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EXHIBIT 10.6
EXECUTION VERSION
AMENDED AND RESTATED
EQUIPMENT FINANCING AGREEMENT
dated as of
April 28, 2000
by and between
▇▇▇▇▇ INTERNATIONAL (BRAZIL), LTD.
and
MOTOROLA CREDIT CORPORATION
2
SECTION 1. DEFINITIONS...................................................................................2
Section 1.01. Defined Terms.........................................................................2
Section 1.02. Interpretation.......................................................................22
Section 1.03. Accounting Principles and Terms......................................................22
SECTION 2. ADVANCES.....................................................................................23
Section 2.01. The Remaining Commitment.............................................................23
Section 2.02. Procedure for Borrowing Final Advance................................................23
Section 2.03. Financing Note.......................................................................24
Section 2.04. Repayment of Principal of Advances...................................................24
Section 2.05. Prepayments..........................................................................25
Section 2.06. Interest.............................................................................26
Section 2.07. Payments.............................................................................27
Section 2.08. Use of Proceeds......................................................................28
Section 2.09. Change in Law........................................................................28
Section 2.10. Illegality...........................................................................28
SECTION 3. FUNDING AND PROTECTION.......................................................................29
Section 3.01. Taxes, Duties, Fees and Charges......................................................29
Section 3.02. Change in Circumstances..............................................................29
SECTION 4. EXPENSES; INDEMNIFICATION; FEES..............................................................30
Section 4.01. Expenses.............................................................................30
Section 4.02. Indemnification......................................................................31
SECTION 5. STOCKHOLDER GUARANTIES AND FOREIGN AFFILIATE GUARANTIES......................................32
Section 5.01. Stockholder Guaranties...............................................................32
Section 5.02. Foreign Affiliate Guaranties.........................................................32
SECTION 6. SECURITY.....................................................................................32
Section 6.01. Security.............................................................................32
SECTION 7. REPRESENTATIONS AND WARRANTIES...............................................................36
Section 7.01. Organization.........................................................................36
Section 7.02. Power; Authority.....................................................................37
Section 7.03. Governmental Approvals; Licenses.....................................................37
Section 7.04. Execution, Enforceability, Violation of Law and Agreements...........................39
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Section 7.05. Financial Statements; Business Plan..................................................40
Section 7.06. Taxes................................................................................41
Section 7.07. Properties...........................................................................41
Section 7.08. Compliance with Laws.................................................................41
Section 7.09. Intellectual Property................................................................42
Section 7.10. Burdensome Documents; Agreements with Affiliates; Other Agreements...................42
Section 7.11. Security Documents...................................................................43
Section 7.12. Judgments, Actions, Proceedings......................................................43
Section 7.13. No Defaults..........................................................................44
Section 7.14. Strikes..............................................................................44
Section 7.15. Sufficiency of System Documents......................................................44
Section 7.16. Delivery of System Documents and Licenses............................................44
Section 7.17. Accuracy of Information..............................................................44
Section 7.18. Business.............................................................................45
Section 7.19. Survival of Representations and Warranties...........................................45
Section 7.20. ERISA................................................................................45
Section 7.21. Regulation...........................................................................46
Section 7.22. Use of Proceeds......................................................................46
Section 7.23. Investment Company...................................................................46
Section 7.24. Capital Contributions................................................................46
Section 7.25. Bank Accounts........................................................................46
Section 7.26. Inactive Foreign Affiliates..........................................................46
Section 7.27. Construction of the System...........................................................46
SECTION 8. AFFIRMATIVE COVENANTS........................................................................46
Section 8.01. Performance of Obligations...........................................................47
Section 8.02. Annual Financial Statements..........................................................47
Section 8.03. Quarterly Financial Statements.......................................................48
Section 8.04. Other Information....................................................................49
Section 8.05. Access to Books; Inspections.........................................................51
Section 8.06. Governmental Approvals...............................................................51
Section 8.07. Insurance............................................................................51
Section 8.08. Continuance of Business..............................................................52
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Section 8.09. [Reserved]...........................................................................52
Section 8.10. Maintenance and Repairs..............................................................52
Section 8.11. Compliance with Law..................................................................52
Section 8.12. Notices..............................................................................54
Section 8.13. Further Assurances...................................................................56
Section 8.14. [Reserved]...........................................................................58
Section 8.15. Restricted Assets; Option Companies..................................................58
Section 8.16. Maintenance of Licenses..............................................................58
Section 8.17. Financial Covenants..................................................................58
Section 8.18. [Reserved]...........................................................................61
Section 8.19. Failure to Perform of Stockholder Guarantor..........................................61
Section 8.20. Adult Content........................................................................61
Section 8.21. Translation and Registration.........................................................61
Section 8.22. Foreign Resident Account.............................................................61
Section 8.23. Update of Security Documents.........................................................61
SECTION 9. NEGATIVE COVENANTS...........................................................................62
Section 9.01. Indebtedness.........................................................................62
Section 9.02. Guaranties...........................................................................62
Section 9.03. Transfer.............................................................................63
Section 9.04. Liens................................................................................63
Section 9.05. Mergers; Acquisitions................................................................63
Section 9.06. Distributions; Redemptions...........................................................64
Section 9.07. Stock Issuance.......................................................................64
Section 9.08. Amendment of Documents and Organization..............................................65
Section 9.09. Loans; Advances......................................................................65
Section 9.10. Use of Funds.........................................................................66
Section 9.11. Transactions with Affiliates.........................................................66
Section 9.12. Changes in Business..................................................................66
Section 9.13. Prepayments..........................................................................67
Section 9.14. Additional System Documents..........................................................67
Section 9.15. ERISA Obligations....................................................................67
Section 9.16. Sale and Leaseback Transactions......................................................67
Section 9.17. New Subsidiaries.....................................................................67
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Section 9.18. Restricted Assets and Option Companies...............................................67
Section 9.19. Bank Accounts........................................................................67
Section 9.20. Bankruptcy...........................................................................68
SECTION 10. CONDITIONS PRECEDENT........................................................................68
Section 10.01. Conditions to Final Advance.........................................................68
Section 10.02. Representation and Warranty as to Previous Advance Conditions.......................74
Section 10.03. Conditions to Final Advance.........................................................74
SECTION 11. EVENTS OF DEFAULT...........................................................................78
Section 11.01. Events of Default...................................................................78
Section 11.02. Remedies............................................................................83
Section 11.03. Cumulative Rights...................................................................85
Section 11.04. Waiver of Demand....................................................................85
Section 11.05. Waiver of Notice....................................................................86
SECTION 12. MISCELLANEOUS...............................................................................86
Section 12.01. Waiver of Sovereign Immunity........................................................86
Section 12.02. Venue for Suit......................................................................86
Section 12.03. Governing Law.......................................................................87
Section 12.04. Severability of Provisions..........................................................87
Section 12.05. Binding Effect; Assignment..........................................................87
Section 12.06. Entire Agreement; Amendments........................................................88
Section 12.07. Notices.............................................................................88
Section 12.08. Right of Set-Off....................................................................89
Section 12.09. Counterparts........................................................................89
Section 12.10. Proposed Consolidation..............................................................89
Section 12.11. [Reserved]..........................................................................89
Section 12.12. Confidentiality.....................................................................89
Section 12.13. Term of Agreement...................................................................90
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a. Schedules to EFA
Schedule 1.01(a) -- MSO Site
Schedule 1.01(b) -- Foreign Affiliates
Schedule 1.01(c) -- Paid-In Capital
Schedule 1.01(d) -- Target Subscribers
Schedule 1.02 -- Restricted Assets
Schedule 7.01(a) -- Credit Party Structure; Ownership; Subsidiaries
Schedule 7.01(b) -- Qualification Jurisdictions
Schedule 7.03(a) -- Governmental Approvals
Schedule 7.03(b) -- Licenses
Schedule 7.04 -- Violation of Law
Schedule 7.05 -- Contingent Liabilities
Schedule 7.09 -- Intellectual Property
Schedule 7.10 -- Management Agreements; Affiliate Transactions
Schedule 7.12 -- Litigation
Schedule 7.25 -- Bank Accounts
Schedule 8.07(a) -- General Insurance Requirement
Schedule 8.07(b) -- Political Risk Insurance
b. Exhibits to EFA
A: Approved Business Plan
B: Form of Request for Financing
C: Form of Financing Note
D-1: Form of Nextel International Guaranty
D-2: Form of Motorola do Brasil Guaranty
E: Invested Capital
F: Form of Company Security Deposit Agreement
G: Form of Nextel Ltda. Security Deposit Agreement
H-1: Form of Legal Opinion of Brazilian counsel to Company
H-2: Form of Legal Opinion to U.S. counsel to Company
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This AMENDED AND RESTATED EQUIPMENT FINANCING AGREEMENT, dated as of April
28, 2000 (as the same may be further amended, modified or supplemented from time
to time, this "Agreement"), by and between ▇▇▇▇▇ INTERNATIONAL (BRAZIL), LTD., a
corporation organized under the laws of the State of Virginia, with its
principal office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.▇.▇.
(the "Company") and MOTOROLA CREDIT CORPORATION, a corporation duly organized
under the laws of the State of Delaware, U.S.A., with its principal office at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, U.S.A. (the
"Creditor").
WITNESSETH:
WHEREAS, (i) with respect to Sao Paulo, Brazil, the Company is party to an
Integrated Digital Enhanced Network Equipment Purchase Agreement dated as of
March 21, 1997, as amended, by and between Motorola, Inc., a Delaware
corporation (the "Vendor") and the Company (as the same may be further amended,
modified and supplemented from time to time, the "Sao ▇▇▇▇▇ ▇▇▇▇ Equipment
Agreement"), along with the Integrated Digital Enhanced Network Installation and
Optimization Agreement dated as of March 21, 1997, as amended, by and between
the Vendor and the Company (the "Sao Paulo Installation and Optimization
Agreement"), and (ii) with respect to Rio de Janiero, Brazil, the Company is
party to an Integrated Digital Enhanced Network Equipment Purchase Agreement
dated as of May 9, 1997, as amended, by and between Vendor and the Company (as
the same may be further amended, modified and supplemented from time to time,
the "Rio iDEN Equipment Agreement"), along with the Integrated Digital Enhanced
Network Installation and Optimization Agreement dated as of May 9, 1997, as
amended, by and between the Vendor and the Company (together with the Sao ▇▇▇▇▇
▇▇▇▇ Equipment Agreement, the Sao Paulo Installation and Optimization Agreement
and the Rio iDEN Equipment Agreement, as the same may be further amended,
modified and supplemented from time to time, and together with any other similar
agreements entered into between the Company and the Vendor for the purchases of
iDEN equipment and services for use in Brazil, collectively, the "iDEN Equipment
and Services Agreements");
WHEREAS, the Company has entered into (i) a Conditional Sale Agreement
dated as of October 31, 1997, by and between the Company and Nextel S.A., a
corporation organized under the laws of Brazil formerly named AirLink S.A.
("Nextel S.A."), pursuant to which the Company has agreed to extend credit to
Nextel S.A. for the purchase of certain iDEN and non-iDEN equipment in an
aggregate amount not exceeding $31,250,000 (as amended, modified and
supplemented, the "Conditional Sale Agreement"), and (ii) a Conditional Sale
Agreement, dated as of October 31, 1997, by and between the Company and Nextel
S.A. pursuant to which the Company has agreed to extend credit to Nextel S.A.
for the purchase of certain iDEN and non-iDEN equipment in an aggregate amount
not exceeding $125,000,000 (as amended, modified and supplemented from time to
time, the "Conditional Sale Agreement No. 2");
WHEREAS, Nextel S.A. is a Subsidiary of the Company;
WHEREAS, the Company has heretofore entered into an Equipment Financing
Agreement, dated as of October 31, 1997 with the Creditor (as heretofore
amended, modified or supplemented, the "Original EFA") pursuant to which the
Company requested that the Creditor
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provide Advances (as defined in the Original EFA) in the principal amount not
exceeding the least of (i) $125,000,000, (ii) the aggregate purchase price
(excluding import taxes and/or duties) for all equipment and services purchased
pursuant to the iDEN Equipment and Service Agreements, (iii) the Maximum Total
Advance Cap and (iv) the Maximum Total Foreign Advance Cap (as such terms are
defined in the Original EFA) (such lesser amount being defined under the
Original EFA as the "Commitment" and defined herein as the "Original
Commitment") to finance the Company's purchase of iDEN (as hereinafter defined)
equipment and services pursuant to the iDEN Equipment and Service Agreements;
WHEREAS, as of the date hereof, an aggregate principal amount of
$103,757,097.31 of Advances (as defined in the Original EFA) have been made and
remain outstanding under the Original EFA;
WHEREAS, the Company and the Creditor are parties to that certain Bridge
Line of Credit dated as of March 26, 1998 (as heretofore or hereafter amended,
modified or supplemented, the "Bridge Line") pursuant to which the Creditor has
agreed, subject to the terms and conditions provided in the Bridge Line, to make
advances (all such advances heretofore or hereafter made, "Bridge Line
Advances") prior to June 30, 2000 (the "Bridge Line Termination Date") to the
Company solely to finance the Company's purchase of iDEN equipment and services
pursuant to the iDEN Equipment and Service Agreements;
WHEREAS, the Creditor is willing, subject to the terms and subject to the
conditions hereinafter set forth, to make a Final Advance (as hereinafter
defined) to the Company on the Drawdown Date (as hereinafter defined) in an
aggregate principal amount not to exceed the aggregate unpaid principal amount,
plus accrued and unpaid interest in respect thereof, of all outstanding Bridge
Line Advances as of such date; and
WHEREAS, the Creditor and the Company have agreed to amend and restate in
its entirety the Original EFA as hereinafter set forth in order to accomplish
the foregoing.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Creditor to make the Final Advance and to induce the Creditor to enter into the
agreements referred to herein, the parties agree to amend and restate the
Original EFA in its entirety as follows:
SECTION 1. DEFINITIONS
Section 1.01. Defined Terms. In addition to the terms defined above, when
used in this Agreement, the following terms shall have the
following meanings:
"Acceptable Guarantor" means a guarantor who is a shareholder of Nextel
S.A. and whose creditworthiness is equivalent to, or better than, the
creditworthiness of Nextel International as determined on the Original Closing
Date or on the date of the proposed assignment of the applicable Stockholder
Guaranty (whichever is better) in the Creditor's sole determination; it being
understood that in no event may Nextel International make any assignment of its
rights and obligations that would result in it guaranteeing less than 70% of the
Obligations.
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"Additional System Documents" means all contracts and agreements related to
the construction, maintenance, repair or operation of the System or the
Telecommunications Business entered into by the Company, Nextel International or
any Foreign Affiliate subsequent to the Original Closing Date (i) in replacement
of an existing System Document or (ii) which, if terminated, could reasonably be
expected to have a Material Adverse Effect or (iii) having an aggregate net
present value or cost in excess of $10,000,000.
"Adjusted Consolidated Fixed Charges" means, as to any Person and for any
period, without duplication, the difference of (a) the sum of the following: (i)
the total interest expense for such Person and its Subsidiaries on a
consolidated basis for such period (including, without limitation, all interest
expense on Capital Lease Obligations), (ii) the scheduled principal amount of
all amortization payments on all Indebtedness for borrowed money of such Person
and its Subsidiaries on a consolidated basis for such period, other than
payments in respect of Permitted Indebtedness of the type described in clause
(b) of the definition thereof for such period which arise from handset purchases
and which are owed to a Motorola Entity, (iii) all payments made under
capitalized leases (except for any such payments covered by clause (i) of this
definition), and (iv) all payments made under Hedge Agreements, minus (b) all
payments received under Hedge Agreements.
"Adjusted Paid-in Capital" means, as of any date, (a) the paid-in capital
of the Company (including for this purpose the principal amount of any
outstanding Permitted Indebtedness incurred by the Company of the type described
under clause (l) of the definition thereof) reflected on the most recent
financial statements delivered pursuant to Section 8.2 or 8.3 (whichever is
later) plus (b) any increases in paid-in capital (including for this purpose the
principal amount of any outstanding Permitted Indebtedness incurred by the
Company and of the type described under clause (l) of the definition thereof)
since the end of the reporting period relating to such financial statements
minus (c) any decreases in paid-in capital (including any repayments, whether or
not permitted hereunder, of any principal or interest with respect to Permitted
Indebtedness of the type described under clause (l) of the definition thereof)
since the end of the reporting period relating to such financial statements.
"Advance" has the meaning ascribed to such term in subsection 2.01(a)
hereof.
"Affiliate" means with respect to any Person, any other Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such first Person, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of such
first Person, or (iii) whereby 5% or more of the Voting Stock (or in the case of
a Person which is not a corporation, 5% or more of the equity interest) of such
other Person is beneficially owned or held by such first Person or by a
Subsidiary of such first Person. term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agreement" means this Amended and Restated Equipment Financing Agreement.
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"AIG" means American International Group.
"AIG Policy" means the Contract of Lender's Insurance Against
Inconvertibility, Expropriation and Political Violence between National Union
Fire Insurance of Pittsburgh, PA, the Company and the Creditor.
"AirFone Holdings" means AirFone Holdings, Inc.
"Applicable Margin" means (i) with respect to any LIBOR Advance 4.63% per
annum, and (ii) with respect to any Prime Advance 2.5% per annum.
"Approved Business Plan" means the quarterly business plan of the Company
for a nationwide iDEN system in Brazil dated December 15, 1999 (and delivered to
the Creditor prior to the date of this Agreement) as the same may be modified
pursuant to Section 8.04 hereof. The current Approved Business Plan as of the
date hereof is attached hereto as Exhibit A.
"Arm's-Length Affiliate" has the meaning ascribed to such term in Section
9.11 hereof.
"Authorized Officer" means (a) with respect to any Person that is a
corporation, the President, Vice President or Treasurer of such Person, (b) with
respect to any Person that is a partnership, the President, Vice President or
Treasurer of a general partner of such Person, in each case whose names appear
on a certificate of incumbency of such Person delivered concurrently with the
execution of this Agreement, or (c) with respect to Brazilian limited liability
companies, the delegate manager or managing quotaholder.
"Bridge Line" has the meaning ascribed to such term in the sixth preamble
hereof.
"Bridge Line Advances" has the meaning ascribed to such term in the sixth
preamble hereof.
"Bridge Line Termination Date" has the meaning ascribed to such term in the
sixth preamble hereof.
"Business Day" means (i) any day other than Saturday, Sunday or any other
day on which commercial banks in New York City or Sao Paulo are authorized or
required under the laws of the State of New York or Brazil, respectively, or
pursuant to other government action to close, and (ii) with respect to all
notices and determinations in connection with any payment of principal and
interest on LIBOR Advances, any day which satisfies the conditions set forth in
clause (i) above and which is also a day for trading by and between banks for
U.S. dollar deposits in the London interbank market.
"Capital Lease Obligations" means the obligations of a Person and its
Subsidiaries (determined on a consolidated basis (without duplication) in
accordance with GAAP) to pay rent or other amounts under any leases for real or
personal property which obligations are required to be classified and accounted
for as capital leases in accordance with GAAP.
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"Class B Redemption" has the meaning ascribed to such term in subsection
9.06(b) hereof.
"Code" means the Internal Revenue Code of 1986, as it may be amended from
time to time, and the regulations promulgated thereunder.
"Collateral" means all real and personal property, whether owned or leased
(including, without limitation, the System Documents (excluding the Excluded
Leases), the Licenses and Governmental Approvals) which are subject to the
security interests or Lien granted by any of the Security Documents in each case
except to the extent they are Restricted Assets or Immaterial Assets.
"Commitment Termination Date" means June 30, 2000.
"Company" means ▇▇▇▇▇ International (Brazil), Ltd., a corporation organized
under the laws of the Commonwealth of Virginia.
"Company Promise to Pledge Quotas" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"Company Quota Pledge Agreement" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"Company Quota Voting Agreement" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"Company Security Agreement" has the meaning ascribed to such term in
subsection 6.01(a)(i)(A) hereof.
"Company Security Deposit Agreement" has the meaning ascribed to such term
in subsection 6.01(a)(i)(A) hereof.
"Company Share Pledge Agreements" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"Company Share Voting Agreement" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"Conditional Sale Agreement No. 1" has the meaning ascribed to such term in
the second preamble hereof.
"Conditional Sale Agreement No. 2" has the meaning ascribed to such term in
the second preamble hereof.
"Conditional Sale Agreements" means collectively the Conditional Sale
Agreement No. 1 and the Conditional Sale Agreement No. 2.
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"Conditional Sale Notes" means collectively (i) (a) the iDEN promissory
note dated the Initial Funding Date issued by Nextel S.A. in favor of the
Company in connection with the Conditional Sale Agreement No. 1 in the principal
amount of $25,000,000 and (b) the non-iDEN promissory note dated the Initial
Funding Date issued by Nextel S.A. in favor of the Company in connection with
the Conditional Sale Agreement No. 1 in the principal amount of $6,125,000 and
(ii) (a) the iDEN promissory note dated the Initial Funding Date issued by
Nextel S.A. in favor of the Company in connection with the Conditional Sale
Agreement No. 2 in the principal amount of $100,000,000 and (b) the non-iDEN
promissory note dated the Initial Funding Date issued by Nextel S.A. in favor of
the Company in connection with the Conditional Sale Agreement No. 2 in the
principal amount of $25,000,000.
"Consents to Assignments" means a collective reference to each consent
executed and delivered by a System Party (other than an Option Company) in
connection with each System Document other than the Excluded Leases.
"Consolidated Entity" means the Foreign Affiliate holding all of the
Licenses after the consummation of the Proposed Consolidation (x) which entity
has no creditors except to the extent permitted by the definition of Permitted
Indebtedness, and (y) of which entity the Company shall directly own (on a fully
diluted basis) more than 50% of the Voting Stock and more than 50% of the
economic interests and which entity the Company shall otherwise Control.
"Consolidated Fixed Charges" means, as to any Person and for any period,
without duplication, the difference of (a) the sum of the following: (i) the
total interest expense for such Person and its Subsidiaries on a consolidated
basis for such period (including, without limitation, all interest expense on
Capital Lease Obligations), (ii) the scheduled principal amount of all
amortization payments on all Indebtedness for borrowed money of such Person and
its Subsidiaries on a consolidated basis for such period, (iii) all payments
made under capitalized leases (except for any such payments covered by clause
(i) of this definition), and (iv) all payments made under Hedge Agreements,
minus (b) all payments received under Hedge Agreements.
"Control" means at any time, the possession (on a fully diluted basis),
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which as of the relevant date, together with the Company, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section 4001(b)(1)
of ERISA.
"could reasonably be expected" means as would be determined by a prudent
Person, familiar with the general substance at issue, in like circumstances with
the Person making the decision.
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"Credit Documents" means, individually and collectively, this Agreement,
the Financing Note, the Security Documents, the Foreign Affiliate Guaranties and
the Stockholder Guaranties and each other document entered into pursuant
thereto.
"Creditor" means Motorola Credit Corporation, a corporation organized under
the laws of the State of Delaware, United States of America.
"Credit Party" means the Company, any Foreign Affiliate, any Stockholder
Guarantor (other than MIDC or Motorola do Brasil) and Telcom.
"Default" means any event, occurrence, factual or legal condition which, if
continued uncured or unchanged would, with the passage of time or the giving of
notice or both, become or constitute an Event of Default.
"Depositary" has the meaning ascribed to such term in the Company Security
Deposit Agreement.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Drawdown Date" means the date that is the earlier of (a) June 30, 2000,
and (b) thirty (30) days after the date that the principal amount of the
advances and accrued and unpaid interest thereon under the Bridge Line exceeds
the Maximum Advance Amount.
"EBITDA" means, as to any Person and for any period, the net income of such
Person and its Subsidiaries as measured in accordance with GAAP on a
consolidated basis for such period, plus interest expense, minus interest
income, plus (or minus, in the case of income tax benefits) provision for taxes,
minus (or plus, in the case of a loss) extraordinary gains or losses, to the
extent not covered by GAAP, minus (or plus, in the case of a loss) financial
gains or losses, or gains or losses from sales of assets (other than sales of
inventory in the ordinary course of their respective businesses), plus
amortization and depreciation charges plus (or minus, in the case of losses)
minority interest in the net income or losses of consolidated Subsidiaries,
minus (or plus, in the case of a loss) income or losses from equity method
investments, minus (or plus, in the case of a loss) any inflationary
adjustments, to the extent not covered by GAAP, including (i) monetary
correction gain or loss, (ii) foreign exchange gain or loss, and (iii)
inflationary income statement adjustments to revenues or expenses.
"Environmental Laws" means any and all governmental statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, guidelines, interpretations,
policies, agreements or other Restrictions or requirements (herein, "laws and
regulations") relating to Materials of Environmental Concern or protection of
human or animal health or the environment (including, without limitation,
ambient air, indoor air, surface water, ground water, land surface or
sub-surface strata), including, without limitation, laws and regulations
relating to emissions, discharges, health or safety, noise abatement, releases
or threatened releases of Materials of Environmental Concern or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, recycling,
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reporting or handling of Materials of Environmental Concern, and all such laws
and regulations that may be enacted in the future.
"Environmental Matters" has the meaning ascribed to such term in subsection
7.08(d) hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time, and the regulations promulgated thereunder.
"Event of Abandonment" means the abandonment of the System or the
Telecommunications Business or cessation of the operation of the System or the
Telecommunications Business which reasonably indicates to the Creditor that the
Company intends to abandon the System or the Telecommunications Business.
"Event of Default" means any of the events specified in Section 11.01
hereof.
"Excess Cash Flow" means, for any period, an amount equal to (i) EBITDA of
the Company for such period, minus (ii) capital expenditures of the Company for
such period, plus (iii) the decrease in the value added tax credit account of
the Company during such quarter, minus (iv) the increase in the value added tax
credit account of the Company during such quarter, minus (v) the sum of the
aggregate Consolidated Fixed Charges, taxes accrued and voluntary prepayments
made hereunder, during such period.
"Excluded Leases" means those leases entered into prior to October 31,
1997, and any other Leases which Nextel International, the Company or any
Foreign Affiliate shall not be permitted to assign to the Creditor,
notwithstanding their exercise of good faith and commercially reasonable efforts
in accordance with the provisions of Section 8.13 hereof.
"Final Advance" has the meaning ascribed to such term in subsection 2.01(a)
hereof.
"Financing Note" has the meaning ascribed to such term in Section 2.03
hereof. "Fixed Charge Coverage Ratio" means, as at any date, the ratio (for the
then ending or most recently ended fiscal quarter of the Company) of (a) (i)
EBITDA for such quarter, plus (ii) the Quarterly Paid-in Capital Contribution
for such quarter, plus (iii) the decrease in the value added tax credit account
of the Company during such quarter, minus (iv) the increase in the value added
tax credit account of the Company during such quarter to (b) Adjusted
Consolidated Fixed Charges for such quarter.
"Foreign Affiliate" means, with respect to the Company, those Affiliates
listed on Schedule 1.01(b) hereto, each entity created or acquired pursuant to
Section 9.05 or 9.12 hereof, and any other Affiliate of the Company that
executes a Credit Document.
"Foreign Affiliate Assignment of Rights and Obligations" has the meaning
ascribed to such term in subsection 6.01(d)(i) hereof.
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"Foreign Affiliate Guaranties" has the meaning ascribed to such term in
Section 5.02 hereof.
"Foreign Affiliate Pledge Agreements" has the meaning ascribed to such term
in subsection 6.01(f)(i) hereof.
"Foreign Affiliate Security Agreements" has the meaning ascribed to such
term in subsection 6.01(d)(i) hereof.
"Foreign Affiliate Trademark Assignment Agreement" has the meaning ascribed
to such term in subsection 6.01(d)(i) hereof.
"Foreign Affiliate Voting Agreement" has the meaning ascribed to such term
in subsection 6.01(f)(i) hereof.
"Foreign Projects" means the iDEN systems operated by Nextel International
or its Affiliates outside the United States.
"Foreign Resident Account" means the non-resident account according to the
Brazilian Central Bank Circular 2677, April 10, 1996, established for the
benefit of the Creditor under Section 8.22 of the Original EFA.
"GAAP" means generally accepted accounting principles used, from time to
time, in the United States of America.
"Governmental Approval" means any authorization, consent approval, license,
franchise, concession, lease, ruling, permit, certification, exemption, filing
or registration by or with any Governmental Authority or legal or administrative
body reasonably desirable, or necessary, for the design, location, construction,
completion, ownership, operation, repair or maintenance of the System or the
Telecommunications Business, authority to conduct business, the execution and
delivery of the Credit Documents, the making of Advances or the creation and
perfection of the Liens contemplated by the Security Documents.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative authority or functions of or pertaining
to government.
