ninety (90) days after the Closing Date) of the
Mexican counsel, the New York counsel, and such other legal counsel as may
reasonably be requested by the Administrative Agent, in each case, in form
and substance satisfactory to the Administrative Agent.
(b) As soon as possible after the Closing Date, each of the
Borrowers shall use its best efforts to (i) deliver to Administrative
Agent the CFE Consent; (ii) deliver to the Administrative Agent the SCT
Authorization; (iii) deliver to the Administrative Agent the Third Party
Consents listed on SCHEDULE 5.9(B), (iv) deliver to the Administrative
Agent the Mexican Landowner Consents, (v) deliver to the Administrative
Agent a Mexican Industrial Mortgage with respect to Servicio Corporativos,
and (vi) deliver to the Administrative Agent favorable written opinions of
counsel (addressed to the Administrative Agent, the U.S. Collateral Agent
and the Mexican Collateral Agent and dated the date of such delivery) of
the Mexican counsel or the New York counsel, as the case may be, as may
reasonably be requested by the Administrative Agent, with respect to each
of the items set forth in clauses (i) through (v), in form and substance
satisfactory to the Administrative Agent.
(c) As soon as possible after the Closing Date but in no event later
than the commencement date of operation of the Network, Telereunion shall
and each of the Borrowers shall cause Telereunion to either (i) satisfy
each of the overall equity capitalization and total debt to equity ratio
requirements currently contained in the Concession, or (ii) receive, a
written modification, in form and substance satisfactory to the
Administrative Agent, of each of the overall equity capitalization and
total debt to equity
ratio requirements currently contained in the Concession from any and all
necessary Governmental Authority.
(d) Undertake all actions which are necessary or appropriate in the
reasonable judgment of the Administrative Agent to (i) maintain the
Lenders' senior security interest in the Collateral (including the
priority thereof) in full force and effect at all times, (ii) preserve and
protect the Collateral, and (iii) protect and enforce each of the
Borrower's rights and title, and the rights of the Lenders, to the
Collateral. Subject to the prior written consent of the Administrative
Agent, not to be unreasonably withheld if the terms of the proposed
agreement are reasonable to the Borrowers, the Borrowers may enter into
agreements pursuant to which the Borrowers sell, lease or assign rights or
interests in fiber optic cable facilities owned or operated by the
Borrowers in exchange for rights or interests in other fiber optic cable
facilities provided that a first priority Lien on the resulting rights or
interests of the Borrowers pursuant to any such agreement is granted to
the Administrative Agent pursuant to Section 5.10.
Section 5.10 PLEDGE OF AFTER ACQUIRED PROPERTY; ADDITIONAL BORROWERS.
(a) If at any time following the Closing Date, any Borrower shall
acquire property of any nature whatsoever which is intended by the terms
of the applicable Security Document to be, but is not, subject to the
Liens created by the Security Documents, such Borrower shall, as soon as
possible and in no event later than 30 days after the relevant acquisition
date and, to the extent permitted by applicable law, grant to the
Administrative Agent for the ratable benefit of the Lenders a first
priority Lien subject to Permitted Liens on such property as collateral
security for with respect to a Mexican Borrower, the Mexican Borrower
Obligations, and with respect to a U.S. Borrower, the Obligations,
pursuant to documentation reasonably satisfactory in form and substance to
the Administrative Agent. The Borrowers, at their own expense, shall
execute, acknowledge and deliver, or cause the execution, acknowledgement
and delivery of, and thereafter register, file or record in an appropriate
governmental office, any document or instrument (including legal opinions,
title insurance, consents and corporate documents) and take all such
actions reasonably deemed by the Administrative Agent to be necessary or
desirable to ensure the creation, priority and perfection of such Lien.
(b) (i) Holdings shall cause each new Subsidiary of Holdings created
or acquired after the date hereof, promptly upon such creation or
acquisition, to execute an instrument, substantially in the form of the
Accession Agreement in form and substance reasonably satisfactory to the
Administrative Agent pursuant to which such new Subsidiary shall become a
party hereto and the Lenders agree to permit such Subsidiary to be a
Borrower hereunder, and (ii) Holdings shall, or shall cause the Subsidiary
of Holdings which holds the Capital Stock of such new Subsidiary to,
execute and deliver an instrument in form and substance reasonably
satisfactory to the Administrative Agent providing for the pledge of 100%
of the issued and outstanding Capital Stock of each new Subsidiary of
Holdings created or acquired after the date hereof and owned by Holdings
or one of its Subsidiaries to the U.S. Collateral Agent or the Mexican
Collateral Agent with respect to Subsidiaries incorporated in Mexico for
the benefit of the Lenders, and the Borrowers shall deliver to the U.S.
Collateral Agent or the Mexican Collateral Agent the stock certificates
evidencing such Capital Stock together with undated stock powers for each
such certificate, duly executed in blank.
Section 5.11 MAINTENANCE OF PERMITS AND APPROVALS. Obtain each permit,
consent, license or approval of any Governmental Authority or Person required in
connection with the construction of the Network or any part thereof or necessary
in the conduct of its business at or before the time such permit, consent,
license or approval is required and comply in all material respects with the
terms and conditions of, and otherwise maintain in full force and effect without
material adverse modification, any such permit, consent, license or approval or
any permit, consent, license or approval of any Governmental Authority or Person
material in the transaction of its business.
Section 5.12 SUPPLY CONTRACT. Comply in all material respects with the
terms and conditions of the Supply Contract.
Section 5.13 USE OF PROCEEDS. Use the proceeds of the Loans in the manner
set forth in Section 2.6.
Section 5.14 POLITICAL RISK INSURANCE. Cooperate to obtain political risk
insurance with respect to the Network acceptable to the Administrative Agent for
the benefit of the Lenders; PROVIDED, HOWEVER, that the Borrowers shall be
responsible for payment of the insurance premiums, exposure fees and any other
related charges for a minimum amount of $18,000,000 of political risk insurance.
Section 5.15 CASH TRUST AGREEMENTS.
i) As soon as possible but in any event no more than ten (10)
Business Days after the Closing Date, each of the Borrowers must (i)
deliver to the Administrative Agent the executed, valid and enforceable
Telereunion Cash Trust Agreement, (ii) deliver to the Administrative Agent
the executed, valid and enforceable Vextro Cash Trust Agreement, and (iii)
deliver to the Administrative Agent favorable written opinion of Mexican
counsel, addressed to the Administrative Agent, the U.S. Collateral Agent,
the Mexican Collateral Agent and the Lenders and dated no later than ten
(10) Business Days after the Closing Date, in form and substance
satisfactory to the Administrative Agent.
