EXHIBIT 1.1
FORM OF DEALER MANAGER AND SOLICITATION AGENT AGREEMENT
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▇▇▇▇▇▇▇, S. DE ▇. ▇. DE C.V.
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
as Dealer Manager and Solicitation Agent
Offer to Exchange
Senior Step-Up Notes due 2008 Cash Tender Offer for
for all outstanding 12 1/8% Senior Notes due 2006 a portion of outstanding 12 1/8% Senior Notes due 2006
and and
Senior Step-Up Notes due 2011 a portion of outstanding 12 5/8% Senior Notes due 2009
for all outstanding 12 5/8% Senior Notes due 2009
and solicitations of consents to amend the indentures for the 12 1/8% Senior
Notes due 2006 and the 12 5/8% Senior Notes due 2009
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DEALER MANAGER AND SOLICITATION AGENT AGREEMENT
Dated as of February o, 2003
DEALER MANAGER AND SOLICITATION AGENT AGREEMENT
February o, 2003
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Exchange Offers, Cash Tender Offers and Consent Solicitations. ▇▇▇▇▇▇▇,
S. de ▇.▇. de C.V., a limited liability variable capital company (sociedad de
responsabilidad limitada de capital variable) organized under the laws of Mexico
(the "Company"), plans to make exchange offers (such exchange offers, as they
may be amended and supplemented, the "Exchange Offers") to exchange all of its
outstanding 12 1/8% senior notes due 2006 and 12 5/8% senior notes due 2009 (the
"Existing Notes"), for Senior Step-Up Notes due 2008 (the "New 2008 Notes") and
Senior Step-Up Notes due 2011 (the "New 2011 Notes" and, together with the New
2008 Notes, the "New Notes"), on the terms and subject to the conditions set
forth in the prospectus dated February, 2003 (as the same may be amended or
supplemented, the "Prospectus") included in the Company's registration statement
on Form F-4 (No. 333-100075) filed with the United States Securities and
Exchange Commission (the "Commission") (as such registration statement may be
amended or supplemented and including the documents incorporated by reference
therein and all financial statements, schedules and exhibits, the "Registration
Statement"). Simultaneously with the Exchange Offers, the Company plans to make
a cash tender offer for a portion of the Existing Notes on the terms and
conditions set forth in the Prospectus (such cash tender offers, as they may be
amended and supplemented, the "Cash Tender Offers").
In conjunction with, and to facilitate the Exchange Offers and the Cash
Tender Offers, the Company will solicit consents ("Consents") (such
solicitations, as they may be amended and supplemented, the "Solicitations", and
the Solicitations, together with the Exchange Offers and the Cash Tender Offers,
the "Offers") from the holders of the Existing Notes to certain amendments (the
"Proposed Amendments") to the indentures between the Company and U.S. Bank Trust
National Association dated as of May 17, 1999 (the "Existing Notes Indentures")
pursuant to which such Existing Notes were issued. The Offers will be on the
terms and subject to the conditions set forth in the Prospectus and the
accompanying exchange offer letter of transmittal and cash tender offer letter
of transmittal (as each may be amended or supplemented, the "Letters of
Transmittal") attached hereto as Exhibits A, B-1 and B-2, respectively. Each of
the Prospectus, the Registration Statement (of which the Prospectus forms a
part), the Letters of Transmittal, including any documents incorporated by
reference therein, as such documents may be amended or supplemented from time to
time, and all documents filed or to be filed with any federal, state, local or
foreign governmental or regulatory agency or authority, including the
Commission, and any advertisements, press releases or summaries relating to the
Offers and any forms of letters to brokers, dealers, banks, trust companies and
other nominees relating to the Offers as the Company may use or authorize for
use in connection with the Offers are collectively referred to herein as the
"Offer Material".
The New 2008 Notes will be issued pursuant to an indenture, to be dated as
of the Settlement Date (as defined in the Prospectus) (the "2008 Notes
Indenture"), between the Company and The Bank of New York, as trustee (in such
capacity, the "2008 Notes Trustee"). The New 2011 Notes will be issued pursuant
to an indenture, to be dated the Settlement Date (the "2011 Notes Indenture"
and, together with the 2008 Notes Indenture, the "New Notes Indentures"),
between the Company and The Bank of New York, as trustee (in such capacity, the
"2011 Notes Trustee" and, together with the 2008 Notes Trustee, the " New Notes
Trustees"). An application has been made to list the New Notes on the New York
Stock Exchange and the Company intends to apply to list the New Notes on the
Luxembourg Stock Exchange. Subject to certain conditions and limitations as set
forth in the Prospectus and Letters of Transmittal, a fee equal to 0.25% of the
principal amount of the Existing Notes exchanged or tendered pursuant to the
Offers will be paid by the Company to certain banks and financial institutions
for processing exchanges or tenders of the Existing Notes (the "Processing
Fee").
2. Engagement as Dealer Manager and Solicitation Agent. (a) The Company
hereby engages ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and its affiliates ("▇▇▇▇▇▇
▇▇▇▇▇▇▇") as sole dealer manager in connection with the Offers and sole
solicitation agent in connection with the Solicitations (in such capacities, the
"Dealer Manager"). On the basis of the representations and warranties and
agreements of the Company contained in this Agreement and subject to and in
accordance with the terms hereof, as Dealer Manager, you agree, in accordance
with your customary practice, to perform in connection with the Offers, those
services that are customarily performed by investment banking concerns in
connection with similar offers and consent solicitations, including the
solicitation of the exchanges, tenders and consents pursuant to the Offers. The
performance by you of such services hereunder shall commence on the date of the
mailing (the "Commencement Date") of the Prospectus, Letters of Transmittal and
related cover letters and documents to each holder of record of the Existing
Notes.
(b) You have been engaged to act as Dealer Manager in connection with the
Offers and, in such capacity, you shall act as an independent contractor, not as
an agent, with duties owed solely to the Company. In connection with the Offers,
no broker, dealer, commercial bank, trust company or other nominee is to be
deemed to be acting as your agent or as agent of the Company, and you shall not
be deemed to be an agent of the Company, any broker, dealer, commercial bank,
trust company or other nominee or any other person. The Company expressly
acknowledges that all opinions and advice (written or oral) given by you to the
Company in connection with your engagement are intended solely for the benefit
and use of the Company (including its management, directors and attorneys) in
considering the transactions to which such opinions or advice relate.
(c) You shall have no liability (in tort, contract or otherwise) to the
Company or any other person for any act or omission on the part of any broker or
dealer in securities (each, a "Dealer") (other than yourselves) or any bank or
trust company or any other person, and you shall have no liability (in tort,
contract or otherwise) to the Company or any other person that solicits
exchanges, tenders or consents pursuant to the Offers for any losses, claims,
damages or liabilities arising from your own acts or omissions in performing
your obligations as Dealer Manager hereunder or otherwise in connection with the
Offers, except for any such losses, claims, damages or liabilities finally
judicially determined to be attributable primarily to your gross negligence or
willful misconduct. In soliciting or obtaining exchanges, tenders or
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consents, no Dealer, bank or trust company is to be deemed to be acting as your
agent or the agent of the Company, and you, as Dealer Manager, are not to be
deemed the agent of the Company or any Dealer, bank or trust company or any
other person. The Company acknowledges and agrees that, in your capacity as
Dealer Manager, you shall act as an independent contractor, not an agent.
3. The Offer Material. (a) The Company hereby (i) agrees to furnish you, at
its own expense, with as many copies as you may reasonably request of the
Prospectus
and any amendments or supplements thereto, the Letters of Transmittal and any
amendments thereto and any other Offer Material to be used by the Company in
connection with the Offers, (ii) authorizes you, as Dealer Manager, to use
copies of the Offer Material in connection with the Offers and (iii)
acknowledges that the Offer Material has been, or will be, prepared and approved
by the Company and are the Company's sole responsibility with respect to its
accuracy and completeness.
(b) The Company agrees that, at a reasonable time prior to using any Offer
Material, the Company will furnish to you a reasonable number of copies of such
material and will give reasonable consideration to your and your counsel's
comments, if any, thereon.
(c) Prior to and during the period of the Offers, the Company shall inform
you promptly after it receives notice or becomes aware of the happening of any
event, or the discovery of any fact, that requires the making of any change in
any Offer Material then being used or would affect the truth or completeness of
any representation or warranty contained in this Dealer Manager and Solicitation
Agent Agreement (the "Agreement") if such representation or warranty were being
made immediately after the happening of such event or the discovery of such
fact.
(d) The Dealer Manager hereby agrees that, without the prior consent of the
Company (which consent the Company agrees will not be unreasonably withheld or
delayed), the Dealer Manager will not hereafter publicly disseminate any written
materials or written information to holders of the Existing Notes or any other
person for or in connection with the Offers, other than the Offer Material.