"Governmental Rule" means any statute, law, regulation, ordinance, rule,
judgment, order, writ, decree, directive, guideline, policy or requirement, or
any similar form of decision of or determination by, or any interpretation or
administration of, any of the foregoing by, any Governmental Authority
(including, without limitation, any Environmental Law), whether now or hereafter
in effect.
"Hedge Agreement" means an interest rate swap, cap, floor or collar
agreement, any spot or forward contracts, interest rate future or option
contracts, currency swap agreements,
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commodities future contracts, currency future or option contracts, as the same
shall be modified and supplemented and in effect from time to time.
"iDEN" means the Integrated Digital Enhanced Network created by the
Motorola Entities.
"iDEN Equipment Agreements" has the meaning ascribed to such term in the
first preamble hereof.
"iDEN Equipment and Service Agreements" has the meaning ascribed to such
term in the first preamble hereof.
"iDEN Service Agreements" has the meaning ascribed to such term in the
first preamble hereof.
"Immaterial Assets" means motor vehicles and immaterial assets, in each
case (i) having a fair market value of not more than $50,000 and an aggregate
value at any time of not more than 1% of the fair market value of all assets
owned by the Company and the Foreign Affiliates, and (ii) that are not essential
for the operation of the Company or any Foreign Affiliate or the operation of
the System or the Telecommunications Business.
"Indebtedness" means, with respect to any Person, (a) all indebtedness of
such Person for borrowed money (whether by loan or the issuance and sale of debt
securities), (b) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services excluding current trade payables incurred
in the ordinary course of business of such Person which are due less than three
(3) months after the date of invoice, (c) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (d) the
obligations of such Person under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the types referred to in clauses (a) and (c) above, (e)
all obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person (including reimbursement obligations with respect
thereto), but excluding (i) letters of credit including trade letters of credit
securing obligations (other than obligations described in (a), (b), (c) and (d)
above and (f), (g) and (h) below) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not drawn upon
or, if drawn upon, to the extent such drawing is reimbursed no later than the
third Business Day following receipt by such Person of a demand for
reimbursement and (ii) letters of credit secured by cash which is deposited in a
segregated account held by a non-affiliate of such Person, (f) all indebtedness
of others secured by a Lien on any asset of such Person whether or not such
indebtedness is assumed by such Person; provided that in the case where such
Person has no obligation with respect to the Indebtedness of such other Person
other than such Lien, the amount of Indebtedness shall be the lesser of (i) the
fair market value of such asset at such date of determination and (ii) the
amount of such Indebtedness, (g) all Capital Lease Obligations, and (h) to the
extent not otherwise included in this definition, all obligations in respect of
Hedge Agreements.
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"Information" has the meaning ascribed to such term in Section 12.12
hereof.
"Initial Funding Date" means December 1, 1997.
"Intellectual Property" has the meaning ascribed to such term in Section
7.09 hereof.
"Interest Payment Dates" means (i) semi-annually on the Semi Annual Dates,
and (ii) at any time, in the case of any Advance, upon the payment or prepayment
thereof or the conversion thereof into an Advance of another type pursuant to
subsections 2.02(a) and 2.06(b) hereof (but only on the principal so prepaid,
paid or converted).
"Interest Period" means with respect to each LIBOR Advance, each period
commencing in the date such LIBOR Advance is made or converted from a Prime
Advance pursuant to subsection 2.02(a) hereof or the last day of the preceding
Interest Period with respect to such LIBOR Advance, and ending, except as
otherwise provided in Section 2.02 hereof, on the same day in the sixth calendar
month thereafter. Notwithstanding the foregoing, (i) the final Interest Period
shall end on the Maturity Date and (ii) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day.
"Invoice" has the meaning ascribed to such term in subsection 2.02(a)
hereof.
"IRS" means the Internal Revenue Service of the United States.
"knowledge" means (a) as it applies to the Company or Nextel International,
the actual knowledge of a Vice President or more senior officer of the Company
or Nextel International, respectively, or any other officer of the Company or
Nextel International, respectively, having responsibility for the transactions
contemplated by the Operative Documents, and (b) as it applies to Nextel S.A.,
the actual knowledge of a director or other representative having management
authority; provided, that each of the Company, Nextel International and Nextel
S.A. shall be deemed to have "knowledge" of any matter as to which it has
received written notice from any Governmental Authority, any party to any System
Document or any other Credit Party.
"Lease Assignment Agreements" means each Lease Assignment Agreement
executed and delivered by a Credit Party in the form of Exhibit M-2 to the
Original EFA (incorporated herein by reference).
"Leases" mean the various lease agreements executed by the Company or any
of the other Credit Parties in connection with the lease of such interests of
real and personal property as shall be necessary to install, operate and
maintain the System or the Telecommunications Business.
"LIBOR Advance" means any of the Advances the interest on which is
determined on the basis of rates referred to in the definition of LIBOR Base
Rate.
"LIBOR Base Rate" means, during an Interest Period for LIBOR Advances, the
rate per annum equal to the rate determined by reference to the LIBOR Page on
the Reuters Monitor Money Rates Services, or any successor thereto as of 11:00
a.m., London, England time two (2)
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Business Days prior to the beginning of such Interest Period, for delivery on
the first day of such Interest Period for the number of days comprised therein
and in an amount comparable to the amount of the LIBOR Advances to be
outstanding during such Interest period. If quotes for the foregoing rates are
not available on the Reuters Monitor Money Rates Services or any successor
thereto, the "LIBOR Base Rate" shall mean, during an Interest Period for LIBOR
Advances, the rate of interest per annum determined by the Creditor to be the
weighted average (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1% per annum, if such weighted average is not such a multiple) of
the rates per annum at which deposits in Dollars are offered to major money
center banks in the London interbank market at 11:00 a.m. London time two (2)
Business Days prior to the first day of such Interest Period, in the approximate
amount equal to the principal amount of the LIBOR Advance to be made by the
Creditor for such Interest Period and for a period equal to such Interest
Period.
"LIBOR Rate" means for any Interest Period therefor, the LIBOR Base Rate
for such Advance for such Interest Period divided by 1 minus the Reserve
Requirement for such Advance for such Interest Period.
"Licenses" means collectively all those licenses and concessions permitting
the Company and the Foreign Affiliates to conduct a wide range of mobile radio
services, including but not limited to radio dispatch service, paging, telephone
interconnect services, and other mobile communications, and personal
communication services together with any amendments or changes to each such
license that expand the authority of the Company and the Foreign Affiliates
thereunder.
"Lien" means, with respect to any Person, any security interest, lien,
pledge, mortgage, deed of this charge or encumbrance (including any agreement to
give any of the foregoing), conditional sale agreement, title retention
agreement, finance lease or trust receipt or a consignment or bailment for
security purposes, or other security arrangement or any other arrangement on or
with respect to any asset or revenue of such Person.
"Major Market Area" means each of the following cities in Brazil: Sao
Paulo, Rio de Janeiro and other market areas in Brazil in which the Company
intends to build out its System and Telecommunications Business.
"Majority-Owned Foreign Affiliate" means each and any of Nextel S.A.,
Nextel Ltda., AirFone Holdings, and any other Foreign Affiliate in which Nextel
International or the Company directly or indirectly through one or more
intermediaries beneficially owns more than 50.0% of the voting stock or equity
interest, as the case may be.
"Management Agreements" means collectively the Management Agreements
referred to on Schedule 7.10 hereto.
"Material Adverse Effect" means, generally with respect to any Person,
event or occurrence, a material adverse effect on (i) such Person's business,
financial condition, assets, properties or operations (including the
construction, completion and operation of the System in the case of the
Company), (ii) such Person's ability to perform its obligations under the
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Operative Documents to which such Person is a party, (iii) the security
interests granted by such Person under the Security Documents, (iv) the System
or (v) such Person's Licenses or Governmental Approvals.
(a) With respect to any of the Company, Nextel International and any
of the Foreign Affiliates, Material Adverse Effect shall mean a material
adverse effect set forth in clauses (i) through (v) above. When the term
Material Adverse Effect is applied to the Company and the Foreign
Affiliates, it shall be deemed to apply to the Company and the Foreign
Affiliates taken as a whole (or, after consummation of the Proposed
Consolidation in accordance with this Agreement, the Consolidated Entity,
the Company and any surviving Foreign Affiliates taken as a whole).
(b) With respect to any Stockholder Guarantor other than Nextel
International, Material Adverse Effect shall mean a material adverse effect
set forth in clauses (i), (ii) and (iii) above, unless, with respect to
clause (ii) above in respect of a failure to perform under its Stockholder
Guaranty (the "Defaulting Stockholder Guarantor"), (x) within five (5)
Business Days after notice of such Material Adverse Effect, Nextel
International or any other Stockholder Guarantor shall have assumed the
liability of such Defaulting Stockholder Guarantor under its Stockholder
Guaranty, and (y) there shall be no adverse effect on the stock or quotas
pledged by such Defaulting Stockholder Guarantor.
"Materials of Environmental Concern" means chemicals, pollutants,
polychlorinated biphenyls, contaminated wastes, toxic or hazardous substances,
asbestos, petroleum and petroleum products.
"Maturity Date" means December 31, 2003; provided that if such date is not
a Business Day, then the Maturity Date shall be the next succeeding Business
Day.
"Maximum Advance Amount" means an amount equal to (x) the Original
Commitment minus (y) the aggregate principal amount of all Advances made to the
date of determination, including without limitation Advances that have been
prepaid.
"MEFA" means the Master Equipment Financing Agreement, dated as of February
4, 1999, by and between Nextel International, the lenders party thereto, and
Motorola Credit Corporation, as administrative agent and collateral agent, as
heretofore or hereafter amended, supplemented or otherwise modified.
"MIDC" means Motorola International Development Corporation, a Delaware
corporation.
"Ministry of Communications" means the Brazilian Ministry of Communications
and its successors.
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"Motorola do Brasil" means Motorola do Brasil Ltda., a Brazilian limited
liability company.
"Motorola do Brasil Guaranty" has the meaning ascribed to such term in
Section 5.01 hereof.
"Motorola Entity" means Motorola, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware, United States of
America, and each of its Subsidiaries and their successors and assigns.
"MSO Site" means the site described on Schedule 1.01(a) hereof, formerly
leased at the time of the Original Closing and now owned by the Company.
"Net Worth" means, with respect to any Person, the net worth of such Person
as determined in accordance with GAAP.
"Nextel" means Nextel Communications, Inc., a Delaware corporation.
"Nextel International" means Nextel International, Inc., a Washington
corporation.
"Nextel International Guaranty" has the meaning ascribed to such term in
Section 5.01 hereof.
"Nextel Ltda." means Nextel Telecomunicacoes Ltda., a Brazilian limited
liability company (formerly known as Air Fone Comercio e Servicos de Radiofonia
Movel Ltda.) and the survivor of mergers in July 1999 with (i) Via Radio
Administracao e Participacoes Ltda., a Brazilian limited liability company, (ii)
Via Radio-1 Telecomunicacoes Ltda., a Brazilian limited liability company, (iii)
MCS Radio Telefonia Ltda., a Brazilian limited liability company, (iv) SOW
Comercio e Servicos de Telefonia Movel Ltda., a Brazilian limited liability
company, (v) Radio Telecomunicacoes do Brasil Ltda., a Brazilian limited
liability company, and (vi) ATG Telecomunicacoes e Comercio Ltda., a Brazilian
limited liability company.
"Nextel Ltda. Receipt Account" has the meaning ascribed to such term in the
Nextel Ltda. Security Deposit Agreement.
"Nextel Ltda. Security Deposit Agreement" has the meaning ascribed to such
term in subsection 6.01(f) hereof.
"Nextel S.A." has the meaning ascribed to such term in the second preamble
hereof.
"Nextel S.A. Intercompany Services Agreement" has the meaning ascribed to
such term in Section 7.10(d) hereof.
"Nextel S.A. Promise to Pledge Quotas" has the meaning ascribed to such
term in subsection 6.01(g) hereof.
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21
"Nextel S.A. Shareholders Agreement" means the AirLink S.A. Shareholders
Agreement, dated as of September 26, 1997, by and among the Company, Motorola do
Brasil and Nextel S.A.
"Obligations" means collectively, all of the Indebtedness, liabilities and
obligations of the Company to the Creditor, whether now existing or hereafter
arising, whether or not currently contemplated, including without limitation
those arising under the Credit Documents.
"Operations and Maintenance Costs" means, for any period, the sum of the
following expenses incurred during such period (without duplication), calculated
in accordance with GAAP: (a) ordinary costs incurred in connection with the
ongoing operation and maintenance of the System in accordance with the Approved
Business Plan, (b) reasonable expenses of administering and operating the System
and of maintaining it in good repair and operating condition, (c) insurance
costs, (d) reasonable costs and fees incurred in connection with obtaining and
maintaining in effect the Governmental Approvals and Licenses, (e) legal,
accounting, marketing and other professional fees incurred in connection with
any of the foregoing items, and (f) scheduled major maintenance; provided that
such expenses do not include depreciation or any items properly chargeable by
GAAP to fixed capital accounts or any taxes.
"Operative Documents" means, collectively, the Credit Documents and the
System Documents.
"OPIC" means Overseas Private Investment Corporation, an agency of the
United States government.
"OPIC Policy" means the OPIC Contract of Insurance No. E926.
"Option Agreements" mean collectively those Option Agreements referred to
on Schedule 7.10 hereto.
"Option Companies" means Telecomunicacoes Brastel S/C Ltda., Telemobile
Telecomunicacoes Ltda. and Promobile Telecomunicacoes Ltda., each of which is a
limited liability company organized under the laws of Brazil.
"Options" means the options granted to Nextel Ltda. in respect of the
quotas of each of the Option Companies pursuant to the Option Agreements.
"Original Closing Date" means October 31, 1997.
"Original Commitment" has the meaning set forth in the fourth preamble.
"Original EFA" has the meaning ascribed to such term in the fourth preamble
hereof.
"Payment Date" means each Semi Annual Date in each year commencing with the
June 30, 2000 Semi Annual Date.
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22
"PBGC" means the Pension Benefit Guaranty Corporation or its successor.
"Permitted Indebtedness" means, collectively, (a) the Obligations, (b)
trade accounts payable and other similar Indebtedness of the Company and the
Foreign Affiliates incurred in the ordinary course of business (including,
without limitation, handsets or mobile units purchased in the ordinary course of
business) which are not due later than 120 days after invoice (or, in the case
of trade accounts payable owed to a Motorola Entity, on payment and other terms
as agreed to from time to time between the relevant obligor(s) and the Motorola
Entity); provided that in addition to the foregoing, there shall be permitted to
be outstanding at any one time trade accounts payable and other similar
Indebtedness of the Company and the Foreign Affiliates incurred in the ordinary
course of business which are due later than 120 days after invoice but no later
than 180 days after invoice (not to exceed the difference between $10,000,000
and the amount of "Permitted Indebtedness" under and as defined in the MEFA
above $10,000,000 that has been utilized under clause (b) of the definition
thereof), (c) obligations under long-term real property leases of the Company
and the Foreign Affiliates in respect of the cell sites, switch sites, retail
space and office space incurred in the ordinary course of business, (d)
short-term lease obligations of the Company and the Foreign Affiliates in an
amount per annum not exceeding $250,000 in the aggregate, (e) Indebtedness of
the Company and the Foreign Affiliates to be used for working capital purposes
and not exceeding $7,000,000 in the aggregate which may be secured by the
Collateral on a pari passu basis on terms and conditions reasonably satisfactory
to the Creditor, (f) Indebtedness of the Company and the Foreign Affiliates not
exceeding $50,000,000 in the aggregate which may be secured by the Collateral on
a pari passu basis on terms and conditions reasonably satisfactory to the
Creditor, (g) Indebtedness of Nextel S.A. to Motorola do Brasil relating to
loans made by Motorola do Brasil as the minority shareholder in Nextel S.A.
pursuant to subsection 5.2(e) of the Nextel S.A. Shareholders Agreement, (h)
Indebtedness of the Company to Nextel International incurred in order to fund
prepayment obligations as described in subsection 2.05(e) hereof, (i)
Indebtedness of the Company to Motorola Credit Corporation, a Delaware
corporation, under the Bridge Line, (j) handset purchase financing from a
financial institution in an amount not to exceed $60,000,000 in the aggregate,
(k) Indebtedness under Hedge Agreements; provided that such Hedge Agreements (I)
are designed solely to protect the Company against fluctuations in foreign
currency exchange rates or interest rates and (II) do not increase the
Indebtedness of the obligor outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by reason
of fees, indemnities and compensation payable thereunder, and (l) unsecured
subordinated indebtedness of the Company owing to Nextel International, having
no principal payments, cash interest payments or fee payments permitted or
scheduled prior to the repayment in full of the Obligations and in amounts and
on other terms (including, without limitation, payment and remedies
subordination terms) acceptable to the Creditor.
"Permitted Investments" means:
(a) debt obligations maturing, within twelve months of the time of
acquisition thereof which from time to time are accorded a rating of AA- or
better by Standard & Poor's Corporation (or an equivalent rating by another
recognized
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23
credit rating agency of similar standing if such corporation is not then in
the business of rating long term debt obligations);
(b) commercial paper with a maturity of 270 days or less which from
time to time is accorded a rating of A-1 or better by Standard & Poor's
Corporation (or an equivalent rating by another recognized credit rating
agency of similar standing if such corporation is not then in the business
of rating commercial paper);
(c) certificates of deposit maturing within twelve months of the time
of acquisition thereof issued by commercial banks that are accorded a
rating by an internationally recognized rating service then in the business
of rating commercial banks which is in the first quartile of the rating
categories used by such service;
(d) obligations maturing within twelve months of the time of
acquisition thereof of any Governmental Authority which obligations from
time to time are accorded a rating of BBB or better by Standard & Poor's
Corporation (or an equivalent rating by another recognized credit rating
agency of similar standing if such corporation is not then in the business
of rating governmental obligations); and
(e) demand deposits, certificates of deposit, bankers acceptance and
time deposits (having a term of less than one year) of United States or
Brazil banks having total assets in excess of $1,000,000,000 (or such
amount of local currency as is equivalent in $1,000,000,000 at all times
using the rate of exchange in effect from time to time on legal and
customarily used foreign exchange markets in Brazil).
"Permitted Liens" means, as of any particular time, (a) with respect to
Collateral located in the United States, Liens for taxes, assessments or
governmental charges not then delinquent or which the Company may, pursuant to
the provisions of Section 8.01 hereof, permit to remain unpaid, (b) Liens
created pursuant to the Security Documents, (c) with respect to Collateral
located in the United States, any mechanic's, worker's, repairer's,
materialmen's, supplier's, vendor's or like Liens securing obligations arising
in the ordinary course of business that (x) are not mature and not overdue, or
(y) are being contested in good faith and (1) as to which adequate reserves have
been established on the books of the Company in accordance with GAAP or (2) that
do not materially impair the value or marketability of the security granted to
the Creditor pursuant to the Security Documents and could not result in an
aggregate liability in excess of $1,000,000, (d) with respect to Collateral
located in the United States, all utility, access and other similar easements,
rights-of-way and restrictions granted in the ordinary course of business, (e)
with respect to Collateral located in the United States, pledges or deposits by
the Company under workers' compensation laws, unemployment insurance laws,
social security or pension obligations or similar legislation, in respect of
which adequate reserves shall have been established, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness of the Company) or leases to which the Company is permitted
hereunder to be a party, or deposits to secure public or statutory obligations
of the Company, or
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24
deposits of cash or bonds to secure surety or appeal bonds which the Company is
obligated to provide in accordance with activities permitted of it hereunder, or
deposits as security for contested taxes or import duties or for the payment of
rent, (f) Liens upon tangible personal property (which was acquired after
October 31, 1997, and the cost of which, individually or in the aggregate, does
not exceed $100,000) by the Company or any Foreign Affiliate, each of which
Liens was created solely to secure Indebtedness representing, or incurred to
finance, refinance or refund, the cost of such property (provided that no such
Lien shall extend to cover any property of the Company other than the property
so acquired), and (g) with respect to Collateral located in the United States,
rights reserved to or vested in any Governmental Authority as of October 31,
1997, to condemn, appropriate, control or regulate the System or any portion
thereof. A contest referred to in this definition shall be permitted only if the
execution or enforcement of the Lien being contested shall have been stayed or
is stayed as a result thereof and such contest could not reasonably be expected
to (i) have a Material Adverse Effect, or (ii) create or materially increase the
risk of imposition of any material penalties or liabilities, whether civil or
criminal, upon the Creditor.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, unincorporated association, trust or other juridical
entity, or any Governmental Authority.
"Plan" means at any time an employee pension benefit plan as defined in
Section 3(2) of ERISA that is covered by Title IV of ERISA or that is subject to
the minimum funding standards under Section 412 of the Code and is either: (i)
maintained by the Company or any member of the Controlled Group for employees of
the Company, or by the Company or any other member of the Controlled Group for
employees of any member of the Controlled Group, or (ii) maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the Company or any member of the
Controlled Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made or been obligated to make
contributions.
"Political Risk Insurance" means insurance insuring against the non-payment
of the Obligations and arising out of the events or circumstances set forth in
the OPIC Policy and the AIG Policy.
"Post-Default Rate" means (i) in respect of any Advances not paid when due
(whether at stated maturity, by acceleration or otherwise), a rate per annum
during the period commencing on the due date until such Advances are paid in
full equal to: (x) if such Advances are Prime Advances, 2% above the Prime Rate
as in effect from time to time plus the Applicable Margin for Prime Advances
(but in no event less than the interest rate in effect on the due date), or (y)
if such Advances are LIBOR Advances, 2% above the rate of interest in effect
thereon at the time of such default until the end of the then current Interest
Period therefor and, thereafter, 2% above the Prime Advances as in effect from
time to time plus the Applicable Margin for Prime Advances (but in no event less
than the interest rate in effect on the due date); and (ii) in respect of other
amounts payable by the Company hereunder (other than interest) not paid when due
(whether at stated maturity, by acceleration or otherwise), a rate per annum
during the period commencing on the due date until such other amounts are paid
in full equal to 2% above the
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Prime Rate as in effect from time to time plus the Applicable Margin for Prime
Advances (but in no event less than the interest rate in effect on the due
date). In each case, the Post-Default Rate shall not exceed the maximum
post-default interest rate permitted by applicable law.
"Prime Advances" means any of the Advances which bear interest at a rate
based upon the Prime Rate.
"Prime Rate" means the prime commercial lending rate from time to time as
published in The Wall Street Journal (United States edition). Each change in any
interest rate provided for herein based upon the Prime Rate resulting from a
change in the Prime Rate to take effect on the beginning of the day of such
change in the Prime Rate.
"Proposed Consolidation" means the consolidation of the Foreign Affiliates
with the Consolidated Entity surviving such consolidation.
"Quarterly Paid-in Capital Contribution" shall mean, for any quarter, the
net increase in cumulative Adjusted Paid-in Capital from the beginning of such
quarter to the end of such quarter, as determined in accordance with the
calculation of "Ending Cumulative Paid In Capital -- Actual" as set forth on
Schedule 1.01(c) hereto.
"Recurring Revenues" means total gross revenues earned by the Company and
the Foreign Affiliates from recurring revenue sources (including, without
limitation, interconnect fees, monthly fees, usage fees, roaming fees, air time
charges, value-added services, each adjusted for inflation in accordance with
GAAP, and additional service charges, less the bad debt expense for that period
indicated on the income statement of the Company and the Foreign Affiliates).
Recurring Revenues shall not include equipment sales or leases of iDEN or other
subscriber units.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from time to time.
"Regulatory Change" means any change after the date of this Agreement in
United States federal, state or foreign laws or regulations (including
Regulation D and the laws or regulations that designate any assessment rate
relating to certificates of deposit or otherwise) or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks of or under any United States federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Remaining Commitment" means the aggregate unpaid principal amount, plus
accrued and unpaid interest in respect thereof, of all outstanding Bridge Line
Advances as of the Drawdown Date; provided in no event shall the Remaining
Commitment exceed the Maximum Advance Amount.
"Request for Financing" means a request described in subsection 2.02(a)
hereof substantially in the form of Exhibit B hereto, duly completed and
executed by the Company.
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"Reserve Requirement" means for any LIBOR Advances for any semi annual
period (or, as the case may be, shorter period) as to which interest is payable
hereunder, the average rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
period by the Creditor or its assignees against "Eurocurrency liabilities" (as
such term in used in Regulation D).
"Restricted Assets" means those assets listed on Schedule 1.02 hereto.
"Securities Act" means the Securities Act of 1933, as amended, of the
United States of America.
"Security Documents" means individually and collectively the Company
Security Agreement, the Company Security Deposit Agreement, the Company Quota
Pledge Agreement, the Company Share Pledge Agreements, the Company Promise to
Pledge Quotas (and power of attorney related thereto), the Company Quota Voting
Agreement, the Company Share Voting Agreement, the Foreign Affiliate Security
Agreements, the Nextel S.A. Promise to Pledge Quotas, the Nextel Ltda. Security
Deposit Agreement, the Lease Assignment Agreements, the Foreign Affiliate Pledge
Agreements, the Foreign Affiliate Assignment of Rights and Obligations, the
Foreign Affiliate Trademark Assignment Agreements, Foreign Affiliate Voting
Agreements, the Stockholder Guarantor Pledge Agreements, the Telcom Pledge
Agreement, the Consents to Assignment and any financing statements,
registrations or similar documents filed or recorded in connection with the
foregoing.
"Semi Annual Dates" means June 30 and December 31.
"Shareholders Agreement" means the Shareholders Agreement dated as of
January 29, 1997, by and among the Company, Nextel International and the Telcom
Entities.
"Stockholder Guarantor Pledge Agreement(s)" has the meaning ascribed to
such term in subsection 6.01(b)(i) hereof.
"Stockholder Guarantors" means Nextel International, MIDC (on behalf of
Motorola do Brasil) and each other Acceptable Guarantor executing and delivering
a Stockholder Guaranty.
"Stockholder Guaranty(ies)" has the meaning ascribed to such term in
Section 5.01 hereof.
"Subscriber" means, as at any date, the aggregate number of units employing
iDEN based digital enhanced specialized mobile radio technology, subscribing to,
and paying for, communications services provided by the Company or the Foreign
Affiliates in connection with the System, excluding any such unit to the extent
the accounts receivable generated by operation of such unit are more than ninety
(90) days past due as of such date.
"Subsidiary" means (a) a company of which for the time being (i) any Person
controls the composition of the Board of Directors or the appointment of the
delegate managers or is the
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managing quotaholder; or (ii) such Person holds more than 50% in par value of
the issued and outstanding capital stock or quotas, or (b) a company which is a
subsidiary of any company which is a subsidiary of such Person.
"System" means the wireless communications system to be constructed and
operated in Brazil by Nextel International or its Affiliates utilizing the iDEN
based digital enhanced specialized mobile radio technology.
"System Documents" means the (i) iDEN Equipment and Services Agreements,
(ii) the Management Agreements, (iii) the Leases, (iv) the Conditional Sale
Agreements, (v) the Option Agreements, and (vi) any Additional System Document.
"System Party" means the Company, the Foreign Affiliates and each other
party to any System Document.
"System Revenues" means all income and receipts derived from the ownership
or operation of the System and the Telecommunications Business, including
without limitation proceeds of any business interruption insurance, income
derived from the operation of the System and the Telecommunications Business,
all as determined in conformity with cash accounting principles and the
investment income on the U.S. Accounts and the Nextel Ltda. Receipt Account.
"Target Subscribers" means, as of any quarter end date, the "Target
Subscribers" set forth opposite such quarter end date on Schedule 1.01(d)
hereto.
"Taxes" means, with respect to the Creditor, any present or future taxes,
levies, imposts, stamp, duties, fees, charges, deductions, withholding,
restrictions or conditions of any nature whatsoever imposed, levied, collected,
assessed or withheld by or within Brazil or any political subdivisions or taxing
authority thereof or therein or by or within any jurisdiction from which payment
is made on account of the transactions contemplated by the Credit Documents, but
excluding taxes on the overall net income of the Creditor (other than taxes on
interest payments or all other payments to be made in pursuance to the Credit
Documents).
"Telcom" means Telcom Ventures, L.L.C.