(a) At any time, if any Mexican Borrower (other than a Mexican
Borrower who has entered into a cash trust agreement) shall not be able to
deliver a certificate pursuant to Section 5.2(f) because such Mexican
Borrower's consolidated account balance for all of its accounts exceeds
$250,000 for any quarter, such Mexican Borrower must, as soon as possible
but in any event no more than ten (10) Business Days after the quarter
then ended, (i) deliver to the Administrative Agent the executed, valid
and enforceable cash trust agreement in form and substance satisfactory to
the Administrative Agent and (ii) deliver to the Administrative Agent
favorable written opinion of Mexican counsel, addressed to the
Administrative Agent, the U.S. Collateral Agent, the Mexican Collateral
Agent and the Lenders and dated no later than ten (10) Business Days after
the quarter then ended, in form and substance satisfactory to the
Administrative Agent.
ARTICLE VI
NEGATIVE COVENANTS
Holdings with respect to itself and each of its Subsidiaries and
each of the Borrowers with respect to itself hereby agree that, so long as the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document outstanding,
each shall not, directly or indirectly, unless the Required Lenders shall
otherwise agree in writing:
Section 6.1 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for the following ("PERMITTED LIENS"):
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of Holdings or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) statutory landlords' liens and carriers', warehousemen' s,
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business for sums which are not overdue for a period of
more than 90 days or which are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money) leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) all easements, zoning restrictions, flowage rights, rights-of
way, covenants, conditions, restrictions, reservations, licenses,
agreements and other similar matters, including the unrecorded easements
and similar agreements set forth in SCHEDULE 6.1(E), which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the use of the property subject thereto or
materially interfere with the ordinary conduct of the business of Holdings
or such Subsidiaries;
(f) Liens in existence on the date hereof listed on SCHEDULE 6.1(F),
PROVIDED that no such Lien is spread to cover any additional property
after the Closing Date and that the amount of indebtedness secured thereby
shall not subsequently be increased, except for an advance from NTFC
Capital Corporation in an amount not to exceed $1,300,000;
(g) all building codes and zoning ordinances and other laws,
ordinances, regulations, rules, orders or determinations of any Federal,
state, county, municipal or other governmental authority now or hereafter
enacted;
(h) Liens created pursuant to the Loan Documents;
(i) restrictions on the transfer of assets imposed by the Concession
as now in effect or by any Requirements of Law;
(j) Liens on any property or asset existing thereon at the time of
acquisition of such property or asset and not created in connection with
such acquisition; and provided that the amount of Indebtedness secured
thereby is not increased in connection with such acquisition and does not
exceed the fair market value of property or asset;
(k) Replacement or renewal of any Lien permitted above, provided
that such new Lien is limited to the property or asset which was subject
to the prior Lien immediately before such renewal or replacement; and
(l) Liens on fiber optic cable facilities which are part of the
Network created pursuant to sales, lease or assignments of rights of
interests in such fiber optic cable facilities so long as the condition
set forth in Section 5.9(c) is met with respect to such sale, lease or
assignment.
Section 6.2 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) any Subsidiary of Holdings may be merged or consolidated with or
into Holdings (provided that Holdings shall be the continuing or surviving
corporation) or with or into any one or more Subsidiaries of Holdings or
with or into another Person (provided that the Subsidiary of Holdings
shall be the continuing or surviving corporation);
(b) any Subsidiary of each of the Borrowers may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrowers or any other Subsidiary of the
Borrowers so long as the effect of such sale, lease, transfer or other
disposition will not dilute such assets without proper consideration; and
(c) Holdings may be merged or consolidated with or into another
Person provided that Holdings shall be the continuing or surviving
corporation and that, following such merger or consolidation, no default
or Event of Default would exist and be continuing hereunder.
Section 6.3 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in any Person (an
"INVESTMENT"), except:
(a) extensions of trade credit and endorsements of negotiable
instruments and other documents in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Investments by any Borrower in another Borrower;
(d) loans to officers, directors and employees of the Borrowers,
Holdings and their Subsidiaries where cash is paid out to such officers,
directors, and employees shall not exceed in the aggregate $500,000 at any
one time;
(e) Investment in Telecommunications companies; and
(f) acquisitions of Telecommunications equipment.
Section 6.4 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS AND OTHER OBLIGATIONS. (a) Make any optional payment or prepayment
on or redemption, defeasance or purchase of any Indebtedness unless otherwise
permitted under Article II hereof, (b) amend, modify or change, or consent or
agree to any amendment, modification or change to any of the terms of any
Indebtedness (other than any such amendment, modification or change which (i)
would extend the maturity or reduce the amount of any payment of principal
thereof or would reduce the rate or extend the date for payment of interest
thereon, (ii) does not in any way adversely affect the interests of the
Administrative Agent or the Lenders hereunder, thereunder or under the other
Loan Documents, or (iii) is of a technical or clarifying nature), or (c) amend,
modify or change, or consent or agree to any amendment, modification or change
to the articles of incorporation (or such similar charter documents) of the
Borrowers in any material respect.
Section 6.5 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, or (b) in the
ordinary course of Holdings' or such Subsidiary's business and upon fair and
reasonable terms no less favorable to Holdings or such Subsidiary, as the case
may be, than it would obtain in a comparable arm's-length transaction with a
Person which is not an Affiliate; PROVIDED THAT the foregoing restriction shall
not prohibit (i) transactions among the Borrowers and any Subsidiary thereof and
between Subsidiaries, (ii) indemnification payments to officers and directors of
any Borrower or any of its respective Subsidiaries, or (iii) the payment of
certain management fees not to exceed the lesser of two and one-half percent
(2.5%) of the investments of the Equity Investors or in the aggregate $625,000
per annum pursuant to certain consulting agreements with the Equity Investors.