4. Withdrawal. In the event that:
(a) the Company uses or permits the use of any of the Offer Material or any
amendment or supplement thereto and such document (i) has not been submitted to
you previously for your and your counsel's comments and your prior approval or
(ii) has been so submitted, and you or your counsel have promptly made comments
that have not been reflected in a manner satisfactory to you and your counsel;
(b) the Company shall have breached, in any material respect, any of its
representations, warranties, agreements or covenants herein; it being understood
that any breach of Section 8(hh) or Section 10(l) shall be deemed material
for purposes of this Section 4(b);
(c) the Offers are terminated or withdrawn for any reason, or any stop
order, restraining order, injunction or denial of an application for approval
has been issued and not promptly thereafter stayed or vacated with respect to,
or any proceeding, litigation or investigation has been initiated that, if
adversely determined, could reasonably be expected to
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have a material adverse effect on the Company's ability to carry out the Offers
including, but not limited to, the exchange of the Existing Notes pursuant to
any of the Exchange Offers, the payment of amounts pursuant to any of the Cash
Tender Offers and the Solicitations, the performance of any of the provisions of
this Agreement, the execution, delivery and performance of any of the New Notes
Indentures, or the issuance of the New Notes pursuant thereto, or the execution,
delivery and performance of indenture supplements with respect to the Existing
Notes Indentures to effect the Proposed Amendments (the "Supplemental
Indentures");
(d) except as accurately described in the Prospectus, subsequent to the
Commencement Date or, if earlier, the dates as of which information is given in
the Prospectus (exclusive of any amendment or supplement thereto), there shall
have been (i) any material change in capital stock or cash dividends paid,
material increase in consolidated bank or financial debt, material decrease in
fixed assets or net revenues, each as specified and subject to the
qualifications in the letter or letters referred to in Section 9(c), or (ii) any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects of the Company and its subsidiary, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Dealer Manager, so material and adverse
as to make it impractical or inadvisable to consummate the Offers as
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto);
(e) you shall not have received (i) on the Commencement Date the opinions
of counsel and comfort letter described in Section 9(a) and 9(c) hereof and (ii)
on the Settlement Date (as defined in the Prospectus), bring-down opinions of
counsel described in Section 9(a), a bring-down comfort letter as described in
Section 9(c) and certificates of executive officers of the Company as described
in Section 9(b) hereof;
(f) you shall not have received on the Commencement Date, the Settlement
Date or any date after the Commencement Date on which the Registration Statement
is amended, any of such opinions, letters or certificates or any other documents
mentioned elsewhere in this Agreement or they shall not be satisfactory in form
or substance to you or your counsel; or
(g) if at any time from and including the Expiration Date (as defined in
the Prospectus) and through and including the Settlement Date (as defined in the
Prospectus), you shall not possess either final and unconditional (i) listing
approval for the New Notes, subject only to notice of issuance, from the New
York Stock Exchange or other "nationally recognized securities exchange" as such
term is defined in Section 18 of the Securities Act of 1933, as amended and Rule
146 promulgated thereunder (such exchange, a "Nationally Recognized Securities
Exchange"), or (ii) "blue sky" clearance to consummate the Offers at such time
to all existing noteholders in each of the ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, the
District of Columbia and Guam;
Then, in each case, you shall be entitled to withdraw as Dealer Manager in
connection with the Offers without any liability or penalty to you or any other
Indemnified Person (as defined in Section 11 below) and without loss of any
right to indemnification or contribution provided in Section 11 or right to the
payment of all fees and expenses payable
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pursuant to Sections 5 and 6 that have accrued to the date of such withdrawal.
Fees payable pursuant to Section 5, if any, shall be paid on the date that
Existing Notes tendered and not withdrawn are acquired by the Company, pursuant
to the Offers. Expenses payable pursuant to Section 6 shall be paid promptly
after the date of such withdrawal by the Dealer Manager pursuant to this Section
4. In the event of any such withdrawal by you as the Dealer Manager, for
purposes of determining the fees payable pursuant to Section 5, you shall only
be entitled to the Success Fee for the principal amount of Existing Notes
tendered pursuant to the Offers as of the close of business on the date of such
withdrawal that are not subsequently withdrawn and that are thereafter acquired
by the Company pursuant to the Offers, and such fees accrued through the date of
such withdrawal shall be paid to you on the date such Existing Notes are
acquired by the Company; provided that in the event of any withdrawal by the
Dealer Manager pursuant to this Section 4, the Dealer Manager shall not be
entitled to receive any Success Fee (as defined below) in connection with
Existing Notes tendered subsequent to the date of such withdrawal that are
thereafter acquired by the Company pursuant to the Offers.
5. Fees. As compensation for your services hereunder, the Company agrees,
subject to Section 4 hereof, to pay to you a fee of $ for each $1,000 in
principal amount of Existing Notes tendered and not subsequently withdrawn that
are thereafter acquired by the Company pursuant to the Offers (such fee, the
"Success Fee"). The Success Fee will be payable on the date such Existing Notes
are acquired by the Company.
6. Expenses. In addition to your compensation for your services as Dealer
Manager, the Company shall: (a) (i) reimburse brokers and dealers (including
yourself), commercial banks, trust companies and other nominees for their
reasonable customary mailing and handling expenses incurred in forwarding the
Offer Material, as the case may be, to their customers and (ii) pay the
"Processing Fee" to banks and financial institutions (each, a "Processor"),
which may include the Dealer Manager, provided that, the maximum aggregate
amount of total Processing Fees shall not exceed $1,250 per noteholder per
series of Existing Notes for which such a Processor processes Existing Notes,
which shall be payable as described in the Prospectus; (b) pay all expenses
relating to the preparation, filing, printing, mailing and publishing of the
Offer Material, the preliminary and final forms of any Blue Sky Survey or other
legal surveys for any domestic or foreign jurisdictions necessary in connection
with the Offers, and any other material prepared in connection with the Offers;
(c) pay all costs of the preparation, issuance and delivery of the New Notes
Indentures and the Supplemental Indentures, including the execution and delivery
of the Supplemental Indentures; (d) pay all costs of furnishing such copies of
any other Offer Material as may be reasonably requested in connection with the
Offers; (e) pay all advertising expenses relating to the Offers; (f) pay all
fees and expenses of the Information Agent and the Exchange Agent relating to
the Offers (as defined in Section 7 below); (g) pay all fees and expenses
(including fees and expenses of counsel) relating to the qualification of the
New Notes under securities or Blue Sky laws and in connection with the
determination of the eligibility of the New Notes for investment under the laws
of such jurisdictions as required for consummation of the Offers, including the
reasonable expenses of obtaining any opinion of local counsel required by any
international, state securities or equivalent Blue Sky authorities; (h) all fees
and expenses of the Company's accountants and fees and expenses of counsel
(including local and special counsel) for the Company; (i) all travel,
transportation and other expenses incurred by, or on behalf of the Dealer
Manager and its representatives (including legal counsel) in connection with the
preparation of the Offer Material
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and the consummation of the Offers; (j) the fees and expenses (including
disbursements) of the Dealer Manager's legal counsel incurred in connection with
the Offers, the preparation of this Agreement, the New Notes Indentures and the
Supplemental Indentures and costs and expenses related to filings required to be
made with the National Association of Securities Dealers, Inc. (which fees and
expenses will be paid directly to such counsel promptly after delivery of any
interim invoices and on the Settlement Date, in the case of their final
invoice); (k) any fees and expenses payable in connection with the listing of
the New Notes on the New York Stock Exchange and Luxembourg Stock Exchange; and
(l) pay all other fees and expenses reasonably incurred by you pursuant to the
terms of the Engagement Letter.
All payments to be made pursuant to this Section 6 shall be made promptly
after the expiration or termination of the Offers (or when required pursuant to
Section 4 or Section 6(j)). The Company shall perform its obligations as set
forth in this Section 6 and in Section 5 whether or not the Company or any of
its subsidiaries or affiliates acquires any Existing Notes pursuant to the
Exchange Offers and Cash Tender Offers or receives any Consents pursuant to the
Solicitations.
7. Securities Lists; Depositary; Information and Exchange Agent. (a) The
Company will use its best efforts to provide you or cause the trustees under the
Existing Notes Indentures and The Depository Trust Company ("DTC") to provide
you with copies of the records or other lists showing the names and addresses
of, and principal amounts of Existing Notes held by, the holders of Existing
Notes as of a recent date and shall, from and after such date, use its best
efforts to cause you to be advised from day to day during the pendency of the
Offers, such notification consisting of the name and address of the transferor
and transferee of any Existing Notes and the date of such transfer.
(b) The Company has appointed and authorizes you to communicate with DTC in
its capacity as depositary (the "Depositary") in connection with the Offers. The
Company will instruct the Depositary to advise you at least daily as to such
matters relating to the Offers as you may reasonably request and to furnish you
with any written reports concerning any such information as you may reasonably
request.
(c) The Company has arranged for ▇. ▇. ▇▇▇▇ & Co., Inc. to serve as
information (the "Information Agent") in connection with the Offers and, as
such, to advise you as to such matters relating to the Offers as you may
reasonably request and to furnish you with any written reports concerning any
such information as you may reasonably request.
(d) The Company has arranged for The Bank of New York to serve as exchange
agent (the "Exchange Agent") in connection with the Offers and, as such, to
advise you as to such matters relating to the Offers as you may reasonably
request and to furnish you with any written reports concerning any such
information as you may reasonably request.
8. Representations and Warranties. The Company represents and warrants to
you, on each of the Commencement Date, the Expiration Date, the Settlement Date
and on the date of any post-effective amendment to the Registration Statement
(each, an "Amendment Date") as follows:
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(a) Incorporation and Registration of the Company and its Subsidiary.
Servicios ▇▇▇▇▇▇▇, ▇.▇. de C.V. is the only subsidiary of the Company. Each of
the Company and its subsidiary has been duly incorporated and is validly
existing as a sociedad de responsabilidad limitada de capital variable in the
case of the Company and as a sociedad anonima de capital variable in the case of
its subsidiary, each organized under the laws of the United Mexican States, and
has corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement and
pursuant to the Offers. Each of the Company and its subsidiary is duly qualified
as a foreign corporation to transact business and in each jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify would not, individually or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or in the
earnings, business, operations or prospects of the Company and its subsidiary,
considered as one entity (a "Material Adverse Effect"). Except as described in
the Prospectus, all of the issued and outstanding capital stock of the
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim.