"Telcom Entities" mean collectively (i) South Beach Ventures, Inc., (ii)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (iii) ▇▇▇▇▇ ▇▇▇▇▇, (iv) The ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Education Trust, (v)
The Samir ▇▇▇ ▇▇▇▇▇ Education Trust, (vi) ▇▇▇▇▇▇ ▇▇▇▇▇, and (vii) ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
"Telcom Pledge Agreement" has the meaning ascribed to such term in
subsection 6.01(c)(i) hereof.
"Telecommunications Business" means the operation of analog SMR, radio
paging, mobile communications, personal communications services and related
wireless services, including data access and transmission, internet access and
services, and long-distance backhaul, which (i) materially utilize as a
necessary and central component thereof the iDEN based digital
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enhanced specialized mobile radio technology in Brazil in which the Company or
any Foreign Affiliate is engaged and (ii) comprise an enhancement to such iDEN
based digital enhanced specialized mobile radio technology.
"Trademark License Agreement" means the Trademark License Agreement, dated
October 31, 1997, between Motorola, Inc. and Nextel S.A. (formerly known as
AirLink S.A.).
"U.S. Accounts" means the U.S. Receipt Account and the U.S. Debt Service
Account.
"U.S. Debt Service Account" has the meaning ascribed to such term in the
Company Security Deposit Agreement.
"U.S. Receipt Account" has the meaning ascribed to such term in the Company
Security Deposit Agreement.
"Vendor" has the meaning ascribed to such term in the first preamble
hereof.
"Voting Stock" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote in the
election of the corporate directors (or Persons performing-similar functions).
"Wireless" means the Company as in existence prior to January 29, 1997.
Section 1.02. Interpretation. In this Agreement the singular includes the
plural and the plural the singular; words importing any gender include the other
gender, references to statutes or regulations are to be construed as including
all statutory or regulatory provisions consolidating, amending or replacing the
statute or regulation referred to; references to "writing" include printing,
typing, lithography and other means of reproducing words in a tangible visible
form; references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement unless otherwise indicated;
references to agreements and other contractual instruments shall be deemed to
include all schedules and exhibits to such agreement and all subsequent
amendments and other modifications to such agreements and contractual
instruments, but only to the extent such amendments and other modifications are
not prohibited by the terms of this Agreement, unless otherwise indicated; and
references to Persons include their respective permitted successors and assigns
and, in the case of Governmental Authorities, Persons succeeding to their
respective functions and capacities.
Section 1.03. Accounting Principles and Terms. Except as otherwise provided
in this Agreement: (a) all computations and determinations as to financial
matters, and all financial statements to be delivered under this Agreement,
shall be made or prepared in accordance with generally accepted accounting
principles in effect in the United States (including principles of consolidation
where appropriate) applied on a consistent basis; and (b) all accounting terms
used in this Agreement shall have the meanings respectively ascribed to such
terms by such principles.
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SECTION 2. ADVANCES
Section 2.01. The Remaining Commitment.
(a) The Creditor agrees, upon the terms and subject to the conditions
hereinafter set forth, to make credit available in Dollars to the Company on the
Drawdown Date in an aggregate principal equal to the Remaining Commitment (such
advance being referred to as the "Final Advance" and, together with any other
advances heretofore made by the Creditor to the Company under the Original EFA
(any such advance being referred to as an "Advance"), the "Advances"). The
Creditor represents, warrants and covenants that no part of the funds to be used
by it to make the Final Advance or hold the Advances constitutes, directly and
indirectly, the assets of an "employee benefit plan," within the meaning of
Section 3(3) of ERISA, or a "plan," within the meaning of Section 4975(e)(1) of
the Code.
(b) The Company shall avail itself of the Remaining Commitment in one
drawdown on the Drawdown Date.
(c) The Final Advance shall be either a Prime Advance or a LIBOR Advance
(each being a "type" of Advance as the Company shall specify in the applicable
Request for Financing).
Section 2.02. Procedure for Borrowing Final Advance.
(a) The Company shall deliver to the Creditor at the address listed in
Section 12.07 hereof, at least three (3) Business Days prior to the Final
Advance, a Request for Financing for each Advance which shall specify (i) the
type of the Final Advance (LIBOR Advance or Prime Advance and in the case of a
Prime Advance whether such Prime Advance will be converted to a LIBOR Advance on
the next Semi Annual Date), and (ii) the recipient of such Advance. The
foregoing Request for Financing, once delivered to the Creditor, shall be
irrevocable and shall commit the Company to receive the amount to be advanced by
the Creditor pursuant to the immediately preceding sentence on the date
specified therein.
(b) Not later than 2:00 p.m., New York City time on the Drawdown Date, but
subject to the terms and conditions hereof and to the fulfillment of all
applicable conditions set forth in subsection 2.02(a), Section 2.03 and Section
10 hereof, the Creditor shall make the Final Advance, and the proceeds thereof
shall be used by the Company to satisfy the aggregate unpaid principal amount,
plus accrued and unpaid interest in respect thereof, of all outstanding Bridge
Line Advances. The Company authorizes and directs the Creditor to, without any
further action or instruction (other than as set forth in the Request for
Financing), disburse the proceeds of such Advance directly to the Creditor as
specified in the Request for Financing. The Company acknowledges that
disbursement of funds to a Person other than the Company in accordance with the
Request for Financing pursuant to the immediately preceding sentence shall be
deemed receipt by the Company of the proceeds of the Final Advance made
hereunder.
Section 2.03. Financing Note. The Advances made by the Creditor hereunder
shall be evidenced by and be payable by the Company in accordance with the terms
of a single financing note of the Company substantially in the form of Exhibit C
hereto (the "Financing Note"), dated the Initial Funding Date, and be payable to
the order of the Creditor in a principal amount equal to the $125,000,000;
subject, however, to the provisions of the Financing Note to the effect that
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the principal amount payable thereunder at any time shall not exceed the then
unpaid principal amount of the Advances. The Company hereby irrevocably
authorizes the Creditor to make or cause to be made, at or after the time of
each Advance, an appropriate notation on the records of the Creditor, including
the Financing Note, reflecting the principal amount of such Advance, and the
Creditor shall make or cause to be made, at or after the time of receipt of
payment of any principal of any Advance, an appropriate notation on its records
and such Financing Note reflecting such payment and the Creditor will, prior to
any transfer of the Financing Note, endorse on the reverse side thereof the
outstanding principal amount of the Advances evidenced thereby. Failure to make
any such notation shall not affect the Company's obligations in respect of such
Advances.
Section 2.04. Repayment of Principal of Advances.
(a) The Company shall pay to the Creditor the principal of the Advances
made by the Creditor outstanding at the close of business on the Commitment
Termination Date in eight (8) consecutive semi-annual installments on the
Payment Dates (provided that the last such payment shall be in an amount
sufficient to repay in full the principal amount of such Advances), with the
amount of the installment paid on each Payment Date to be equal to the
respective percentages of the principal of such Advances outstanding at the
close of business on the Commitment Termination Date as set forth below:
Percentage of Original
Principal of
Payment Date Advance Payable on such Payment Date
------------ ------------------------------------
June 30, 2000 10%
December 31, 2000 10%
June 30, 2001 10%
December 31, 2001 10%
June 30, 2002 15%
December 31, 2002 15%
June 30, 2003 15%
December 31, 2003 15%
(b) The Advances shall be repaid as and when necessary to cause the
aggregate principal amount of the Advances outstanding not to exceed the Maximum
Advance Amount and as required by subsection 2.05(a) hereof.
Section 2.05. Prepayments.
(a) Mandatory Prepayment. The Company shall prepay Advances on the dates
and in the principal amounts described below together with all accrued interest
on such principal prepaid to date of prepayment:
(i) not later than the date 120 days (or 150 days, in the event that
(x) the Foreign Resident Account of the Company is no longer permitted
under applicable law or (y) the use of such Foreign Resident Account would
result in a
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significant cost to the Company and in each case the Brazilian Central Bank
approval for such prepayment is pending, so long as the Company is using
reasonable efforts to obtain such approval), after the end of each fiscal
year of the Company (commencing with the fiscal year ending on December 31,
1998), the Company shall prepay Advances in an aggregate amount equal to
50% of Excess Cash Flow for such fiscal year from amounts contained in the
U.S. Receipt Account; and
(ii) on the dates and the amounts specified in subsection 2.06(b) and
Sections 2.09 or 2.10 hereof if the Company shall be required to prepay the
Advances pursuant to such Sections.
(b) Optional Prepayment. The Company may prepay Advances, in whole or in
part, in integral multiples of $100,000 upon not less than thirty (30) days
prior written notice to the Creditor of the principal amount to be prepaid and
the date of such prepayment. On the date specified for prepayment the Company
shall pay such principal amount plus accrued interest on such principal amount
prepaid to the date of such prepayment. Notwithstanding the foregoing, unless
the conditions set forth in subsection 2.05(c) hereof shall be simultaneously
satisfied, LIBOR Advances may be only repaid on the last day of the Interest
Period for such LIBOR Advance. A notice of prepayment once received shall be
irrevocable and binding on the Company.
(c) Broken Funding Indemnification. The Company shall pay to the Creditor
such amount or amounts as shall compensate the Creditor for any loss, cost or
expense incurred by the Creditor (as reasonably determined and documented by the
Creditor) as a result of:
(i) any prepayment or repayment of a LIBOR Advance on a date other
than the last day of the Interest Period for such LIBOR Advance; or
(ii) any failure by the Company to borrow a LIBOR Advance on the
Drawdown Date specified in the relevant Request for Financing under Section
2.02 hereof, such compensation to include, without limitation, an amount
equal to: (x) any loss or expense suffered by the Creditor during the
period from such failure to borrow to the last day of such Interest Period
if the rate of interest obtainable by the Creditor upon the redeployment of
an amount of funds equal to the amount not borrowed is less than the rate
of interest applicable to such LIBOR Advance for such Interest Period or
(y) any loss or expense suffered by the Creditor in liquidating LIBOR
deposits to maturity.
The Company shall pay any amount due hereunder no later than seven (7) days
after receipt of an invoice therefor from the Creditor.
(d) Effect of Prepayment. All Advances prepaid, whether by mandatory or
optional prepayment, may not be reborrowed.
(e) Certain Reimbursements In Respect of Prepayments. Without affecting the
obligations of the Company set forth above, the Creditor acknowledges that (i)
the primary source of funds for the prepayments described above will be revenue
generated in Brazil by the
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operations of the Foreign Affiliates and that the Company expects to make any
required prepayments from corresponding prepayment amounts which Nextel S.A. is
obligated to make to the Company under the Conditional Sale Agreements, and (ii)
the transferring of the amounts for such prepayments under the Conditional Sale
Agreements will be subject to the approval of the Central Bank in Brazil. In the
event that (i) (x) the Company is prohibited by applicable law from maintaining
a Foreign Resident Account or (y) the use of such Foreign Resident Account would
result in a significant cost to the Company, and (ii) the approval of the
Central Bank is not obtained within the applicable periods provided for above
(notwithstanding the reasonable efforts of the Company and Nextel S.A. to obtain
such approval), Nextel International may make an intercompany loan to the
Company in the amount of such prepayment no later than 151 days after the end of
such fiscal year. Simultaneously with the receipt of such intercompany loan, the
Company shall use the proceeds thereof to make the prepayment required pursuant
to this Section 2.05. After making such prepayment and so long as no Default
shall have occurred and is continuing under this Agreement, then such
intercompany loan may be repaid directly or indirectly to Nextel International
by the Company or Nextel S.A. pursuant to the terms of the Company Security
Deposit Agreement and the Nextel Ltda. Security Deposit Agreement.
Section 2.06. Interest.
(a) The Company shall pay to the Creditor interest on the outstanding
principal amount of each of the Advances made by the Creditor, for the period
commencing on the date of such Advance until such Advance is paid in full, at
the following rate per annum:
(i) if such Advance is a Prime Advance, a rate per annum equal to the
Prime Rate (as in effect from time to time) plus the Applicable Margin; and
(ii) if such Advance is a LIBOR Advance, for each Interest Period
relating thereto, the LIBOR Rate for such Advance plus the Applicable
Margin.
Accrued interest on each of the Advances shall be paid in arrears on the
Interest Payment Dates. Notwithstanding the foregoing, interest that is payable
at the Post-Default Rate shall be payable from time to time on demand of the
Creditor.
(b) Anything herein to the contrary notwithstanding, if, on or prior to the
determination of an interest rate for any LIBOR Advance for any Interest Period
therefor, the Creditor reasonably determines (which determination shall be
conclusive absent manifest error):
(i) by reason of any event affecting the money markets in the United
States of America or the London interbank market, quotations of interest
rates for the relevant deposits are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining the rate
of interest for such LIBOR Advances under this Agreement; or
(ii) the rates of interest referred to in the definition of "LIBOR
Base Rate" in Section 1.01 hereof upon the basis of which the rate of
interest on any LIBOR Advance for such period is determined, do not
accurately reflect the cost to the Creditor of making or maintaining such
LIBOR Advance for such period,
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then the Creditor shall give the Company prompt notice thereof (and shall
thereafter give the Company prompt notice of the cessation, if any, of such
condition), and so long as such condition remains in effect, the Creditor shall
be under no obligation to make LIBOR Advances or to convert Prime Advances into
LIBOR Advances pursuant to subsection 2.02(a) hereof and the Company shall, on
the last day(s) of the then current Interest Period(s) for the outstanding LIBOR
Advances either prepay such LIBOR Advances in accordance with Section 2.05
hereof or convert such LIBOR Advances in Prime Advances.
(c) Without prejudice to the provisions of Section 11.02 hereof, in the
event of default by the Company in payment of any principal amount of the
Advances or interest thereon when due (whether at the stated maturity, by
acceleration or otherwise), the Company shall pay to the Creditor interest on
such past due and unpaid principal amount and (to the extent permitted by
applicable law) on such defaulted interest from the due date until the date of
payment in full (both before as well as after judgment), at the Post-Default
Rate. In addition, the Company shall indemnify the Creditor against any loss or
expense which it may sustain or incur as a direct consequence of the default by
the Company in payment of any principal amount of the Advances or interest
thereon. Each determination of any loss or expense by the Creditor under this
paragraph (c) shall be conclusive in the absence of manifest error.
(d) Interest on all Prime Advances shall be computed on the basis of a year
of 365/366 days and actual days elapsed (including the first day but excluding
the last) occurring in the period for which payable and interest on all LIBOR
Advances shall be computed on the basis of 360 days and actual days elapsed
(including the first day but excluding the last) occurring in the period for
which payable.
Section 2.07. Payments.
(a) Except as otherwise provided herein, all payments whatsoever by the
Company to the Creditor hereunder or under the Financing Note shall be made in
Dollars in same-day funds to the order of Motorola, Inc. at ▇▇▇▇▇▇ Bank,
Chicago, Illinois, USA, ABA# ▇▇▇-▇▇▇-▇▇▇, for the account of Motorola Credit
Corporation, Account # 350-9551 (or such other place as the Creditor shall have
designated in writing to the Company at least five (5) Business Days prior to
the scheduled payment date), not later than 2:00 p.m. New York time, on the day
on which such payment shall become due. Any amounts received after such time on
any date may, in the discretion of the Creditor, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon.
(b) If any payment hereunder or under the Financing Note would otherwise be
due on a day that is not a Business Day, such payment shall be made on the next
succeeding day that is a Business Day and including the additional days elapsed
in the computation of the interest payable on such next succeeding Business Day.
Section 2.08. Use of Proceeds. The Company agrees that the proceeds of the
Final Advance shall be used by the Company solely to satisfy the aggregate
unpaid principal amount, plus accrued and unpaid interest in respect thereof, of
all outstanding Bridge Line Advances as of the Drawdown Date. The Company
represents and warrants that the proceeds of all other Advances were used by the
Company solely to finance the purchase of equipment and services
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acquired pursuant to the iDEN Equipment and Service Agreements (including down
payments, milestone payments and other payments due under the iDEN Equipment and
Service Agreements) to be used in connection with the System excluding import
taxes and/or duties related thereto, to purchase equipment and services promptly
sold to Nextel S.A. pursuant to the Conditional Sale Agreements solely for use
in Brazil, or to repay Indebtedness owing under the Bridge Line. The proceeds of
the Final Advance shall be paid by the Creditor directly to Motorola Credit
Corporation.
Section 2.09. Change in Law. If any change in applicable law or regulation
or in the interpretation thereof by any Governmental Authority charged with the
administration thereof has made (or has made it apparent that it is) unlawful
for any Credit Party to perform any of obligations under any of the Credit
Documents and such change could reasonably be expected to have a Material
Adverse Effect then (i) the Creditor shall be discharged from all obligation to
make, renew or maintain the Advances, and (ii) the Company shall on demand pay
to the Creditor without premium or penalty the outstanding principal amount of
the Advances together with accrued interest thereon and all other moneys due to
the Creditor hereunder; provided that for so long as the Company is diligently
pursuing the contest of the same by appropriate proceedings and such contest
could not reasonably be expected to have a Material Adverse Effect and adequate
reserves have been established in accordance with GAAP, then the Creditor shall
not be so discharged and the Company shall not be required to so pay upon
demand.
Section 2.10. Illegality. If any change in applicable law or regulation or
in the interpretation thereof by any Governmental Authority charged with the
administration thereof has made (or has made it apparent that it is) unlawful
for the Creditor to perform its obligations hereunder, then (i) the Creditor
shall be discharged from all obligations to make, renew or maintain the Advances
and (ii) Company agrees to pay on demand to the Creditor without premium or
penalty the outstanding principal amount of the Advances together with accrued
interest thereon and all other moneys due to the Creditor hereunder.
Notwithstanding the foregoing, the Creditor will use reasonable endeavors to
assist in any restructuring necessitated by this Section 2.10; provided,
however, that the Creditor shall be under no obligation to take any act on the
effect or likely effect of which, in the opinion of the Creditor could
reasonably be expected to have an adverse effect upon the Creditor; provided,
further, that the Company shall reimburse the Creditor on demand for all
expenses (including attorneys' fees) incurred by the Creditor in assisting in
any such restructuring.
SECTION 3. FUNDING AND PROTECTION
Section 3.01. Taxes, Duties, Fees and Charges.
(a) All payments due to the Creditor under any of the Credit Documents,
whether of principal, interest, penalties, fees or otherwise, including payments
made under this subsection 3.01(a), shall be made without set-off, withholding
or counterclaim, and free and clear and without any deduction or withholding on
account of any Taxes, all of which shall be for the account of the Company and
paid by it directly to the relevant taxing or other authority when due. If the
Company shall be required by law to make any deduction or withholding in respect
of Taxes from any payment hereunder, including payments made under this
subsection 3.01(a), the sum payable shall be increased to such sum as will
result in the receipt by the Creditor after
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such deduction or withholding, of the amount that would have been received if
such deduction or withholding had not been required.
(b) The Company agrees to pay any Taxes imposed on or with regard to the
execution, formalization, registration, recordation or perfection of any of the
Operative Documents or any other documentation contemplated hereunder or
delivered pursuant hereto.
(c) The Company shall deliver to the Creditor within thirty days after the
payment thereof copies of the receipts evidencing payment of any withholding
taxes to any Governmental Authority.
Section 3.02. Change in Circumstances.
(a) In the event that there shall hereafter occur any change in any
Governmental Rule which increases or will increase (i) the cost of maintaining
any reserves or special deposits against the Remaining Commitment or the LIBOR
Advances or (ii) any other cost of complying with any law, regulation or
condition with respect to the Remaining Commitment or the LIBOR Advances, and
the result of any of the foregoing is or will be to increase the cost to the
Creditor of making or maintaining the Remaining Commitment or the LIBOR Advances
or to reduce the amount of any payment (whether of principal, interest or
otherwise) receivable by the Creditor hereunder, then upon receipt of a request
from the Creditor the Company shall pay or reimburse to the Creditor such amount
as will compensate the Creditor for such additional cost or reduction of
payment; provided that the Company shall only be liable for such costs
applicable to LIBOR Advances then outstanding. Amounts payable hereunder shall
be due seven (7) days after invoice therefor.
(b) The protection of subsection 3.02(a) hereof shall apply to voluntary
compliance by the Creditor with restraints, guidelines or policies not having
the force of law and shall apply if the Creditor shall comply with any law,
regulation or condition irrespective of any possible contention of invalidity or
non-applicability thereof.
(c) The Creditor will promptly (but in no event later than twenty (20) days
after actual knowledge of the occurrence of the event described in subsection
3.02(a) hereof) inform the Company by facsimile of its intention to claim
indemnification under this Section 3.02. The facsimile statement of the Creditor
as to the amount sufficient to indemnify the Creditor against any increased
cost, reduction or payment incurred, suffered or made by the Creditor, supported
by the computations made by the Creditor in arriving at such figure, shall, in
the absence of manifest error, be conclusive as to the amount thereof and
binding on Company.
A claim made under this Section 3.02 may be made before or after the end of
the Interest Period to which such claim relates and before or after any
repayment of all or part of the Advance to which such Interest Period relates;
provided, that the Company shall in no event be liable for any payment under
this Section 3.02 with respect to more than one Interest Period for each claim
made under this Section 3.02. An increased cost shall be an increased cost for
the purpose of subsection 3.02(a) hereof even if the payment or quantification
of such increased cost is not or cannot be made until after the expiry of any
Interest Period to which it relates.
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(d) In the event of any such change or request as is contemplated by
subsection 3.02(a) hereof the Creditor will use reasonable endeavors to mitigate
the effect or likely effect of such change or request by transferring the LIBOR
Advances to another jurisdiction or otherwise; provided, however, that the
Creditor shall be under no obligation to transfer the LIBOR Advances to another
jurisdiction or to take any other action to mitigate the effect or likely effect
of such change or request if, in the reasonable opinion of the Creditor, such
transfer or other action could reasonably be expected to have an adverse effect
upon the Creditor, whether as a result of taxes, credit policies, political
considerations or otherwise; provided, further, that the Company shall reimburse
the Creditor on demand for all expenses (including attorney's fees) incurred by
the Creditor in effecting such transfer (if such transfer is requested by the
Company) and the Creditor shall have no obligation to effect any such transfer
unless the Creditor is satisfied that it will not suffer any adverse
consequences as a result of such transfer for which it has not been indemnified
by the Company. If the Creditor is entitled to reimbursement under this
subsection 3.02(d) for any cost, the Creditor shall deliver to the Company a
statement of the nature and amount of such cost which statement shall constitute
prima facie evidence as to the amount due to the Creditor under this subsection
3.02(d).
(e) If the Company elects (which election shall be irrevocable) by giving
at least two (2) Business Days prior written notice to the Creditor, the Company
may, without penalty or premium, prepay to the Creditor any outstanding Advances
on any Interest Payment Date applicable to such Advances with respect to which
the Company has received a claim under this Section 3.02 together with accrued
interest thereon and all other sums due to the Creditor (including amounts
accrued or due under this Section 3.02).
SECTION 4. EXPENSES; INDEMNIFICATION; FEES
Section 4.01. Expenses. The Company agrees to pay, whether or not the Final
Advance is made hereunder, on demand: (a) all reasonable out-of-pocket costs and
expenses of the Creditor incurred in connection with the negotiation,
preparation, execution and delivery of the Credit Documents (including without
limitation all costs and expenses of registering, recording and perfecting the
security interests contemplated by the Security Documents) and the review of the
System Documents and any of the other documents, agreements and instruments
referred to in this Agreement or relating to the transactions contemplated
hereby; (b) the reasonable fees and expenses of the Creditor's expert
consultants; (c) the reasonable fees and disbursements of ▇▇▇▇▇▇▇▇▇, Will &
▇▇▇▇▇, United States counsel to the Creditor and of ▇▇▇▇▇▇ Filho, ▇▇▇▇▇ Filho,
Marrey Jr., Moherdaui e ▇▇▇▇▇▇▇ Advogados, Brazilian counsel to the Creditor,
incurred in connection with such negotiation, preparation, execution and
delivery of the Credit Documents and the review of the System Documents and any
of the other agreements and instruments referred to in this Agreement or
relating to the transactions contemplated hereby; (d) all reasonable
out-of-pocket costs and expenses of the Creditor (including the fees and
disbursements of counsel) incurred in connection with the negotiation,
preparation, execution and delivery of any amendment or waiver of, or supplement
or modification to, the Operative Documents and not solely requested by the
Creditor; (e) all costs and expenses (including legal fees and disbursements of
counsel) incident to the enforcement, protection or preservation of any right or
claim of the Creditor under any of the Operative Documents; and (f) all
transfer, stamp, documentary or other similar taxes, assessments or charges, if
any, upon any of the System
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Documents and the Credit Documents. Fees shall be deemed reasonable to the
extent they are reviewed and approved by the Creditor.
Section 4.02. Indemnification.
(a) Without in any way limiting the applicability of subsection 4.02(b)
hereof, and without regard to whether the Company or any other Person has
disclosed any fact to the Creditor, the Company hereby indemnifies and holds
harmless the Creditor and each of its respective officers, directors, employees,
consultants, advisors and agents (collectively, the "Indemnities") from and
against any and all actions, suits, claims, damages, demands, judgments, losses,
liabilities, costs or expenses whatsoever, including reasonable attorneys' fees,
which any Indemnitee may sustain or incur (or which may be claimed against the
Creditor by any Person or entity whatsoever) to the extent arising by reason of
or in connection with the construction, ownership or operation of the System or
the Telecommunications Business or the execution and delivery of, or payment or
failure to pay the Obligations, or the occurrence of an Event of Default or the
pursuit by the Creditor of any legal remedy in connection with an Event of
Default or arising out of or in connection with the Creditor's entering into
this Agreement or the Security Documents, or enforcing their remedies hereunder
or thereunder; provided that, the Company shall not be required to indemnify the
Creditor for any actions, suits, claims, damages, demands, judgments, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by
the Creditor's willful misconduct or gross negligence, or to the extent caused
by the acts or omissions of the Creditor after taking possession and control of
the System or the Telecommunications Business upon foreclosure. Fees shall be
deemed reasonable to the extent they are reviewed and approved by the Creditor.
(b) Notwithstanding anything in subsection 4.02(a) hereof to the contrary,
and without regard to whether the Company or any other Person has disclosed any
fact to the Creditor, the Company agrees to indemnify, defend and hold the
Indemnities free and harmless from and against any and all actions, suits,
claims, demands, judgments, liabilities, losses, costs, damages and expenses
(including, without limitation, reasonable attorneys' fees and expenses and
other expenses incurred in connection with environmental compliance and clean-up
obligations imposed under any Environmental Laws) any such Indemnitee may
sustain by reason of the assertion against it by any party of any claim
(including claims for indemnification or contribution and claims by third
parties for death, personal injury, illness or loss of or damage to property or
economic loss) in connection with any Materials of Environmental Concern used,
generated, treated, stored, recycled, disposed of, handled, discharged or
otherwise located or released in, on, under or from the System,
Telecommunications Business, Collateral or Property, except to the extent
resulting from such Indemnitee's grossly negligent act or willful misconduct
with respect to such Materials of Environmental Concern.
(c) Nothing contained in this Section 4.02 shall in any way diminish any of
the Company's rights or the Vendor's obligations under the iDEN Equipment and
Service Agreements.
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SECTION 5. STOCKHOLDER GUARANTIES AND FOREIGN AFFILIATE GUARANTIES
Section 5.01. Stockholder Guaranties. The due payment and performance of
the Obligations shall continue to be guaranteed to the Creditor by (i) Nextel
International, severally, for 93.9% of the aggregate Obligations, by the
execution and delivery to the Creditor, simultaneously with the execution and
delivery of this Agreement, by Nextel International of an amended and restated
guaranty in the form of Exhibit D-1 hereto (the "Nextel International
Guaranty"), and (ii) MIDC (on behalf of Motorola do Brasil), severally, for 6.1%
of the aggregate Obligations (as such percentile may be adjusted in accordance
with terms of the Motorola do Brasil Guaranty), by the execution and delivery to
the Creditor by MIDC of an amended and restated Guaranty in the form of Exhibit
D-2 hereto (the "Motorola do Brasil Guaranty" and together with the Nextel
International Guaranty and any other guaranty executed by a Stockholder
Guarantor in favor of the Creditor, hereinafter referred to individually as a
"Stockholder Guaranty"; and collectively, the "Stockholder Guaranties"). Any
Stockholder Guarantor may assign a portion of its obligations under its
Stockholder Guaranty to an Acceptable Guarantor subject to the terms and
conditions of its respective Stockholder Guaranty; provided that in no event may
any such assignment result in Nextel International guaranteeing less than 93.9%
of the Obligations.