Section 6.6 LIMITATION OF RESTRICTED PAYMENTS. Declare or make, or agree
to pay or make, directly or indirectly, any Restricted Payment (or incur any
obligation to do so), except (a) each of the Borrowers may declare and pay
dividends with respect to its Capital Stock payable solely in additional shares
of its common stock that are pledged pursuant to the Pledge Agreement as
provided therein, (b) Subsidiaries may declare and pay dividends ratably to
their shareholders with respect to their Capital Stock, (c) Subsidiaries may
make payments ratably to their Shareholders on account of the redemption of
their Capital Stock, (d) each Borrower may declare and pay dividends to the
other Borrowers with respect to their Capital Stock, (e) each Borrower may make
any payment on any Indebtedness owed to another Borrower but solely to the
extent permitted pursuant to Article VIII, (f) if at the time thereof and after
giving effect thereto no Default has occurred and is continuing, each of the
Borrowers may make a payment in cash on the date that any amount is due and
payable with respect to any Indebtedness listed on SCHEDULE 6.6 in an amount not
exceeding the amount due and owing, or (g) Holdings may make the payment of
certain management fees not to exceed the lesser of two and one-half percent
(2.5%) of the investments of the Equity Investors or in the aggregate $625,000
per annum pursuant to certain consulting agreements with the Equity Investors;
PROVIDED that any Restricted Payment otherwise permitted pursuant to this
Section shall not be permitted unless the Borrower shall have delivered to the
Administrative Agent, prior to such Restricted Payment, a certificate signed by
a Responsible Officer setting forth the amount of such Restricted Payment and
certifying that all conditions to such Restricted Payment are satisfied.
Section 6.7 LIMITATION ON CHANGES IN FISCAL YEAR. Without the consent of
the Required Lenders, which shall not be unreasonably withheld, permit the
fiscal year of the Borrowers to end on a day other than December 31.
Section 6.8 LIMITATION ON ISSUANCE OF CAPITAL STOCK. Without the consent
of the Required Lenders, which shall not be unreasonably withheld, issue or
transfer legal or beneficial interest in any Capital Stock (including, without
limitation, preferred stock) of any Borrower other than Holdings that would
result in any Person (other than a Borrower) holding in excess of five percent
of such Borrower.
Section 6.9 CONDUCT OF BUSINESS. Engage in any business other than the
business of telecommunications and businesses which are related thereto.
Section 6.10 AMENDMENT OF MATERIAL CONTRACTS. Without the consent of the
Required Lenders, amend, modify or supplement a material term of (a) a
Contractual Obligation in connection with the construction, operation, ownership
and maintenance of the Network or the business derived from the Network, or (b)
any other Contractual Obligation, the amendment or modification of which could
reasonably be expected to have a Material Adverse Effect.
Section 6.11 EQUITY DOCUMENTS. Enter into the Equity Documents other than
in substantially in the form of the drafts of such Equity Documents provided
prior to the date hereof to the Administrative Agent, with such changes therein
as it may approve.
Section 6.12 ADDITIONAL BANK ACCOUNTS. Open, establish or maintain any
deposit account, investment account or any other account with any bank or other
financial institution, other than the accounts set forth in SCHEDULE 3.28,
except with the prior written consent of the Administrative Agent, which shall
not be unreasonably withheld, and subject to such conditions thereto as the
Administrative Agent may establish in accordance with Section 5.10.
ARTICLE VII
FINANCIAL CONDITION COVENANTS
Holdings agrees that, so long as the Commitments remain in effect
or any amount is owing to any Lender or the Administrative Agent hereunder or
under any other Loan Document, Holdings shall not, unless the Required Lenders
shall otherwise agree in writing:
Section 7.1 RATIO OF CONSOLIDATED TOTAL DEBT TO TOTAL CAPITALIZATION.
Permit the ratio of (i) Consolidated Total Debt outstanding on any of the dates
set forth below to (ii) Total Capitalization on such date to exceed the ratio
set forth opposite such date:
DATE RATIO
------- ---------
9/30/99 0.55 to 1
12/31/99 0.55 to 1
3/31/00 and each quarter end until Maturity Date 0.50 to 1
Section 7.2 RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA.
Permit the ratio of (i) Consolidated Total Debt outstanding on any of the dates
set forth below to (ii) Consolidated EBITDA for the period of four consecutive
quarters ending on such date to exceed the ratio set forth opposite such date:
DATE RATIO
------- ---------
3/31/00 6.0 to 1
6/30/00 and each quarter end until Maturity Date 6.0 to 1
Section 7.3 CAPITAL EXPENDITURES. Permit Capital Expenditures for any of
the periods set forth below to exceed the amount set forth opposite such period:
DATE AMOUNT
------- ---------
1/1/99 through 12/31/99 60,000,000
1/1/00 through 12/31/00 12,000,000
1/1/01 through Maturity Date 10,000,000 (annually)
Notwithstanding the foregoing, the Borrowers shall be permitted to carry over
from 1999 and add to the amount of Capital Expenditures permitted in 2000, any
amount yet to be paid under the Supply Agreement, as originally executed, if
such amount would be a Capital Expenditure.
Section 7.4 1999 CONSOLIDATED EBITDA. Permit the Consolidated EBITDA for
the period ending 1999 to be less than $3,000,000.
Section 7.5 RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED DEBT SERVICE
Obligations. Permit the ratio of (i) Consolidated EBITDA for the period of four
consecutive quarters ending on such dates as set forth below to (ii)
Consolidated Debt Service Obligations as of the last day of any quarter
occurring during any period set forth below to be less than the ratio set forth
opposite such period:
DATE RATIO
------- ---------
6/30/00 1.00 to 1
9/30/00 1.25 to 1
12.31/00 and each quarter end until Maturity Date 1.50 to 1
ARTICLE VIII
SUBORDINATION; WAIVER
Section 8.1 SUBORDINATION.
(a) GENERALLY. The Subordinated Claims shall be and hereby are
expressly made subordinate and junior in right of payment to all
Obligations to the extent and in the manner provided in these
Subordination Provisions. These Subordination Provisions are made for the
benefit of the Secured Parties including the Collateral Agents, and the
Collateral Agents are express third party beneficiaries hereof, with the
same effect as if their names were written as such in this Agreement. Any
Secured Party or all of them may proceed to enforce these Subordination
Provisions. Each Borrower waives any and all notice of the creation or
accrual of any Obligation and notice of acceptance and proof of reliance
upon these Subordination Provisions by any Secured Party. Moreover, each
Borrower agrees:
(i) to be bound by these Subordination Provisions;
(ii) that each Obligation shall conclusively be deemed to have
been created, contracted, and incurred in reliance upon these
Subordination Provisions; and
(iii) that all dealings between any Borrower and the Secured
Parties shall be deemed to have been consummated in reliance upon
these Subordination Provisions.