(b) Non-Contravention of Existing Instruments. Neither the Company nor its
subsidiary is (i) in violation of its charter (escritura constitutiva) or
by-laws (estatutos sociales) or (ii) in default (or, with the giving of notice
or lapse of time, would be in default) ("Default") under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument (including the New Notes Indentures) to which the Company or its
subsidiary is a party or by which any of them may be bound, or to which any of
the property or assets of the Company or its subsidiary is subject (each an
"Existing Instrument") except for (i) the currently pending Defaults as
described in the Prospectus with respect to the Existing Notes and (ii) such
other Defaults as would not, individually or in the aggregate, have a Material
Adverse Effect.
(c) Corporate Actions. The Offers, the execution, delivery and performance
of the New Notes Indentures, the Supplemental Indentures and this Agreement and
all other actions by the Company contemplated in the Offer Material and this
Agreement, have been duly and validly authorized by all necessary corporate
action by the Company, and no other corporate proceedings by the Company are
necessary to authorize any such actions.
(d) Authorization of this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by the Company and is a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except (1) as the enforceability thereof may be
limited by bankruptcy, insolvency reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally and (2) as the
enforceability thereof is subject to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
(e) The Offering Material; No Material Misstatements. A complete and
correct copy of the Offer Material has been furnished to you or will be
furnished to you no later than the Commencement Date. The Offer Material, as
amended and supplemented from time to time, will comply with the provisions of
the Securities Act of 1933, as amended (the "Securities Act"),
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and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations promulgated by the Commission thereunder and with all
applicable requirements of the laws of those jurisdictions in which
solicitations of exchanges or tenders pursuant to the Offers are or will be
made. The Registration Statement, when it became effective did not contain, and
none of the Offer Material (including the Registration Statement), contains, or
at any time during the period from the Commencement Date up to and including the
Settlement Date (such period, the "Offer Period") will contain, any untrue
statement of a material fact or omits, or at any time during the Offer Period
will omit, to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of the circumstances
under which they are made, not misleading. There is no material fact or
information concerning the Company or its subsidiary, or the operations, assets,
condition, financial or otherwise, or prospects of the Company or its
subsidiary, that has not been disclosed in the Offer Material.
(f) Non-Contravention of Existing Instruments in Connection with Offers; No
Further Authorization or Approvals Required in Connection with the Offers. The
Offers, the exchange of Existing Notes pursuant to the Exchange Offers, the
payment of amounts with respect to the tendered Existing Notes pursuant to the
Cash Tender Offers and the Solicitations, the execution, delivery and
performance of the New Notes Indentures and the Supplemental Indentures with
respect to the Existing Notes and all other actions by the Company contemplated
in the Offer Material, and the execution, delivery and performance of, and the
consummation by the Company of the transactions contemplated in this Agreement,
(i) do not and will not conflict with or violate the charter (escritura
constitutiva), by-laws or other organizational documents of the Company or its
subsidiary, (ii) do not conflict with or violate any law, regulation, order,
judgment or decree applicable to the Company or its subsidiary or by which any
property or asset of the Company or its subsidiary is bound, (iii) do not
conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation of or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or its subsidiary pursuant to, or require the consents of any other
party to, any Existing Instrument, and (iv) comply with all applicable
requirements of the Securities Act, the Exchange Act, the Trust Indenture Act of
1939, as amended (the "TIA"), applicable state securities or "blue sky" laws,
and other applicable laws, and all applicable regulations of the Commission or
any Other Agency (as defined below) (including, but not limited to, Sections 10
and 14 of the Exchange Act and Rules 10b-5, 14a-9, 14e-1, 14e-2 and 14e-3
thereunder). As used herein, a "Debt Repayment Triggering Event" means any event
or condition which gives, or with the giving of notice or lapse of time would
give, the holder of any note, debenture or other evidence of indebtedness in
excess of $25,000 (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or its subsidiary. The commencement and consummation
by the Company of the Offers and the other transactions by the Company
contemplated in the Offer Material (including but not limited to the obligations
of the Company to effect payments of principal of, and premium, interest and
Additional Amounts (as defined in the New Notes Indentures) on the New Notes in
United States dollars free of any liability on the part of any holder thereof),
and this Agreement do not and will not require any consent, authorization,
approval, order, exemption or other action of, or filing with or notification
to, the Commission or any other federal or other governmental agency, authority
or instrumentality (each an "Other Agency"), including, but not limited to, any
filing of the Indentures and the Supplemental Indentures under the TIA other
than
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(i) the registration of the New Notes in the Seccion Especial (the "Special
Section") of the Registro Nacional de Valores (the "National Registry of
Securities") maintained by the Comision Nacional Bancaria y de Valores (the
"CNBV"), which registration, in the case of the New Notes, has been applied for
and will become effective on or before the Settlement Date, (ii) the filing of
certain information as required by the CNBV which required filing or filings
will not affect the effectiveness of the registration of the New Notes or (iii)
any such consent, authorization, approval, order, exemption, registration,
qualification or other action or filing or notification as have already been
obtained or made and is in full force and effect.
(g) Investment Company. The Company is not, nor will be as a result of the
consummation of the Offers, an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations
promulgated by the Commission thereunder, or controlled by an entity required to
be registered under the 1940 Act as an "investment company."
(h) Documents Incorporated by Reference. Any document filed with the
Commission and incorporated by reference in the Offer Material or from which
information is so incorporated by reference, subsequent to the date of this
Agreement and prior to or on the Settlement Date (as defined in the Prospectus),
when so filed or becoming effective, as the case may be, shall comply with the
requirements of the Securities Act and the Exchange Act, as applicable, and the
rules and regulations thereunder.
(i) Auditors. PricewaterhouseCoopers (the "Company Auditors"), the
accountants who have certified or shall certify the financial statements of the
Company included, to be included or incorporated by reference in the Prospectus
are independent public or certified public accountants within the meaning of
Regulation S-X under the Securities Act and the Exchange Act.
(j) Financial Statements. The financial statements of the Company and its
subsidiary and the related notes and schedules included or incorporated by
reference in the Prospectus fairly present and will fairly present the
consolidated financial condition of the Company and its subsidiary on a
consolidated basis as of the dates indicated, and the results of operations and
changes in financial position of the Company and its subsidiary on a
consolidated basis for the periods therein specified, in each case, in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise expressly stated therein).
Such financial statements have been prepared in conformity with generally
accepted accounting principles as in effect in Mexico ("Mexican GAAP"), applied
on a consistent basis throughout the periods involved. The reconciliations of
certain of such statements to generally accepted accounting principles in the
United States ("U.S. GAAP") have been prepared in accordance with U.S. GAAP
consistently applied. The financial data set forth in the Prospectus under the
captions "Summary -- Summary Consolidated Financial Data" fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Prospectus.
(k) Accounting Controls. The Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as
9
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as in effect in Mexico and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(l) Capitalization and Other Capital Stock Matters. As of September 30,
2002, or any subsequent date as of which the capitalization is expressed in any
amendments of the Prospectus, on a consolidated basis, after giving pro forma
effect to the consummation of the Offers, the Company would have an authorized
and outstanding capitalization as set forth in the Prospectus under the caption
"Capitalization". All of the outstanding equity interests of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
have been issued in compliance with all applicable securities laws. None of the
outstanding equity interests were issued in violation of any preemptive rights,
rights of first refusal or other rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any equity interests of the Company or any of its subsidiaries other than those
accurately described in the Prospectus.
(m) Insurance. The Company and its subsidiary, taken as a whole, have not
sustained, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, or
otherwise, other than as described in the Prospectus.
(n) No Material Adverse Change. Since the respective dates as of which
information is given in the Prospectus and as of the date hereof, there has not
been any decrease in the capital stock or any material increase in the debt of
the Company or its subsidiary or any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects of the Company
and its subsidiary, taken as a whole, other than as set forth in the Prospectus.
(o) Effectiveness; No Stop Orders. The Registration Statement has become
effective; no stop order, restraining order, injunction or denial of an
application for approval has been issued, and no proceedings, litigation or
investigations have been initiated or threatened, by or before the Commission or
any Other Agency (including any court) of the United States, the State of New
York or Mexico with respect to the commencement or consummation of either the
Offers or the execution, delivery or performance of this Agreement.
(p) No Material Actions or Proceedings. Except as otherwise disclosed in
the Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the Company's knowledge, threatened against or affecting the
Company, its subsidiary or any property owned or leased by the Company or its
subsidiary which, if determined adversely, could reasonably be expected to have
a Material Adverse Effect or adversely affect the consummation of any of the
transactions contemplated by this Agreement or the Offer Material.
10
(q) Supplemental Indentures. Each of the Supplemental Indentures has been
duly qualified under the TIA and has been duly and validly authorized by the
Company and may be entered into upon the consent of holders of a majority of the
outstanding principal amount of such Existing Notes as of the record date for
the Solicitations (the "Requisite Consents"), pursuant to the provisions of the
Existing Notes Indentures. Upon such execution and delivery thereof, and on the
Settlement Date, such Supplemental Indentures will have been duly and validly
authorized, executed and delivered by the Company and will be legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except (1) as the enforceability thereof
may be limited by bankruptcy, insolvency reorganization, moratorium, or similar
laws relating to or affecting creditors' rights generally and (2) as the
enforceability thereof is subject to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
(r) New Notes Indentures. Each of the New Notes Indentures has been duly
qualified under the TIA and has been duly and validly authorized by the Company
and, at the Settlement Date, will have been duly executed and delivered by the
Company and will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except (1) as the
enforceability thereof may be limited by bankruptcy, insolvency reorganization,
moratorium, or similar laws relating to or affecting creditors' rights generally
and (2) as the enforceability thereof is subject to the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
(s) New Notes. The New Notes to be exchanged for Existing Notes pursuant to
the Exchange Offers are in the form contemplated by the relevant New Notes
Indenture, have been duly authorized for issuance and exchange pursuant to the
Offer Material and the relevant New Notes Indenture and, at the Settlement Date,
will have been duly executed by the Company and when authenticated in the manner
provided for in the relevant New Notes Indenture and delivered, will constitute
valid and binding agreements of the Company, enforceable in accordance with
their terms, except (1) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or affecting creditors' rights generally and (2) as the enforceability thereof
is subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
(t) Description of the New Notes and the New Notes Indentures. The New
Notes and the New Notes Indentures will conform in all material respects to the
respective descriptions thereof contained in the Offer Material.