Section 5.02. Foreign Affiliate Guaranties. The due payment and performance
of the Obligations shall continue to be guaranteed to the Creditor by each
Majority-Owned Foreign Affiliate, by the execution and delivery to the Creditor,
prior to or simultaneously with the execution and delivery of this Agreement, by
each Majority-Owned Foreign Affiliate of a guaranty in the form of Exhibit J to
the Original EFA (incorporated herein by reference) (the "Foreign Affiliate
Guaranty"; and collectively the "Foreign Affiliate Guaranties").
SECTION 6. SECURITY
Section 6.01. Security.
(a) In order to secure the due payment and performance by the Company of
the Obligations, prior to or simultaneously with the execution and delivery of
this Agreement and as a condition precedent to the effectiveness of this
Agreement:
(i) The Company shall have:
(A) Granted to the Creditor a Lien on all of the Company's
personal properties and assets (excluding Restricted Assets), whether
now owned or hereafter acquired, tangible and intangible by the
execution and delivery to the Creditor of a Security Agreement in the
form of Exhibit K to the Original EFA (incorporated herein by
reference) (the "Company Security Agreement"), a Security Deposit
Agreement in the form of Exhibit F hereto (the "Company Security
Deposit Agreement"), and endorsed the Conditional Sale Notes in favor
of the Creditor;
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(B) Granted to the Creditor a Lien on and pledge with the
Creditor, all of the issued and outstanding quotas or shares, as the
case may be, of its Subsidiaries (including, without limitation,
Nextel S.A. and the other Foreign Affiliates) owned by it, by the
execution and delivery to the Creditor of a Quota Pledge Agreement in
the form of Exhibit N-1 to the Original EFA (incorporated herein by
reference) (the "Company Quota Pledge Agreement") and a Voting
Agreement in the form of Exhibit X-1(a) to the Original EFA
(incorporated herein by reference) (the "Company Quota Voting
Agreement") and a Share Pledge Agreement in the form of Exhibit N-2(a)
and Exhibit N-2(b) to the Original EFA (incorporated herein by
reference) (the "Company Share Pledge Agreements") and a Voting
Agreement in the form of Exhibit X-1(b) to the Original EFA
(incorporated herein by reference) (the "Company Share Voting
Agreement") and a Company Promise to Pledge Quotas in the form of
Exhibit N-3 to the Original EFA (incorporated herein by reference)
(the "Company Promise to Pledge Quotas") and power of attorney related
thereto and execution and delivery of all related documents necessary
to give effect thereto; and
(C) Executed and delivered or cause to be executed and delivered
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Company
Security Agreement, the Company Quota Pledge Agreement, the Company
Promise to Pledge Quotas, the Company Share Pledge Agreements, the
Company Quota Voting Agreement, the Company Share Voting Agreement,
the Company Security Deposit Agreement, this subsection 6.01(a) and
this Agreement including, but not limited to, the Consents to
Assignment.
(b) In order to secure the due payment and performance by each Stockholder
Guarantor of all of the Indebtedness, liabilities and obligations of such
Stockholder Guarantor and the Company to the Creditor, whether now existing or
hereafter arising, whether or not currently contemplated, including, without
limitation, those arising under its Stockholder Guaranty and this Agreement,
prior to or simultaneously with the execution and delivery of this Agreement and
as a condition precedent to the effectiveness of this Agreement by the Creditor,
each Stockholder Guarantor (excluding MIDC but including Motorola do Brasil for
the purposes of Section 6.01(b)(i)) shall have:
(i) Granted to the Creditor a Lien on and pledge with the Creditor,
all of the issued and outstanding shares of the capital stock of the
Company and each of the Foreign Affiliates owned by it, by the execution
and delivery to the Creditor of a Pledge Agreement in the form of Exhibit O
to the Original EFA (incorporated herein by reference) and the execution
and delivery of all related documents necessary to give effect thereto
(each a "Stockholder Guarantor Pledge Agreement"); and
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(ii) Executed and delivered, or cause to be executed and delivered,
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Stockholder
Guaranties, the Stockholder Guarantor Pledge Agreement, this subsection
6.01(b) and this Agreement.
(c) In order to secure the due payment and performance of all of the
Indebtedness, liabilities and obligations of the Company to the Creditor,
whether now existing or hereafter arising, whether or not currently
contemplated, including, without limitation, those arising under this Agreement,
prior to or simultaneously with the execution and delivery of this Agreement and
as a condition precedent to the effectiveness of this Agreement, each of Telcom
and the Telcom Entities shall have:
(i) Granted to the Creditor a Lien on and pledge with the Creditor,
all of the issued and outstanding shares of the capital stock of the
Company owned by it, by the execution and delivery to the Creditor of a
Pledge Agreement in the form of Exhibit P to the Original EFA (incorporated
herein by reference) and the execution and delivery of all related
documents necessary to give effect thereto (the "Telcom Pledge Agreement");
and
(ii) Executed and delivered, or cause to be executed and delivered,
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Telcom Pledge
Agreement, this subsection 6.01(c) and this Agreement.
(d) In order to secure the due payment and performance by each of Nextel
S.A. and Nextel Ltda. of all of the Indebtedness, liabilities and obligations of
such Foreign Affiliate and the Company to the Creditor, whether now existing or
hereafter arising, whether or not currently contemplated, including, without
limitation, those arising under its Foreign Affiliate Guaranty (if any) and this
Equipment Financing Agreement, prior to or simultaneously with the execution and
delivery of this Agreement and as a condition precedent to the effectiveness of
this Agreement, each such Foreign Affiliate shall have:
(i) Granted to the Creditor a Lien on all of such Foreign Affiliate's
personal properties and assets (excluding Restricted Assets and Immaterial
Assets), whether now owned or hereinafter acquired, tangible and
intangible, by the execution and delivery to the Creditor of a Pledge
Agreement in the form of Exhibit Q-1 to the Original EFA (incorporated
herein by reference) (each a "Foreign Affiliate Security Agreement"); and
(ii) Executed and delivered or caused to be executed and delivered
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Foreign Affiliate
Security Agreement, this subsection 6.01(d) and this Agreement including,
but not limited to, the Consents to Assignment (except in respect of Option
Companies).
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(e) In order to secure due payment and performance by each of Nextel S.A.,
Nextel Ltda., and Telemobile Telecomunicacoes Ltda. of all of the Indebtedness,
liabilities and obligations of such Foreign Affiliate and the Company to the
Creditor, whether now existing or hereafter arising, whether or not currently
contemplated, including, without limitation, those arising under its Foreign
Affiliate Guaranty (if any) and the Equipment Financing Agreement, prior to or
simultaneously with the execution and delivery of this Agreement and as a
condition precedent to the effectiveness of this Agreement, each such Foreign
Affiliate shall have:
(i) Granted to the Creditor a Trademark Assignment Agreement in the
form of Exhibit R to the Original EFA (incorporated herein by reference)
(each a "Foreign Affiliate Trademark Assignment Agreement"); and
(ii) Executed and delivered or caused to be executed and
delivered such other agreements, instruments and documents as the Creditor
may reasonably require in order to effect the purposes of the Foreign
Affiliate Trademark Assignment Agreement, this subsection 6.01(e) and this
Agreement.
(f) In order to secure the due payment and performance by Nextel Ltda. and
Nextel S.A. of all of the Indebtedness, liabilities and obligations of such
Foreign Affiliate and the Company to the Creditor, whether now existing or
hereafter arising whether or not currently contemplated, including, without
limitation, those arising under its Foreign Affiliate Guaranty and this
Equipment Financing Agreement, prior to or simultaneously with the execution and
delivery of this Agreement and as a condition precedent to the effectiveness of
this Agreement, each of Nextel Ltda. and Nextel S.A. shall have in addition to
clauses (d) and (e) hereof (as applicable), shall have:
(i) Granted to the Creditor a Lien on and pledge with the Creditor,
all of the issued and outstanding quotas of the Foreign Affiliates owned by
it; by the execution and delivery to the Creditor of a Foreign Affiliate
Quota Pledge Agreement in the form of Exhibit S-1 to the Original EFA
(incorporated herein by reference) and the execution and delivery of all
related documents necessary to give effect thereto (each a "Foreign
Affiliate Pledge Agreement") and a Voting Agreement in the form of Exhibit
X-2 to the Original EFA (incorporated herein by reference) (the "Foreign
Affiliate Voting Agreement") in respect of Nextel Ltda. and Nextel S.A.;
and
(ii) Executed and delivered, or cause to be executed and delivered,
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Foreign Affiliate
Pledge Agreements, the Foreign Affiliate Voting Agreements, the ▇▇▇▇▇▇
▇▇▇▇▇ Promise to Pledge Quotas, this subsection 6.01(f) and this Agreement.
(g) In order to secure the due payment and performance by Nextel S.A. of
all of the Indebtedness and obligations of Nextel S.A. and the Company to the
Creditor, whether now existing or hereafter arising, whether or not currently
contemplated, including without limitation, those arising under its Foreign
Affiliate Guaranty and this Equipment Financing Agreement, prior to or
simultaneously with the execution and delivery of this Agreement and as a
condition
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precedent to the effectiveness of this Agreement, Nextel S.A. shall have, in
addition to delivering the documents described in clauses (d) and (f) above:
(i) executed and delivered to the Creditor a Security Deposit
Agreement in the form of Exhibit G hereto (the "Nextel Ltda. Security
Deposit Agreement") and an Assignment Agreement of Rights and Obligations
in respect of the Management Agreement in the form of Exhibit Y-1 to the
Original EFA (incorporated herein by reference) and an Assignment of Rights
and Obligations in respect of the Conditional Sale Agreements in the form
of Exhibit Y-2 to the Original EFA (incorporated herein by reference)
(collectively, the "Foreign Affiliate Assignment of Rights and
Obligations") and a Promise to Pledge Quotas in the form of Exhibit S-4 to
the Original EFA (incorporated herein by reference) (the "Nextel S.A.
Promise to Pledge Quotas"); and
(ii) [intentionally deleted]; and
(iii) executed and delivered, or cause to be executed and delivered,
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purpose of the Nextel Ltda.
Security Deposit Agreement, the Foreign Affiliate Assignment of Rights and
Obligations, this subsection 6.01(g) and this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES
Each of the Company and Nextel International makes the representations
and warranties attributed to it, as a Credit Party, in this Section 7 and each
of the Company and Nextel International makes, on behalf of the Foreign
Affiliates, the representations and warranties attributable to such Foreign
Affiliate, as a Credit Party, in this Section 7. Where a representation and
warranty is not attributed to any particular Credit Party, it shall be deemed
made by and on behalf of the Company, Nextel International and each Foreign
Affiliate as to the Company, Nextel International and each Foreign Affiliate
respectively.
Section 7.01. Organization.
(a) Each Credit Party is duly organized and validly existing under the laws
of its state or jurisdiction of organization. Schedule 7.01(a) hereto accurately
and completely lists, as to such Credit Party: (i) the state of incorporation or
organization of each such entity, and the type of legal entity that each of them
is, (ii) as to each of them that is a corporation, the classes and number of
authorized and outstanding shares of capital stock of each such corporation, and
the owners of such outstanding shares of capital stock, (iii) as to each of them
that is a legal entity other than a corporation (but not a natural Person), the
type and amount of equity interests authorized and outstanding of each such
entity, and the owners of such equity interests, and (iv) the business in which
each of such entities is engaged. All of the foregoing shares or other equity
interests that are issued and outstanding have been duly and validly issued and
are fully paid and non-assessable, and are owned by the Persons referred to on
Schedule 7.01(a) hereto, free and clear of any Lien except those stock options
in favor of the Company referred to on Schedule 7.01(a) hereto, Permitted Liens
and as otherwise provided for herein. Except as set
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forth on Schedule 7.01(a) hereto, there are no outstanding warrants, options,
contracts or commitments of any kind entitling any Person to purchase or
otherwise acquire any shares of capital stock or other equity interests of such
Credit Party nor are there outstanding any securities that are convertible into
or exchangeable for any shares of capital stock or other equity interests of
such Credit Party. Except as set forth on Schedule 7.01(a) hereto, such Credit
Party has no Subsidiaries. The Company has no Subsidiaries other than those
listed on Schedule 1.01(b) hereof and after the Original Closing Date any
additional Subsidiaries to the extent permitted hereunder.
(b) Each Credit Party is in good standing (to the extent that such
jurisdiction recognizes the legal concept of good standing) in its state or
jurisdiction of organization and in each state or jurisdiction in which it is
qualified to do business. There are no jurisdictions other than as set forth on
Schedule 7.01(b) hereto in which the character of the properties owned or
proposed to be owned by any Credit Party or in which the transaction of the
business of such Credit Party as now conducted or as proposed to be conducted
requires or will require such Credit Party to qualify to do business and as to
which failure so to qualify could reasonably be expected to have a Material
Adverse Effect.
Section 7.02. Power; Authority.
(a) Each Credit Party has full legal right, power and authority to carry on
its respective present business, to own its respective properties and assets, to
incur the obligations thereunder, to execute and deliver each Operative Document
to which it is a party, and, to the extent it is a party thereto, to perform and
observe the terms and conditions thereof.
(b) All appropriate and necessary corporate, partnership and legal actions
have been taken by each Credit Party to authorize the execution, delivery and
performance of each Operative Document to which it is a party, and each Credit
Party is duly authorized to execute and deliver and to perform its obligations
under each of the Operative Documents to which it is a party.
Section 7.03. Governmental Approvals; Licenses.
(a) All Governmental Approvals that are necessary under all applicable
Governmental Rules in connection with (a) the due execution, delivery and
performance by each Credit Party of its obligations, and the exercise of its
rights, under the Operative Documents, (b) the construction, completion,
ownership, operation and maintenance of the System in the Major Market Areas
(except such Governmental Approvals which are ministerial in nature or which the
failure to obtain such could not reasonably be expected to have a material
adverse effect on the ability of the Company and the Foreign Affiliates taken as
a whole to achieve the Approved Business Plan with respect to any such Major
Market Area), (c) the Telecommunications Business currently engaged in, and (d)
the grant by the Credit Parties of the assignments and security interests
granted by the Security Documents and the validity and enforceability thereof
and for the perfection of and the exercise by the Creditor of its rights and
remedies thereunder are identified on Schedule 7.03(a) hereto (which Schedule
sets forth: the applicant; the issuing Governmental agency (or agencies); the
date of application (or, if not yet applied for, when it will be necessary to
obtain such Governmental Approval to achieve the Approved Business Plan
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and the date the application is expected to be submitted); the term of the
expected (or granted) approval, and if not yet granted, when approval is
necessary to achieve the Approved Business Plan and when approval is expected;
any appeal periods which are pending; and a brief description of the matters
governed by such approval. All Governmental Approvals identified on Part I of
each of Sections A and B of Schedule 7.03(a) hereto have been duly obtained on
or before the Original Closing Date and are final, in full force and effect and
all administrative appeal periods with respect thereto have terminated and are
all that are necessary to conduct the business as presently being conducted.
Those Governmental Approvals set forth on Part II of each of Sections A and B of
Schedule 7.03(a) are expected to be obtained in due course. There is no
proceeding pending or (to the Company's knowledge after due inquiry) threatened,
that could reasonably be expected to rescind, terminate, modify or suspend any
Governmental Approval listed in Part II of Sections A and B of Schedule 7.03(a)
hereto, and no such disclosed matter could reasonably be expected to have a
Material Adverse Effect. None of Nextel International, the Company and Nextel
S.A., respectively, have any knowledge that the information set forth in each
application submitted by the relevant Credit Party in connection with each such
Governmental Approval is not accurate or complete in all respects as of the date
submitted and as of the Original Closing Date and true and complete copies of
such Governmental Approvals have been delivered to the Creditor. Except for
those Governmental Approvals set forth on Schedule 7.03(a) hereto and the
Licenses set forth on Schedule 7.03(b) hereto, no other consent, approval or
authorization of, or declaration or filing with, any other Person is required in
connection with (i) the construction, ownership, operation or maintenance by the
Company of the System in the Major Market Areas (except such Governmental
Approvals which are ministerial in nature or which the failure to obtain such
Governmental Approvals or Licenses could not reasonably be expected to have a
material adverse effect on the ability of the Company and the Foreign Affiliates
taken as a whole to achieve the Approved Business Plan with respect to any such
Major Market Area), (ii) the Telecommunications Business currently engaged in,
or (iii) as to such Credit Party and, to the Company's knowledge after due
inquiry, as to Persons affiliated with any Credit Party, with the execution,
delivery, performance, validity or enforceability of this Agreement or any other
Operative Document. Section C of Schedule 7.03(a) hereto sets forth the
Governmental Approvals necessary for the grant by the Credit Parties of the
assignments and security interests granted by the Security Documents and the
validity and enforceability thereof and for the perfection of and the exercise
by the Creditor of its rights and remedies all of which will be obtained by the
registration or filing of the Security Documents in the locations indicated on
Schedule 7.03 hereto.
(b) Schedule 7.03(b) sets forth all Licenses that are necessary for (i) the
ownership, operation or maintenance of the System in the Major Market Areas
(except such Licenses which are ministerial in nature or which the failure to
obtain such License could not reasonably be expected to have a Material Adverse
Effect on the Company and the Foreign Affiliates taken as a whole to achieve the
Approved Business Plan in the Major Market Areas) as is contemplated by the
Approved Business Plan, and (ii) the Telecommunications Business currently
engaged in. Except to the extent expressly set forth in Schedule 7.03(b) hereof,
each such License is in full force and effect. Those Licenses set forth in Part
II of Schedule 7.03(b) hereof are expected to be obtained in due course. No
default has occurred which is continuing under or in respect of any of the
provisions of any License except for defaults resulting from the failure to meet
certain milestones set forth in such Licenses which failure could not reasonably
be expected to have a Material Adverse Effect. No authorization, approval,
application, filing, registration, consent or
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other action of any local, state or federal authority is required to enable the
Company or any Foreign Affiliate to operate under its respective License (except
such Licenses which are ministerial in nature or which the failure to obtain
such License could not reasonably be expected to have a Material Adverse Effect
on the Company and the Foreign Affiliates taken as a whole to achieve the
Approved Business Plan in the Major Market Areas) other than those filings made
and referred to on Schedule 7.03(b) hereto. There is no proceeding pending, or
to the knowledge of the Company after due inquiry, threatened, which could
rescind, terminate, modify or suspend any such approval, filing, registration or
consent, and no such disclosed proceeding could reasonably be expected to have a
Material Adverse Effect. None of Nextel International, the Company and Nextel
S.A., respectively, have any knowledge that the information set forth in each
application submitted by the Company and any Foreign Affiliate in connection
with each such approval, filing, registration or consent is not accurate or
complete in any material respect.
Section 7.04. Execution, Enforceability, Violation of Law and Agreements.
Each of the Operative Documents to which a Credit Party is a party has been duly
executed and delivered by such Credit Party and constitutes, the legal, valid
and binding contract, agreement and obligation of such Credit Party enforceable
in accordance with its terms except as (w) the enforceability of a pledge of
more than 49% of the ownership interest of an entity holding a License may
require the approval of the Ministry of Communications and the Company and
Nextel International have no reason to believe such approval will not be granted
in due course, (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws relating or affecting creditors' rights generally,
(y) the availability of equitable remedies, and (z) rights to indemnification
and contribution as they may be limited by public policy; provided, however,
that such laws shall not materially interfere with the practical realization of
the benefits of the Security Documents or the Liens created thereby, except for
(i) possible delay, (ii) situations that may arise under Chapter 11 of the
Bankruptcy Code, and (iii) equitable orders of the Bankruptcy Court. The
execution, delivery and performance of the terms of each of the Operative
Documents by each Credit Party and the payment by such Credit Party of all
amounts due on the dates and in the currency provided for therein (i) will not,
except as is set forth on Schedule 7.04 hereto, violate or contravene any
Governmental Rule or other provision of law or other Governmental directive,
whether or not having the force of law, which is applicable to such Credit
Party, which set forth violation or contravention thereof individually and in
the aggregate could not reasonably be expected to have a Material Adverse
Effect; (ii) will not, except as is set forth on Schedule 7.04 hereto,
contravene any governmental guideline or policy statement applicable to such
Credit Party but not having the force of law, which set forth violation or
contravention thereof individually and in the aggregate could not reasonably be
expected to have a Material Adverse Effect; (iii) will not conflict with,
violate or breach the Articles of Incorporation or By-laws (or any other
organizational documents, as the case may be, of such Credit Party; (iv) will
not conflict with or result in the breach of any provision of, or result in the
creation or imposition of any Lien or other preferential arrangement under, any
other indenture, agreement, mortgage, contract or other undertaking or
instrument to which such Credit Party is a party or by which it or any of its
properties or assets is bound other than the Credit Documents; (v) will not
constitute a default or an event that, with the giving of notice or the passing
of time, or both, would constitute a default under any such agreement or
instrument, and (vi) except for the approvals, consents and registrations
described in subsection 10.01(j) hereof (all those described in clause (i)
thereof have been obtained on or prior to the Initial Funding Date and are and
will remain in full force and effect and no further action is needed with
respect thereto) do not require any governmental
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consent, registration or approval. To the extent the representations and
warranties contained in this Section 7.04 relate to any law, Governmental Rule,
governmental directive or other matter related to an "employee benefit plan,"
within the meaning of Section 3(3) of ERISA, or a "plan," within the meaning of
Section 4975(e)(1) of the Code, such representations and warranties are made
assuming the truth of the representation, warranty and covenant contained in the
second sentence of subsection 2.01(a).
Section 7.05. Financial Statements; Business Plan.
(a) The consolidated audited balance sheets of Nextel International and its
Subsidiaries and consolidated statements of operations, changes in stockholders'
equity and cash flows of Nextel International and its Subsidiaries each as of
December 31, 1998, and all other information and data heretofore furnished by
the Company, Nextel International or any agent of the Company or Nextel
International on behalf of Nextel International to the Creditor, including the
quarterly (each as at June 30, 1999 and September 30, 1999) consolidated balance
sheets and consolidated statements of operations, changes in stockholders'
equity and cash flows are complete and correct have been prepared in accordance
with GAAP and fairly represent the condition and results of operations of Nextel
International and its Subsidiaries as of such dates or for such periods. Since
December 31, 1998, no event that could reasonably be expected to have a Material
Adverse Effect has occurred. None of Nextel International or any of its
Subsidiaries has contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material either individually or in
the aggregate.
(b) The consolidated audited balance sheets of the Company and its
Subsidiaries and consolidated statements of operations, stockholders' equity and
cash flows of the Company and the Subsidiaries, each as at December 31, 1998,
and all other information and data heretofore furnished by the Company or any
agent of the Company on behalf of the Company to the Creditor, including the
quarterly (each as at June 30, 1999 and September 30, 1999) consolidated balance
sheets and statements of operations, stockholders' equity and cash flows of the
Company and its Subsidiaries are complete and correct, have been prepared in
accordance with GAAP and fairly represent the condition and results of
operations of the Company and its Subsidiaries as of such dates or for such
periods. Since December 31, 1998, no event that could reasonably be expected to
have a Material Adverse Effect has occurred. None of the Company or any of its
Subsidiaries have contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material either individually or in
the aggregate, except as disclosed in the above-referenced financials or on
Schedule 7.05 hereto.
(c) The financial and business projections for the System contained in the
Approved Business Plan submitted to the Creditor were prepared in good faith and
represent the Company's best estimate (as of the date of such Approved Business
Plan) of performance for the forecast period.
Section 7.06. Taxes. Each Credit Party has timely paid all required taxes,
duties, fees and assessments of any kind with respect to, or in connection with,
its respective income, business, properties and certificates of stock and each
is current with all the tax returns required to be filed by it except such
taxes, if any, as are being contested in good faith and by proper proceedings
and as to which either (x) adequate reserves have been established in accordance
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with GAAP on the books of such Credit Party or (y) the aggregate amount of such
taxes, duties, fees and assessments is less than $1,000,000 and the non-payment
of which could not reasonably be expected to have a Material Adverse Effect
under such circumstances. There are no tax liens against such Credit Parties or
any of their respective properties. Such Credit Party is not party to any action
or proceeding by any Governmental Authority for the assessment or collection of
taxes, nor has any claim for assessment or collection of taxes been asserted
against such Credit Party or any of its respective properties.
Section 7.07. Properties. All property and assets owned by each Credit
Party, including, without limitation, contracts, Governmental Approvals
currently held by such Credit Party, entitlements and other rights, titles or
interest of such Credit Party relating or incidental to the System or the
Telecommunications Business are owned by it free and clear of all Liens other
than Permitted Liens. Each Credit Party has good title in and to all of the
Collateral, the Immaterial Assets and the Restricted Assets now owned by it, and
with respect to leased property a valid and subsisting leasehold estate in and
to such property, in each case free and clear of all Liens other than Permitted
Liens. No mortgage or financing statement or other instrument or recordation or
registration covering all or any part of the Collateral, the Immaterial Assets
or the Restricted Assets is on file in any recording office other than in
connection with the Liens granted under the Security Documents. Each Credit
Party has been granted (or reasonably expects to be granted) and has good
leasehold right or title (or reasonably expects to have a good leasehold right
or title) to all easements, rights-of-way, licenses and other real property
rights reasonably required for access to, and construction or operation of, the
System and the Telecommunications Business, free and clear of any Lien other
than Permitted Liens.
Section 7.08. Compliance with Laws.
(a) Each Credit Party complies and has complied in all material respects
with all applicable Governmental Rules, and any such non-compliance cannot,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. To the extent the representations and warranties contained in
the preceding sentence relate to any Governmental Rule related to an "employee
benefit plan," within the meaning of Section 3(3) of ERISA, or a "plan," within
the meaning of Section 4975(e)(1) of the Code, such representations and
warranties are made assuming the truth of the representation, warranty and
covenant contained in the second sentence of subsection 2.01(a). Except as
previously disclosed to the Creditor in writing, no such Credit Party has
received any communication of which the Company has not made the Creditor aware
in writing promptly after the Company becoming aware thereof, from a
Governmental Authority that alleges that such Credit Party is not in full
compliance in all material respects with all applicable Governmental Rules, and
to the Company's knowledge, after due inquiry, there are no circumstances that
may prevent or interfere with such full compliance in all material respects in
the future.
(b) Each Credit Party is in compliance in all material respects with all
applicable laws relating to the employment of labor, wages, hours and conditions
of work, collective bargaining, withholding tax and the payment of social
security contributions and other labor-related taxes, and any non-compliances
cannot, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect. Such Credit Party is not liable for any arrears in
wages, compensation, benefits, premiums, taxes or penalties for failure to
comply with any of the
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foregoing laws except to the extent that the same are being contested in good
faith and by proper proceedings and as to which either (x) adequate reserves
have been established in accordance with GAAP on the books of such Credit Party
or (y) nonpayment of which could not have a Material Adverse Effect under such
circumstances and could not result in an aggregate liability in excess of
$1,000,000. To the extent the representations and warranties contained in this
Section 7.08(b) relate to any law related to an "employee benefit plan," within
the meaning of Section 3(3) of ERISA, or a "plan," within the meaning of Section
4975(e)(1) of the Code, such representations and warranties are made assuming
the truth of the representation, warranty and covenant contained in the second
sentence of subsection 2.01(a).
(c) The operations of each Credit Party complies in all material aspects
with all applicable Environmental Laws.
(d) There are no claims, investigations, litigation, administrative
proceedings, whether pending or threatened, or judgments or orders, relating to
any Materials of Environmental Concern or alleging the violation of any
Environmental Laws (collectively "Environmental Matters") relating in any way to
any property or to the operations of such Credit Party.
(e) No Materials of Environmental Concern are presently stored or otherwise
located on, in or under real estate owned or leased by such Credit Party except
in compliance in all material respects with the Environmental Laws, and, no part
of such real estate or adjacent parcels of real estate, including the
groundwater located thereon, is to the knowledge of the Company after due
inquiry, presently contaminated by any Materials of Environmental Concern in any
material respect.
(f) Such Credit Party has no material contingent liability in connection
with any release of any Materials of Environmental Concern into the environment.
Section 7.09. Intellectual Property. Each of the Credit Parties owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business (the "Intellectual Property"),
and the use thereof by the Credit Parties does not infringe upon the rights of
any other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
All material fees which are due in respect of the Intellectual Property have
been paid. All Intellectual Property owned by such Credit Party, together with
any pending applications therefor is listed on Schedule 7.09 hereto.
Section 7.10. Burdensome Documents; Agreements with Affiliates; Other
Agreements.