(b) BINDING ON TRANSFEREES, ETC. These Subordination Provisions
shall be binding upon any transferee or assignee of any Subordinated
Claim.
(c) LEGEND. Each note or other instrument evidencing any
Subordinated Claim (or, if none, the relevant Subordinated Agreement)
shall contain the following legend, conspicuously noted on the face
thereof:
THIS [NAME OF INSTRUMENT OR AGREEMENT] IS SUBJECT TO THE
SUBORDINATION PROVISIONS SET FORTH IN ARTICLE VIII TO THE CREDIT
AGREEMENT, DATED AS OF AUGUST __, 1999, AMONG TELEREUNION S.A. DE
C.V., A MEXICAN CORPORATION, TELEREUNION INTERNATIONAL, S.A. DE
C.V., A MEXICAN CORPORATION, TELSCAPE INTERNATIONAL, INC., A TEXAS
CORPORATION, AND THE OTHER BORROWERS LISTED ON SCHEDULE 1.0 THERETO
AND THE ADDITIONAL BORROWERS FROM TIME TO TIME PARTY THERETO, LUCENT
TECHNOLOGIES INC., IN ITS CAPACITY AS ADMINISTRATIVE AGENT, AND THE
SEVERAL LENDING INSTITUTIONS THAT FROM TIME TO TIME ARE PARTY
THERETO.
Section 8.2 TURNOVER OF IMPROPER PAYMENTS. If any payment or distribution
of any character (whether in cash, securities, or other property) shall be
received by any Borrower in contravention of any of the terms hereof, such
Borrower shall promptly return such payment or distribution to the relevant
Borrower(s). Each Secured Party is irrevocably authorized to supply any required
endorsement or assignment that may have been omitted. Until so delivered, such
Borrower shall (a) hold such improper payment or distribution in trust for the
Secured Parties and (b) not commingle such payment or distribution with other
funds or property of any Borrower. The foregoing obligation shall survive, and
shall not be in any way affected by, the result of any Proceeding.
Section 8.3 OBLIGATIONS ABSOLUTE; WAIVERS.
(a) NO PREJUDICE OR IMPAIRMENT. The liabilities of any Borrower with
respect to the Obligations or the Subordination Provisions shall remain in
full force and effect without regard to, and shall not be impaired or
affected by:
(i) any act or failure to act on the part of any Borrower;
(ii) any renewal, extension, accrual, or indulgence in respect
of any payment or prepayment of any Obligation or any part thereof
or in respect of any other amount payable to any Secured Party;
(iii) any amendment, modification, or waiver of, or addition or
supplement to, or deletion from, or compromise, release, consent, or
other action in respect of, any of the terms of any Loan Document or
any other agreement that may be made relating to any Obligation;
(iv) any exercise or non-exercise by any Secured Party of any
right, power, privilege, or remedy under or in respect of any
Obligation or these Subordination Provisions, or any waiver of any
such right, power, privilege, or remedy or of any default in respect
of such Obligation, any Loan Document, or these Subordination
Provisions;
(v) any receipt by any Secured Party of any security, or any
failure by such Secured Party to perfect a security interest in, or
any release by such Secured Party of, any security for the payment
of any Obligation;
(vi) any merger or consolidation of any Borrower into or with
any other Person, or any sale, lease, or transfer of any or all of
the assets of any Borrower to any other Person, with or without the
consent of any Secured Party;
(vii) absence of any notice to, or knowledge by, the Borrowers
of the existence or occurrence of any of the matters or events set
forth in the foregoing clauses (i) through (vi); or
(viii) any other circumstance whatsoever.
(b) WAIVERS. The Borrowers unconditionally waive:
(i) notice of any of the matters referred to in Section
8.5(a);
(ii) to the extent permitted by law, all notices that may be
required, whether by statute, rule of law, or otherwise, to preserve
intact any rights of any Secured Party against any Borrower,
including any:
(A) demand, presentment, protest, or proof of notice of
nonpayment under any Obligation; and
(B) notice of any failure on the part of any Borrower to
perform and comply with any covenant, agreement, term, or
condition of any Loan Document;
(iii) any condition to the enforcement, assertion, or exercise
by any Secured Party of any right, power, privilege, or remedy
conferred in any Loan Document or otherwise;
(iv) any requirement of diligence on the part of any Secured
Party;
(v) any requirement on the part of any Secured Party to
mitigate damages resulting from any default under any Loan Document;
(vi) any notice of any sale, transfer, or other disposition of
any Collateral by any Secured Party;
(vii) any defense based on the adequacy of a remedy at law that
might be asserted as a bar to the remedy of specific performance of
any provision of this Agreement or the Notes;
(viii) the defense that any claim asserted by any Secured Party
pursuant to any provision of this Agreement or the Notes is RES
JUDICATA as a result of any decision rendered in any prior
proceeding; and
(ix) any other matter that could result in a defense to the
enforcement of any provision of this Agreement or the Notes.
(c) REINSTATEMENT. The obligations of the Borrowers under these
Subordination Provisions shall continue to be effective, or be reinstated,
as the case may be, if at any time any payment in respect of any
Obligation, or any other payment to any Secured Party in its capacity as
such, is rescinded or must otherwise be restored or returned by such
Secured Party upon the occurrence of any Proceeding, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Borrower or any substantial part of
its property, or otherwise, all as though such payment had not been made.
(d) MODIFICATIONS, ETC., OF THE OBLIGATIONS. Each Borrower hereby
irrevocably consents and assents to:
(i) any renewal, extension, or postponement of the time of
payment of any Obligation or any other indulgence with respect
thereto;
(ii) any increase in the amount of any Obligation;
(iii) any substitution, exchange, or release of collateral for
any Obligation;
(iv) the addition or release of any Person primarily or
secondarily liable for any Obligation; and
(v) the provisions of any agreement, instrument, security, or
other writing evidencing, amending, supplementing, or otherwise
modifying any Obligation.
