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EXHIBIT 10.45
THIRD AMENDMENT
TO
EQUIPMENT FINANCING AGREEMENT
This Third Amendment (the "Third Amendment") to Equipment Financing
Agreement is entered into 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").
W I T N E S S E T H:
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 "Financing Agreement"; capitalized terms
used herein and not otherwise defined herein having the meanings assigned
thereto in the Financing Agreement);
WHEREAS, the Company has requested that the Creditor agree to certain
amendments to the Financing Agreement; and
WHEREAS, subject to the terms and conditions set forth herein, the
Creditor is willing to undertake certain amendments to the Financing Agreement.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Company and the Creditor hereby agree as follows:
SECTION 1. AMENDMENTS.
Upon the satisfaction by the Company of the conditions precedent set
forth in Section 2 below, and in reliance on the warranties of the Company set
forth in Section 3 below, the Financing Agreement is hereby amended as follows:
1.1 There is hereby added to the Schedules to the Financing Agreement
(a) a Schedule 1.01(c) ("Target Subscribers") and (b) Schedule
1.01(d) ("Adjusted Paid-in Capital Schedule") in the forms
attached.
1.2 The following term is hereby added to Section 1.01 of the
Financing Agreement in its appropriate alphabetical order:
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" "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."
1.3 The following term is hereby added to Section 1.01 of the
Financing Agreement in its appropriate alphabetical order:
" "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. "
1.4 The following term is hereby added to Section 1.01 of the
Financing Agreement in its appropriate alphabetical order:
" "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."
1.5 The following term is hereby added to Section 1.01 of the
Financing Agreement in its appropriate alphabetical order:
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" "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."
1.6 The definition of the term "Fixed Charge Coverage Ratio" set forth
in Section 1.01 of the Financing Agreement is hereby amended and
restated as follows:
" "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 the
decrease (or minus the increase) in the value added tax credit
account during such quarter) to (b) Adjusted Consolidated Fixed
Charges for such quarter."
1.7 The definition of the term "Permitted Indebtedness" set forth in
Section 1.01 of the Financing Agreement is hereby amended and
restated as follows:
" "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
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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."
1.8 The definition of the term "Subscriber" set forth in Section 1.01
of the Financing Agreement is hereby amended and restated as
follows:
" "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."
1.9 The last sentence of clause (b) of Section 8.02 of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
"(b) 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
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forth in this Agreement, and (iii) is consistent with the
Company's preparation of the Approved Business Plan."
1.10 The last sentence of clause (b) of Section 8.03 of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
"(b) 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."
1.11 Section 8.17 of the Financing Agreement is hereby amended and
restated in its entirety as follows:
" 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
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
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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:
Date Indebtedness to
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
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
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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.
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 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). "
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1.12 The parties agree and acknowledge that the address for notices for
the Company shall, until changed pursuant to Section 12.07 of the Financing
Agreement, be Nextel International, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer (Telecopy:
703-390-5111), with copies to (a) Nextel International, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Legal Department (Telecopy: 703-433-4035)
and (b) Nextel S.A., Ave. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-215, Bloco D - 7o Andar, ▇▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇-▇▇▇ Brasil, Attention: Legal Department (Telecopy: 55 11
3748 1215).
SECTION 2. CONDITIONS.
(a) As a condition precedent to the effectiveness of the Third Amendment,
the Company shall have delivered to the Creditor the Third Amendment, duly
executed and delivered and appropriately dated and in form and substance
satisfactory to the Creditor, and such other documents as the Creditor may
reasonably request.
(b) As a condition subsequent to the Third Amendment, the Company and the
Creditor shall have entered into an amended and restated Financing Agreement on
mutually acceptable terms no later than thirty (30) days from the date hereof.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
To induce the Creditor to enter into the Third Amendment, the Company
hereby represents and warrants to the Creditor as of the date hereof that:
(a) The representations and warranties contained in the Financing
Agreement and the other Credit Documents are true and correct in all
material respects on and as of November 30, 1999, except for
representations and warranties that speak as of a particular date, in
which case such representations and warranties are true as of such date;
(b) With respect to the Company, there has been no Material Adverse
Effect since November 30, 1999;
(c) The consolidated audited balance sheets of the Company and its
Subsidiaries and consolidated statements of operations, changes in
stockholders' equity and cash flows of the Company and its Subsidiaries
each as of 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 March 31, 1999, June 30, 1999 and September 30, 1999) consolidated
balance sheets and consolidated statements of operations, changes in
stockholders' equity and cash flows, have been prepared in accordance
with GAAP and fairly present the condition and
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results of operations of the Company and its Subsidiaries as of such
dates or for such periods;
(d) Each Credit Party has made all material required contributions under
the Plans for all periods through and including September 30, 1999, or
adequate accruals therefor have been provided for in the financial
statements referenced in paragraph (b) above;
(e) The actuarial value of vested benefits required to be funded by each
Credit Party, or with respect to which such Credit Party is liable, under
the Plans, determined using the actuarial methods and assumptions used by
the relevant Plan's actuary as of the last valuation date for which an
actuarial valuation was completed to determine such Plan's funded status,
did not as of the last valuation date as of which an actuarial valuation
has been completed, which in the case of any individual Plan was not
earlier than January 1, 1999, exceed the actuarial value of the assets of
the Plans allocable to such vested and non-vested benefits by a material
amount; and
(f) After giving effect to the Third Amendment, no Default or Event of
Default has occurred and is continuing.