(u) Description of Proposed Amendments. The Proposed Amendments set forth
in the Supplemental Indentures when executed and delivered will conform in all
material respects to the description thereof in the Offer Material.
(v) Taxes. The Company and its subsidiary have filed all necessary income,
franchise value added and other tax returns and have paid all taxes required to
be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them. The Company has made
adequate charges, accruals and reserves in the applicable
11
financial statements of the Prospectus in respect of all income and franchise
taxes for all periods as to which the tax liability of the Company or its
subsidiary has not been finally determined.
(w) Sufficient Funds. The Company has, or has arranged for the borrowing
of, sufficient funds (and authority to use such funds under applicable law),
which, together with funds presently available or committed to it, will enable
the Company to pay, and the Company hereby agrees that the Company will pay
promptly, in accordance with the terms and subject to the conditions of the
Offers as set forth in the Offer Materials and this Agreement, (i) the full
purchase price (and related costs) of the Existing Notes pursuant to the Offers,
(ii) the consent fee relating to the Solicitation and (iii) all related fees and
expenses, including, but not limited to, fees and expenses payable hereunder.
(x) Intellectual Property. The Company and its subsidiary own, license,
have the right to use or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would have a Material Adverse Effect. Neither the
Company nor its subsidiary has received any notice of infringement or conflict
with asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would have a Material
Adverse Effect.
(y) Permits. Except as otherwise described in the Prospectus, the Company
and
its subsidiary possess such valid and current certificates, authorizations,
concessions or permits (including without limitation, the long distance, local
and wireless concessions) issued by the appropriate regulatory agencies or
bodies necessary to conduct their respective businesses, and neither the Company
nor its subsidiary has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such certificate,
authorization, concession or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could have a Material
Adverse Effect.
(z) Environmental Liabilities. Except as otherwise disclosed in the
Prospectus, the operations of the Company and its subsidiary are in compliance
with all environmental laws, rules, regulations and orders of Mexico and the
United States, except for any noncompliance which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(aa) Stamp Taxes. There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid in connection with
the execution and delivery or performance of this Agreement or the consummation
of the Offers as contemplated by the Offer Material.
(bb) No Immunity. Neither the Company nor its subsidiary nor any of their
properties or assets has any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise).
12
(cc) Labor and Employment Matters. No labor problem or dispute with the
employees of the Company or its subsidiary exists or, to the best of the
Company's knowledge, is threatened or imminent, except as described in the
Prospectus (exclusive of any amendment or supplement thereto) and except where
such labor problems, disputes or disturbances would not individually or in the
aggregate have a Material Adverse Effect on the Company and its subsidiary,
taken as a whole.
(dd) Title to Properties. The Company and its subsidiary have good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in clause (j) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except (i) as described
in the Prospectus, (ii) such as do not materially and adversely affect the value
of such property and do not materially interfere with the use made or proposed
or be made of such property by the Company or its subsidiary. The real property,
improvements, equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal
property by the Company or its subsidiary.
(ee) Withholding Tax. Payments by the Company in respect of the Offers, the
New Notes Indentures and this Agreement will be made subject to withholding or
deduction for or on account of any present taxes, duties, compulsory loans,
assessments or other governmental charges of whatever nature imposed or levied
by or on behalf of Mexico or any political subdivision or authority thereof or
therein having power to tax only as described in the Prospectus.
(ff) No Required Filing. To ensure the legality, validity, enforceability
or admissibility into evidence of the Supplemental Indentures, the New Notes,
the New Notes Indentures and this Agreement in Mexico, it is not necessary that
any such document be submitted to, filed or recorded with any court or other
authority in Mexico or that any tax, imposition or charge be paid in Mexico on
or in respect of any such document provided, however, that in the event that any
legal proceeding is brought before a court in Mexico, the party initiating such
proceeding must submit to such court a Spanish translation of any document
referred to in any pleading involved in such proceeding and such transaction is
to be prepared by a court-approved translator and approved by the court after
giving the defendant the opportunity to contest the accuracy of the translation
(gg) No Required Obligation. It is not necessary under the laws of Mexico
that any of the holders of the New Notes be licensed, qualified or entitled to
carry on business in Mexico solely by reason of the execution, delivery,
performance or enforcement of the Supplemental Indentures, the New Notes, the
New Notes Indentures or this Agreement.
(hh) Qualification Conditions. As of the Expiration Date and Settlement
Date only, either (i) the New Notes have been duly authorized for listing,
subject only to notice of issuance, on the New York Stock Exchange or other
Nationally Recognized Securities Exchange or (ii) the Company has obtained final
and unconditional "blue sky" clearance to consummate
13
the Offers to all existing noteholders in each of the ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, the District of Columbia and Guam.
Any certificate signed by any officer of the Company and delivered to the
Dealer Manager or counsel for the Dealer Manager in connection with the Exchange
Offer shall be deemed a representation and warranty by the Company as to matters
covered thereby to the Dealer Manager.
9. Opinions of Counsel; Officers Certificates; Comfort Letters. On the
Commencement Date, and the Settlement Date, the Company will deliver to you (a)
opinions of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, S.C., U.S. counsel and Mexican counsel to the Company, respectively,
in the form set forth in Exhibits C-1 and C-2 attached hereto. You shall also
have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Angoitia ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ S.C. on the Commencement Date and the Settlement Date, such opinions
addressed to you with respect to matters as you may reasonably require, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass on such matters;
(b) Certificates, dated the Commencement Date and the Settlement Date,
signed by (i) an authorized officer duly appointed by the Board of Directors of
the Company and (ii) the principal financial or accounting officer of the
Company, confirming as of the Commencement Date, any Amendment Date and the
Settlement Date, as applicable, that (A) all of the representations and
warranties of the Company, as the case may be, contained in this Agreement are
true and correct with the same force and effect as if made on and as of such
date, (B) the Company has complied with all of the agreements contained in this
Agreement and required to be performed or complied with by it at or prior to
such date pursuant to the provisions of this Agreement, and the Offer Material,
and (C) since the date of the most recent financial statements included in the
Prospectus (exclusive of any amendment or supplement thereto), there has been no
change, or any development that is reasonably likely to result in a prospective
change, that has had or could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, business or
prospects of the Company or its subsidiaries, taken as a whole, except as
accurately described in the Prospectus (exclusive of any amendment or supplement
thereto); and
(c) (i) a comfort letter addressed to you and dated the Commencement Date
in the form attached hereto as Exhibit D and (ii) a bring-down comfort letter
dated the Settlement Date or any Amendment Date, from the Company Auditors in
form and substance satisfactory to the Dealer Manager.
10. Covenants. The Company covenants and agrees:
(a) to advise you promptly of (i) the occurrence of any event that could
cause the Company to withdraw or terminate the Offers or would permit the
Company to exercise any right not to exchange or purchase the Existing Notes
tendered pursuant to the Offers and Solicitations, (ii) any proposal or
requirement to amend or supplement any Offer Material; (iii) the issuance of any
stop order, restraining order, injunction or denial of an application for
approval or any other action by the Commission or any Other Agency concerning
the Offers
14
(and, if in writing, to furnish you a copy thereof) and (iv) after it receives
notice thereof (until consummation of the Offers) of any litigation or
administrative action with respect to the Offers;
(b) to provide to you promptly any other information relating to the Offers
that you may from time to time reasonably request, and to advise you promptly if
any information previously provided becomes inaccurate in any material respect
or is required to be updated;
(c) that, (i) if any event occurs or condition exists as a result of which
the Offer Material would at any time include an untrue statement of a material
fact, or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances when the Offer Material is delivered
to a holder of Existing Notes, not misleading, or (ii) if, in the reasonable
opinion of the Dealer Manager or the Company, it is necessary at any time to
amend or supplement the Offer Material to comply with applicable law, the
Company shall, in the case of clause (i) above, promptly notify the Dealer
Manager, in the case of clauses (i) and (ii) above, prepare an amendment or
supplement to the Offer Material that will correct such statement or omission or
effect such compliance, and supply such amended or supplemented Offer Material
to the Dealer Manager;
(d) to pay promptly (i) the full cash payment, as specified in the
Prospectus for the Existing Notes for which the Company makes the Cash Tender
Offers, and (ii) the full cash payment for Consents for which it will be
required to pay pursuant to the Solicitations, in each case in accordance with
the terms and conditions set forth in the Offer Material;
(e) unless otherwise specified, to pay by wire transfer on the Settlement
Date all fees and expenses of the Dealer Manager pursuant to Sections 5 and 6 of
this Agreement including, but not limited to, all fees and expenses of counsel
to the Dealer Manager;
(f) to cooperate with the Dealer Manager and use its best efforts to permit
the New Notes to be eligible for clearance and settlement through DTC;
(g) not take, directly or indirectly, any action that is designed to cause
or result, or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the New Notes or the tender of
Existing Notes in the Exchange Offer;
(h) to deliver to the Dealer Manager and its counsel such further
information, certificates and documents as they may reasonably request related
to the Offers or otherwise related to the matters contemplated hereby;
(i) upon the receipt of the Requisite Consents, the Company will execute
and deliver the Supplemental Indentures;
(j) to make arrangements, on or prior to the Commencement Date, to the
extent applicable, with The Bank of New York or any other "qualified" securities
depository to allow for the book-entry movement of the tendered Existing Notes
between depository participants and the Depositary;
15
(k) to use its best efforts to have the New Notes approved for listing on
the Luxembourg Stock Exchange, on or prior to the Settlement Date;
(l) to use its best efforts to obtain (i) listing approval for the New
Notes, subject only to notice of issuance, from the New York Stock Exchange or
other Nationally Recognized Securities Exchange and/or (ii) final and
unconditional "blue sky" clearance to consummate the Offers to all existing
noteholders in each of the ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, the District of
Columbia and Guam, in each case, on or prior to the Settlement Date;
(m) not to consummate the Offers absent either (i) the unconditional
listing of the New Notes on the New York Stock Exchange or other "nationally
recognized securities exchange" as such term is defined in Section 18 of the
Securities Act of 1933, as amended and Rule 146 promulgated thereunder, and/or
(ii) final and unconditional "blue sky" clearance to consummate the Offers to
all existing noteholders in each of the ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, the
District of Columbia and Guam;
(n) to use its best efforts to have the form of Global Notes (as defined in
the New Notes Indenture) approved by DTC on or prior to the Settlement Date;
(o) to use its best efforts to have each of (i) DTC, (ii) Euroclear Bank
S.A./N.V., as operator of the Euroclear System and (iii) Clearstream Luxembourg
indicate the eligibility of the New Notes for deposit on or prior to the
Settlement Date; and
(p) to prepare and, if required, file with the Commission or Other Agency,
any and all necessary amendments or supplements to the Offer Material and will
promptly furnish to you as many complete and correct copies as you may
reasonably request of each such amendment and supplement.