(a) Except as set forth on Schedule 7.10 hereto, no Credit Party is a party
to or bound by, nor are any of the properties or assets owned by such Credit
Party used in the conduct of its businesses (with respect to Nextel
International only, its Brazilian businesses) affected by, any agreement, bond,
note, indenture, order or judgment, including, without limitation, any of the
foregoing relating to any Environmental Matter, that a violation thereof could
reasonably be expected to have a Material Adverse Effect
(b) Such Credit Party is not a party to any agreement with any Arm's-Length
Affiliate or any of the officers, directors or stockholders of such Arm's-Length
Affiliate except the
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Management Agreements, Option Agreements and agreements made in the ordinary
course of business and on arm's length, on commercially reasonable or more
advantageous terms; provided, further, that the foregoing representation does
not apply to any transaction entered into by Nextel International with any
Affiliate which is an Arm's-Length Affiliate so long as such transaction could
not reasonably be expected to have a Material Adverse Effect.
(c) Such Credit Party is not a party to nor is any of its respective
property subject to or bound by any lease, forward purchase contract or futures
contract, covenant not to compete, or other agreement which restricts such
Credit Party's ability to conduct its respective business as presently
conducted, or could reasonably be expected to have a Material Adverse Effect.
(d) No material purchase or other commitment (other than pursuant to the
Operative Documents, the Management Agreements, the Intercompany Services
Agreement, dated February 1, 1997 (the "Nextel S.A. Intercompany Services
Agreement"), between Nextel S.A. and Nextel International and the Intercompany
Services Agreement, intended to be executed between Nextel S.A. and Nextel
Argentina S.A. in substantially the form of the Nextel S.A. Intercompany
Services Agreement) of such Credit Party is in excess of the normal ordinary and
usual requirements of its respective business, or was made at any price in
excess of the then current market price, or contains terms and conditions more
onerous than those usual and customary in the applicable industry.
Section 7.11. Security Documents. The Security Documents create in favor of
the Creditor legal, valid and, upon proper recording, registration or filing for
those documents or instruments that require such filing, registration or
recording, and possession for those security interests perfected by possession,
perfected first security interests in the real and personal property of the
Credit Parties other than (i) the Restricted Assets, and (ii) the Immaterial
Assets. All filings, recordations, registrations and other actions necessary to
perfect and protect such security interests have been duly effected or taken,
and a perfected Lien on the Collateral other than the Restricted Assets and
Immaterial Assets, prior and superior to all other Liens (except for Permitted
Liens) has been created in favor of the Creditor.
Section 7.12. Judgments, Actions, Proceedings. Except as set forth on
Schedule 7.12 hereto, there are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
any of the Credit Parties after due inquiry, threatened against or affecting any
of the Credit Parties (i) as to which an adverse determination could reasonably
be expected and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect or (ii) that
involve any of the Operative Documents or the transactions contemplated thereby
nor is there any reasonable basis for the institution of any such action or
proceeding. There is no proceeding pending, or to the best of the Company's or
Nextel International's knowledge after due inquiry, threatened, which could
rescind, terminate, modify or suspend any License in a Major Market Area which
could reasonably be expected to have a material adverse effect on the ability of
the Company and the Foreign Affiliates to achieve the Approved Business Plan for
such Major Market Area.
Section 7.13. No Defaults. No Default or Event of Default has occurred and
is continuing. No Credit Party is in default under or with respect to (i) the
iDEN Equipment and Service Agreements or any other System Document or (ii) any
other agreement, lease or
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instrument to which any Credit Party is a party or by which it or its properties
or assets may be bound which in the case of clause (h) could reasonably be
expected to have a Material Adverse Effect.
Section 7.14. Strikes. There are no strikes, work stoppages or
controversies pending or threatened between any Credit Party and its employees,
other than employee grievances; arising in the ordinary course of business which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Section 7.15. Sufficiency of System Documents. The services to be
performed, the materials to be supplied and the property interests, easements
(if any) and other rights granted to the Credit Parties pursuant to the System
Documents or otherwise anticipated to be obtained by the Credit Parties in the
ordinary course of business:
(i) will comprise all of the property interests necessary to secure
any such right that is material to the construction, operation and
maintenance of the System in the Major Market Areas in accordance with all
Governmental Rules, the Licenses and as contemplated by the Operative
Documents; and
(ii) will provide adequate ingress and egress to the real estate
necessary in connection with the construction and operation of the System
in the Major Market Areas.
There are no services, materials or rights required for the construction,
ownership and operation of the System in the Major Market Areas by the Company
and the Foreign Affiliates in accordance with the Operative Documents other than
(A) those granted by, or to be provided to the Credit Parties pursuant to, the
Operative Documents or (B) those that can be reasonably expected to be
commercially available.
Section 7.16. Delivery of System Documents and Licenses. There has been
delivered to the Creditor by Nextel International a true and complete copy of
each System Document (including all exhibits, schedules and documents referred
to therein or delivered pursuant thereto, if any), each Governmental Approval
granted in favor of the Company and each Foreign Affiliate and each License.
Except as identified in the definition applicable to such System Document, none
of the System Documents have been amended, modified or terminated, and all of
the System Documents are in full force and effect.
Section 7.17. Accuracy of Information. Each of the foregoing
representations and warranties attributed to the Company, Nextel International
and each Foreign Affiliate and all information heretofore furnished by the
Company, Nextel International and each Foreign Affiliate to the Creditor for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all such information hereafter furnished by the Company, Nextel
International and each Foreign Affiliate to the Creditor will be, true and
accurate in all respects on the date of this Agreement, and as of the date on
which such information is stated or certified; provided that, with respect to
projected financial information, Nextel International and the Company represent
only that such information was prepared in good faith and based upon assumptions
believed to be reasonable at the time. Each of Nextel International, the Company
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and each Foreign Affiliate has disclosed to the Creditor in writing any and all
facts which have or could reasonably be expected to have a Material Adverse
Effect.
No representation or warranty of Company or Nextel International herein,
and no certification, document or statement furnished or to be furnished to
Creditor contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements of fact contained herein
not misleading.
Section 7.18. Business. None of the Company or any Foreign Affiliate has
(i) on and after February 1, 1997, conducted any business other than relating to
the development, financing, construction, ownership and maintenance of the
System or the Telecommunications Business, or (ii) prior to February 1, 1997,
(to the Company's or any Majority-Owned Foreign Affiliate's knowledge or Nextel
S.A.'s knowledge with respect to the Option Companies) conducted any business
which could reasonably be expected to have a Material Adverse Effect on the
Collateral.
Section 7.19. Survival of Representations and Warranties. Each of the
representations and warranties set forth in Section 7 hereof (subject, in the
case of Nextel International, to the provisions of Section 12.11 hereof) shall
be deemed repeated on (a) the date of each Advance, (b) the first day of each
Interest Period, and (c) each date upon which the audited or unaudited (as
applicable) financial statements of the Company and Nextel International are
delivered to the Creditor pursuant to Section 8.02 or 8.03 (as applicable) (or,
if earlier, such date upon which such statements are required to be delivered
under which sections), as fully as if made on each such date with respect to the
circumstances of the relevant Credit Party existing at such time; provided that
the representations and warranties set forth in subsections 7.05(a), (b) and (c)
hereof as to the financial statements of the Company and Nextel International
shall be deemed a reference to the audited and unaudited financial statements of
the Company and Nextel International most recently delivered to the Creditor
pursuant to Sections 8.02 and 8.03 hereof.
Section 7.20. ERISA.
(a) No Credit Party is a participating employer in: (i) any Plan under
which more than one unrelated employer makes contributions as described in
Section 4063 and 4064 of ERISA, or (ii) a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
(b) Subject to the first paragraph of Section 7, all references to a Credit
Party in this Section 7.20 or in any other Section of this Agreement relating to
ERISA (other than references relating to the knowledge or awareness of the
Company, Nextel International and Nextel S.A.) shall be deemed to refer to such
Credit Party and all other entities that are part of a Controlled Group as of
the relevant date.
Section 7.21. Regulation. As a result of the Creditor's participation in
the transaction contemplated by this Agreement and the other Credit Documents
(but without consideration of any of the Creditor's other activities, including,
without limitation, the Creditor's execution and delivery of, and performance of
its obligations under, the Credit Documents and enforcement of its rights and
remedies thereunder:
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(a) The Creditor will not be subject to regulation under any
Governmental Authority in Brazil.
(b) The Creditor will not be subject to regulation as a "bank" by any
Governmental Authority in the United States of America.
Section 7.22. Use of Proceeds. No part of the proceeds received by any
Credit Party from the Advances will be used directly or indirectly for (a) any
purpose other than as is set forth in Section 2.08 hereof, or (b) the purpose of
purchasing or carrying, or for payment in full or in part of Indebtedness that
was incurred for the purposes of purchasing or carrying, any margin stock
(within the meaning of Regulation U or X of the Board of Governors of the
Federal Reserve System).
Section 7.23. Investment Company. Neither the Company nor Nextel
International is an "Investment Company" within the meaning of the Investment
Company Act of 1935.
Section 7.24. Capital Contributions. Nextel International has made capital
contributions in an amount equal to $576,852,536 during the period commencing
January 1, 1997 through and including March 20, 2000, as indicated on Exhibit E
hereto.
Section 7.25. Bank Accounts. Schedule 7.25 hereto is a complete and
accurate list of all bank accounts maintained by the Company and each of the
Foreign Affiliates with any bank or financial institution.
Section 7.26. Inactive Foreign Affiliates. None of the Majority-Owned
Foreign Affiliates own assets having a value in excess of $25,000, other than
Nextel S.A. and Nextel Ltda. For purposes of this Section 7.26, value shall be
determined by using the lesser of (x) book value and (y) fair market value.
Section 7.27. Construction of the System. The Company has constructed the
System in Rio de Janeiro and Sao Paulo as required and permitted pursuant to the
Licenses.
SECTION 8. AFFIRMATIVE COVENANTS
Until termination of the Remaining Commitment and payment in full of the
Advances, any interest due thereon and all other amounts due hereunder, and so
long as this Agreement remains in effect, each Credit Party covenants and agrees
that, unless the Creditor shall otherwise consent in writing, it shall comply in
all respects with each of the following covenants and agreements attributed to
it.
In addition, each of Nextel International and the Company agrees to cause
each Foreign Affiliate to comply in all respects with each covenant and
agreement set forth below and attributed to such Foreign Affiliate.
Section 8.01. Performance of Obligations.
(a) Each of the Company, Nextel International and the Foreign Affiliates
shall punctually pay all amounts due by it under each of the Credit Documents at
the times, on the dates and in
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the places specified therein, and shall timely perform all of its other
obligations, undertakings and covenants under each of the Credit Documents.
(b) Each of Nextel International, the Company and the Foreign Affiliates
shall punctually pay all its respective Indebtedness and shall perform all its
respective contractual obligations (except those being diligently contested in
good faith by appropriate proceedings) promptly pursuant to agreements to which
it is a party or by which it is bound at all times during the term of this
Agreement.
(c) Each of Nextel International, the Company and the Foreign Affiliates
shall pay and discharge all taxes, assessments and governmental charges levied
upon it or against any of its respective properties or assets prior to the date
after which penalties attach for failure to pay, except for such taxes,
assessments and governmental charges that are being contested in good faith and
so long as such Credit Party has established adequate reserves therefor on the
books of such Credit Party in accordance with GAAP or as to which the aggregate
amount of such taxes, assessments and governmental charges is less than $100,000
and the nonpayment of which could not reasonably be expected to have a Material
Adverse Effect under the circumstances. Each of Nextel International, the
Company and the Foreign Affiliates shall make timely filings of all tax returns
and material governmental reports required to be filed or submitted by any of
them under any applicable laws or regulations. If any such Person pays any tax
or charge as provided herein or makes any deductions or withholdings from
amounts paid hereunder, the Company or Nextel International shall promptly
forward to the Creditor official receipts or other evidence acceptable to the
Creditor establishing payment of such amounts.
Section 8.02. Annual Financial Statements.
(a) As soon as available, but not later than 120 days after the end of its
fiscal year the Company shall deliver to the Creditor a copy of the consolidated
annual financial statements of the Company and its Subsidiaries (including,
without limitation, its balance sheet, statement of income, statement of changes
in stockholders' equity and statement of cash flows and related earnings for
such fiscal year with related notes specifying significant accounting practices
and their impact on such financial statements and with related schedules) as at
and for the fiscal year then ended, audited and certified by Deloitte & Touche
LLP or other internationally recognized independent certified public accountants
of recognized standing selected by the Company, without material exception or
qualification and prepared in accordance with GAAP. In addition, the principal
financial officer of the Company shall deliver a certificate stating that at the
date of such certificate (i) in respect of Nextel International, the Company and
the Foreign Affiliates, no Default or Event of Default has occurred and is
continuing, or if such Default or an Event of Default has occurred and is
continuing, with a reasonably detailed description thereof and the actions the
Company is taking with respect thereto, and (ii) there is no litigation,
initiated or filed by or against Nextel International, the Company or the
Foreign Affiliates, and, except for Permitted Liens, no Lien against any of the
Collateral has been created, voluntarily or by operation of law, or if there is
any such litigation or Lien, a description thereof and the actions the Company
or any such other Credit Party, as the case may be, is taking with respect
thereto. In addition, the foregoing certificate shall set forth in reasonable
detail the calculations required to establish that the financial covenants set
forth in Section 8.17 hereof have been complied with. In addition, the chief
financial officer of Nextel International shall deliver an updated Invested
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Capital Schedule in the form of Exhibit E hereto reflecting updated figures for
acquisition costs, capital expenditures and working capital advances made by
Nextel International or any equity investor on behalf of the Company or any
Majority-Owned Foreign Affiliates and working capital advances made by Nextel
International to the Company or Nextel S.A. to the extent permitted hereunder.
(b) As soon as available, but not later than 120 days after the end of
Nextel International's fiscal year, the Company shall deliver to the Creditor a
copy of the consolidated annual financial statements of Nextel International,
the Company and its Subsidiaries including, at least, Nextel International's,
the Company's and its Subsidiaries' consolidated balance sheet, consolidated
statement of income, statement of changes in stockholders' equity and statement
of cash flows and retained earnings for the fiscal year then ended of Nextel
International with related notes specifying significant accounting practices and
their impact on such financial statements and with related schedules as at and
for the fiscal year then ended, audited and certified by Deloitte & Touche LLP
or other internationally recognized independent certified public accountants of
recognized standing selected by Nextel International, without material exception
or qualification and prepared in accordance with GAAP. The foregoing financial
statements shall be accompanied by a certificate of the Company's or Nextel
International's principal financial officer setting forth in reasonable detail
each of the calculations required to establish compliance with the financial
covenants set forth in Section 8.17 hereto, which certificate shall include a
representation that each such calculation (including, without limitation, any
such calculations made pursuant to any Schedule to this Agreement) (i) has been
made in accordance with GAAP, (ii) is consistent with all relevant definitions
set forth in this Agreement, and (iii) is consistent with the Company's
preparation of the Approved Business Plan.
Section 8.03. Quarterly Financial Statements.
(a) As soon as available but not later than 60 days after the end of each
fiscal quarter occurring within its fiscal year (other than the fourth fiscal
quarter), the Company shall deliver to the Creditor a copy of consolidated
unaudited financial statements of the Company and its Subsidiaries for such
quarterly period (including, without limitation, its balance sheet, statement of
income, statement of changes in stockholders' equity and statement of cash flows
and related earnings, for such quarter) which shall be certified as having been
prepared in accordance with GAAP by the principal financial officer of the
Company. In addition, the chief financial officer of the Company shall deliver a
certificate stating that at the date of such certificate (i) in respect of
Nextel International, the Company and any Foreign Affiliate, no Default or Event
of Default has occurred and is continuing, or if such Default or an Event of
Default has occurred and is continuing, with a reasonably detailed description
thereof and the actions being undertaken by the Company with respect thereto,
and (ii) there is no litigation initiated or filed by or against Nextel
International, the Company or any Foreign Affiliate, and except for Permitted
Liens, no Lien against any of the Collateral has been created, voluntarily or by
operation of law, or if there is any such litigation or Lien, a description
thereof and the actions the Company or any other such Credit Party as the case
may be, is taking with respect thereto. In addition, the foregoing certificate
shall set forth in reasonable detail the calculations required to establish that
the financial covenants set forth in Section 8.17 hereof have been satisfied. In
addition, the chief financial officer of Nextel International shall deliver an
updated Invested Capital Schedule in the form of Exhibit E hereto reflecting
updated figures for acquisition costs, capital expenditures and
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working capital advances made by Nextel International or any equity investor on
behalf of the Company or any Majority-Owned Foreign Affiliates and working
capital advances made by Nextel International to the Company, Nextel S.A. or
Nextel Ltda. to the extent permitted hereunder.
(b) As soon as available but not later than 60 days after the end of each
fiscal quarter occurring within its fiscal year (other than the fourth fiscal
quarter), the Company shall deliver to the Creditor a copy of consolidated
unaudited financial statements of Nextel International and the Subsidiaries for
such quarterly period (including, without limitation, its consolidated balance
sheet, consolidated statement of income, statement of changes in stockholders'
equity and statement of cash flows and related earnings, for such quarter) which
shall be certified as having been prepared in accordance with GAAP by the
principal financial officer of Nextel International. The foregoing financial
statements shall be accompanied by a certificate of the Company's or Nextel
International's principal financial officer setting forth in reasonable detail
each of the calculations required to establish compliance with the financial
covenants set forth in Section 8.17 hereto, which certificate shall include a
representation that each such calculation (including, without limitation, any
such calculations made pursuant to any Schedule to this Agreement) (i) has been
made in accordance with GAAP, (ii) is consistent with all relevant definitions
set forth in this Agreement, and (iii) is consistent with the Company's
preparation of the Approved Business Plan.
Section 8.04. Other Information.
(a) Promptly upon their becoming available, the Company and Nextel
International shall deliver to the Creditor, copies of all material notices or
material documents given or received by any Credit Party pursuant to any of the
System Documents.
(b) From time to time, the Company and Nextel International shall deliver
to the Creditor, such other information regarding the business of the Company,
Nextel International, the Foreign Affiliates, the System or the
Telecommunications Business as the Creditor may reasonably request.
(c) As soon as available, but, in any event, within sixty (60) days after
the end of each fiscal quarter of the Company, a copy of a management report,
which shall contain to the extent pertinent for such period (i) statistical
information regarding Subscriber load and number of Subscribers lost (including,
without limitation, average Subscriber load for each applicable quarter and
Subscriber load as of the end of such quarter), (ii) revenue per Subscriber and
usage (including, without limitation, dispatch, interconnect and other minutes
billed, and basic charges), (iii) management and marketing fees billed, (iv) the
network installation progress including, without limitation, cities in Brazil
served by the iDEN network, and a list specifying each License, the channels
which such License controls (and in which cities), any modification to any
License, and the expiration date of such License and the renewal dates as
provided by applicable telecommunications law), and (v) the iDEN network
operation benchmarks (as prepared by the management of the Company), such
management report to be certified by an Authorized Officer of the Company.
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(d) The Company shall, no less than ten (10) days in advance of the
beginning of each fiscal year of the Company, adopt and deliver to the Creditor
and the Depositary an Approved Business Plan setting forth in detail an annual
budget for the ensuing year. If for any reason the Company shall not have
adopted an Approved Business Plan for the ensuing year before the beginning of
the fiscal year or fails to deliver such new Approved Business Plan at least ten
(10) days in advance of the beginning of such fiscal year, the Approved Business
Plan for the preceding year shall, until ten (10) days after delivery of such
Approved Business Plan for the ensuing year to the Creditor and the Depositary,
be deemed to be in full force and effect as the Approved Business Plan.
Thereafter (but not more frequently than quarterly in any calendar year), if
there is a breach by the Company of any of the financial covenants set forth in
Section 8.17 of this Agreement or at the request of the Creditor when an Event
of Default has occurred and is continuing, the Company shall promptly adopt and
deliver to the Creditor an amended Approved Business Plan. Each such Approved
Business Plan shall identify the quarterly expenditures and investments for the
following major matters: ongoing development, operations, maintenance,
financing, acquisition and expansion of System and the Telecommunications
Business. Each Approved Business Plan shall be accompanied by a statement of the
chief financial officer of the Company to the effect that the items set forth
therein are reasonable estimates for the period covered thereby.
(e) Promptly upon the execution and delivery thereof, copies of all
interconnect agreements with local exchange carriers and long distance carriers
of each city in Brazil in which any Credit Party currently provides, or in the
future will provide, services.
(f) The Company shall provide, or shall cause to be provided to, the
Creditor a monthly report summarizing the balance in the Foreign Resident
Account and each of the accounts referred to in the Company Security Deposit
Agreement and the Nextel Ltda. Security Deposit Agreement, including a
description of all deposits and disbursements therefrom. The Company shall
provide, or shall cause to be provided to, the Creditor a quarterly report
summarizing the balance of each of the Foreign Affiliates' respective bank
accounts including a description of all deposits and disbursements therefrom.
(g) From time to time, the Company and Nextel International shall deliver
to OPIC, such information regarding the Conditional Sale Agreements and the
transactions contemplated thereby and such other information regarding the
business of the Company, the Foreign Affiliates, the System or the
Telecommunications Business as OPIC may reasonably request.
Section 8.05. Access to Books; Inspections.
(a) Each of the Company and Nextel International (with respect to its
Brazilian operations) shall permit the Creditor and OPIC and their respective
representatives, at all reasonable times, but prior to an Event of Default at
the Creditor's or OPIC's (as appropriate) own expense and with prior written
notice to the Company and the relevant other Credit Parties, and after an Event
of Default at the expense of the Company and Nextel International and each
Foreign Affiliate, to inspect the facilities, activities, books of account and
records of the Company and the other Credit Parties and make copies thereof, and
shall cause its representatives, employees and accountants to give their full
cooperation and assistance in connection with any such visits of inspection or
any financial conferences called by the Creditor
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or OPIC. The Company shall promptly supply to the Creditor or OPIC (as
appropriate) copies of any reports on its or Nextel International's (with
respect to its Brazilian operations) or any Foreign Affiliate's business and
activities which are publicly distributed, and will give notice of and make
available to the Creditor or OPIC (as appropriate) copies of any other reports
on its or Nextel International's (with respect to its Brazilian operations) or
any Foreign Affiliate activities and reports made to the government, or any
governmental agency or council as the Creditor or OPIC may from time to time
reasonably request. Each of the Company and Nextel International shall also make
available such further information concerning its, Nextel International's or any
other Foreign Affiliate's business and affairs in Brazil as the Creditor or OPIC
may from time to time reasonably request.
(b) Each Credit Party shall maintain an adequate accounting system,
including books, accounts and records, prepare all financial statements required
hereunder in accordance with GAAP, consistently applied, and in compliance with
the regulations of any governmental regulatory body having jurisdiction thereof.
Section 8.06. Governmental Approvals. Each of Nextel International, the
Company and the Foreign Affiliates shall promptly from time to time obtain or
cause to be obtained all Governmental Approvals as shall now or hereafter be
necessary (i) to import the equipment pursuant to the Conditional Sale
Agreements including, without limitation, the registration of the Conditional
Sale Agreements with the Brazilian Central Bank and any other registration
required by the Brazilian Central Bank, (ii) for the construction, ownership,
completion, operation and maintenance of the System and the Telecommunications
Business and as contemplated by the System Documents (except where failure to
obtain could not reasonably be expected to have a Material Adverse Effect), and
(iii) for the grant of the assignments and security interests granted by the
Security Documents or the validity and enforceability thereof or for the
perfection of or the exercise by the Creditor of its rights and remedies
thereunder. Such Person shall promptly furnish to the Creditor copies of all
such Governmental Approvals.
Section 8.07. Insurance.
(a) Business Insurance. The Company shall (i) maintain or cause to be
maintained, to the extent available on commercially reasonable terms, in full
force and effect at all times on and after the Original Closing Date and
continuing until the Maturity Date, with responsible insurance companies having
a Best Insurance Reports rating of "A-" or better and a financial size category
of "IX" or higher (and other companies reasonably acceptable to the Creditor)
such insurance on such of its properties, in such amounts and against such risks
and with such deductibles and other terms as is set forth on Schedule 8.07(a)
hereto, (ii) file with the Creditor no more than 7 days after each policy
anniversary, certificates of all insurance then in effect, stating the names of
the insurance companies, the amounts of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby and specifically
listing the special provisions enumerated for such insurance required by this
Section 8.07, and (iii) obtain such additional insurance, to the extent
available on commercially reasonable terms, as the Creditor may reasonably
request to cover risks not foreseen prior to the Original Closing Date. The
certificates of insurance referred to in clause (ii) hereof shall be executed by
an authorized representative of each insurer. Upon request, the Company will
promptly furnish the Creditor with evidence of such insurance relating to the
System and the Telecommunications Business.
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(b) Political Risk Insurance. The Company shall maintain or cause to be
maintained with OPIC and AIG (or any other responsible insurance carrier
reasonably acceptable to the Creditor) Political Risk Insurance in the amounts
set forth on Schedule 8.07(b) hereto. The Company shall pay all costs and
premiums in connection with the Political Risk Insurance.
Section 8.08. Continuance of Business. Each of Nextel International, the
Company and the Foreign Affiliates shall maintain their respective corporate
existence, rights, licenses and privileges in good standing under and in
compliance with all applicable laws and regulations, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect and shall maintain, subject to the provisions of
Section 9.05 hereof, the present character of its respective business. Each of
the Company and the Foreign Affiliates shall conduct its respective business
substantially within the scope provided in the Licenses (or as otherwise
contemplated in the Approved Business Plan) and in material compliance with
applicable laws and regulations binding on it or its operations or assets except
those laws and regulations that are being contested in good faith by appropriate
proceedings and as to which such noncompliance could not reasonably be expected
to have a Material Adverse Effect.
Section 8.09. [Reserved]
Section 8.10. Maintenance and Repairs. Each of the Company and the Foreign
Affiliates shall conduct its respective business in a manner consistent with
prudent industry standards, keep all its respective material assets and
properties in good working order and condition, and from time to time make all
needful and proper repairs, renewals, replacements and improvements thereof so
that the business carried on in connection therewith may be properly and
prudently conducted at all times.
Section 8.11. Compliance with Law.
(a) Each of Nextel International, the Company and the Foreign Affiliates
shall comply with the requirements of all applicable Governmental Rules except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect. In particular, and without application of any materiality
standard, each such Person agrees that its activities in connection with the
System and the Telecommunications Business shall be conducted in full compliance
under the United States Foreign Corrupt Practices Act and any other applicable
law dealing with improper or illegal payments, gifts or gratuities. Promptly
upon request, but no later than 15 days after such request, each of the Company
and Nextel International shall provide the Creditor with certification to the
effect that neither it nor any of its Subsidiaries has made any payments,
directly or indirectly, in violation of the foregoing agreement. Notwithstanding
the foregoing, the covenants contained in this Section 8.11 shall not be deemed
to have been violated to the extent any failure to comply with any Governmental
Rules or any other requirement of this Section 8.11 is attributable to a breach
of the representation, warranty or covenant contained in the second sentence of
Section 2.01(a) hereto. Each Credit Party warrants and represents that since the
merger with Wireless it has not taken any action, or failed to take any action,
with respect to the System or the Telecommunications Business if that act or
failure to act would have violated this Section 8.11. Nextel International and
the Company warrant and represent that prior to the merger with Wireless, Nextel
International and the Company conducted reasonable
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due diligence of Wireless and its Subsidiaries and in connection therewith
nothing came to their attention or led them to believe that the activities of
Wireless or any officers, directors or agents thereof could be construed as
violations of the United States Foreign Corrupt Practices Act of Wireless and
its Subsidiaries if they had been wholly owned Subsidiaries of Nextel
International at the time of such activities. To the extent the warranties and
representations contained in this Section 8.11(a) relate to any Governmental
Rule, including, but not limited to, the United States Foreign Corrupt Practices
Act, related to an "employee benefit plan," within the meaning of Section 3(3)
of ERISA, or a "plan," within the meaning of Section 4975(e)(1) of the Code,
such warranties and representations are made assuming the truth of the
representation, warranty and covenant contained in the second sentence of
Section 2.01(a).