Section 8.4 SUBROGATION. No Borrower shall have any subrogation or other
right as the holder of an Obligation, and each Borrower hereby waives all rights
to exercise subrogation rights and all rights of reimbursement or indemnity
whatsoever and all rights of recourse to any security for any Obligation until
the Obligations shall have been Indefeasibly Paid.
Section 8.5 LIMITATION ON ACTIONS. Each Borrower agrees and undertakes
that:
(a) GENERALLY. Except as provided in Section 8.2 hereof, no Borrower
shall:
(i) demand, xxx for, or accept from any other Borrower or any
other Person any payment or collateral in respect of any
Subordinated Claim;
(ii) take any action to enforce any of its rights or exercise
any of its remedies in respect of any Subordinated Claim or any
collateral therefor, including any action to foreclose on any asset
of any Borrower; or
(iii) commence, prosecute, or participate in any administrative,
legal, or equitable action against any Borrower to enforce payment
of any Subordinated Claim;
(b) RIGHTS OF THE SECURED PARTIES UPON A VIOLATION. If any Borrower,
in violation of any provision herein set forth, shall commence, prosecute,
or participate in any suit, action, case, or proceeding against any
Borrower:
(i) any Borrower may interpose as a defense or plea the
provisions set forth herein, and any Secured Party may intervene and
interpose such defense or plea in its own name or in the name of any
Borrower; and
(ii) any Secured Party shall, in any event, be entitled to
restrain the enforcement of the payment provisions of any
Subordinated Agreement in its own name or in the name of any
Borrower, as the case may be, in the same suit, action, case, or
proceeding or in any independent suit, action, case, or proceeding.
(c) NO COLLATERAL FOR ANY SUBORDINATED CLAIM. No Borrower shall
take, obtain, or hold (or permit anyone acting on its behalf to take,
obtain, or hold) any assets of any Borrower, whether as a result of any
administrative, legal, or equitable action, or otherwise, in violation of
the provisions of these Subordination Provisions.
Section 8.6 PROCEEDINGS.
(a) NO COMMENCEMENT BY ANY BORROWER. No Borrower shall commence, or
join with any other creditor or creditors of any Borrower in commencing,
any Proceeding.
(b) RIGHTS OF THE SECURED PARTIES IN A PROCEEDING. Each Secured
Party is hereby irrevocably authorized (but not required) in any
Proceeding:
(i) to enforce claims comprising Subordinated Claims in the
name of any Borrower by proof of debt, proof of claim, suit, or
otherwise;
(ii) to collect any assets of any Borrower distributed,
divided, or applied by way of dividend or payment, and any
securities issued, in each case on account of Subordinated Claims,
and apply the same to Senior Claims; provided that if any Secured
Party receives any payment in excess of its Obligation, it shall
either pay such excess to the Borrowers as directed in the
Proceeding or interplead such excess with a court of competent
jurisdiction;
(iii) to vote claims comprising Subordinated Claims to accept or
reject any plan of partial or complete liquidation, reorganization,
arrangement, composition, or extension; and
(iv) to take generally any action in connection with such
Proceeding that any Borrower might otherwise take.
Each Borrower shall cooperate fully with each Secured Party and perform all acts
requested by any Secured Party to enable any Secured Party to enforce any
Subordinated Claim as aforesaid on behalf of such Secured Party, including
filing appropriate proofs of claim and executing and delivering all necessary
powers of attorney, assignments, or other instruments.
(c) INQUIRY BY A BORROWER. After the commencement of any Proceeding,
any Borrower may inquire in writing to any Secured Party whether such
Secured Party has exercised the rights set forth in Section 8.6(b) hereof
with respect to such Borrower's Subordinated Claim. If, within a
reasonable time after receipt of such inquiry, no Secured Party:
(i) files a proof of claim with respect to such Subordinated
Claim and furnishes a copy thereof to such Borrower; or
(ii) informs such Borrower in writing that such Secured Party
intends to exercise its right to assert such Subordinated Claim on
behalf of such Secured Party in the manner provided in Section 8(b)
hereof,
such Borrower may (but shall not be required to) proceed to file a proof of
claim with respect to its Subordinated Claim and take such further steps with
respect thereto, not inconsistent with these Subordination Provisions, as such
Borrower may deem proper.
(d) EFFECT OF A PROCEEDING. No ruling made or decision reached in
any Proceeding shall:
(i) be considered a full and fair determination of the rights
and obligations of any Secured Party or Borrower pursuant to these
Subordination Provisions; or
(ii) in any way prevent any Secured Party from enforcing its
fights under these Subordination Provisions in a court of law,
arbitral tribunal, or otherwise.
Section 8.7 TERMINATION. These Subordination Provisions shall terminate on
the date that the Obligations are Indefeasibly Paid.
Section 8.8 UNDERSTANDING OF WAIVERS. Each Borrower warrants and agrees
that the waivers set forth in this Article VIII are made with fill knowledge of
their significance and consequences. If any of such waivers are determined to be
contrary to any applicable law or public policy, such waivers shall be effective
only to the maximum extent permitted by law.
Section 8.9 UNLIMITED LIABILITY. The Obligations of the Borrowers
hereunder shall be in addition to any obligations of the Borrowers to the Lender
heretofore given or hereafter to be given to the Lender unless such other
obligations are expressly modified or terminated in writing or repaid. The
liability of the Borrowers to the Lender shall at all times be deemed to be the
aggregate liability of the Borrowers under the terms of this Agreement and of
any other obligations heretofore or hereafter incurred by the Borrowers to the
Lender and not expressly terminated or modified in writing or repaid.