11. Indemnification and Contribution; Settlement of Litigation; Release.
(a) The Company hereby agrees to indemnify, defend and hold harmless you and
your affiliates and your and their respective officers, directors, employees and
agents, and each other person, if any, controlling you or any of your affiliates
(you and each such affiliate, officer, director, employee, agent and other
person being an "Indemnified Person"), from and against any losses, claims,
damages, liabilities and expenses whatsoever (each a "Loss" and collectively the
"Losses"), and will reimburse each Indemnified Person for all expenses
(including fees and expenses of counsel) as they are incurred in connection with
investigating, preparing, pursuing or defending any Loss, action, claim, suit,
investigation or proceeding (whether or not pending or threatened and whether or
not any Indemnified Person is a party), in each case related to, arising out of
or in connection with (i) any untrue statement or alleged untrue statement of a
material fact in the Offer Material or any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, (ii)
the exchange and tender of Existing Notes pursuant to the Exchange Offers and
Cash Tender Offers and the payment for Consents pursuant to the Solicitations,
(iii) the execution, delivery and performance of the New Notes Indentures and
the Supplemental Indentures, (iv) any breach by the Company of any
representation or warranty or failure to comply with any of the agreements
contained herein, (v) any advice or services rendered or to be rendered by an
Indemnified Person pursuant to or in connection with this Agreement, (vi) any
16
withdrawal or termination by the Company of, or failure by the Company to
commence or consummate, the Offers or (vii) any other action or failure to act
in connection with the Offers by the Company or its directors, officers, agents
or employees or any Indemnified Person at the request or with the consent of the
Company. The Company shall not, however, be required so to indemnify any
Indemnified Person for any Losses (or expenses relating thereto) to the extent
that such Losses (or expenses relating thereto) are finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of such Indemnified Person. The Company also acknowledges and agrees
that no Indemnified Person shall have any liability (whether direct or indirect,
in contract, tort or otherwise) to the Company or any other person for any act
or omission on the part of any broker or dealer in securities or any commercial
bank, trust company or other nominee and that no Indemnified Person shall have
any liability (whether direct or indirect, in contract, tort or otherwise) to
the Company or any other person for any losses, claims, damages, liabilities or
expenses arising from or in connection with any act or omission in performing
your obligations hereunder or otherwise in connection with the Offers, the
exchange or tender of Notes pursuant to the Exchange Offers and the Cash Tender
Offers and the payment for Consents pursuant to the Solicitations, the
execution, delivery and performance of the New Notes Indentures and the
Supplemental New Notes Indentures or any other action contemplated in the Offer
Material with respect to the Offers, except to the extent that any such losses,
claims, damages, liabilities or expenses are finally judicially determined to
have resulted solely from the gross negligence or willful misconduct of such
Indemnified Person.
(b) If a claim is made against any Indemnified Person as to which such
Indemnified Person may seek indemnity under this Section 11, such Indemnified
Person shall notify the Company promptly after any written assertion of such
claim threatening to institute an action or proceeding with respect thereto and
shall notify the Company promptly of any action commenced against such
Indemnified Person promptly after such Indemnified Person shall have been served
with a summons or other first legal process giving information as to the nature
and basis of the claim. Failure so to notify the Company shall not, however,
relieve the Company from any liability which it may have on account of the
indemnity under this Section 11 if it has not been prejudiced in any material
respect by such failure. The Company, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Company may designate in
such proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Company and the Indemnified Person shall have mutually agreed in writing to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the Indemnified
Person and representation of either party by the same counsel, in the reasonable
judgment of counsel to the Dealer Manager, would be inappropriate because of
actual or potential conflicting interests between them. It is understood that
the Company shall not, in connection with any litigation or proceeding or
related litigation or proceeding in the same jurisdiction, be liable under
clause (ii) of the preceding sentence for the reasonable fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons that do not have actual or potential conflicting interests
as among themselves, and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Dealer
Manager.
17
(c) The Company shall not, without your prior written consent, settle,
compromise, consent to the entry of any judgment in or otherwise seek to
terminate any action, claim, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party thereto) unless such settlement, compromise,
consent or termination (i) includes an unconditional release of each Indemnified
Person from any liabilities arising out of such action, claim, suit or
proceeding and (ii) does not include a statement as to, or an admission of
fault, culpability or a failure to act by or on behalf of, an Indemnified
Person. No Indemnified Person seeking indemnification, reimbursement or
contribution under this Agreement will, without the prior written consent of the
Company, settle, compromise, consent to the entry of any judgment in or
otherwise seek to terminate any action, claim, suit, investigation or proceeding
referred to in the preceding paragraph.
(d) If the indemnification provided for in the foregoing paragraphs of this
Section 11 is judicially determined to be unavailable (other than in accordance
with the terms hereof) to an Indemnified Person or insufficient in respect of
any Losses referred to therein, then, in lieu of indemnifying such Indemnified
Person hereunder, the Company shall contribute to the amount paid or payable by
such Indemnified Person as a result of such Losses (and expenses relating
thereto) (i) in such proportion as is appropriate to reflect the relative
benefits to the Company, on the one hand, and to the Dealer Manager, on the
other hand, of the Offers or (ii) if the allocation provided by the preceding
clause (i) is not available, in such proportion as is appropriate to reflect not
only the relative benefits referred to in such clause (i) but also the relative
fault of the Company, on the one hand, and of the Dealer Manager, on the other
hand, in connection with any matter that has resulted in such Losses, as well as
any other relevant equitable considerations; provided, however, in no event
shall the Dealer Manager's aggregate portion of the amount paid or payable
exceed the aggregate amount of fees actually received by the Dealer Manager
under this Agreement. For the purposes of this Section 11, the relative benefits
to the Company, on the one hand, and to the Dealer Manager, on the other hand,
of the Offers shall be deemed to be in the same proportion as the aggregate
principal amount of the Existing Notes in respect of which the Offers are made,
whether or not the Offers are consummated, bears to the aggregate fees paid or
to be paid to the Dealer Manager under this Agreement. The relative fault of the
Company, on the one hand, and of the Dealer Manager, on the other hand, (x) in
the case of any untrue statement of a material fact or omission or alleged
omission to state a material fact, shall be determined by reference to, among
other things, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and (y) in the case
of any other action or omission, shall be determined by reference to, among
other things, whether such action or omission was taken or omitted to be taken
by the Company or its affiliates or by the Dealer Manager, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action or omission.
(e) The Company and the Dealer Manager agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an Indemnified Person as a result of the Losses referred to
in this Section 11 shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Agreement, no person guilty of fraudulent
misrepresentation (within the
18
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The remedies provided for in this Agreement are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
Indemnified Person at law or in equity.
(g) The reimbursement, indemnity and contribution obligations of the
Company provided for in this Agreement shall be in addition to any liability
which the Company may otherwise have and shall be binding upon and shall enure
to the benefit of any successors, assigns, heirs and personal representatives of
the Company and the Dealer Manager and any other Indemnified Persons.
(h) The Company acknowledges that no information has been furnished by or
on behalf of the Dealer Manager for inclusion in the Offer Material (or in any
amendment or supplement thereto).
12. Confidentiality. Any advice or opinions provided by you will not be
disclosed or referred to publicly to any third party (other than to attorneys
and accountants of the Company who agree to keep such advice or opinions
confidential) except in accordance with your prior written consent or as may be
required by applicable laws. The Company agrees that any reference to you in the
Offer Material, or in any other release or communication relating to the Offers,
is subject to your prior written approval.
13. Trading Activities. The Company acknowledges that you are a full
service securities firm engaged in securities trading and brokerage activities,
as well as providing investment banking and financial advisory services. In the
ordinary course of your trading and brokerage activities, any of you or your
affiliates may at any time hold long or short positions, and may trade or
otherwise effect transactions, for your or its own account or the accounts of
customers, in debt or equity securities of the Company or any other company that
may be involved in the Offers.