(b) Notwithstanding anything in the foregoing paragraph (a) or in this
Agreement to the contrary, the Company and Nextel International shall keep the
System and the assets of the Telecommunications Business free of any Lien
imposed pursuant to any Environmental Law, and will pay or cause to be paid when
due any and all costs in connection with the foregoing (except where the same
are being contested in good faith by proper procedures and as to which either
(x) adequate reserves have been established in accordance with GAAP on the books
of such Person or (y) nonpayment of which could not reasonably be expected to
result in liability in excess of $100,000 and could not reasonably be expected
to have a Material Adverse Effect), including without limitation the cost of
identifying the nature and extent of the presence of any Materials of
Environmental Concern in, on or from the System and the assets of the
Telecommunications Business or on any real property owned or leased by the
Company or any Foreign Affiliate or any real property which is subject to any
mortgage securing directly or indirectly all or any part of the Advances, and
the cost of delineation, removal, treatment and disposal of any such Materials
of Environmental Concern. If the Company or Nextel International fails to do any
of the foregoing, then (i) after the occurrence of an Event of Default related
thereto which is continuing under this Agreement or (ii) in the event the
Creditor sustains any liability, loss, cost, damage or expense (including
reasonable attorneys' fees and expenses) arising out of the presence of
Materials of Environmental Concern in, on or about, or resulting from, the
System, the assets of the Telecommunications Business or the Collateral, the
Creditor may cause the System, the assets of the Telecommunications Business or
the Collateral to be freed (by removal or otherwise) from such Materials of
Environmental Concern, and the cost of such action (including reasonable
attorneys, consultants' and laboratories' fees and expenses) shall be added to
the Obligations of the Company pursuant to this Agreement and secured by the
Security Documents. Nextel International, the Company and each Foreign Affiliate
will give to the Creditor and its agents and employees reasonable access to the
System, the assets of the Telecommunications Business and the Collateral to
effect the foregoing, including, without limitation, following such failure the
periodic conduct of an environmental audit, the cost of such audit to be paid by
the Company, to ensure compliance with this Section 8.11.
(c) None of the Company and the Foreign Affiliates shall use the System,
the Telecommunications Business or any of their real property to generate,
manufacture, refine, produce, treat, store, handle, dispose of, transfer,
process or transport Materials of Environmental Concern other than in compliance
with Environmental Laws.
(d) Each of the Company and the Foreign Affiliates will notify the Creditor
promptly upon its receipt of any notice or advice from any Governmental
Authority or in writing from any
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other source with respect to Materials of Environmental Concern on, from or
affecting the System or the Telecommunications Business. Each such Person will
also make available for inspection by the Creditor and its agents and employees,
accurate and complete records of all investigations, studies, sampling and
testing conducted, and any and all remedial actions taken, by the Company and
any Foreign Affiliate or, to the knowledge of and to the extent obtained by, the
Company or Nextel International, any Governmental Authority or other Person in
respect of Materials of Environmental Concern on or affecting the System or the
Telecommunications Business.
(e) Neither the Company, Nextel S.A. nor Nextel Ltda. shall take any action
to prevent its employees from lawfully exercising their right of free
association and their right to organize and bargain collectively. The Company,
Nextel S.A. and Nextel Ltda. further agree to observe applicable laws relating
to a minimum age for employment of children, acceptable conditions of work with
respect to minimum wages, hours of work and occupational health and safety, and
not to use forced labor. Additionally, the Company, Nextel S.A. and Nextel Ltda.
agree to take action to assure that employees shall be permitted to remove
themselves from dangerous work situations without jeopardy to their continued
employment, and that no children under the age of fifteen (15) years of age will
be employed for the System or the Telecommunications Business. The Company,
Nextel S.A. and Nextel Ltda. are not responsible under this Section 8.11 for the
actions of a Governmental Authority.
Section 8.12. Notices. Each of the Company and Nextel International (as
applicable) shall promptly, but in no event later ten (10) Business Days (unless
otherwise indicated below) after the occurrence of the following events, give
notice to the Creditor of the occurrence of any of the following:
(a) a Default or an Event of Default;
(b) a default by Nextel International, the Company or any Foreign
Affiliate under any System Document, together with a statement of action
proposed to be taken by such Credit Party to cure such default;
(c) any (i) written claim, litigation, investigation or proceeding
which arises at any time involving the Licenses in the Major Market Areas;
(ii) written claim, litigation, investigation or proceeding which arises at
any time involving any Credit Party which could reasonably be expected to
have a Material Adverse Effect; (iii) the issuance by any court or
governmental agency or authority of any injunction order, decision or other
restraint prohibiting, or having the effect of prohibiting, the making of
Advances hereunder, or invalidating, or having the effect of invalidating,
any provision of this Agreement or any of the other Credit Documents,
including but not limited to, provisions regarding the granting of security
interests in the Collateral or the priority of such security interests, or
the initiation of any litigation or similar proceeding seeking any such
injunction, order, decision or other restraint; or (iv) any written
challenge to the Licenses by any third party in the Major Market Areas;
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(d) any development in the business or affairs of any of Nextel
International, the Company or any Foreign Affiliate which has resulted in
or could reasonably be expected to result in a Material Adverse Effect;
(e) thirty (30) days prior written notice thereof, after delivery from
a Motorola Entity, the movement of any of the iDEN equipment outside of
Brazil;
(f) thirty (30) days prior written notice thereof, the movement of the
Company's, or any Foreign Affiliate's principal place of business to any
location other than as set forth in the Company Security Agreement and any
Foreign Affiliate Security Agreement;
(g) thirty (30) days written notice thereof, any notice received by
any of Nextel International, the Company or any Foreign Affiliate from any
other Governmental Authority regarding events if determined adversely which
could reasonably be expected to have a Material Adverse Effect, including,
without limitation, the rejection, termination or revocation or any License
or Governmental Approval;
(h) any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance) or
other event of Force Majeure (as defined under Article 1058, first
paragraph of Brazilian Code) which could reasonably be expected to have a
Material Adverse Effect; and
(i) promptly, upon their becoming available (and the Company and
Nextel International becoming aware of their existence), copies of: (i) all
correspondence with any representative of PBGC, the Secretary of Labor or
the IRS with respect to any Plan, relating to an actual or threatened
change or development that could reasonably be expected to have a Material
Adverse Effect; and (ii) copies of any notices of Plan termination filed by
any Plan Administrator (as those terms are used in ERISA) with the PBGC and
of any notices from the PBGC to the Company with respect to the intent of
the PBGC to institute involuntary termination proceedings where such
termination could reasonably be expected to have a Material Adverse Effect.
Each notice shall be accompanied by a statement of the principal financial
officer of the Company setting forth details of the occurrence referred to
therein and stating what action the Company proposes to take with respect
thereto.
Section 8.13. Further Assurances.
(a) Each of Nextel International, the Company and the Foreign Affiliates
shall register or record each of the Credit Documents to which it is a party (or
a copy thereof) required to be registered or recorded and execute and file and
cause to be filed in such offices as shall be required or appropriate under any
applicable Uniform Commercial Code or mortgage recording or other statute in any
state or jurisdiction, and, in each such case, in such manner and form as
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the Creditor may reasonably require or as may be necessary under applicable
governmental laws, any financing statement, registration, mortgage or other
instrument that may be necessary, or that the Creditor may reasonably request,
in order to create, perfect, preserve, validate or satisfy the Liens granted to
the Creditor pursuant to the Security Documents and shall pay (except to the
extent resulting solely from an act or omission of the Creditor) all costs,
charges and expenses of and incidental to the registration and recordation of
the Credit Documents and the filing or recording of such financing statements,
mortgages or other instruments; provided, that the foregoing obligations in this
clause (a) shall not apply with respect to Liens on Immaterial Assets.
(b) To the extent and at such times as real estate is acquired by any of
Nextel International, the Company or any Foreign Affiliate, such Person shall
promptly cause such real estate to be subjected to a Lien in favor of the
Creditor and such Person will execute, deliver and register the necessary
mortgages.
(c) To the extent and at such times as additional easements and
rights-of-way are obtained by any of Nextel International, the Company or any
Foreign Affiliate, such Person shall promptly use good faith and commercially
reasonable efforts to cause such easements and rights-of-way to be subjected to
the Lien of the Security Documents, and such Person will cause the necessary
amendments to be made in respect thereto.
(d) Each of Nextel International, the Company and the Foreign Affiliates
shall at all times and at such Person's cost, warrant and defend its title in
and to the Collateral attributed to it.
(e) To the extent and at such times as Leases are entered into from and
after the Original Closing Date by any of Nextel International, the Company or
any Foreign Affiliate, such Person shall, to the extent that such Lease may be
assigned (provided that Nextel International, the Company or such Foreign
Affiliate shall have used good faith and commercially reasonable efforts to
allow such Lease to be assigned) execute and deliver a Lease Assignment
Agreement in the form of Exhibit M-2 to the Original EFA (incorporated herein by
reference) in respect of such Lease in favor of the Creditor and register such
Lease and the Lease Assignment Agreement. No Lease shall contain a provision
that would result in a termination of such Lease or a modification of any
material right or obligation thereunder upon a change in control of the lessee
(including without limitation a change of control effectuated through any of the
Security Documents). Each Credit Party agrees to give the Creditor notice of any
non-compliance or default under any Lease within 10 Business Days of any such
non-compliance or default and each Credit Party acknowledges its obligations to
comply with all Leases as set forth in Section 8.01(b).
Notwithstanding the foregoing, with respect to all Leases constituting
Additional System Documents (each Credit Party acknowledges and agrees that any
MSO Lease shall constitute an Additional System Document), either (x) (i) the
language set forth on Exhibit G to the Original EFA (incorporated herein by
reference) must be included in all such Leases, and (ii) a Lease Assignment
Agreement in the form of Exhibit M-2 to the Original EFA (incorporated herein by
reference) in respect of such Lease must be executed by the parties to such
Lease in favor of the Creditor and such Lease Assignment Agreement must be
properly registered (it being understood
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that, notwithstanding Section 9.14, no Consent to Assignments shall be required
with respect to such Leases), or (y) (i) the Lease shall include a purchase
option entitling the lessee to purchase all of the property subject to the Lease
within one (1) year from the date such Lease was first entered into, (ii) the
lessee shall exercise such purchase option as soon as such option is
exercisable, (iii) the property subject to such Lease shall be purchased by the
lessee no later than one (1) year from the date such Lease was first entered
into, and mortgaged to the Creditor as required under Section 8.13(b), and (iv)
at the time such Lease is entered into, the applicable Credit Party shall use
good faith and commercially reasonable efforts to satisfy clause (x) above.
(f) To the extent and at such times Intellectual Property is acquired by
the Company or any Foreign Affiliate, such Person shall execute and deliver to
the Creditor a trademark assignment agreement in the form of Exhibit R to the
Original EFA (incorporated herein by reference) and register such agreement.
(g) To the extent any Foreign Affiliate owns assets in excess of $10,000 or
conducts any business operation, such Foreign Affiliate shall execute and
deliver a Foreign Affiliate Security Agreement and take all actions required to
create and perfect a first priority lien on the assets of such Foreign
Affiliate, to the extent such Foreign Affiliate had not previously delivered a
Foreign Affiliate Security Agreement.
(h) To the extent permitted by applicable law and at such times the Company
or any Foreign Affiliate acquires or leases any phone lines after October 31,
1997 which interconnect with the land lines operated by Telebras, any other
Governmental Authority or other phone company which phone lines are essential to
the phone/interconnect operation of the System, the Company or such Foreign
Affiliate shall cause such phone lines to be subjected to the Lien of the
Security Documents and assign its interest in such interconnect agreement and
such Person will cause the necessary amendments to be made in respect thereto.
Section 8.15 hereof shall apply to all other phone lines owned or leased by the
Company and the Foreign Affiliates.
(i) From time to time and at all time hereafter upon the reasonable request
of the Creditor and (except to the extent are caused solely by a change in
circumstance related to the Creditor) at the cost of the Company, the Company
and Nextel International shall execute and cause to be done and executed all
such acts, deeds and assurances to perfect, preserve or protect the rights of
the Creditor with respect to the Collateral as the Creditor may reasonably
request.
(j) Each Person that is or becomes a Majority-Owned Foreign Affiliate shall
have executed and delivered, or promptly after becoming a Majority-Owned Foreign
Affiliate shall execute and deliver, a power of attorney to the Creditor, in
form and substance reasonably satisfactory to Creditor, covering all Leases,
System Documents, interconnect agreements and any other agreement that such
Credit Party is or may in the future become a party to that relates to the
System or Telecommunications Business (the "Covered Documents"). Such power of
attorney shall grant the Creditor irrevocable authority upon the occurrence and
continuation of an Event of Default to act on behalf of the applicable Credit
Party with respect to any matter arising under any Covered Documents, including
without limitation effectuating an assignment of any of the Covered Documents.
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Section 8.14. Construction of the System. The Company shall construct the
System in Belo Horizonte as required and permitted pursuant to the Licenses but
only to the extent it is strategically and economically advantageous to do so.
Section 8.15. Restricted Assets; Option Companies.
(a) If during the term of this Agreement it becomes permissible and
commercially practicable in the Creditor's reasonable determination under
applicable Governmental Rule to ▇▇▇▇▇ ▇ ▇▇▇▇ on any Restricted Asset, the
Company and Nextel International will, and will cause each Foreign Affiliate (at
their expense), to take all actions required to create and perfect a first
priority lien on such Restricted Assets in favor of the Creditor and deliver
opinions relating to the security interests in such assets in form and substance
satisfactory to the Creditor.
(b) The Company shall, and shall cause Nextel Ltda. to, comply with the
conditions relating to approvals of the Ministry of Communications set forth in
each Option Agreement so to ensure that the Company and Nextel Ltda. acquire the
quotas of the Option Companies at the earliest date possible. The Company shall,
and shall cause Nextel Ltda. to, upon the Ministry of Communications' approval
of the exercise of the Options, pledge all quotas relating thereto to the
Creditor and execute and deliver a Company Quota Pledge Agreement or Foreign
Affiliate Quota Pledge Agreement, as appropriate. In connection with the
foregoing, the Creditor shall have received opinions of counsel in form and
substance satisfactory to it. In addition, simultaneously with the exercise of
the Options, Nextel International, the Company and Nextel Ltda. will, and will
cause each Option Company (at their expense), to (i) take all actions required
to create and perfect a first priority lien on the assets of such Option
Company, (ii) execute and deliver a guaranty in the form of Exhibit J to the
Original EFA (incorporated herein by reference), and (iii) to deliver opinions
in respect of the Foreign Affiliate Security Agreement and the Foreign Affiliate
Guaranty in form and substance satisfactory to the Creditor.
Section 8.16. Maintenance of Licenses. Except to the extent loss of a
License could not reasonably be expected to have a Material Adverse Effect, each
of Nextel International, the Company and the Foreign Affiliates shall: (i)
comply with all the terms and conditions of the Licenses, preserve and maintain
each License in full force and effect and shall not permit or suffer to exist
any default under the Licenses; (ii) enforce and maintain all of its respective
rights under such Licenses; and (iii) not permit or consent to the modification
or waiver of any provision of the Licenses.
Section 8.17. Financial Covenants. The Company and its Subsidiaries shall
have or maintain, on a consolidated basis, at all times:
(a) a Fixed Charge Coverage Ratio (measured at the end of each fiscal
quarter) of not less than 1.00 : 1.00 at the end of each fiscal quarter of
the Company;
(b) EBITDA, at the end of each fiscal quarter period then ended
(measured at the end of each fiscal quarter), of not less than the
respective amounts set forth opposite each such date:
Date EBITDA
---- ------
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Date EBITDA
---- ------
March 31, 2000 $(21,500,000)
June 30, 2000 $(16,400,000)
September 30, 2000 $(19,300,000)
December 31, 2000 $(22,300,000)
March 31, 2001 $(11,800,000)
June 30, 2001 $ (9,900,000)
September 30, 2001 $ (6,300,000)
December 31, 2001 $ 100,000
March 31, 2002 $ 3,800,000
June 30, 2002 $ 7,900,000
September 30, 2002 $ 10,600,000
December 31, 2002 $ 12,000,000
March 31, 2003 $ 14,600,000
June 30, 2003 $ 22,700,000
September 30, 2003 $ 24,000,000
December 31, 2003 $ 27,500,000
(c) a ratio of Indebtedness to EBITDA as at the end of each quarterly
period then ended of not greater than the ratios set forth opposite each
such date:
Indebtedness to
Date EBITDA
---- ---------------
March 31, 2002 41.1 : 1.00
June 30, 2002 17.3 : 1.00
September 30, 2002 12.8 : 1.00
December 31, 2002 9.8 : 1.00
March 31, 2003 8.1 : 1.00
June 30, 2003 4.3 : 1.00
September 30, 2003 4.1 : 1.00
December 31, 2003 2.9 : 1.00
(d) minimum Recurring Revenues, as at the end of each quarterly period
then ended, of not less than the respective amounts set forth opposite each
such date:
Date Recurring Revenues
---- ------------------
March 31, 2000 $ 8,700,000
June 30, 2000 $ 9,700,000
September 30, 2000 $13,000,000
December 31, 2000 $16,900,000
March 31, 2001 $22,300,000
June 30, 2001 $27,700,000
September 30, 2001 $30,900,000
December 31, 2001 $35,000,000
66
Date Recurring Revenues
---- ------------------
March 31, 2002 $39,700,000
June 30, 2002 $43,500,000
September 30, 2002 $48,500,000
December 31, 2002 $53,500,000
March 31, 2003 $59,200,000
June 30, 2003 $63,800,000
September 30, 2003 $67,600,000
December 31, 2003 $71,800,000
(e) a minimum number of Subscribers, as at the end of each quarterly
period then ended, of not less than the number of Subscribers set forth
opposite each such date:
Date Subscribers
---- -----------
March 31, 2000 115,000
June 30, 2000 129,000
September 30, 2000 154,000
December 31, 2000 190,000
March 31, 2001 226,000
June 30, 2001 253,000
September 30, 2001 280,000
December 31, 2001 311,000
March 31, 2002 345,000
June 30, 2002 370,000
September 30, 2002 398,000
December 31, 2002 431,000
March 31, 2003 468,000
June 30, 2003 489,000
September 30, 2003 513,000
December 31, 2003 538,000
(f) a minimum amount of Adjusted Paid-In Capital at all times for each
calendar quarter in an amount equal to the actual cash requirements for
such calendar quarter as provided in the Adjusted Paid-In Capital Schedule
(in the form of Schedule 1.01(c) attached hereto) provided by the Company
as part of the compliance package delivered with the financial statements
required under Sections 8.2 and 8.3. As set forth in the Adjusted Paid-In
Capital Schedule (Schedule 1.01(c)), a deficiency in Adjusted Paid-In
Capital for any calendar quarter must be contributed into the Company
within fifteen (15) days from the end of the applicable reporting period.
(g) Notwithstanding anything herein to the contrary (including,
without limitation, the provisions of Section 11.1 hereof), (i) a breach of
Section 8.17(d) hereof shall not constitute an Event of Default hereunder
unless the Company is in breach of such Section 8.17(d) as of two (2)
consecutive quarter end dates and (ii) a breach of Section 8.17(b) or
Section 8.17(c) hereof as of any quarter end date shall
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not constitute an Event of Default hereunder unless the aggregate
Subscribers as of the end of such quarter were less than the "Target
Subscribers" set forth opposite the quarter end dates set forth in Schedule
1.01(d).
Section 8.18. [Reserved]
Section 8.19. Failure to Perform of Stockholder Guarantor. If any
Stockholder Guarantor (other than Nextel International) shall fail to perform
its obligations under its Stockholder Guaranty, Nextel International or another
Stockholder Guarantor shall assume the liability of such Stockholder Guarantor
under its Stockholder Guaranty no later than five (5) Business Days after the
Creditor notifies Nextel International of such failure by the Stockholder
Guarantor. Notwithstanding the foregoing or any other term in this Agreement or
any other Credit Document, MIDC shall not be required to assume the liability of
any other Stockholder Guarantor.
Section 8.20. Adult Content. None of the Company, Nextel S.A. and the
Foreign Affiliates shall enter into any arrangement, contractual or otherwise
permitting the use of the assets of the System for the provision of services
marketed as telecommunications offering sexually explicit adult content.
Section 8.21. Translation and Registration. On or prior to the Initial
Funding Date, the Company shall, at its exclusive expense, translate this
Agreement into Portuguese and carry out the registration of this Agreement at
the proper register of deeds and documents.
Section 8.22. Foreign Resident Account. The Company shall have established,
and shall continue to maintain, a non-resident account according to the
Brazilian Central Bank Circular 2677, April 10, 1996 (the "Foreign Resident
Account") for the benefit of the Creditor and shall have granted the Creditor
continuing control of such account in a manner reasonably acceptable to the
Creditor.
Section 8.23. Update of Security Documents. Concurrently with the delivery
by the Company of the quarterly financial statements pursuant to Section 8.03
(or, in the case of the fourth fiscal quarter, the delivery by the Company of
the annual financial statements under Section 8.02), the following actions shall
be taken:
(i) an Authorized Officer of each of the Company and the
Majority-Owned Foreign Affiliates shall deliver a list of all of the assets
of such Credit Party along with a certificate of an Authorized Officer of
such Credit Party certifying as to the completeness and accuracy thereof;
(ii) an Authorized Officer of Nextel International shall provide a
list of the shareholdings or quotaholdings of record of the Company and the
Foreign Affiliates;
(iii) each of the Company, the Stockholder Guarantors (in connection
with the Stockholder Guarantor Pledge Agreements) and the Majority-Owned
Foreign Affiliates shall have amended its respective Security Documents as
necessary to cover all personal property and fixtures acquired since the
Original
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Closing Date (to the extent the same is not already covered by the Security
Documents) and shall have made all necessary registrations, filings and
recordings in order to create a first priority Lien in favor of the
Creditor in such after acquired property all in accordance with the
provisions of the Security Documents (except as otherwise expressly
provided herein) and each such Credit Party shall deliver to the Creditor
copies of all such amendments made to its Security Documents in respect of
after acquired property. Notwithstanding the foregoing, if an Advance has
been made during the fiscal quarter at issue and in connection with such
Advance the conditions set forth in Section 10.02(e) have been satisfied in
full, this Section 8.23 shall be deemed to be satisfied with respect to
such fiscal quarter. Additionally, notwithstanding Clause 4 of any of the
Foreign Affiliate Security Agreements, such Foreign Affiliate Security
Documents need only be amended to reflect the acquisition of newly acquired
assets as provided in Sections 8.13, 8.23 and 10.02(e).
SECTION 9. NEGATIVE COVENANTS
Until the termination of the Remaining Commitment and payment in full of
the Advances, any interest due thereon and all other amounts due hereunder, and
so long as this Agreement remains in effect, each signatory Credit Party
covenants and agrees that, unless the Creditor shall otherwise consent to it in
writing, it shall comply in all respects with each of the following covenants
and agreements attributed to it. In addition, each of Nextel International and
the Company agrees to cause each Foreign Affiliate to comply in all respects
with each covenant and agreement set forth below and attributed to such Foreign
Affiliate.
Section 9.01. Indebtedness. None of the Company or any Foreign Affiliate
shall, at any time, incur, create, assume or suffer to exist any Indebtedness
(howsoever incurred, created, assumed or existing, directly or indirectly) other
than Permitted Indebtedness.
Section 9.02. Guaranties. None of the Company or any Foreign Affiliate
shall assume, endorse, be or become liable for, or guarantee, the obligations of
any Person (other than the Foreign Affiliate Guaranties), except (i) by the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, and (ii) in respect of the Permitted Indebtedness of the
Company and the Majority-Owned Foreign Affiliates. For the purposes hereof, the
term "guarantee" shall include any agreement, whether such agreement is on a
contingency or otherwise, to purchase, repurchase or otherwise acquire
Indebtedness of any other Person, or to purchase, sell or lease, as lessee or
lessor, property or services, in any such case primarily for the purpose of
enabling another Person to make payment of Indebtedness, or to make any payment
(whether as an advance, capital contribution, purchase of any equity interest or
otherwise) to assure a minimum equity, asset base, working capital or other
balance sheet or financial condition in connection with the Indebtedness of
another Person, or to supply funds to or in any manner invest in another Person
in connection with such Person's Indebtedness.
Section 9.03. Transfer. None of the Company or any Foreign Affiliate shall,
without the prior written consent of the Creditor, sell, lease, transfer, assign
or otherwise dispose of (whether in one transaction or in a series of related
transactions) all or any material part of its assets (except (x) in the ordinary
course of business, and (y) if the value of the asset is less than 1% of
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the total assets of the Company and its Subsidiaries as listed on the most
recent balance sheet delivered in accordance with subsections 8.02(a) or 8.03(a)
hereof, as the case may be, or the aggregate value of assets disposed of in any
year does not exceed 5% of the total assets of the Company and its Subsidiaries
as listed on the most recent balance sheet delivered in accordance with
subsections 8.02(a) and 8.03(a) hereof, as the case may be, or such disposition
is for the replacement of obsolete, worn or defective equipment for which such
Credit Party shall have received adequate and fair consideration), whether now
owned or hereafter acquired.
Section 9.04. Liens. None of the Company, Nextel International or any
Foreign Affiliate shall create or suffer to exist any Lien upon or with respect
to any of such Credit Party's assets constituting the Collateral or the
Restricted Assets, whether now owned or hereafter acquired other than Permitted
Liens.
Section 9.05. Mergers; Acquisitions.
(a) None of the Company or any Foreign Affiliate shall merge or consolidate
with any Person (whether or not such Credit Party is the surviving entity), or,
except as permitted by Section 9.12 hereof, acquire all or substantially all of
the assets of any of the capital stock or the partnership interests of any
Person, except that such Credit Parties may consummate the Proposed
Consolidation provided that simultaneously therewith:
(i) the consummation thereof could not reasonably be expected to have
a Material Adverse Effect upon the Credit Parties affected thereby
considered as a whole;
(ii) (x) after consummation thereof the surviving Credit Party or
Parties and the Consolidated Entity shall be in compliance with all
Governmental Rules and (y) the consummation thereof shall have no adverse
effect upon (1) the Collateral, the Foreign Affiliate Guaranties or the
Stockholder Guaranties or the Creditor's rights therein, and (2) all
Governmental Rules relating to the Proposed Consolidation shall be in full
force and effect and administratively non-appealable and the Credit Parties
shall have delivered to the Creditor a clean opinion to such effects of
counsel selected by them and reasonably acceptable to the Creditor; and
(iii) this Agreement and the other Credit Documents shall have been
amended, in form and substance reasonably acceptable to the Creditor, to
preserve the Creditor's rights hereunder and in the Collateral.
(b) In addition, Nextel International shall not merge or consolidate with
any Person unless (i) at the time thereof, and after giving effect thereto, no
Default shall have occurred and be continuing, (ii) either (x) Nextel
International shall be the continuing and surviving entity or (y) the continuing
or surviving entity shall have assumed all of the obligations of Nextel
International hereunder and under the Nextel International Guaranty and the
other Credit Documents pursuant to an instrument in form and substance
satisfactory to the Creditor and delivered such proof of corporate action,
incumbency of officers, opinions of counsel and other documents, as is
consistent with those delivered pursuant to Section 10.01 hereto, on the Initial
Funding Date or as the Creditor may request, and (iii) the Net Worth (determined
on a
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consolidated basis in accordance with GAAP) of the continuing or surviving
entity immediately after giving effect thereto shall be greater than or equal to
the Net Worth of Nextel International prior to giving effect thereto.
Section 9.06. Distributions; Redemptions.
(a) None of the Company or any Foreign Affiliate shall declare or pay any
dividends or make any distribution of any kind on such Credit Party's
outstanding stock, or set aside any sum for such purposes (all of the foregoing,
"Distributions"), except that Nextel S.A. may declare or pay a dividend in favor
of its shareholders so long as the aggregate amount of such dividend is
transferred directly to the U.S. Receipt Account and is subject to the
provisions of the Company Security Deposit Agreement.
(b) None of the Company or any Foreign Affiliate shall purchase, redeem,
retire or otherwise acquire, directly or indirectly, or make any sinking fund
payment with respect to, any shares of any class of stock of any Credit Party
now or hereafter outstanding or set apart any sum for any such purpose, other
than the repurchase or redemption by the Company of its Class B Common Stock
pursuant to the Second paragraph of the Restated Articles of Incorporation of
the Company as such provision exists of October 31, 1997 (the "Class B
Redemption"); provided, that (i) in the event that the Company becomes so
obligated to repurchase or redeem such Class B Common Stock, the Company shall
promptly notify the Creditor of its receipt of a request of redemption from any
holder of Class B Common Stock of the Company, (ii) prior to such Class B
Redemption, Nextel International shall contribute additional equity in an amount
equal to the redemption price of such shares being redeemed pursuant to the
Class B Redemption and additional amounts necessary to maintain the financial
covenants of the Company set forth in Section 8.17 hereof and the Company shall
cause such amounts to be deposited in the U.S. Receipt Account, and (iii) no
Default exists or shall occur as a result of the Class B Redemption. Nextel
International's obligations in this subsection 9.06(b) shall survive until all
of the Obligations hereunder and the other Credit Documents have been satisfied
and this Agreement has terminated.