SECTION 4. GENERAL.
4.1 Reservation of Rights. The Company acknowledges and agrees that the
execution and delivery of the Third Amendment shall not be deemed (i) to
create a course of dealing or otherwise obligate the Creditor to forbear
or execute similar amendments under the same or similar circumstances in
the future, or (ii) as a waiver by the Creditor of any covenant,
condition, term or provision of the Financing Agreement or any of the
other Credit Documents, and the failure of the Creditor to require strict
performance by the Company or any other Credit Party of any provision
thereof shall not waive, affect or diminish any right of the Creditor to
thereafter demand strict compliance therewith. The Creditor hereby
reserves all rights granted under the Financing Agreement, the other
Credit Documents and the Third Amendment.
4.2 Full Force and Effect. As hereby modified, the Financing Agreement
and each of the other Credit Documents shall remain in full force and
effect and each is hereby ratified, approved and confirmed in all
respects.
4.3 Affirmation. The Company hereby affirms its obligations under Section
4 of the Financing Agreement and agrees to pay on demand all reasonable
costs and expenses of the Creditor in connection with the preparation,
execution and delivery of the Third Amendment and all instruments and
documents delivered in connection herewith.
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4.4 Successors and Assigns. The Third Amendment shall be binding upon and
shall inure to the benefit of the Company, the Creditor and the
respective successors and assigns of the Company and the Creditor.
4.5 Counterparts. The Third Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Third
Amendment.
* * * * *
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IN WITNESS WHEREOF, the Company and the Creditor have executed this
Third Amendment as of the 24th day of March, 2000.
COMPANY:
▇▇▇▇▇ INTERNATIONAL (BRAZIL), LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President and Treasurer
-----------------------------
CREDITOR:
MOTOROLA CREDIT CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
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SCHEDULE 1.01(c)
"ADJUSTED PAID-IN CAPITAL SCHEDULE"
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PERIOD: FIRST QUARTER ENDING
3/31/2000
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-----------------------------------------------------------------====================--------------------------------------
CUMULATIVE TOTALS
-----------------------------------------------------------------====================--------------------------------------
BEGINNING CUMULATIVE ADJUSTED PAID IN 0 A
CAPITAL- ACTUAL
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BEGINNING CUMULATIVE ADJUSTED PAID IN 0 B
CAPITAL- REQUIRED
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ONE-TIME CREDIT FOR DECEMBER 1999 CAPITAL $16,729,764 Q
CONTRIBUTION ▇▇▇▇▇ BRAZIL
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TOTAL CONSOLIDATED PAID-
IN CAPITAL REQUIREMENT
===========================================================================================================================
Quarterly EBITDA Loss/(Gain)
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plus/(minus): Capital expenditures/(sale of
assets)
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plus/(minus): Interest expense, scheduled debt
amortizations, withholding tax on interest
expense, (interest income):
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plus/(minus): increases/(decreases) in accounts
receivable, inventory, other non-cash current
assets:
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minus/(plus): increases/(decreases) in accounts
payable, accrued expenses and other current
liabilities (except short-term notes payable):
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plus/(minus): increases/(decreases) in the
Company's value added tax credit account
during such quarter:
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minus: increases in short-term and long-term
debt and notes payable (except shareholder
notes as per Permitted Indebtedness (l)):
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plus: increases/(decreases) in investments or
other assets (including spectrum and/or other
acquisitions and not including changes in the
Company's value added tax credit account
during such quarter)
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minus: minority partner capital contributions(1):
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TOTAL QUARTERLY PAID-IN CAPITAL 0 C
CONTRIBUTION REQUIREMENT
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ACTUAL QUARTERLY PAID-IN CAPITAL D
CONTRIBUTION
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CUMULATIVE ADJUSTED PAID IN CAPITAL- A + D = X
ACTUAL
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CUMULATIVE ADJUSTED PAID IN CAPITAL- B + C = Y
REQUIRED
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DEFICIENCY IN PAID-IN CAPITAL TO BE If Y > X, then Y - X, if not 0: Z
CONTRIBUTED:
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ENDING CUMULATIVE ADJUSTED PAID IN 0
CAPITAL- ACTUAL X + Z
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ENDING CUMULATIVE ADJUSTED PAID IN 0 y
CAPITAL- REQUIRED
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* Deficiencies in Paid-in Capital must be contributed into the Company within 15 days from the end of the reporting period.
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Note: All calculations in the foregoing chart shall be made in accordance
with GAAP (unless non-GAAP variations are specified) and the application of
GAAP by the Company shall be on a consistent basis.
----------------
(1) This item is applicable ONLY IF there has been one hundred percent (100%)
consolidation by the Company with the entity to which the capital contribution
has been made.
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SCHEDULE 1.01(d)
"TARGET SUBSCRIBERS"
Target
Date Subscribers
March 31, 2000 143,559
June 30, 2000 171,135
September 30, 2000 210,987
December 31, 2000 251,624
March 31, 2001 280,864
June 30, 2001 311,575
September 30, 2001 345,661
December 31, 2001 383,031
March 31, 2002 411,292
June 30, 2002 442,130
September 30, 2002 479,418
December 31, 2002 520,497
March 31, 2003 543,421
June 30, 2003 569,974
September 30, 2003 598,256
December 31, 2003 628,283
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