14. Termination. This Agreement may be terminated upon the earlier of (a)
the expiration, withdrawal or termination of the Offers, (b) the date of the
Dealer Manager's withdrawal pursuant to Section 4 of this Agreement or (c) the
time and date at which this Agreement is terminated by the mutual consent of the
parties hereto. Notwithstanding the termination of the Agreement pursuant to
this Section 14, the right to compensation and reimbursement pursuant to the
provisions of Sections 4, 5 and 6 of this Agreement, accrued prior to the date
of such termination, and the indemnity and the other provisions set forth in
Sections 11, 12, 20, 21 and 27 hereof will remain operative and in full force
and effect regardless of (i) any failure to commence, or the withdrawal,
termination, expiration or consummation of, the Offers or the termination or
assignment of this Agreement, (ii) any investigation made by or on behalf of any
Indemnified Person, (iii) any withdrawal by you pursuant to Section 4 or
otherwise and (iv) the completion of your services hereunder.
15. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other provisions of
19
this Agreement shall nevertheless remain in full force and effect so long as the
economic and legal substance of the agreements contained herein is not affected
in any manner adverse to any party.
16. Counterparts. This Agreement may be executed in one or more separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Binding Effect. This Agreement, including any right to indemnity or
contribution hereunder, shall enure to the benefit of and be binding upon the
Company, you and the other Indemnified Persons, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that State.
19. Consent to Jurisdiction. The Company agrees that any suit, action or
proceeding against the Company brought by the Dealer Manager, its directors,
officers, employees and agents, or by any person who controls a Dealer Manager,
arising out of or based upon this Agreement or any of the transactions
contemplated hereby or in the Offer Material may be instituted in any federal or
state court in The City of New York, New York, and waives any objection which it
may now or hereafter have to the laying of venue of any such proceeding, and
irrevocably submits to the non-exclusive jurisdiction of such courts in any
suit, action or proceeding. The Company has appointed CT Corporation System as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated herein which may be instituted in any federal or
state court in The City of New York, New York, by the Dealer Manager, the
directors, officers, employees and agents of the Dealer Manager, or by any
person who controls the Dealer Manager, and expressly accepts the non-exclusive
jurisdiction of any such court in respect of any such suit, action or
proceeding. The Company hereby represents and warrants that the Authorized Agent
has accepted such appointment and has agreed to act as said agent for service of
process, and the Company agrees to take any and all action, including the filing
of any and all documents that may be necessary to continue such appointment in
full force and effect as aforesaid. Service of process upon the Authorized Agent
shall be deemed, in every respect, effective service of process upon the
Company. Notwithstanding the foregoing, any action arising out of or based upon
this Agreement may be instituted by the Dealer Manager, the directors, officers,
employees and agents of the Dealer Manager, or by any person who controls the
Dealer Manager, in any court of competent jurisdiction in Mexico.
20. Currency. Each reference in this Agreement to U.S. dollars (the
"relevant currency") is of the essence. To the fullest extent permitted by law,
the obligation of the Company in respect of any amount due under this Agreement
will, notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the party entitled to receive such payment may, in
accordance with its normal procedures, purchase with the sum paid in such other
currency
20
(after any premium and costs of exchange) on any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York
immediately following the day on which such party receives such payment. If the
amount in the relevant currency that may be so purchased for any reason falls
short of the amount originally due, the Company will pay such additional
amounts, in the relevant currency, as may be necessary to compensate for the
shortfall. Any obligation of the Company not discharged by such payment will, to
the fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, will continue
in full force and effect.
21. Waiver of Immunity. To the extent that the Company has or hereafter may
acquire any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from set-off or any legal process
(whether service or notice, attachment in aid or otherwise) with respect to
itself or any of its property, the Company hereby irrevocably waives to the
fullest extent permitted by applicable law and agrees not to plead or claim such
immunity in respect of its obligations under this Agreement.
22. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings both written and oral, among
the parties, or any of them, with respect to the subject matter hereof. This
Agreement may not be amended except in writing signed by each party to be bound
thereby.
23. Taxes. The Company agrees that all amounts payable or reimbursable
pursuant to this Agreement shall be paid in New York City in U.S. dollars and
free and clear of, and without any deduction or withholding for on account of,
any current or future taxes, levies, imposts, duties, charges or other
deductions or withholdings levied by any jurisdiction from or through which
payment is made by on or on behalf of the Company, including without limitation,
the United Mexican States, unless such deduction or withholding is required by
applicable law, in which event the Company will pay additional amounts so that
the persons entitled to such payments will receive the amount that such persons
would otherwise have received but for such deduction or withholding.
24. Third Party Beneficiaries. Except as provided in Section 12 hereof,
this Agreement is solely for the benefit of the parties hereto and should not be
deemed to confer upon third parties any remedy, claim, liability, right of
reimbursement, claim of action or other right.
25. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy, as
follows:
(a) If to you:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Legal Department
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) If to the Company:
Alestra, S. de ▇. ▇. de C.V.
Avenida ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ No. 2321
Col. Residencial San ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇-▇▇) ▇▇▇▇-▇▇-▇▇
Attention: Chief Financial Officer
with a copy to: Legal Department
With a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery, on the day after
such delivery, (x) if by certified or registered mail, on the seventh business
day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, and (z) if by telecopy, on the next day following the day
on which such telecopy was sent, provided that a copy is also sent by certified
or registered mail.
26. Subheadings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
27. WAIVER OF JURY TRIAL. YOU, ON THE ONE HAND, AND THE COMPANY, ON THE
OTHER HAND, WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT OR
PROCEEDING WITH RESPECT TO YOUR ENGAGEMENT AS DEALER MANAGER OR YOUR ROLE IN
CONNECTION HEREWITH OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
22
[Rest of Page Intentionally Left Blank]
23
Please indicate your willingness to act as Dealer Manager on the terms set
forth herein and your acceptance of the foregoing provisions by signing in the
space provided below for that purpose and returning to us a copy of this
Agreement, whereupon this Agreement and your acceptance shall constitute a
binding agreement between us.
Very truly yours,
ALESTRA, S. DE ▇.▇. DE C.V.
By:
----------------------
Name:
Title:
Accepted and agreed as of
the date first above written:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
----------------------------
Name:
Title:
24
Exhibit A
Prospectus
▇-▇
▇▇▇▇▇▇▇ ▇-▇
Exchange Offers Letter of Transmittal
B-1
Exhibit B-2
Cash Tender Offers Letter of Transmittal
B-2
Exhibit C-1
Form of Opinion of U.S. Counsel
-------------------------------
(a) The Agreement has been duly and validly executed and delivered by the
Company enforceable against the Company in accordance with its terms except (1)
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer, or similar laws
relating to or affecting creditors' rights generally; (2) as the enforceability
thereof is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy, (ii) concepts of materiality,
reasonableness, good faith and fair dealing, and (iii) possible judicial action
giving effect to foreign governmental actions or foreign law; (3) that the
enforceability of provisions exculpating or exempting a party from its own
actions or inaction, to the extent the action or inaction involves gross
negligence or willful misconduct, may be limited by the discretion of the court
before which any proceeding may be brought; (4) that such counsel expresses no
opinion relating to any waiver of objection to venue contained therein and (5)
as rights to indemnity and contribution may be limited by applicable laws or
principles of public policy./1/
(b) The New Notes Indentures and, assuming that consents to the Proposed
Amendments have been validly received from holders of a majority in aggregate
principal amount of each series of Existing Notes (other than affiliates of the
Company), the Supplemental Indentures have been duly and validly executed and
delivered by the Company and constitute valid and binding agreements of the
Company, enforceable against the Company in accordance with their terms, except
(1) as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer, or similar laws
relating to or affecting creditors' rights generally; (2) as the enforceability
thereof is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy, (ii) concepts of materiality,
reasonableness, good faith and fair dealing, and (iii) possible judicial action
giving effect to foreign governmental actions or foreign law; (3) that the
enforceability of provisions exculpating or exempting a party from its own
actions or inaction, to the extent the action or inaction involves gross
negligence or willful misconduct, may be limited by the discretion of the court
before which any proceeding may be brought; and (4) that such counsel expresses
no opinion relating to any waiver of objection to venue contained therein./2/
(c) The New Notes have been duly executed by the Company and, when
authenticated by the Trustees in accordance with the provisions of the relevant
New Notes Indenture and delivered in accordance with the terms of the
Prospectus, will be valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except (1) as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or similar laws relating to or affecting creditors'
rights
---------------------------
1 As of the Commencement Date only.
2 As of the Settlement Date only.
C-1-1
generally; and (2) as the enforceability thereof is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including (i) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy, (ii)
concepts of materiality, reasonableness, good faith and fair dealing; (iii)
possible judicial action giving effect to foreign governmental actions or
foreign law and (iv) that the enforceability of provisions exculpating or
exempting a party from its own action or inaction, to the extent such action or
inaction involves gross negligence or willful misconduct, may be limited by the
discretion of the court before which any proceeding therefor may be brought, and
will be entitled to the benefits of the relevant Indenture./3/
(d) The New Notes and the New Notes Indentures conform in all material
respects to the descriptions thereof contained in the Prospectus under the
caption "Description of the New Notes"./4/
(e) Each of the New Notes Indentures and the Supplemental Indentures has
been duly qualified under the TIA./5/
(f) The Supplemental Indentures conform in all material respects to the
descriptions thereof contained in the Prospectus under the caption "The Proposed
Amendments"./6/
(g) The Registration Statement and the Prospectus (except for the financial
statements and other financial information, as to which such counsel expresses
no opinion) comply as to form in all material respects with the Securities Act
and the rules and regulations promulgated by the Commission thereunder./7/
(h) The commencement and consummation by the Company of the Offers and the
other transactions by the Company contemplated in the Agreement will not (1)
require any consent, approval, authorization or other order of, or qualification
with, any U.S. federal or New York state court or governmental body or agency
(except as have been obtained under the Securities Act and the TIA, and as may
be required under the securities or Blue Sky laws of the various states), (2)
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, any indenture, mortgage, lease or other agreement or instrument
governed by the laws of the State of New York and listed on Schedule 1 attached
hereto to which the Company or its subsidiary is a party or by which the Company
or its subsidiary or their respective property is bound, or (3) violate or
conflict with any applicable U.S. federal or New York State law or any rule,
regulation, judgment, order or decree of any U.S. federal or New York state
court or
---------------------------
3 As of the Settlement Date only.
4 As of the Settlement Date only.
5 As of the Commencement Date only.
6 As of the Settlement Date only.
7 As of the Commencement Date and Settlement Date.
C-1-2
governmental body or agency having jurisdiction over the Company, its
subsidiary, or their respective property of which such counsel has knowledge./8/
(i) The Company is not, nor will be as a result of the consummation of the
Offers, an investment company required to be registered under the Investment
Company Act of 1940./9/
(j) The Registration Statement has become effective under the Securities
Act and, to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that purpose
has been instituted or is pending.