ARTICLE IX
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrowers shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; or
(b) the Borrowers shall fail to pay any interest on any Loan, or any
other amount payable hereunder, within five Business Days after any such
other amount becomes due in accordance with the terms hereof; or
(c) Any representation or warranty made or deemed made by any
Borrower herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made or furnished; or
(d) Any Borrower shall default in the observance or performance of
any covenant or other agreement contained in Sections 5.2(f), 5.4, 5.5,
5.9 and 5.10, 5.15, Article VI, or Article VII; or
(e) Any Borrower shall default in the observance or performance of
any covenant or other agreement contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (d) of
this Section), and such default shall continue unremedied for a period of
30 days; or
(f) Any Borrower shall (i) default in any payment of principal of or
interest on any Indebtedness (other than the Loans) or in the payment of
any Guarantee Obligation, beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; PROVIDED HOWEVER, that no
Default or Event of Default shall exist under this paragraph unless the
aggregate amount of Indebtedness or Guarantee Obligations in respect of
which any default or other event or condition referred to in this
paragraph shall have occurred shall be equal to at least $200,000; or
(g) (i) Any Borrower shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to or
seeking to adjudicate it as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Borrower shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against any Borrower any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment and (B) remains undismissed, unvacated,
undischarged or unbonded for a period of 30 days; or (iii) there shall be
entered any order for the issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of the assets of any Borrower which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 30 days from the
entry thereof or (iv) any Borrower shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in clause (i), (ii), or (iii) above; or (v) any
Borrower shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed (or a trustee shall be appointed) to administer, or to
terminate, any Single Employer Plan which Reportable Event or commencement
of proceedings or appointment of a trustee is, in the reasonable opinion
of the Required Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrowers or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any material liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, or (vi) any other similar event or condition shall
occur or exist with respect to a Plan that could result in a liability
(other than in the ordinary course), and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(i) The provisions contained in Article VIII shall cease to be
enforceable in accordance with their terms; or
(j) One or more judgments or decrees shall be entered against any
Borrower involving individually a liability of $200,000 or more (not paid
or fully covered by insurance or with respect to which coverage has been
denied by the insurers), and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(k) (i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect or fail to provide the Liens, security
interests, rights, title, interest, remedies, powers or privileges
intended to be created therein, or any of the Borrowers shall so assert in
writing, (ii) there shall be a default or event of default under any
Security Document, or (iii) any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority, purported to be created thereby; or
(l) Other than as otherwise described on SCHEDULE 3.21 hereof, the
Borrowers shall fail to have in full force and effect any consent, permit,
approval or license (or any material portion thereof) (i) material for the
transaction of its business, which failure has a Material Adverse Effect
or (ii) required for the transactions contemplated hereby; or
(m) An event of default on the part of Holdings or any Borrower
shall exist and be continuing under the Supply Contract, or Holdings or
any Borrower shall terminate or purport to terminate the Supply Contract
other than as a result of a breach by the Vendor of its obligations under
the Supply Contract; or
(n) Expropriation, condemnation, confiscation or nationalization by
any Governmental Authority of any Borrower or of all or a material part of
the assets or capital of any Borrower for a period of longer than thirty
(30) days if the result of such expropriation, condemnation, confiscation
or nationalization has a Material Adverse Effect; or
(o) Any Change in Control shall occur; or
(p) Any termination, revocation, impairment in a material manner, or
the failure to renew the Concession or issuance of any final resolution
that concludes that any Borrower is in serious breach of the Concession;
or
(q) Vesting of tax liens of $200,000 or more as the result of any
Borrower's failure to pay taxes when due (except in the event of good
faith challenge by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrowers, as the case may be, in conformity with GAAP); or
(r) Adverse event affecting (i) a Contractual Obligation in
connection with the construction, operation, ownership and maintenance of
the Network or the business derived from the Network, if the result of
such would be a Material Adverse Effect, or (ii) any other Contractual
Obligation, if the result of such would be a Material Adverse Effect;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iii) of paragraph (f) of this Section with respect to
any Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrowers declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall by notice to the
Borrowers, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.
ARTICLE X
THE ADMINISTRATIVE AGENT
Section 10.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents and each Lender irrevocably authorizes
the Administrative Agent, in such capacity, to enter into any such Loan Document
on its behalf, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
Section 10.2 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 10.3 EXCULPATION PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of each of the Borrowers
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrowers.
Section 10.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrowers),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to make any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders or all Lenders, as
the case may be, as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Document in
accordance with a request of the Required Lenders or all Lenders, as the case
may be, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and all future holders of the Loans.
Section 10.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has received notice from a Lender or the
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders or all Lenders, as the case may be; provided
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
Section 10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Borrowers, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or furnished to the Administrative Agent for the
account of or with a copy or counterpart for any of the Lenders, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrowers which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
Section 10.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Commitments shall have terminated and the Loans shall
have been paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
Section 10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with each of the Borrowers and its
respective Affiliates as though it were not the Administrative Agent hereunder
and under the other Loan Documents. With respect to the Loans made by it, it
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include it in
its individual capacity.
Section 10.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' prior written notice to the Lenders
and the Borrowers. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall be subject to the approval of the Borrowers if no
Default or Event of Default shall have occurred and be continuing (which
approval shall not be unreasonably withheld), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Article X shall inure to the benefit of such retiring Person as to any
actions taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement and the other Loan Documents.
ARTICLE XI
MISCELLANEOUS
Section 11.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with any Borrower
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrowers hereunder or thereunder, (b) release collateral or (c) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; PROVIDED, HOWEVER, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount or extend the
scheduled date of maturity of any Loan made by any Lender or of any installment
thereof, or reduce the stated rate of any interest thereon or reduce the fee
payable hereunder to any Lender or extend the scheduled date of any payment
thereof or increase the aggregate amount or extend the expiration date of any
Lender's Commitments, in each case without the written consent of each Lender
directly affected thereby, (ii) amend, modify or waive any provision of this
Section 11 .1 or reduce the percentages specified in the definition of Required
Lenders or consent to the assignment or transfer by any Borrower of any of its
respective rights and obligations under this Agreement and the other Loan
Documents or release all or substantially all of the Collateral, in each case
without the written consent of all the Lenders, or (iii)
amend, modify or waive any provision of Article X without the written consent of
the then Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon any Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Borrowers, the
Lenders and the Administrative Agent shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
Section 11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission followed by other delivery,) and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered, or three days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when received, addressed to the addresses set
forth on SCHEDULE 11.2 of the Borrowers and the Administrative Agent by
messenger or by mail, or to such other address as may be hereafter notified in
writing by the respective parties hereto; PROVIDED that any notice, request or
demand to or upon the Administrative Agent or the Lenders pursuant to subsection
2.2, 2.4, 2.9 or 2.12 shall not be effective until received.