Section 9.07. Stock Issuance. None of the Company or any Foreign Affiliate
shall issue any additional shares or any right or Option to acquire any shares,
or any security convertible into any shares, of the capital stock of any Credit
Party unless such options and such shares upon issuance, become pledged to the
Creditor and subject to the other agreements referred to herein to which the
existing shares of such Credit Party are subject prior to such issuance, and
provided that, in any event, after (or as a result of) any such issuance there
shall not have occurred any Event of Default of the type referred to in
subsections 11.01(w), (x) and (y) hereof.
Section 9.08. Amendment of Documents and Organization.
(a) None of the Company or any Foreign Affiliate shall (i) amend, waive or
modify, or agree to any amendment, waiver, supplement or modification of, or
fail to perform its Obligations under any System Document to which it is a party
or any other agreement, contract or instrument, the result of which could
reasonably be expected to have a Material Adverse Effect, (ii) cancel or
terminate, or agree to any cancellation, termination or assignment of any such
System Document the cancellation or termination of which could reasonably be
expected to
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have a Material Adverse Effect, or grant consents with respect to any material
obligation thereunder, (iii) exercise any options or remedies or make any
elections under any such System Document which exercise or election could
reasonably be expected to have a Material Adverse Effect, (iv) fail to exercise
promptly and diligently each and every material right which it may have under a
System Document (other than any right of termination) the result of which could
reasonably be expected to have a Material Adverse Effect, or (v) enter into any
Additional System Documents unless (x) such Additional System Document is in
connection with the ordinary and routine furnishing of goods or services to the
System or the Telecommunications Business, or (y) such Additional System
Document is provided for in the Approved Business Plan, or (z) the dollar value
of work to be performed pursuant to such Additional System Document does not
exceed $1,000,000 in any calendar year and the aggregate dollar value of work to
be performed pursuant to all Additional System Documents shall not exceed
$10,000,000 in any calendar year. The Company and the Foreign Affiliates shall
promptly furnish to the Creditor true and correct copies of all material
amendments, modifications, waivers, options, elections and with respect to the
System Documents.
(b) None of Nextel International, the Company or any Foreign Affiliate
shall amend, supplement, or otherwise modify or waive compliance with any of the
provisions of its respective articles of incorporation or by-laws or
shareholders agreement (or any other constitutive documents) except for
amendments, supplements, modifications or waivers that could not reasonably be
expected to have a Material Adverse Effect or could not otherwise materially and
adversely affect the Company's or any such other Credit Party's ability to
perform its obligations under the Credit Documents.
Section 9.09. Loans; Advances. None of the Company or any Foreign Affiliate
shall make any guarantee, loan or advance to any Person except as follows:
(a) Guarantees to the extent permitted by Section 9.02 hereof;
(b) loans or advances to the extent permitted by Section 9.12 hereof;
(c) Permitted Investments;
(d) loans or advances among or between the Company and the
Majority-Owned Foreign Affiliates;
(e) additional guarantees, loans or advances, in an aggregate amount
outstanding at any time not in excess of $1,000,000; and
(f) loans or advances to the extent permitted by subsection 2.05(e)
hereof.
Section 9.10. Use of Funds. The Company and the Foreign Affiliates shall
not make expenditures which are not contemplated by the then current Approved
Business Plan; provided that the Company and the Foreign Affiliates may make
expenditures and investments in the development, operation, maintenance,
financing, acquisition and expansion of its System and Telecommunications
Business as well as investments to increase the Company's equity in Nextel S.A.
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Section 9.11. Transactions with Affiliates. None of the Company, Nextel
International or any Foreign Affiliate shall except for the transactions
contemplated by the Conditional Sale Agreements and the Management Agreements
and except as expressly permitted by the Credit Documents, transfer, sell,
assign or otherwise dispose of, directly or indirectly, any Collateral or other
assets to any Affiliate other than a Majority-Owned Foreign Affiliate (any such
Affiliate, an "Arms-Length Affiliate"), or enter into any transaction directly
or indirectly with or for the benefit of any Arm's-Length Affiliate; provided,
that the Company or any other Foreign Affiliate may enter into transactions with
an Arm's-Length Affiliate so long as the monetary or business consideration
arising therefrom would be as advantageous to the Company or Foreign Affiliate
as the monetary or business consideration which the Company or Foreign Affiliate
would obtain in a comparable arm's length transaction with a Person not an
Affiliate; provided, further, that the restrictions of this Section 9.11 shall
not apply to any transaction entered into by Nextel International with any
Affiliate which is not a Credit Party so long as such transaction could not
reasonably be expected to have a Material Adverse Effect on Nextel
International.
Section 9.12. Changes in Business.
(a) None of the Company or any Foreign Affiliate shall enter into or engage
in any business other than the ownership and operation of the System; provided
that, such Persons may (x) continue to engage in a Telecommunications Business
in which it is engaged on the Original Closing Date and (y) enter into or engage
in a Telecommunications Business (including by way of purchase of assets or
stock by merger or consolidation) other than ownership and operation of the
System if with respect to a new Telecommunications Business:
(i) the entering into thereof could not reasonably be expected to have
a Material Adverse Effect;
(ii) all property associated with such business (including stock of
any new companies owned wholly or in part by any such Credit Party) shall,
to the maximum extent permitted by law, become part of the Collateral and
the Company and the Foreign Affiliates shall take all required actions
required by the Creditor in accordance with Section 8.13 hereof; and
(iii) the Credit Documents shall be amended simultaneously with the
entering into of such business to accomplish the matters referred to in the
foregoing clause (ii) and to add any new "Credit Parties."
(b) None of the Company and the Foreign Affiliates shall (i) make any
material change in its business or the System in the Major Market Areas, or (ii)
wind-up or liquidate or dissolve itself (or suffer any liquidation or
dissolution) or discontinue its business, except (x) with respect to a Foreign
Affiliate, the winding-up, liquidation or dissolution of which could not
reasonably be expected to have a Material Adverse Effect and (y) pursuant to the
Proposed Consolidation.
Section 9.13. Prepayments. None of the Company or any Foreign Affiliate
shall make any voluntary or optional prepayment of any Indebtedness for borrowed
money incurred or permitted to exist under the terms of this Agreement, other
than the Indebtedness evidenced by the Financing Note or the Bridge Line of
Credit.
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Notwithstanding the foregoing, the Company or any Foreign Affiliate may
make prepayments of Indebtedness incurred or permitted to exist hereunder in
accordance with the provisions of the Company Security Deposit Agreement and the
Nextel Ltda. Security Deposit Agreement.
Section 9.14. Additional System Documents. No Credit Party (other than
Option Companies) shall enter into any Additional System Document unless in
connection therewith, the relevant Credit Party or Parties shall have delivered
a Consent to Assignment substantially in the form of Exhibit B to the Original
EFA (incorporated herein by reference).
Section 9.15. ERISA Obligations. No Credit Party shall do, agree to do, or
permit to be done, any of the following with respect to any Plan:
(a) be or become obligated to the PBGC in excess of $1,000,000 other
than in respect of timely paid annual premium payments; and
(b) be or become obligated to the IRS or the Secretary of Labor in
excess of $1,000,000 with respect to excise taxes or other penalties
provided for in Sections 4971 through 4980B of the Code or Section 502 of
ERISA.
Section 9.16. Sale and Leaseback Transactions. None of the Company or any
Foreign Affiliate shall, directly or indirectly, enter into any sale and
leaseback transaction or any other arrangement with any Person providing for any
such Credit Party to lease or rent property that any such Credit Party has sold
or will sell or otherwise transfer to such Person.
Section 9.17. New Subsidiaries. None of the Company or any ForeignAffiliate
shall, directly or indirectly, organize, create, acquire or permit to exist any
Subsidiary other than those Subsidiaries in existence on the Original Closing
Date and listed on Schedule 7.01(a) hereof and those Subsidiaries permitted by
Section 9.05 and subsection 9.12(a) hereof.
Section 9.18. Restricted Assets and Option Companies. Subject to Section
8.15 hereof, none of the Company or any Foreign Affiliate shall grant any Lien
upon any Restricted Assets or pledge the quotas in the Option Companies to
anyone other than the Creditor.
Section 9.19. Bank Accounts. The Company and Nextel Ltda. shall not create
or have any bank accounts other than those permitted under the Company Security
Deposit Agreement and the Nextel Ltda. Security Deposit Agreement. In addition,
the other Foreign Affiliates shall not create or have any bank accounts other
than those listed on Schedule 7.25 hereto unless either (i) such additional bank
account shall be subject to a security deposit agreement in form satisfactory to
the Creditor or (ii) all funds deposited in such additional bank account shall
be transferred directly to the Nextel Ltda. Receipt Account or the U.S. Receipt
Account on a daily basis.
Section 9.20. Bankruptcy. Neither the Company nor any Foreign Affiliate
shall file a petition for bankruptcy. Each of the Company and Nextel
International shall cure any event which may trigger an Event of Default under
subsections 11.01(l), (m) and (n) hereto.
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SECTION 10. CONDITIONS PRECEDENT
Section 10.01. Conditions to Previous Advances. The obligations of the
Creditor to make any Advance under the Original EFA (each, a "Previous Advance")
were subject to the fulfillment of the following conditions precedent (the
"Previous Advance Conditions"):
(a) The Creditor's receipt of copies of each System Document (other
than any Additional System Document) duly executed and delivered by each of
the parties thereto, each certified by the Company to be true, complete, in
full force and effect with no defaults existing thereunder, and executed
copies of the Consents to Assignment in respect of each System Document
other than the System Documents in respect of the Option Companies and the
Leases.
(b) All representations and warranties of the Credit Parties in
Section 7 of the Original EFA being true and correct as of the date made
and as of the date of each Previous Advance.
(c) Company Documents. The Company:
(i) having executed and delivered to the Creditor the Original
EFA, the Company Security Deposit Agreement (under and as defined in
the Original EFA), the Financing Note (under and as defined in the
Original EFA), and the Conditional Sale Agreements.
(ii) having executed and delivered to the Creditor the Company
Security Agreement;
(iii) having delivered acknowledgment copies of UCC-1 Financing
Statements necessary to perfect a first priority security interest and
evidence thereof;
(iv) having delivered to the Creditor: (1) copies of, or
certificates of the issuing companies with respect to, policies of
insurance owned by the Company complying with the provisions of
Section 8.07 of the Original EFA, together with endorsements thereto
complying with the terms of the Company Security Agreement naming the
Creditor (where applicable), in its capacity as such, as additional
insured as its interests may have appeared; (2) evidence of the
Company's liability insurance policies; and (3) evidence of such
insurance being in full force and effect;
(v) having executed and delivered to the Creditor the Company
Quota Pledge Agreement, the Company Quota Voting Agreement, the
Amendment to the Company Quota Pledge Agreement in the form of Exhibit
N-4 to the Original EFA (incorporated herein by reference), the
Company Share Pledge Agreements together with the certificates
evidencing the capital
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stock pledged by it accompanied by stock powers endorsed in blank and
irrevocable proxies relating thereto, the Company Share Voting
Agreement, the Amendment to the Company Share Pledge Agreement in the
form of Exhibit N-5 to the Original EFA (incorporated herein by
reference), the Company Promise to Pledge Quotas, and duly complying
with all of the terms and conditions thereof;
(vi) having endorsed the Conditional Sale Notes in favor of the
Creditor; and
(vii) otherwise duly complying with all of the terms and
conditions of the Security Documents to be executed by it.
(d) Stockholder Guarantor Documents. Each Stockholder Guarantor:
(i) having executed and delivered to the Creditor its respective
Stockholder Guaranty (under and as defined in the Original EFA);
(ii) having executed and delivered to the Creditor its
Stockholder Guarantor Pledge Agreement, together with the certificates
evidencing the capital stock pledged by it accompanied by stock powers
endorsed in blank and irrevocable proxies relating thereto, and having
duly complied with all of the terms and conditions thereof; and
(iii) otherwise duly complying with all of the terms and
conditions of the Security Documents to be executed by it.
(e) Telcom Documents. Each of Telcom and the Telcom Entities:
(i) having executed and delivered to the Creditor the Telcom
Pledge Agreement together with the certificates evidencing the capital
stock pledged by it accompanied by stock powers endorsed in blank and
irrevocable proxies relating thereto, and having duly complied with
all of the terms and conditions thereof; and
(ii) otherwise duly complying with all of the terms and
conditions of the Security Documents to be executed by it.
(f) Nextel S.A. Documents. Nextel S.A:
(i) having delivered the Nextel S.A. Promise to Pledge Quotas,
the Foreign Affiliate Assignment of Rights and Obligations and the
other documents referred to in subsection (h) of Section 10.01 of the
Original EFA;
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(ii) having executed and delivered the Conditional Sale
Agreements each being in substantially the form of Exhibit U to the
Original EFA (incorporated herein by reference);
(iii) having made all registrations applicable under Brazilian
law, including the registration of the Conditional Sale Agreements
required by the Brazilian Central Bank and those registrations
necessary to perfect a first priority security interest and evidence
thereof;
(iv) having paid all documentary taxes and registration fees
payable on the Security Documents attributed to it under the Central
Bank registration; and
(v) otherwise duly complying with all of the terms and conditions
of the Security Documents to be executed by it.
(g) Majority-Owned Foreign Affiliate Documents. Each of the
Majority-Owned Foreign Affiliates:
(i) having executed and delivered to the Creditor its Foreign
Affiliate Guaranty;
(ii) each of Nextel S.A. and Nextel Ltda. having executed and
delivered to the Creditor its Foreign Affiliate Security Agreement,
the Amendment to its Foreign Affiliate Security Agreement in the form
of Exhibit Q-2 to the Original EFA (incorporated herein by reference)
and the Foreign Affiliate Trademark Assignment Agreement;
(iii) Nextel Ltda. having executed and delivered the Nextel Ltda.
Security Deposit Agreement;
(iv) having made all registrations under Brazilian law, including
those necessary to perfect a first priority security interest in so
much of the Collateral as is attributed to such Foreign Affiliate and
evidence thereof;
(v) having paid all documentary taxes and registration fees
payable on the Security Documents attributed to such Foreign
Affiliates;
(vi) having delivered to the Creditor: (A) copies of, or
certificates of the issuing companies with respect to, policies of
insurance owned by such Foreign Affiliate complying with the
provisions of Section 8.07 of the Original EFA, together with
endorsements thereto complying with the terms of such Foreign
Affiliate Security Agreement naming the Creditor (where
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applicable), in its capacity as such, as additional insured as its
interests may have appeared; (B) evidence of such insurance being in
full force and effect, and (C) certificates and summaries of such
Foreign Affiliate's liability insurance policies;
(vii) (A) with respect to Nextel Ltda. and Nextel S.A., having
executed and delivered to the Creditor the Foreign Affiliate Quota
Pledge Agreement, the Amendment to the Foreign Affiliate Quota Pledge
Agreement in the form of Exhibit S-3 to the Original EFA (incorporated
herein by reference), together with the Foreign Affiliate Voting
Agreements, and duly complying with all of the terms and conditions
thereof, and (B) with respect to ▇▇▇▇▇▇ ▇▇▇▇▇, having executed and
delivered to the Creditor the ▇▇▇▇▇▇ ▇▇▇▇▇ Promise to Pledge Quotas
and duly complying with the terms and conditions thereof; and
(viii) otherwise duly complying with all of the terms and
conditions of the Security Documents to be executed by it.
(h) The Creditor's receipt of the following documents (except as
waived in writing by the Creditor):
(i) with respect to each Credit Party, copies, certified by an
Authorized Officer of such Credit Party, of the Articles of
Incorporation (including amendments thereto reflecting the pledge of
stock or quotas and exercise of the Options) and By-Laws of such
Person (or other organizational documents), each as amended to the
date of each Previous Advance, along with evidence with respect to
such Person establishing the existence and good standing (where
applicable) of such Person as of the date of each Previous Advance;
(ii) certificates of an Authorized Officer of each Credit Party
certifying (i) the resolutions of the Board of Directors or other
governing body of such Person or other action of such Person
authorizing the execution, delivery and performance of the Credit
Documents to which it was a party as of the date of each Previous
Advance and, with respect to the Company, the iDEN Equipment and
Service Agreements and the other System Documents, and (ii) the
authority, name, title and specimen signature of each individual
authorized to execute any of the Credit Documents to which it was a
party as of the date of each Previous Advance and, with respect to the
Company, the iDEN Equipment and Service Agreements, and any other
documents in relation thereto on behalf of such Person and to bind
such Person thereby;
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(iii) a copy of the Company's and Nextel International's most
recent audited and unaudited financial statements preceding each
Previous Advance in conformity with Sections 8.02 and 8.03 of the
Original EFA;
(iv) copies, certified by the Corporate Secretary of the Company
of each Governmental Approval necessary or advisable in connection
with the execution, delivery, performance or enforceability of each of
the Credit Documents as of the date of each Previous Advance and the
iDEN Equipment and Service Agreements and the other System Documents,
together with any application with respect thereto;
(v) the opinion of Brazilian counsel to each Credit Party and the
opinion of special United States counsel to the Company and each other
Credit Party, each dated as of the date of the Original EFA and
addressed to the Creditor, in the forms attached as Exhibits V-1 and
V-2 to the Original EFA (incorporated herein by reference),
respectively; and
(vi) the opinion of Heng-Pin Kiang, General Counsel of Nextel
International and the Company, dated as of the date of the Initial
Advance and addressed to the Creditor.
(i) The Creditor's receipt of the then current Approved Business Plan
of the Company.
(j) The Creditor's receipt of (i) a copy of each Governmental Approval
set forth on Part I of Schedule 7.03(a) to the Original EFA and each
License referred to in Schedule 7.03(b) to the Original EFA, certified by
an Authorized Officer of the Company to be true, complete, in full force
and effect, and administratively non-appealable as of such date, and an
opinion of counsel selected by the Company and acceptable to the Creditor
confirming the matters referred to in Section 7.03 of the Original EFA,
together with (ii) a copy of each application referred to on Part II of
Schedule 7.03(a) of the Original EFA submitted to any Governmental
Authority.
(k) The Creditor's receipt of a certificate of an Authorized Officer
certifying that the Company had obtained, or would obtain in due course
when needed, all easements, licenses, rights-of-way and any other rights
expected to be necessary for the construction and operation of the System
in the Major Market Areas.
(l) The payment of all fees payable in connection with the
transactions contemplated by the Original EFA.
(m) Political Risk Insurance having been in full force and effect and
all premiums and other costs associated therewith having been paid.
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(n) The Management Agreements having been amended and in form and
substance satisfactory to the Creditor and side letters with respect
thereto having been executed and delivered and in form and substance
satisfactory to the Creditor in its sole discretion.
(o) The Brazilian Central Bank having approved OPIC providing
insurance in respect of the scheduled payments under the Conditional Sale
Agreements.
(p) The Creditor's receipt of the Nextel Side-Letter a post
closing agreement in form and substance satisfactory to the Creditor in its
sole discretion.
(q) The letter in respect of subrogation rights in favor of OPIC
having been executed and delivered.
(r) The lease in respect of the MSO Site having been amended and in
form and substance satisfactory to the Creditor in its sole discretion;
(s) The Creditor having received a Request for Financing and a
Drawdown Certificate pursuant to Section 2.02 of the Original EFA;
(t) On and as of the date of each Previous Advance, (i) no Default,
Event of Default or default under any Credit Document as of the date of the
Initial Advance or any System Document having occurred and been continuing,
(ii) there having been no adverse change in the financial condition, assets
or operations of the Company or any other Credit Party which individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect, (iii) there having occurred no fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm. hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) affecting the business or properties of the Company or any
other Credit Party which could reasonably be expected to have a Material
Adverse Effect, (iv) there having been no change in the status of the
matters disclosed on Schedule 7.12 to the Original EFA that individually or
in the aggregate could reasonably have been expected to have a Material
Adverse Effect, and (v) the Creditor having received a certificate of a
duly Authorized Officer of the Company certifying as to the foregoing
matters.
(u) None of the following events having occurred: (i) Brazil or any
Governmental Authority in Brazil having declared a moratorium on the
payment of indebtedness by Brazil or any Governmental Authority in Brazil
or corporations therein; (ii) Brazil having ceased to be a member in good
standing of the International Monetary Fund or having ceased to be eligible
to utilize the resources of the International Monetary Fund under the
Articles of Agreement thereof; or (iii) the international monetary reserves
of Brazil having become subject to any lien.
(v) (i) The Creditor having received from the Company, each
Majority-Owned Foreign Affiliate and Nextel International a list of all of
the assets of such
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Credit Party (in the case of Nextel International such list being limited
to any shares or quotas of record in respect of the Company and any Foreign
Affiliates) and a certificate for an Authorized Officer of such Credit
Party certifying to the accuracy and completeness of such list.
(ii) Each Credit Party having amended its Security Documents as
necessary to cover all personal property and fixtures acquired since the
Original Closing Date and executing and delivering mortgages with respect
to real property interests acquired since the Original Closing Date and
having made all necessary registrations filings and recordings in order to
create a first priority Lien in favor of the Creditor in such after
acquired property and having paid all costs, charges and expenses
incidental thereto.
Section 10.02. Representation and Warranty as to Previous Advance
Conditions. The Company hereby represents and warrants that each of the Previous
Advance Conditions were (and remain) satisfied in full.
Section 10.03. Conditions to Final Advance. The obligations of the Creditor
to make the Final Advance hereunder shall be subject to the fulfillment of the
following conditions precedent to the satisfaction of the Creditor on or prior
to the Drawdown Date:
(a) All representations and warranties of the Credit Parties in
Section 7 (and in Section 10.02) of this Agreement shall be true and
correct as of the date made and as of the date of the Final Advance.
(b) Company Documents. The Company:
(i) shall have executed and delivered to the Creditor this
Agreement, the Company Security Deposit Agreement and the Financing
Note;
(ii) shall have delivered acknowledgment copies of any UCC-1
Financing Statements in addition to those delivered in connection with
the Original EFA necessary to perfect the first priority security
interest granted under the Company Security Agreement;
(iii) shall have delivered to the Creditor (to the extent
requested by the Creditor and not previously provided to the Creditor
under the Original EFA): (1) copies of, or certificates of the issuing
companies with respect to, policies of insurance owned by the Company
complying with the provisions of Section 8.07, together with
endorsements thereto complying with the terms of the Company Security
Agreement naming the Creditor (where applicable), in its capacity as
such, as additional insured as its interests may appear; (2) evidence
of the Company's liability insurance policies; and (3) evidence of
such insurance being in full force and effect; and
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(iv) shall have otherwise duly complied with all of the terms and
conditions of the Security Documents executed or to be executed by it.
(c) Stockholder Guarantor Documents. Each Stockholder Guarantor:
(i) shall have executed and delivered to the Creditor its
respective Stockholder Guaranty; and
(ii) shall have otherwise duly complied with all of the terms and
conditions of the Security Documents executed or to be executed by it.
(d) Telcom Documents. Each of Telcom and the Telcom Entities shall
have duly complied with all of the terms and conditions of the Security
Documents executed by it.
(e) Nextel S.A. Documents. Nextel S.A:
(i) shall have made all registrations applicable under Brazilian
law relating to or necessary under the Security Documents to which it
is a party, including those necessary to perfect a first priority
security interest in so much of the Collateral as is attributed to
Nextel S.A. and evidence thereof;
(ii) shall have paid all documentary taxes and registration fees
payable on the Security Documents attributed to it under the Central
Bank registration; and
(iii) shall otherwise have duly complied with all of the terms
and conditions of the Security Documents executed by it.
(f) Majority-Owned Foreign Affiliate Documents. Each of the
Majority-Owned Foreign Affiliates:
(i) shall have made all registrations under Brazilian law,
including those necessary to perfect a first priority security
interest in so much of the Collateral as is attributed to such Foreign
Affiliate and evidence thereof;
(ii) shall have paid all documentary taxes and registration fees
payable on the Security Documents attributed to such Foreign
Affiliates;
(iii) delivered to the Creditor (to the extent requested by the
Creditor and not previously provided to the Creditor under the
Original EFA): (A) copies of, or certificates of the issuing companies
with respect to, policies of insurance owned by such
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Foreign Affiliate complying with the provisions of Section 8.07,
together with endorsements thereto complying with the terms of such
Foreign Affiliate Security Agreement naming the Creditor (where
applicable), in its capacity as such, as additional insured as its
interests may appear; (B) evidence of such insurance being in full
force and effect, and (C) certificates and summaries of such Foreign
Affiliate's liability insurance policies; and
(iv) shall otherwise have duly complied with all of the terms and
conditions of the Security Documents executed by it.
(g) The Creditor shall have received the following documents (except
as waived in writing by the Creditor):
(i) with respect to each Credit Party that is executing one or
more Credit Documents in connection with this Agreement, copies,
certified by an Authorized Officer of such Credit Party, of the
Articles of Incorporation (including amendments thereto reflecting the
pledge of stock or quotas and exercise of the Options) and By-Laws of
such Person (or other organizational documents), each as amended to
the date of the Final Advance, along with evidence with respect to
such Person establishing the existence and good standing (where
applicable) of such Person sufficiently close in the reasonable
determination of the Creditor to the date of the Final Advance;
(ii) certificates of an Authorized Officer of each applicable
Credit Party certifying (i) the resolutions of the Board of Directors
or other governing body of such Person or other action of such Person
authorizing the execution, delivery and performance of any Credit
Documents which it is executing in connection with this Agreement, and
(ii) the authority, name, title and specimen signature of each
individual authorized to execute the Credit Documents which it is
executing in connection with this Agreement;
(iii) a copy of the Company's and Nextel International's most
recent audited and unaudited financial statements in conformity with
Sections 8.02 and 8.03;
(iv) (if the same have not previously been provided to the
Creditor under the Original EFA) copies, certified by the Corporate
Secretary of the Company of each Governmental Approval necessary or
advisable in connection with the execution, delivery, performance or
enforceability of each of the Credit Documents being executed in
connection with this Agreement, together with any application with
respect thereto;
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(v) the opinion of Brazilian counsel to each Credit Party and the
opinion of special United States counsel to the Company and each other
Credit Party, each dated as of the date hereof and addressed to the
Creditor, in the forms attached hereto as Exhibits H-1 and H-2,
respectively; and
(vi) the opinion of counsel to Nextel International and the
Company, dated as of the date of the Final Advance and addressed to
the Creditor and in form and substance satisfactory to the Creditor in
the Creditor's sole discretion.
(h) The Creditor shall have received a current Approved Business Plan.
(i) The Creditor shall have received (if the same has not previously
been provided to the Creditor under the Original EFA) (i) a copy of each
Governmental Approval set forth on Part I of Schedule 7.03(a) and each
License referred to in Schedule 7.03(b), certified by an Authorized Officer
of the Company to be true, complete, in full force and effect, and
administratively non-appealable as of such date, together (if the same has
not previously been provided to the Creditor under the Original EFA) with
(ii) a copy of each application referred to on Part II of Schedule 7.03(a)
submitted to any Governmental Authority.
(j) The Creditor shall have received a certificate of an Authorized
Officer certifying that the Company had obtained, or will obtain in due
course when needed, all easements, licenses, rights-of-way and any other
rights expected to be necessary for the construction and operation of the
System in the Major Market Areas.
(k) All fees payable in connection with the transactions contemplated
by this Agreement shall have been satisfied.
(l) The Political Risk Insurance required hereunder shall be in full
force and effect and all premiums and other costs associated therewith
shall have been paid.
(m) The Creditor shall have received a duly completed Request for
Financing pursuant to Section 2 as to the Final Advance.
(n) On and as of the date of the Final Advance, (i) no Default, Event
of Default or default under any Credit Document or any System Document
shall have occurred and be continuing, (ii) there shall have been no
adverse change in the financial condition, assets or operations of the
Company or any other Credit Party which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect, (iii) no
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm. hail, earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance) shall have occurred
affecting the business or properties of the Company or any other Credit
Party which could reasonably be expected to have a Material Adverse
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Effect, (iv) there shall have been no change in the status of the matters
disclosed on Schedule 7.12 that individually or in the aggregate could
reasonably have been expected to have a Material Adverse Effect, and (v)
the Creditor shall have received a certificate of a duly Authorized Officer
of the Company certifying as to the foregoing matters.
(o) None of the following events shall have occurred: (i) Brazil or
any Governmental Authority in Brazil having declared a moratorium on the
payment of indebtedness by Brazil or any Governmental Authority in Brazil
or corporations therein; (ii) Brazil having ceased to be a member in good
standing of the International Monetary Fund or having ceased to be eligible
to utilize the resources of the International Monetary Fund under the
Articles of Agreement thereof; or (iii) the international monetary reserves
of Brazil having become subject to any lien.
(p) If necessary and only to the extent that the same has not already
occurred, each Credit Party shall have amended its Security Documents as
necessary to cover all personal property and fixtures acquired since the
Original Closing Date and executed and delivered mortgages with respect to
real property interests acquired since the Original Closing Date, and shall
have made all necessary registrations filings and recordings in order to
create a first priority Lien in favor of the Creditor in such after
acquired property and shall have paid all costs, charges and expenses
incidental thereto.
SECTION 11. EVENTS OF DEFAULT
Section 11.01. Events of Default. Each of the following events shall
constitute an Event of Default hereunder:
(a) The Company shall have defaulted in the payment of principal of
any of the Advances payable under any of Credit Documents when and as the
same shall become due and payable.
(b) The Company shall have defaulted in the payment of any interest on
any of the Advances or any other amount (other than an amount referred to
in clause (a) of this Section 11.01) payable under this Agreement, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of three or more Business Days.
(c) Any written representation or warranty made by the Company or any
other Credit Party herein or in any other Credit Document or otherwise in
connection herewith or therewith shall prove to have been incorrect or
misleading in any material respect as of the time it was made or deemed to
have been made or any certificate or opinion furnished pursuant to any of
the Credit Documents proves to have been false or misleading in any
material respect as of its date; provided, that the foregoing shall not
constitute an Event of Default hereunder in respect of any representation
or warranty made by any Credit Party on behalf of
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an Option Company unless such incorrectness could reasonably be expected to
have a Material Adverse Effect, in the sole determination of the Creditor.
(d) The Company shall, without the prior written consent of the
Creditor, have used the proceeds of any of the Advances for a purpose other
than that specified in Section 2.08 hereof.
(e) (i) Any Stockholder Guarantor, the Company or any Foreign
Affiliate shall fail to observe or perform any covenant, condition or
agreement covered in Sections 8.06, 8.08, 8.12, 8.16, 8.17 and 8.19 and
Section 9 of this Agreement; provided that the foregoing shall not
constitute an Event of Default hereunder in respect of any failure by any
Credit Party to cause observance or performance by an Option Company unless
such failure could reasonably be expected to result in a Material Adverse
Effect, in the sole determination of the Creditor, (ii) the Company shall
fail to observe or perform any covenant, condition or agreement covered in
Sections 1, 2, 3 and 8 of the Company Security Deposit Agreement, and (iii)
Nextel Ltda. shall fail to observe or perform any covenant, condition or
agreement contained in Sections 1, 2, 3 and 8 of the Nextel Ltda. Security
Deposit Agreement.
(f) The Company or any other Credit Party shall have failed to perform
or comply with any other term, obligation or covenant contained in any of
the Credit Documents to which it is a party (other than those specified
above) and such failure shall have continued unremedied for thirty (30)
days after written notice thereof has been given by the Creditor.
(g) Any Governmental Approval (including, without limitation,
registration with the Brazilian Central Bank) necessary to enable the
Company or any other Credit Party to comply with its obligations under the
Operative Documents shall have been revoked, suspended, withdrawn,
withheld, terminated, modified or restricted and such revocation,
termination withdrawal, suspension, modification, withholding or cessation
could reasonably be expected to have a Material Adverse Effect, or any
proceeding which could reasonably be expected to have a Material Adverse
Effect shall have been commenced by or before any Governmental Authority
for the purpose of so revoking, terminating, withdrawing, suspending,
modifying or withholding any such Governmental Approval and such proceeding
shall not have been contested within ten (10) Business days by proper
proceedings and dismissed or stayed within thirty (30) days, or notice
shall have been given by such Governmental Authority for such purpose and
shall have remained uncontested for ten (10) Business Days.
(h) Any License granted in favor of the Company or the Foreign
Affiliates, or any license or concession part thereof which, in the
reasonable opinion of the Creditor, shall have been terminated, revoked,
suspended, withdrawn, withheld, or adversely modified or restricted which
termination, revocation, suspension or such other action could reasonably
be expected to have a Material Adverse Effect or a proceeding shall have
been initiated by or before,
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or any action shall have been taken by a court of competent jurisdiction,
or other Governmental Authority which in the reasonable opinion of the
Creditor, is likely to result in the cancellation, non-renewal or adverse
modification of any one or more Licenses, radio channels authorized under
the Licenses or Governmental Approvals held by the Company or any of the
Foreign Affiliates which cancellation, non-renewal or adverse modification
could reasonably be expected to have a Material Adverse Effect.
(i) It shall have become unlawful for the Company to perform any
payment obligation under the Credit Documents or any Stockholder Guarantor
to perform its obligations under its Stockholder Guaranty or any
Majority-Owned Foreign Affiliate to perform its obligations under its
Foreign Affiliate Guaranty; provided, that the foregoing shall not
constitute an Event of Default in respect of any Stockholder Guarantor
other than Nextel International if, within five (5) Business Days after
notice thereof by the Creditor to Nextel International, Nextel
International shall have assumed the liability of such Stockholder
Guarantor under the Nextel International Guaranty.
(j) Any of the Company, any Stockholder Guarantor or any Foreign
Affiliate shall have failed to pay money due under any other agreement or
document evidencing, securing, guarantying or otherwise relating to
Indebtedness of such Credit Party outstanding in the aggregate principal
amount to or greater than $1,000,000 in the case of the Company or any
Foreign Affiliate, or $10,000,000 in the case of Nextel International or
any Stockholder Guarantor, or there shall have occurred any other event of
default or breach on the part of such Credit Party under any such agreement
or document, the effect of which is to accelerate or to permit the
acceleration of the maturity of such Indebtedness; provided, that the
foregoing shall not constitute an Event of Default in respect of any
Stockholder Guarantor other than Nextel International if, within five (5)
Business Days after notice thereof by the Creditor to Nextel International,
Nextel International shall have assumed the liability of such Stockholder
Guarantor under the Nextel International Guaranty.
(k) The issuance of any final arbitration award, judgment or decree
which is not subject to appeal, or any award, judgment or decree shall not
have been appealed within thirty (30) days from the date thereof, or a fine
or penalty aggregating in excess of $1,000,000 or its equivalent in any
currency shall have been entered against the Company and not paid and
discharged, dismissed or stayed within 30 days.
(l) Any of the Stockholder Guarantors, the Company or the Foreign
Affiliates shall have made an assignment for the benefit of the creditors,
filed a petition in bankruptcy, been adjudicated insolvent, petitioned or
applied to any tribunal for the appointment of a receiver, custodian, or
any trustee for it or a substantial part of its assets, or shall have
commenced any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect,
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or such Credit Party shall have taken any corporate action to authorize any
of the foregoing actions, or there shall have been filed any such petition
or application, or any such proceeding shall have been commenced against
it, that remains undismissed for a period of sixty (60) days or more; or
any order for relief shall have been entered in any such proceeding; or any
such Credit Party, by any act or omission, shall have indicated its consent
to, approval of or acquiescence in any such petition, application or
proceeding; or the appointment of a custodian, receiver or any trustee for
it or any substantial part of any of its properties, or shall have suffered
any custodianship, receivership or trusteeship to continue undischarged for
a period of sixty (60) days or more;
(m) Any of the Stockholder Guarantors, the Company or the Foreign
Affiliates shall become unable, admit in writing or fail generally to pay
its debts as they become due;
(n) Any of the Stockholder Guarantors, the Company or the Foreign
Affiliates shall have concealed, removed or permitted to be concealed or
removed, any part of its property, with intent to hinder, delay or defraud
its creditors or any of them or made or suffered a transfer of any of its
property that may be fraudulent under any bankruptcy, fraudulent conveyance
or similar law; or shall have made any transfer of its property to or for
the benefit of a creditor at a time when other creditors similarly situated
have not been paid; or shall have suffered or permitted, while insolvent,
any creditor to obtain a Lien upon any of its property through legal
proceedings or distraint that is not vacated within sixty (60) days from
the date thereof.
(o) Any Governmental Authority shall have taken any action to condemn,
seize, requisition, nationalize or otherwise appropriate any portion of the
properties or assets of any Credit Party (without payment of adequate
compensation), or shall have taken any action to dispute the management of
such Credit Party or to curtail such Credit Party's authority to conduct
its business, which prevents any Credit Party from fulfilling its
obligations under any of the Credit Documents.
(p) The Creditor shall fail at any time to have a valid and Perfected
Lien on, subject to no prior or equal Liens other than Permitted Liens, any
portion of the Collateral.
(q) There is an actual or threatened claim by any Person other than
any Motorola Entity which would have the effect of creating a Lien over the
Collateral, other than Permitted Liens.
(r) The Political Risk Insurance ceases to be in full force and effect
for whatever reason and the Company shall fail to remedy the situation for
a period of thirty or more days.
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(s) The termination of any Plan or the institution by the PBGC of
proceedings for the involuntary termination of any Plan, that, in either
case, could reasonably be expected to result in a liability on the part of
the Company to the PBGC in excess of $1,000,000.
(t) The occurrence of any event or condition that results or could
reasonably be expected to result in a material "accumulated funding
deficiency" under Section 412 of the Code with respect to any Plan.
(u) The failure by any Credit Party to make required contributions, in
accordance with the applicable provisions of ERISA, to each of the Plans
maintained or hereafter established or assumed by it where such failure
could reasonably be expected to have a Material Adverse Effect.
(v) There shall have occurred an Event of Abandonment.
(w) Nextel International shall have ceased to own, free of any liens
(other than Liens arising under the Credit Documents), and maintain,
directly or indirectly, 51% of the outstanding capital stock of the
Company.
(x) There shall have occurred any change (direct or indirect) of
ownership of the Company which results in Nextel International ceasing to
have a controlling interest in the Company or the Company ceasing to have a
controlling interest in the Foreign Affiliates.
(y) Nextel International shall have ceased to have and to exercise
actual control of the day to day operations of the Company and the Foreign
Affiliates.
(z) This Agreement, the Financing Note, any Stockholder Guaranty, any
Foreign Affiliate Guaranty, the Security Documents, or any other Credit
Document shall, at any time after their respective execution and delivery,
and for any reason, shall be declared null and void, or be revoked or
terminated, or the validity or enforceability thereof or hereof shall be
contested by any Credit Party or any Credit Party shall deny that it has
any or further liability thereunder or hereunder as the case may be.
Section 11.02. Remedies.
(a) Except as described in the immediately succeeding sentence, if an Event
of Default described in subsections 11.01(l), (m) and (n) hereof with respect to
the Company or any such other Credit Party shall have occurred, then (i) the
Remaining Commitment shall automatically be terminated and the obligation of the
Creditor shall forthwith terminate, and (ii) the entire unpaid principal amount
of the Advances hereunder shall automatically and immediately become due and
payable together with all interest accrued and unpaid thereon and all other
amounts payable hereunder to be forthwith due and payable without presentment,
demand, test or further notice of any kind, all of which are hereby expressly
waived by the Company. If any other Event of Default shall have occurred, then
at any time thereafter, if any such event shall then be continuing, the Creditor
may, by written notice to the Company, (i) declare the Remaining
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Commitment to be terminated whereupon the obligation of the Creditor to make or
maintain the Advances hereunder shall forthwith terminate, and (ii) declare the
entire unpaid principal amount of the Advances, all interest accrued and unpaid
thereon and all other amounts payable hereunder to be forthwith due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company. Upon the occurrence of any Event of
Default, the Creditor shall have, in addition to any other rights and remedies
contained in this Agreement and the other Credit Documents, all of the rights
and remedies of a secured party under the laws of the United States and the laws
of Brazil or other applicable laws, all of which rights and remedies shall be
cumulative and non-exclusive, to the extent permitted by law.
(b) In addition to such remedies as are provided for in this Agreement and
the other Credit Documents, the Creditor's remedies upon the occurrence and
during the continuance of an Event of Default shall include (i) a right to apply
or require the Company to apply for any necessary orders or licenses in
connection with the operation or abandonment of the System, the
Telecommunications Business or any part thereof, and (ii) to the extent
permitted by law, a right to have a receiver appointed by a court of competent
jurisdiction in order to manage, protect and preserve the System, the
Telecommunications Business and all other equipment, property and other
collateral and to continue the operation of the business of the Company, and to
collect the revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership until the sale or other
final disposition of the Collateral, including without limitation, the System,
the Telecommunications Business and such equipment, property and assets
mortgaged or pledged to the Creditor.
(c) The Company agrees, in case an Event of Default shall be existing and
upon the Creditor's request, to assemble, at its expense, all equipment
constituting a part of the Collateral at a convenient place acceptable to the
Creditor and to pay all the Creditor's costs of collection of all amounts due,
and enforcement of all rights hereunder, including reasonable attorney's fees
and legal expenses, and expenses of any repairs to any realty or other property
to which any of such equipment may be affixed or be part. Upon an Event of
Default, the Creditor may, to the fullest extent permitted by applicable law,
without notice, advertisement, hearing or process of law of any kind (i) to the
extent permitted by law, enter upon any premises where any of the equipment
constituting part of the Collateral may be located and take possession of and
remove such equipment, (ii) sell any or all of such equipment, free of all
rights and claims of the Company therein and thereto, at any public or private
sale, and (iii) to the extent permitted by law, bid for and purchase any or all
of such equipment at any such sale.
(d) The Creditor may, upon the occurrence and during the continuance of an
Event of Default, without demand and without advertisement or notice, all of
which the Company waives at any time or times, sell and deliver, any or all
Collateral held by or for it at public or private sale, for cash, upon credit,
or otherwise, at such prices and upon such terms as the Creditor deems
advisable, in its sole discretion and/or collect or enforce the collection of,
the Collateral; provided, however that method, manner, time, place and terms of
any sale must be commercially reasonable and the Creditor shall make a
reasonable attempt to receive fair market value for any Collateral subject to
such sale. In addition to all other sums due to the Creditor, the Company shall
pay the Creditor all reasonable costs and expenses incurred by the Creditor
including attorney's fees and court costs, to obtain, liquidate and/or enforce
payment of Collateral
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obligations, or in the prosecution or defense of any action or proceeding
against the Creditor concerning any matter arising out of or connected with the
Credit Documents or the Collateral.
(e) In connection with the enforcement by the Creditor of any remedies
available to it as a result of any Event of Default, the Company and Nextel
International shall join and cooperate fully with the Creditor and with any
receiver referred to above and with the successful bidder or bidders at any
foreclosure sale when any of these entities files an application (including the
furnishing of any additional information that may be required in connection with
such application), with any necessary Governmental Authorities, requesting their
prior approval of (i) the operation or abandonment of all or any portion of the
System or the Telecommunications Business and (ii) the assignment or transfer to
such entity of all licenses, authorizations and permits issued to the Company or
any other Credit Party by such Governmental Authorities with respect to the
System, the Telecommunications Business and the operation thereof.
(f) In connection with the foregoing remedies, the Company and Nextel
International shall take such further actions and execute all such instruments
as the Creditor deems necessary. The Company agrees that the Creditor may
enforce any obligation of the Company as set forth in this Agreement by an
action for specific performance.
(g) The Creditor may (but shall not be obligated to) make advances to
preserve, protect or obtain any of the Collateral, including advances to pay
taxes, insurance and the like, and all such advances shall become part of the
obligations owing to the Creditor hereunder and shall be repayable to the
Creditor with interest thereon from the date of such advance until paid at the
rate per annum of 2% above the average interest rate applicable to the Financing
Note on the date of such advance.
(h) The Creditor shall be deemed to have exercised reasonable care in the
custody and preservation of any of the Collateral in its possession if it takes
such action for that purpose as the Company requests in writing, but failure of
the Creditor to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care, and no failure of the Creditor to preserve
or protect any rights with respect to such Collateral against prior parties, or
to do any act with respect to the preservation of such Collateral not so
requested by the Company, shall be deemed a failure to exercise reasonable care
in the custody or preservation of such Collateral.
(i) All moneys received by the Creditor pursuant to any right given or
action taken under Section 11 of this Agreement shall be applied as follows:
FIRST -- To the reimbursement to the Creditor of all reasonable
expenses and costs of litigation and of any proceedings resulting in the
collection of such moneys, including, without limitation, attorney's fees,
receivership, collection, maintenance, improvements and other acts of
administration and sale of properties;
SECOND -- To the payment of the unpaid principal of and interest on
any Advance which shall have become due and payable and other fees, costs
and expenses which the Company is required to pay from time to time to the
Creditor under or pursuant to this Agreement or any other Credit Document,
as well as all
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other obligations, covenants, undertakings and liabilities of the Company
to the Creditor arising out of or in connection with this Agreement or any
other Credit Document, which shall have become due and payable in such
order as the Creditor may decide; and
THIRD -- The balance, if any, shall be delivered and paid to the
Company.
(j) In addition to its rights with respect to the Collateral hereunder,
upon the occurrence of an Event of Default, the Creditor may seek payment of the
outstanding obligations from the Stockholder Guarantors or the Foreign
Affiliates. The Creditor shall not, however, proceed to liquidate the Collateral
hereunder and under the Stockholder Guaranties and the Foreign Affiliate
Guaranties in excess of the amount which the Creditor reasonably determines will
be necessary to satisfy the outstanding obligations which have become due and
payable, provided, that the Creditor may continue so to liquidate until all
outstanding obligations which have become due and payable have been satisfied in
full.
(k) The Creditor may exercise any and all of its remedies under the
Security Documents, the Stockholder Guaranties and the Foreign Affiliate
Guaranties contemporaneously or separately from the exercise of any other
remedies hereunder or with respect to any Collateral.
Section 11.03. Cumulative Rights. No failure or delay on the part of the
Creditor in exercising any right, power or remedy accruing to it upon any breach
or default of the Company under any of the Credit Documents shall impair any
such right, power or remedy nor shall it be construed as a waiver of any such
breach or default thereafter occurring, nor shall a waiver of any single breach
or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring, nor shall any single or partial exercise of any such right
or power preclude any other or further exercise thereof or the exercise of any
other right or power hereunder. To the fullest extent permitted by law, all
remedies, either under the Credit Documents or by law otherwise afforded the
Creditor shall be cumulative and not alternative.
Section 11.04. Waiver of Demand. DEMAND, PRESENTMENT, PROTEST AND NOTICE OF
DEMAND, PRESENTMENT, PROTEST AND NONPAYMENT ARE HEREBY WAIVED TO THE EXTENT
PERMITTED BY LAW BY THE COMPANY. THE COMPANY ALSO WAIVES THE BENEFIT OF ALL
VALUATION, APPRAISAL AND EXEMPTION LAWS TO THE EXTENT PERMITTED BY LAW.
Section 11.05. Waiver of Notice. IN THE EVENT OF AN EVENT OF DEFAULT, THE
COMPANY HEREBY WAIVES TO THE EXTENT PERMITTED BY LAW ALL RIGHTS TO NOTICE AND
HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE CREDITOR OF ITS RIGHTS TO
REPOSSESS ANY COLLATERAL WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY
UPON ANY COLLATERAL WITHOUT PRIOR NOTICE OR HEARING. THE COMPANY ACKNOWLEDGES
THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS
TRANSACTION AND THIS AGREEMENT.
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SECTION 12. MISCELLANEOUS
Section 12.01. Waiver of Sovereign Immunity. To the extent that the
Company, Nextel International, the Foreign Affiliates or any of their respective
assets has or hereafter may acquire any right to immunity from suit, set-off,
legal proceedings generally, attachment prior to judgment, attachment in aid of
execution or other attachment or execution of judgment on the grounds of
sovereignty or otherwise, each of the Company and Nextel International hereby
irrevocably waives such rights to immunity for itself and its assets in respect
of its obligations arising under or relating to any of the Credit Documents or
any related documentation.
Section 12.02. Venue for Suit. Each of the Company and Nextel International
irrevocably hereby expressly waives all right to object to jurisdiction or
execution in any legal action or proceeding relating to this Agreement, the
Financing Note or any other Credit Document which it may now or hereafter have
by reason of its domicile or by reason of any subsequent or other domicile and
hereby irrevocably consents that any legal action, suit or proceeding arising
out of or relating to any of the Credit Documents and any other document or
instrument required to be executed in relation thereto may be instituted
exclusively in the federal courts of the United States District Court of the
Southern District of New York and the courts of the State of New York, unless
the Creditor otherwise elects, and by execution and delivery of this Agreement,
each of the Company and Nextel International submits to and accepts and consents
with regard to any such action or proceeding for itself and in respect of its
properties and assets, generally and unconditionally, the jurisdiction of any
such court. Each of the Company and Nextel International hereby waives any
objection it may now or hereafter have to the laying of the venue of any such
action, suit or proceeding, and further waives any claim that any such action,
suit or proceeding brought in any of the aforesaid courts has been brought in
any inconvenient forum.
Each of the Company and Nextel International hereby irrevocably designates,
appoints and empowers CT Corporation System with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and successors as the designee, appointee and agent of
such Credit Party to receive, accept and acknowledge, for and on behalf of such
Credit Party and its properties, service of any and all legal process, summons,
notices and documents which may be served in such action, suit or proceeding
relating to the Financing Note or this Agreement or any other Credit Document in
the case of the courts of the United States District Court of the Southern
District of New York or of the courts of the State of New York, which service
may be made on any such designee, appointee and agent in accordance with legal
procedures prescribed for such courts. Each of the Company and Nextel
International agrees to take any and all action necessary to continue such
designation in full force and effect and should such designee, appointee and
agent become unavailable for this purpose for any reason, the Company or Nextel
International (as appropriate) will forthwith irrevocably designate a new
designee, appointee and agent with offices in New York, New York, which shall
irrevocably agree to act as such, with the powers and for purposes specified in
this Section 12.02. Each of the Company and Nextel International further
irrevocably consents and agrees to service of any and all legal process,
summons, notices and documents out of any of the aforesaid courts in any such
action, suit or proceeding relating to the Financing Note or this Agreement or
any other Credit Document delivered to the Company or Nextel International (as
appropriate) in accordance with this Section 12.02 or to its then designee,
appointee or agent for service. If service is made upon such designee, appointee
and
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agent, a copy of such process, summons, notice or document shall also be
provided to the Company or Nextel International (as appropriate), by registered
or certified mail, or overnight express air courier, provided that failure to
provide such copy to the Company or Nextel International (as appropriate) shall
not impair or affect in any way the validity of such service or any judgment
rendered in such action or proceedings. Each of the Company and Nextel
International agrees that service upon the Company or Nextel International (as
appropriate) or any such designee, appointee and agent as provided for herein
shall constitute valid and effective personal service upon the Company or Nextel
International (as appropriate) with respect to matters contemplated in this
Section 12.02 and that the failure of any such designee, appointee and agent to
give any notice of such service to the Company or Nextel International (as
appropriate) shall not impair or affect in any way the validity of such service
or any judgment rendered in any action or proceeding based thereon. Nothing
herein shall limit or be construed to limit the rights of the Creditor to
commence proceedings against the Company or Nextel International (as
appropriate) in any other venue where assets of the Company or Nextel
International (as appropriate) may be found.
Section 12.03. Governing Law. THIS AGREEMENT AND THE FINANCING NOTE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
EXCLUDING ALL OTHER CHOICE-OF-LAW AND CONFLICTS-OF-LAWS RULES).
Section 12.04. Severability of Provisions. If any one or more of the
provisions contained in this Agreement or any documents executed in connections
herewith shall be invalid, illegal or unenforceable in any respect, I the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired.
Section 12.05. Binding Effect; Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the Company, the Creditor and their
respective successors and assigns, provided, that the Company shall not have the
right to assign or transfer its rights or obligations hereunder except with the
prior written consent of the Creditor.
The Creditor may assign its rights and obligations under this Agreement
(including all or a portion of the Remaining Commitment and the Advances at the
time owing to it without the consent of the Company (the "Syndication"). The
Creditor may request the Company and Nextel International to assist in the
Syndication as contemplated by this Section.
In addition to and without limiting the foregoing, the Creditor may,
without the consent of the Company, sell participations to one or more banks or
other entities (a "Participant") in all or a portion of the Creditor's rights
and obligations under this Agreement (including all or a portion of the
Remaining Commitment and the Advances owing to it); provided that (i) the
Creditor's obligations under this Agreement shall remain unchanged, (ii) the
Creditor shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) the Company shall continue to deal
solely and directly with the Creditor in connection with the Creditor's rights
and obligations under this Agreement. Any agreement or instrument pursuant to
which the Creditor sells such a participation shall provide that the Creditor
shall
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retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement.
Each of the Company and Nextel International agrees to cooperate with the
Creditor in connection with any Syndication. Such cooperation will include, if
requested by the Creditor, (i) making senior officers of the Company and Nextel
International available for a meeting with prospective assignees, the Creditor
and its agents, and (ii) providing such other assistance as may be reasonably
requested by the Creditor and such agents (including providing information to
and responding to questions from prospective assignees with respect to the
operations, business plans and other matters relating to the Company's and each
other Credit Party's business on a timely basis and in any manner reasonably
requested by the Creditor).
Section 12.06. Entire Agreement; Amendments. This Agreement, the documents
referred to herein and those signed contemporaneously herewith constitute the
entire agreement of the parties with respect to the subject matter hereof and
shall supersede any prior expressions of intent or understanding with respect to
this transaction. Any amendment to this Agreement shall be in writing signed by
or on behalf of the party to be bound or burdened thereby.
Section 12.07. Notices. All communications and notices provided for
hereunder shall be in writing and shall be personally delivered or transmitted
by postage prepared registered mail (airmail if international) or by telefax as
follows:
To the Company: ▇▇▇▇▇ International (Brazil), Ltd.
c/o Nextel International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.; ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
with copies to: Nextel International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
and: Nextel S.A.
Ave. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-215
Bloco D - 7o Andar
5808-900 Sao Paulo, SP, ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
Attention: Legal Department
Fax No.: ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
To the Creditor Motorola Credit Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: Motorola Inc.
Law Department
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Finance Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Vendor: Motorola, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Except as otherwise specified herein, all notices shall be deemed duly given on
the date of receipt, if personally delivered or transmitted by telefax, and the
date 15 days after posting if mailed.
Section 12.08. Right of Set-Off. The Creditor shall, to the fullest extent
permitted by applicable law, have the right to apply and all amounts on deposit
or on account with it or with any of its branches, Subsidiaries or affiliates
(general or special, time or demand, matured or unmatured, in whatever currency)
in reduction of amounts past due (whether such amounts became due at schedule
maturity, by acceleration or otherwise) under the Credit Documents.
Section 12.09. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies thereof, each signed by less than all, but together signed by all, of the
parties hereto.
Section 12.10. Proposed Consolidation. The Creditor and the Company agree
that the Proposed Consolidation may be consummated, so long as such consummation
is in full compliance with the conditions set forth in Section 9.05 hereof.
Section 12.11. [Reserved]
Section 12.12. Confidentiality. Each of the Company, Nextel International
and the Creditor hereby agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates, directors, officers, employees and agents, accountants, legal
counsel and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to the execution and
delivery of an agreement containing provisions substantially the same as those
of this Section 12.12, to any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or
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obligations under this Agreement, (g) with the consent of the other parties
hereto, or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 12.12 or (ii) becomes
available to such party on a nonconfidential basis from a source other than the
other parties hereto.
For the purposes of this Section 12.12, "Information" means all information
received from any of the parties hereto relating to any of the Credit Parties,
the Creditor or their respective businesses, other than any such information
that is available to the parties hereto on a nonconfidential basis prior to
disclosure by any party hereto; provided that in the case of information
received from any party hereto after October 31, 1997, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section 12.12
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Section 12.13. Term of Agreement. This Agreement shall continue in full
force and effect, and be binding upon the Company, until all of the Obligations
have been fully and indefeasibly paid and performed whereupon this Agreement
shall terminate. Notwithstanding the foregoing, all the indemnification
provisions shall survive and all other provisions which by their terms survive
termination shall so survive.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized signatories as of the day and year
first written above.
Company: ▇▇▇▇▇ INTERNATIONAL (BRAZIL), LTD.
By:
---------------------------------
Name:
Title:
Creditor: MOTOROLA CREDIT CORPORATION
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Acknowledged and agreed:
NEXTEL INTERNATIONAL, INC.
By:
------------------------------
Name:
Title:
[Signature Page to Equipment Financing Agreement]
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