(k) The statements in the Prospectus under the heading "Certain U.S.
Federal Income Tax Considerations," insofar as such statements represent
statements of U.S. federal income tax law, fairly present and summarize in all
material respects, the matters referred to therein./10/
(l) Assuming (1) due authorization of the Agreement by the Company; (2) the
due authorization, execution and delivery of the Agreement by the Dealer
Manager; and (3) the validity of such action under Mexican law, the Company has
validly and irrevocably submitted to the personal jurisdiction of any United
States federal or New York State court located in the Borough of Manhattan, the
City of New York, in any action arising out of or relating to the Agreement, the
New Notes, the New Notes Indentures, the Existing Notes or the Supplemental
Indentures./11/
In addition, such counsel shall state that based upon such counsel's
participation in the preparation of the Registration Statement and the
Prospectus and such counsel's review and discussions of the contents thereof,
but without independent check or verification of the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as stated in paragraphs (d) and (k) above), such counsel has
no reason to believe that (except for the financial statements, related notes
and other financial information contained therein, as to which such counsel
expresses no belief) the Registration Statement and the Prospectus therein
included, at the time the Registration Statement became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or that (except
for the financial statements, related notes and other financial information
contained therein, as to which such counsel expresses no belief) the Prospectus,
as of its date and as of the date hereof, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading./12/
---------------------------
8 As of the Commencement Date and Settlement Date.
9 As of the Commencement Date and Settlement Date.
10 As of the Commencement Date and Settlement Date.
11 As of the Commencement Date and Settlement Date.
12 As of the Commencement Date and Settlement Date.
C-1-3
Exhibit C-2
Form of Opinion of Mexican Counsel
(a) Each of the Company and its subsidiary is a corporation duly organized,
validly existing under the laws of its jurisdiction of incorporation. Except as
otherwise described in the Prospectus, each of the Company and its subsidiary
has full power and authority (corporate or other) to own, lease and operate its
properties and conduct its business as presently conducted as described in the
Registration Statement and is duly registered as required by law in the Public
Registry of Commerce of Mexico City, Mexico.
(b) The Company has all necessary corporate power and authority to execute
and deliver the Agreement and to perform its obligations thereunder. The Company
has all necessary corporate power and authority to perform its obligations under
the Offers, to consummate the Offers in accordance with their terms, and to
execute and deliver the New Notes, the New Notes Indentures and the Supplemental
Indentures.
(c) The Offers, the execution, delivery and performance of the Agreement,
the New Notes, the New Notes Indentures and the Supplemental Indentures, and all
other actions by the Company contemplated in the Registration Statement and the
Agreement, have been duly and validly authorized by all necessary corporate
action by the Company, and no other corporate proceedings by the Company are
necessary to authorize any such actions.
(d) The authorized, issued and outstanding equity interests of the Company
conform in all material respects to the descriptions thereof set forth in the
Prospectus. All of the outstanding equity interests have been duly authorized
and validly issued and are fully paid and nonassessable. Except for one share
owned each by Onexa, S.A. de C.V. and AT&T Telecom Mexico Inc., all outstanding
shares of capital stock of the Company's subsidiary are directly owned by the
Company free and clear of any security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests, claims, liens or
encumbrances.
(e) No partner of the Company or any other person has any preemptive
rights, right of first refusal or other right to subscribe for or purchase
securities of the Company arising by operation of the escritura constitutiva
("charter") or estatutos sociales, as amended ("by-laws", and together with the
charter, the "by-laws") of the Company, except as provided for in the General
Corporations Law of Mexico and reflected in the by-laws of the Company.
(f) When (i) the Registration Statement has been declared effective, (ii)
the New Indentures and the Supplemental Indentures have been duly qualified
under the Trust Indenture Act of 1939, (iii) the New Notes and the New
Indentures have been duly executed by the Company, (iv) the New Notes have been
duly authenticated by the Trustee in accordance with the provisions of the New
Indentures and issued and delivered against exchange of the Existing Notes in
accordance with the terms set forth in the prospectus included as part of the
Registration Statement, (v) the consents to the Proposed Amendments have been
validly received from holders of a majority in aggregate principal amount of
each series of Existing Notes (other than affiliates of the Company) and the
Supplemental Indentures have been duly executed by the
C-2-1
Company, and (vi) the Company closes on the Offers, and assuming the New Notes
are legal, valid and binding obligations enforceable in accordance with their
terms under the laws of the United States, the New Notes will be legal, valid
and binding obligations of the Company, enforceable under Mexican law in
accordance with their terms except as the enforceability thereof may (x) be
limited by tax (including social security and housing fund taxes), labor,
bankruptcy, insolvency, reorganization, moratorium, concurso mercantil,
fraudulent conveyance or transfer or similar laws relating to or affecting
creditors' rights generally and (y) is subject to the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law), including, without limitation, (a) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy, (b)
concepts of materiality, reasonableness, good faith and fair dealing, (c)
possible judicial action giving effect to foreign governmental actions or
foreign laws. (d) that the enforceability of provisions exculpating or exempting
a party from its own actions or inaction, to the extent the action or inaction
involves gross negligence or willful misconduct, may be limited by the
discretion of the court before which any proceeding may be brought, and (e) that
such counsel express no opinion relating to any waiver or objection to venue
contained therein.1
(g) The New Notes constitute direct, unsecured and unconditional
obligations of the Company and rank at least pari passu, in priority of payment
with all other present and future unsecured obligations of the Company from time
to time outstanding, without any preference among themselves.2
(h) The Supplemental Indentures have been duly and validly executed and
delivered by the Company and, assuming the consents to the Proposed Amendments
have been validly received from holders of a majority in aggregate principal
amount of each series of Existing Notes (other than affiliates of the Company)
and all the conditions provided for in the Offers are met and the Company closes
on the Offers, and assuming the Supplemental Indentures are legal, valid and
binding obligations enforceable in accordance with their terms under the laws of
the United States, the Supplemental Indentures will constitute valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms under Mexican law, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, labor, tax
(including social security and housing fund taxes) or similar laws relating to
or affecting creditors' rights generally and as the enforceability thereof is
subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including (i) the
possible unavailability of specific performance, injunctive relief or any other
equitable remedy, (ii) concepts of materiality, reasonableness, good faith and
fair dealing, and (iii) possible judicial action giving effect to foreign
governmental actions or foreign law 3
---------------
1 In the case of an opinion to be delivered on the Settlement Date only.
2 In the case of an opinion to be delivered on the Settlement Date only.
3 In the case of an opinion to be delivered on the Settlement Date only.
C-2-2
(i) Except as otherwise described in the Prospectus , to knowledge of such
counsel, neither the Company nor its subsidiary is in any violation of its
charter or by-laws or any material law, administrative regulation or
administrative or court decree or other material resolution in Mexico applicable
to the Company or any subsidiary or is in Default in the performance or
observance or any material obligation, agreement, covenant or condition
contained in any Existing Instrument, as such term is defined in the Agreement.
(j) Except as otherwise described in the Prospectus, payments by the
Company with respect to the Offers, the New Notes, the New Notes Indentures and
the Supplemental Indentures are not subject to any withholding or deduction for
or on account of any present taxes, duties, assessments or other governmental
charges of whatever nature imposed or levied by or on behalf of Mexico or any
political subdivision or authority thereof or therein having power to tax.
(k) The Offers and the Solicitations, and all other actions by the Company
contemplated in the Prospectus, and the execution, delivery and performance of,
and the consummation by the Company of the transactions contemplated in the
Agreement, [or any of the New Notes, the New Notes Indentures or the
Supplemental Indentures,]4 do not and will not (i) conflict with or violate the
by-laws or other organizational documents of the Company or its subsidiary, (ii)
conflict with or violate any applicable Mexican law, rule, regulation, order,
judgment or decree of any court or governmental body or agency having
jurisdiction over the Company or its subsidiary or their respective property of
which such counsel has kwowledge, or (iii) to the best of such counsel's
knowledge, result in a breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other encumbrance on any property or assets of the
Company or its subsidiary pursuant to, any material loan or credit agreement,
indenture, mortgage, note or other agreement or instrument to which the Company
or its subsidiary or affiliates is a party or by which any of them or their
properties or assets is bound.
(l) No consent, approval, authorization or other order of, or registration
or filing with, any court or other governmental or regulatory authority or
agency in Mexico, is required for the execution, delivery and performance of
this Agreement or the Offers, or any of the New Notes, the New Notes Indentures
or the Supplemental Indentures, as described in the Prospectus, except for the
authorization of the Comision Nacional Bancaria y de Valores for the
registration of the Notes with the Seccion Especial of the Registro Nacional de
Valores maintained by the Comision Nacional Bancaria y de Valores for the
Exchange Offers outside of Mexico, which has been duly obtained and is in full
force and effect [Note: the CNBV authorization may be applied for only as of the
Commencement Date and will be obtained as of the Settlement Date].