Section 11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
Section 11.4 SURVIVAL. All covenants, agreements, representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder regardless of any investigation made by any such other party or
on its behalf and notwithstanding that the Administrative Agent or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 and 11.5 and Article X shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
Section 11.5 PAYMENT, EXPENSES AND TAXES. The Borrowers jointly and
severally agree (a) to pay or reimburse the Agents for all of their reasonable
out-of-pocket costs and expenses incurred in connection with the Loans and the
Commitments, and the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agents, (b) to pay or reimburse each Lender and
each Agent for all its reasonable costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents prepared in connection herewith or
therewith, including, without limitation, the reasonable fees and disbursements
of counsel to the Lenders and the Agents, (c) to pay, and indemnify and hold
harmless each Lender and each Agent from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise, mortgage recording and other similar taxes, if any, which
are payable or determined to be payable in connection with the execution and
delivery of, or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay and indemnify and hold harmless each Lender and each
Agent from and against, any and all other liabilities (excluding taxes other
than Non-Excluded Taxes), obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents, or the use of the
proceeds of the
Loans, and any such other documents, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under
any Environmental Law applicable to the operations of the Borrowers or any of
the Properties (all the foregoing in this clause (d), collectively, the
"INDEMNIFIED LIABILITIES"), PROVIDED, that the Borrowers shall have no
obligation hereunder to any Agent or any Lender with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of any such
Agent or any such Lender or for special, indirect, consequential or punitive
damages. The agreements in this Section shall survive repayment of the Loans and
all other amounts payable hereunder.
Section 11.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrowers, the Lenders, the Administrative Agent and their respective
successors and assigns, except that none of the Borrowers may assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender and any assignment or transfer by any
Lender of its rights or obligations under this Agreement or any Loan
Document must be made in compliance with this Section 11.6 (and any
purported assignment in violation of this Section shall be null and void).
(b) Any Lender may, without the consent of the Borrowers or the
Administrative Agent, at any time sell to one or more financial
institutions or other entities ("LOAN PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Commitment of such Lender
or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating
interest to a Loan Participant, (i) such Lender's obligation under this
Agreement to the other parties to this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible for the performance
thereof, (iii) such Lender shall remain the holder of any such Loan or
other interest for all purposes under this Agreement and the other Loan
Documents, (iv) the Borrowers and the Administrative Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents, and (v) no Loan Participant under any participation shall have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by the Borrowers therefrom,
except with respect to the matters described in clauses (i) and (ii) of
the proviso to the second sentence of Section 11.1. The Borrowers agree
that, while an Event of Default shall have occurred and be continuing if
amounts outstanding under this Agreement are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Loan Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of set off in
respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement;
PROVIDED, that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 11.7(a) as fully as if it were a
Lender hereunder. The Borrowers also agree that each Loan Participant
shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 with
respect to its participation in the Commitments and the Loans outstanding
from time to time as if it were a Lender, provided that, in the case of
Section 2.15 such Loan Participant shall have complied with the
requirements of said Section and provided, further, that no Loan
Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to
receive in connection with the same event or circumstance in respect of
the amount of the participation transferred by such transferor Lender to
such Loan Participant had no such transfer occurred.
(c) Any Lender may at any time and from time to time assign, with
the consent of the Administrative Agent in the case of an assignment other
than to another Lender or an Affiliate thereof (which in each case shall
not be unreasonably withheld), to any other Lender or an additional bank
or financial institution registered with the Secretaria de Hacienda y
Credito Publico (an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to
an Assignment and Acceptance, substantially in the form of EXHIBIT G
executed by such Assignee, such assigning Lender and in the case of an
Assignee that is not then a Lender or an Affiliate thereof, and delivered
to the Administrative Agent for its acceptance and recording in the
Register. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (i) the Assignee thereunder shall be a party hereto and, to
the extent
provided in such Assignment and Acceptance, shall have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein,
and (ii) the assigning Lender thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such assigning Lender shall cease to be
a party hereto except as to Sections 2.14, 2.15 and 8.5).
(d) The Administrative Agent, on behalf of the Borrowers, shall
maintain at the address of the Administrative Agent referred to in Section
11.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses
of the Lenders and the Commitments of, and principal amounts of the Loans
owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the
other Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder (whether or not
evidenced by a Note) shall be effective only upon appropriate entries with
respect thereto being made in the Register. The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, the Administrative Agent)
together with, except in the case of an assignment pursuant to Section
2.18, payment to the Administrative Agent of a registration and processing
fee of $3,500, the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register
and give notice of such acceptance and recordation to the Lenders and the
Borrowers. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this clause.
(f) The Borrowers authorize each Lender to disclose to any Loan
Participant or Assignee (each, a "TRANSFEREE") and any prospective
Transferee, subject to the provisions of Section 11.15, any and all
financial information in such Lender's possession concerning the Borrowers
and their Affiliates which has been delivered to such Lender by or on
behalf of the Borrowers pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrowers in connection
with such Lender's credit evaluation of the Borrowers and their Affiliates
prior to becoming a party to this Agreement.
(g) The parties to this Agreement acknowledge that the provisions of
this subsection concerning assignments of Loans and Notes relate only to
absolute assignments and that such provisions do not prohibit assignments
creating security interests, including, without limitation, any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law, provided that no such assignment, whether
to a Federal Reserve Bank or other entity, shall release a Lender from any
of its obligations hereunder or substitute any such Federal Reserve Bank
or other entity for such Lender as a party hereto or permit an absolute
assignment to occur other than in accordance with such provisions of this
subsection.
Section 11.7 ADJUSTMENTS; SET-OFF.
(a) If any Lender (a "BENEFITED LENDER") shall at any time receive
any payment of all or part of its Loans, or interest thereon, or receive
any collateral in respect thereof (whether voluntary or involuntarily, by
set-off pursuant to events or proceedings of the nature referred to in
Article IX, or otherwise except as to Sections 2.18 and 11.6), in a
greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the
extent permitted by applicable law, upon any amount becoming due and
payable by the Borrowers hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured at any time held or
owing by such Lender or any branch or agency thereof to or for the credit
or the account of the Borrowers. Each Lender agrees promptly to notify the
Borrowers and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
Section 11.8 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be maintained by the
Borrowers and the Administrative Agent.
Section 11.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without, to
the extent permitted by law, invalidating the remaining provisions hereof and
any such prohibition or unenforceability in any jurisdiction shall not, to the
extent permitted by law, invalidate or render unenforceable such provision in
any other jurisdiction. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provision with valid provisions
the economic effect of which is as close as possible to that of the invalid,
illegal or unenforceable provision.