(m) To ensure the legality, validity, enforceability or admissibility into
evidence in Mexico of the Registration Statement, the Agreement, the New Notes,
the New Notes
----------------
4 In the case of an opinion to be delivered on the Settlement Date only.
C-2-3
Indentures or the Supplemental Indentures, it is not necessary that any such
document be submitted to, filed or recorded with any court or other authority in
Mexico or that any tax, imposition or charge be paid in Mexico on or with
respect to any such document.
(n) The Company possesses such valid and current certificates,
authorizations, concessions or permits (including without limitation, the long
distance, local and wireless concessions) issued by the appropriate regulatory
agencies or bodies necessary to conduct their respective businesses, and, except
as disclosed in the Prospectus, the Company has not received any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization, concession or permit which, singly or
in the aggregate, if the subject of a final unfavorable decision, ruling or
finding, could result in a Material Adverse Change.
(o) To the knowledge of such counsel, after reasonable inquiry, no stop
order, restraining order, injunction or denial of an application for approval
has been notified to the Company, and there are no legal or governmental
investigations, litigation or proceedings pending or threatened, to which the
Company or its subsidiary is a party or subject or to which any of the
properties of the Company or its subsidiary is subject, other than proceedings
described in the Prospectus and proceedings that, if adversely determined by
final judgment, would not have a material adverse effect on the Company and its
subsidiary, taken as a whole, or on the power or ability of the Company to
perform its obligations under this Agreement, or on the power or ability of the
Company to consummate the Offers.
(p) The statements in the Prospectus under the headings "Service of Process
and Enforcement of Civil Liabilities", "Risk Factors -- Factors relating to the
Mexican regulatory environment: Restrictions on foreign ownership may impair our
ability to raise equity capital and limit our growth and Our telecommunications
public network concession and wireless concessions are subject to revocation in
the event of our bankruptcy and several other circumstances", "Risk Factors --
Factors relating to the New Notes: Payment of judgments against us on the
existing notes or new notes would be in Pesos, If we were declared subject to
reorganization under Mexican law, you may find it difficult to collect payment
on the new notes and Mexican law and regulations may impair your ability to
enforce in Mexico certain rights in connection with the existing notes and the
new notes", "Description of ▇▇▇▇▇▇▇'▇ Business -- Legal Proceedings", "The
Mexican Law of Commercial Reorganizations", "Supervision and Regulation of the
Mexican Telecommunications Industry" "Risk Factors - Factors relating to the
offers and the consent solicitations: Mexican reorganization laws may not be as
favorable to you as U.S. insolvency and bankruptcy laws", "Risk Factors- Factors
relating to Alestra. We may be subject to dissolution at the request of third
parties which could result in our liquidation" and "Material Mexican Federal Tax
Considerations," insofar as such statements constitute statements or summaries
of matters of Mexican law provide a fair and accurate summary of such current
law in all material respects.
(q) The choice of law provisions contained in the New Notes, the New Notes
Indentures, the Supplemental Indentures and this Agreement will be recognized by
the courts of Mexico, provided, however, that in any proceedings in Mexico for
the enforcement of any one or all of the Documents, a Mexican court would apply
Mexican procedural law in such proceedings.
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(r) Company has the legal capacity to ▇▇▇ and be sued in its own name under
the laws of Mexico, the Company has the power to submit, and has irrevocably
submitted, to the jurisdiction of any U.S. Federal or state court located in the
State of New York, County of New York and has validly and irrevocably appointed
CT Corporation Systems as its authorized agent (apoderado) under the laws of
Mexico, for the purpose described in Section 19 of the Agreement, in the
Existing Notes Indentures, the New Notes, and the New Notes Indentures; the
irrevocable submission of the Company to the jurisdiction of the New York courts
and the waivers by the Company of any immunity and any objection to the venue of
the proceeding in a New York court in the Agreement, the Existing Notes
Indentures, the New Notes, and the New Notes Indentures are legal, valid and
binding under the laws of Mexico, and personal service of process will be
effective to confer valid personal jurisdiction over the Company under the laws
of Mexico.
(s) The courts in Mexico will recognize as valid and final, and will
enforce, any final and conclusive judgment against the Company obtained in a New
York court arising out of or in relation to the obligations of the Company under
the Agreement, provided that:
1. Such judgment is obtained in compliance with (i) all legal
requirements of the jurisdiction of the court rendering such judgment,
and (ii) all legal requirements of the Documents, as applicable;
2. Such judgment is strictly for the payment of a certain sum of money
and has been rendered in an in personam action as opposed to an in rem
action, and is final in the jurisdiction where obtained,
non-appealable;
3. Such judgment does not contravene Mexican law, public policy of
Mexico, international treaties or agreements binding upon Mexico or
generally accepted principles of international law;
4. Service of process was made personally (not by mail or courier
service) on the Company, on a duly appointed attorney in fact of the
Company by a duly appointed court officer. A final judgment based on
service of process not made personally would not be enforced by the
courts of Mexico.
5. The applicable procedure under the laws of Mexico with respect to the
enforcement of foreign judgments (including, but not limited to,
translation to Spanish requirements (which provides that the party
initiating such proceeding must submit to the court a Spanish
translation prepared by a court certified translator of any document
referred to in any pleading involved in such proceeding, the defendant
is entitled to question the accuracy of such translation and to
present its own version and, further, that the court may rely on a
third translation into Spanish of such documents prepared by a court
appointed independent translator which translation would serve as the
basis for the proceedings thereafter), the issuance of a letter
rogatory by the competent authority of such jurisdiction requesting
enforcement of such judgment and the certification
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of such judgment as authentic by the corresponding authorities of such
jurisdiction in accordance with the laws thereof) is complied with;
6. The courts of such jurisdiction recognize the principles of
reciprocity in connection with the enforcement of Mexican judgments in
such jurisdiction; and,
7. The action in respect of which such judgment is rendered is not the
subject matter of a lawsuit or other preparatory proceedings to a law
suit among the same parties, pending before a Mexican court;
And provided, further, that:
8. Provisions in the Documents granting discretionary authority to any
party thereto, cannot be arbitrarily exercised against the Company and
should be supported by the factual assumptions required for their
reasonable exercise;
9. Any obligation to pay interest on interest may be unenforceable under
Mexican law;
10. The New Notes may not constitute negotiable instruments under Mexican
law and, therefore, if the holder of a New Note initiates an action
against the Company before a Mexican court, such Mexican court may not
grant executive action (accion ejecutiva) based on such document;
11. In the event that proceedings are brought in Mexico seeking
performance of the Company's obligations in Mexico, pursuant to
Article 8 of the Mexican Monetary Law the Company may discharge its
obligations by paying any sums due in currency other than Mexican
currency, in Mexican currency at the rate of exchange fixed by the
Banco de Mexico and published in the Diario Oficial de la Federacion
on the date when payment is made and, therefore, any currency
indemnity provisions of the Documents may not be enforceable under the
laws of Mexico.
(t) The Dealer Manager will not be deemed resident, domiciled, carrying on
business or subject to taxation in Mexico solely by reason of the execution,
delivery, performance or enforcement of the Agreement by the Dealer Manager,
assuming that such Dealer Manager is not a resident of Mexico, does not have a
permanent establishment in Mexico or such Dealer Manager does not otherwise
conduct other activities in Mexico which, together with the execution, delivery,
performance or enforcement of the Agreement, would deem such Dealer Manager to
have a permanent establishment in Mexico.
(u) None of the holders of the New Notes will be deemed resident,
domiciled, carrying on business or subject to taxation in Mexico solely by
reason of the execution, delivery, performance or enforcement of the Agreement,
assuming that such holder is not a resident of Mexico, does not have a permanent
establishment in Mexico or such holder does not otherwise conduct other
activities in Mexico which, together with the execution, delivery, performance
or
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enforcement of the Agreement, would deem such holder to have a permanent
establishment in Mexico.
(v) The Company and its obligations under the Documents are subject to
civil and commercial law and suit; neither the Company nor any of its properties
or assets has any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise), provided, however, that
the transfer of the concessions of the Company and the transfer of equity
interest issued by the Company is subject to the prior authorization of the
Mexican government as per the terms of its concessions and the law.
(w) There is no stamp, transfer or other tax, levy, impost, deduction or
other charge imposed (whether by withholding or otherwise) by Mexico (including
any political subdivision thereof), any Mexican governmental, administrative or
judicial authority or agency on or by virtue of the carrying out by the Company
of the Offers or the execution, delivery or performance by the Company of any of
the Agreement, the New Notes, the New Notes Indentures or the Supplemental
Indentures or the enforcement thereof against the Company.
(x) Except as otherwise described in the Prospectus, upon the issuance of
the New Notes, the Company may, by means of effecting the corresponding gross-up
of the payment amount, make all payments on the New Notes to foreign holders
without withholding or deduction for or on account of any present taxes or
duties of whatever nature imposed or levied by or on behalf of Mexico or any
political subdivision or authority thereof or therein having power to tax.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent public accountants
for the Company, representatives of the Dealer Manager and counsel for the
Dealer Manager, at which conferences the contents of the Registration Statement
and Prospectus and related matters were discussed and, although such counsel are
not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus except as set forth in paragraph (p) above on the
basis of the foregoing, such counsel has no reason to believe that either (i)
the Registration Statement or any amendment thereto, at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) the Prospectus or any amendment or supplement thereto, at
the time the Prospectus was issued, at the time any such amended or supplemented
Prospectus was issued or at the Settlement Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express no
opinion with respect to the financial statements or other financial data
contained in the Registration Statement or the Prospectus.
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Exhibit D
Form of Comfort Letter