Section 11.10 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of the Borrowers, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof or thereof not
expressly set forth or referred to herein or in the other Loan Documents.
Section 11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 11.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of the Borrowers
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) consents to the appointment of CT Corporation System, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its process agent (together with
any successor process agent, the "PROCESS AGENT") upon which service of
process in New York, New York, may be served in any legal action or
proceeding instituted in such courts. To the extent permitted by
applicable law, each of the Borrowers agrees that service of process may
be made personally or by mailing or delivering a copy of the summons and
complaint or other legal process in any legal action or proceeding to the
Borrowers, as the case may be, in care of the applicable Process Agent and
such agent is hereby authorized to receive and acknowledge the same for
and on behalf of the Borrowers, as the case may be, and to admit service
with respect thereto. Service upon the applicable Process Agent shall be
deemed in every respect effective service of process upon the Borrowers,
as the case may be, and shall be legal and binding upon the Borrowers, as
the case may be, for all purposes notwithstanding any failure to mail
copies of such legal process to the Borrowers, or any failure on the part
of the Borrowers, to receive the same. Each of the Borrowers further
agrees that it will not revoke the appointment of the applicable Process
Agent so long as any of the Notes remain outstanding or until the
appointment, which appointment each of the Borrowers similarly agrees not
to revoke, of a successor Process Agent and such successor's acceptance of
such appointment. Each of the Borrowers agrees that it will at all times
continuously maintain the applicable Process Agent to receive service of
process in the State of New York on behalf of itself, and, in the event
that for any reason such Process Agent shall cease to be the applicable
Process Agent, each of the Borrowers shall promptly appoint a successor
Process Agent for service of process in the State of New York and shall
promptly deliver to the Administrative Agent a copy of such successor
Process Agent's acceptance or acknowledgment of that appointment. Each of
the Borrowers will take any and all reasonable action, including, the
filing of any and all documents and instruments that may be necessary to
continue the appointment of the applicable Process Agent in full force and
effect;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
Section 11.13 ACKNOWLEDGEMENTS. Each of the Borrowers hereby acknowledges
that:
(a) it has been advised by counsel in connection with the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrowers arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agent and Lenders, on one hand,
and the Borrowers, on the other hand, in connection herewith or therewith
is solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrowers and the Lenders.
Section 11.14 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM WITH RESPECT THERETO TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW.
Section 11.15 CONFIDENTIALITY. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
or on behalf of the Borrowers or any Subsidiary thereof that is designated by
the Borrowers or any Subsidiary as confidential; PROVIDED THAT nothing herein
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent or any other Lender, (b) to any
Transferee or prospective Transferee which agrees to comply with the provisions
of this Section 11.15, (c) to the employees, directors, agents, attorneys,
accountants and other professional advisors of such Lender for purposes related
to the transactions contemplated by the Loan Documents, (d) upon the request or
demand of any Governmental Authority having jurisdiction over the Administrative
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to applicable
law or regulation, (f) which has been publicly disclosed other than in breach of
this Section 11.15, or (g) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
Section 11.16 JUDGMENT CURRENCY.
(a) If for the purposes of enforcing the obligations of any Borrower
under this Agreement or the Note or any other Loan Document it is
necessary to convert a sum due from the Borrowers in Dollars into another
currency, the parties hereto agree, to the fullest extent permitted by
applicable law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Lenders could purchase
Dollars with such currency at or about 11:00 A.M. (New York City time) on
the Business Day preceding that on which final judgment is given. To the
fullest extent permitted by applicable law, the obligations in respect of
any sum due to the Administrative Agent or any Lender under this Agreement
or the Note or any other Loan Document shall, notwithstanding any
adjudication expressed in a currency other than Dollars, be discharged
only to the extent that on the Business Day following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in
such other currency the Administrative Agent or such Lender may in
accordance with normal banking procedures purchase Dollars with such other
currency if the amount of Dollars so purchased is less than the sum
originally due to the Administrative Agent or such Lender in Dollars, the
Borrowers, jointly and severally, agree to the fullest extent permitted by
applicable law, as a separate obligation and notwithstanding any such
adjudication, to indemnify the Administrative Agent or such Lender against
such loss, and if the amount of Dollars so purchased exceeds the sum
originally due to the Administrative Agent or such Lender, the
Administrative Agent or such Lender shall remit such excess to the
Borrowers.
(b) All amounts due under this Agreement, the Notes and the other
Loan Documents shall be payable in Dollars.
Section 11.17 USE OF ENGLISH LANGUAGE. Any translation of this Agreement
into another language shall have no interpretive effect. All documents or
notices to be delivered pursuant to or in connection with this Agreement shall
be in the English language or, if any such document or notice is not in the
English language, accompanied by an English translation thereof, then the
English language version of any such document or notice shall control for
purposes hereof
Section 11.18 HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
TELEREUNION S.A. DE C.V.
By: __________________________________
Name:
Title:
TELEREUNION INTERNATIONAL, S.A. DE C.V.
By: __________________________________
Name:
Title:
TELEREUNION, INC.
By: __________________________________
Name:
Title:
TELSCAPE USA, INC.
By: __________________________________
Name:
Title:
TELSCAPE INTERNATIONAL, INC.
By: __________________________________
Name:
Title:
MSN COMMUNICATIONS, INC.
By: __________________________________
Name:
Title:
INTERLINK COMMUNICATIONS, INC.
By: __________________________________
Name:
Title:
TSCP INTERNATIONAL, INC.
By: __________________________________
Name:
Title:
VEXTRO DE MEXICO S.A. DE C.V.
By: __________________________________
Name:
Title:
SERVICIOS CORPORATIVOS TELSCAPE DE
MEXICO S.A. DE C.V.
By: __________________________________
Name:
Title:
TELSCAPE DE MEXICO, S.A. DE C.V.
By: __________________________________
Name:
Title:
N.S.I. S.A. DE C.V.
By: __________________________________
Name:
Title:
LAN AND WAN S.A. DE C.V.
By: __________________________________
Name:
Title:
M.S. NOTICIAS Y TELECOMUNICACIONES,
S.A. DE C.V.
By: __________________________________
Name:
Title:
LUCENT TECHNOLOGIES INC.
as Administrative Agent and as a Lender
By: __________________________________
Name:
Title:
