EX-10.44 3 a76829ex10-44.txt EXHIBIT 10.44 EXHIBIT 10.44 -------------------------------------------------- BRIDGE LOAN AGREEMENT dated as of May 27, 1999 -------------------------------------------------- by and among PEGASO COMUNICACIONES Y SISTEMAS, S.A. DE C.V. as Borrower THE MEMBERS OF BORROWER GROUP NAMED HEREIN THE LENDERS PARTY HERETO CITIBANK, N.A. as Administrative Agent SOCIETE GENERALE as Syndication Agent and ABN AMRO BANK N.V. as Documentation Agent Milbank, Tweed, Hadley & McCloy LLP TABLE OF CONTENTS

PAGE ---- SECTION 1. DEFINITIONS.......................................................................... 2 1.1 DEFINED TERMS......................................................................... 2 1.2 OTHER INTERPRETIVE PROVISIONS......................................................... 23 1.3 ACCOUNTING TERMS; GAAP................................................................ 23 SECTION 2. THE CREDITS......................................................................... 24 2.1 SYNDICATED WORKING CAPITAL FACILITY................................................... 24 2.2 VENDOR WORKING CAPITAL FACILITY....................................................... 25 2.3 CAPITALIZED INTEREST FACILITY......................................................... 25 2.4 LETTERS OF CREDIT..................................................................... 25 2.5 LOANS AND BORROWINGS.................................................................. 30 2.6 REQUESTS FOR BORROWINGS............................................................... 31 2.7 FUNDING OF BORROWINGS................................................................. 34 2.8 INTEREST ELECTIONS.................................................................... 35 2.9 TERMINATION AND REDUCTION OF, AND INCREASES IN, COMMITMENTS; FURTHER SYNDICATION...... 36 2.10 REPAYMENT OF LOANS.................................................................... 39 2.11 EVIDENCE OF DEBT...................................................................... 39 2.12 INTEREST.............................................................................. 41 2.13 ADDITIONAL INTEREST ON EURODOLLAR LOANS; INTEREST RATE DETERMINATIONS; ALTERNATE RATE OF INTEREST............................................................ 43 2.14 VOLUNTARY PREPAYMENTS................................................................. 43 2.15 MANDATORY PREPAYMENTS................................................................. 44 2.16 SYNDICATION........................................................................... 45 SECTION 3. FEES; CONSIDERATION FOR QUALCOMM GUARANTY........................................... 45 3.1 FEES.................................................................................. 45 3.2 CONSIDERATION FOR QUALCOMM GUARANTY................................................... 46 SECTION 4. YIELD PROTECTION; PAYMENTS; TAXES; ETC.............................................. 46 4.1 INCREASED COSTS....................................................................... 46 4.2 BREAK FUNDING PAYMENTS................................................................ 47 4.3 ILLEGALITY............................................................................ 47 4.4 TAXES................................................................................. 48 4.5 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS........................... 49 4.6 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS........................................ 51 SECTION 5. CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT................................. 52 5.1 CONDITIONS PRECEDENT TO THE INITIAL SYNDICATED WORKING CAPITAL LOANS AND THE FIRST LETTER OF CREDIT................................................................ 52 5.2 CONDITIONS PRECEDENT TO THE INITIAL VENDOR WORKING CAPITAL LOANS, THE INITIAL CAPITALIZED INTEREST LOANS, AND THE QUALCOMM SATISFACTION OF CONDITIONS PRECEDENT LETTER................................................................................ 54 5.3 FURTHER CONDITIONS PRECEDENT TO CERTAIN LOANS AND LETTERS OF CREDIT................... 57 5.4 CONDITIONS PRECEDENT TO CAPITALIZED INTEREST LOANS AND TO CERTAIN TERM LOANS.......... 57 5.5 FURTHER CONDITIONS PRECEDENT TO SYNDICATED WORKING CAPITAL LOANS AND LETTERS OF CREDIT................................................................................ 58 SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......................................... 58 6.1 SENIOR DEBT; NON-VENDOR FINANCING..................................................... 59 6.2 APPROVALS............................................................................. 59 6.3 CORPORATE STATUS...................................................................... 59

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PAGE ---- 6.4 CORPORATE POWER AND AUTHORITY......................................................... 59 6.5 VALID AND BINDING OBLIGATION.......................................................... 59 6.6 NO VIOLATION.......................................................................... 60 6.7 PERMITS............................................................................... 60 6.8 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED LIABILITIES; ETC............... 60 6.9 LITIGATION; LABOR DISPUTES............................................................ 61 6.10 TAX RETURNS AND PAYMENTS.............................................................. 61 6.11 CAPITALIZATION........................................................................ 62 6.12 SUBSIDIARIES.......................................................................... 62 6.13 COMPLIANCE WITH APPLICABLE LAW........................................................ 63 6.14 PROPERTY RIGHTS....................................................................... 63 6.15 SINGLE-PURPOSE........................................................................ 63 6.16 FEES AND ENFORCEMENT.................................................................. 63 6.17 FOREIGN EXCHANGE APPROVALS............................................................ 64 6.18 LIENS................................................................................. 64 6.19 TITLE................................................................................. 64 6.20 LOAN DOCUMENTS........................................................................ 64 6.21 CERTAIN ANCILLARY SERVICES............................................................ 65 6.22 ENVIRONMENTAL MATTERS................................................................. 65 6.23 INVESTMENT COMPANY ACT................................................................ 65 6.24 TRUE AND COMPLETE DISCLOSURE.......................................................... 65 6.25 NO ADDITIONAL FEES.................................................................... 66 6.26 USE OF PROCEEDS....................................................................... 66 6.27 INSURANCE............................................................................. 66 6.28 PRIVATE ACTIVITIES; IMMUNITY.......................................................... 66 6.29 NO SUBORDINATION...................................................................... 67 6.30 LICENSES.............................................................................. 67 6.31 OPERATOR AGREEMENTS................................................................... 67 6.32 EMPLOYEE BENEFIT PLANS; EMPLOYMENT MATTERS............................................ 67 6.33 YEAR 2000............................................................................. 68 6.34 INDEBTEDNESS.......................................................................... 68 6.35 BUDGET................................................................................ 68 SECTION 7. AFFIRMATIVE COVENANTS............................................................... 68 7.1 INFORMATION COVENANTS................................................................. 69 7.2 PERMITS; ENFORCEMENT OF TRANSACTION DOCUMENTS......................................... 72 7.3 PROPER LEGAL FORM..................................................................... 73 7.4 TRANSLATIONS.......................................................................... 73 7.5 NEW SUBSIDIARIES...................................................................... 73 7.6 CONSENTS, APPROVALS................................................................... 74 7.7 USURY PERMIT.......................................................................... 74 SECTION 8. NEGATIVE COVENANTS.................................................................. 74 8.1 NO PREPAYMENTS........................................................................ 74 8.2 FUNDAMENTAL CHANGES................................................................... 74 8.3 IMMUNITY.............................................................................. 74 8.4 ASSET SALES........................................................................... 75 8.5 RESTRICTED PAYMENTS................................................................... 75 SECTION 9. EVENTS OF DEFAULT................................................................... 75 9.1 EVENTS OF DEFAULT..................................................................... 75 9.2 REMEDIES.............................................................................. 78 9.3 EXERCISE OF REMEDIES.................................................................. 78

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PAGE ---- SECTION 10. ADMINISTRATIVE AGENT................................................................ 79 10.1 APPOINTMENT OF ADMINISTRATIVE AGENT................................................... 79 10.2 RIGHTS AND POWERS AS LENDER........................................................... 79 10.3 DELEGATION OF DUTIES BY ADMINISTRATIVE AGENT.......................................... 79 10.4 LIABILITY OF ADMINISTRATIVE AGENT..................................................... 79 10.5 RELIANCE BY ADMINISTRATIVE AGENT...................................................... 80 10.6 NON-RELIANCE BY LENDERS............................................................... 80 10.7 INDEMNIFICATION....................................................................... 80 10.8 SUCCESSOR ADMINISTRATIVE AGENT........................................................ 81 SECTION 11. MISCELLANEOUS....................................................................... 81 11.1 NOTICES............................................................................... 81 11.2 WAIVERS; AMENDMENTS................................................................... 82 11.3 EXPENSES, INDEMNITY, DAMAGE WAIVER.................................................... 83 11.4 SUCCESSORS AND ASSIGNS; PARTICIPATIONS................................................ 84 11.5 SURVIVAL.............................................................................. 86 11.6 COUNTERPARTS; INTEGRATION; EFFECTIVENESS.............................................. 87 11.7 RIGHT OF SET-OFF...................................................................... 87 11.8 SEVERABILITY.......................................................................... 87 11.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS............................ 87 11.10 WAIVER OF JURY TRIAL.................................................................. 89 11.11 HEADINGS.............................................................................. 89 11.12 CONFIDENTIALITY....................................................................... 89 11.13 INTEREST RATE LIMITATION.............................................................. 90 11.14 CURRENCY OF PAYMENT................................................................... 90 11.15 JUDGMENT CURRENCY..................................................................... 90 11.16 ENGLISH LANGUAGE...................................................................... 90 11.17 REINSTATEMENT......................................................................... 91 11.18 QUALCOMM RIGHT OF SUBROGATION......................................................... 91 11.19 NO THIRD-PARTY BENEFICIARIES.......................................................... 91

iii EXHIBITS Exhibit A Form of Pagare Exhibit B-1 Form of Borrowing Request Exhibit B-2 Form of Budget Breakdown Certificate Exhibit C Form of Capitalized Interest Loan Request Exhibit D Form of Interest Election Request Exhibit E Form of Assignment and Assumption Agreement Exhibit F Amendment No. 1 to Common Agreement Exhibit G Amendment No. 1 to QUALCOMM Credit Agreement Exhibit H Form of Administrative Questionnaire SCHEDULES Schedule 2.1 Syndicated Working Capital Commitments Schedule 2.2 Vendor Working Capital Commitments Schedule 2.3 Capitalized Interest Commitments Schedule 6.10 Withholding Taxes Schedule 6.11 Capitalization Schedule 6.16 Unpaid Taxes Schedule 6.22 Environmental Matters Schedule 6.25 Broker's Fees Schedule 6.30 Licenses Schedule 6.34 Indebtedness iv BRIDGE LOAN AGREEMENT This BRIDGE LOAN AGREEMENT (this "Agreement"), dated as of May 27, 1999, among PEGASO COMUNICACIONES Y SISTEMAS, S.A. DE C.V., a sociedad anonima de capital variable organized under the laws of Mexico ("Borrower"), PEGASO TELECOMUNICACIONES, S.A. DE C.V., a sociedad anonima de capital variable organized under the laws of Mexico, PEGASO PCS, S.A. DE C.V., a sociedad anonima de capital variable organized under the laws of Mexico, PEGASO RECURSOS HUMANOS, S.A. DE C.V., a sociedad anonima de capital variable organized under the laws of Mexico, QUALCOMM INCORPORATED, a corporation organized under the laws of Delaware, ("QUALCOMM") and the Syndicated Lenders (as defined below) from time to time party hereto (each Syndicated Lender, together with QUALCOMM, a "Lender" and, collectively, "Lenders"), CITIBANK, N.A., a national banking association, in its capacity as administrative agent for Lenders ("Administrative Agent"), SOCIETE GENERALE, as Syndication Agent, and ABN AMRO BANK N.V., as Documentation Agent. WITNESSETH A. Borrower desires to obtain from the Working Capital Lenders (as defined below) Working Capital Facilities (as defined below) in the aggregate principal amount of up to One Hundred Million Dollars ($100,000,000) for the purposes of financing Borrower's working capital needs and for capital expenditures and other purposes, all as more particularly described below; B. Borrower desires to obtain from the Capitalized Interest Lenders (as defined below) a credit facility to finance the interest payments, when and as due, under the Working Capital Facilities, in an aggregate principal amount of up to Fifteen Million Dollars ($15,000,000), all as more particularly described below; and C. Lenders are willing to supply such financing subject to the terms and conditions and in reliance on the representations and warranties set forth in this Agreement and the other documents executed in connection herewith; NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants set forth below, Borrower, Lenders and Administrative Agent agree as follows: SECTION 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms have the respective meanings set forth below or set forth in the referenced provision following such term: "Additional Lender" shall have the meaning assigned in Section 2.9(f). 1 "Administrative Agent" shall have the meaning provided in the first paragraph of this Agreement. "Administrative Agent's Account" shall mean such account located in New York, New York as is specified in writing by Administrative Agent to Borrower and Lenders from time to time. "Administrative Agent's Fee Letter" shall mean that letter agreement dated the date hereof by and between Borrower and Administrative Agent regarding payment of fees in connection with Administrative Agent's duties in its capacity as Administrative Agent. "Administrative Questionnaire" shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent. "Affiliate" shall mean, with respect to a specified Person, any other Person which directly or indirectly controls, or is under common control with, such Person. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person will be deemed to control such corporation or other Person. Notwithstanding the foregoing, (i) no individual shall be deemed to be an Affiliate of a Person solely by reason of his or her being a director, committee member, officer or employee of such person and (ii) each member of the Borrower Group and each of their respective Affiliates shall be deemed to be an Affiliate of each other member of the Borrower Group. "Agreement" shall mean this Bridge Loan Agreement, as the same may be from time to time further modified, amended, supplemented or restated. "Alcatel" shall mean Alcatel, a corporation duly organized under the laws of France. "Alcatel Credit Agreement" shall mean the Credit Agreement, dated as of December 15, 1998, among Borrower, the lenders thereunder and Citibank International plc, as Alcatel Administrative Agent. "Applicable Law" shall mean any constitution, statute, law, rule, regulation, ordinance, judgment, order, decree, Permit, or any published directive, guideline, requirement or other governmental restriction which has the force of law, or any determination by, or interpretation of any of the foregoing by, any judicial authority, binding on a given Person whether in effect as of the date hereof or as of any date thereafter, including all applicable Environmental Laws. 2 "Applicable Margin" shall mean (i) for Eurodollar Loans, six percent (6%); and (ii) for Base Rate Loans, five percent (5%); provided that in each case, the Applicable Margin shall increase by one-half of one percent (0.5%) on each Interest Adjustment Date. "Assignment Agreement" shall mean the Assignment and Assumption Agreement in the form of Exhibit E (appropriately completed). "Authorized Officer" shall mean, with respect to any Person, the Managing Director, the President, the Vice President, the Chief Financial Officer, the Assistant Vice President, the Treasurer, the Assistant Treasurer or equivalent officers of such Person and, with respect to Borrower, shall include any officer or representative holding any of the foregoing positions (or their equivalent) whose name appears on a certificate of incumbency delivered concurrently with the execution of this Agreement, as such certificate of incumbency may be amended, supplemented or replaced from time to time to identify names of the individuals then holding such offices or the names of such representatives and the capacity in which they are acting. "Availability Period" shall mean, for any Lender, (i) with respect to such Lender's Syndicated Working Capital Commitment, the period from the Closing Date until the Commitment Termination Date applicable to the Syndicated Working Capital Facility, (ii) with respect to such Lender's Vendor Working Capital Commitment, the period from (A) the date that is 90 days after the Closing Date, if such Lender is QUALCOMM, or such earlier date as QUALCOMM may elect by written notice to Borrower and Administrative Agent, or (B) the Closing Date, if such Lender is an Additional Lender acquiring such Vendor Working Capital Commitment in accordance with Section 2.9(f), until, in each case, the Commitment Termination Date applicable to the Vendor Working Capital Facility, (iii) with respect to such Lender's Term Loan Commitment, the Commitment Termination Date applicable to the Syndicated Working Capital Facility, and (iv) with respect to such Lender's Capitalized Interest Commitment, the period from the Closing Date until the Commitment Termination Date applicable to the Capitalized Interest Facility. "Base Rate" shall mean, for any period, a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of: (a) the rate of interest announced publicly by Citibank in New York, New York from time to time as Citibank's base rate; and (b) 1/2 of one percent per annum above the Federal Funds Rate for such period. "Base Rate Loan" shall mean any Loan bearing interest at the Base Rate. "Borrower" shall have the meaning provided in the first paragraph of this Agreement. "Borrower Group" shall mean (i) Borrower, (ii) Holdings, (iii) Pegaso PCS, (iv) Personnel Co. (v) the respective Subsidiaries of each of the foregoing in existence as of the 3 Closing Date, and (vi) any Subsidiary of any of the foregoing which is formed, established, purchased or acquired after the Closing Date as described in Section 7.5. Any reference to a "member" or to a "member of the Borrower Group" shall mean one or more of the Persons described in clause (i) through (vi) of this definition. "Borrower Obligations" shall mean all obligations of Borrower now existing or hereinafter arising, direct or indirect, absolute or contingent, due or to become due, under this Agreement, the Pagares or any other Loan Document to which Borrower is a party, including, without duplication, (i) payment of the principal of and interest on the Loans and the reimbursement obligations of Borrower in connection with the Letters of Credit, (ii) payment of all fees, expenses, indemnities and other amounts under the Loan Documents, and (iii) all other obligations, duties and liabilities of Borrower under or in connection with the Loan Documents (whether or not evidenced by any note, bond or other instrument and whether or not for the payment of money). "Borrowing" shall mean the incurrence by Borrower of Loans of the same Type, on the same date, and under the same Facility, and, in the case of Eurodollar Loans, having the same Interest Period. "Borrowing Request" shall mean a request by Borrower for a Borrowing in accordance with Section 2.6. "Budget" shall mean the Initial Budget, as the same shall be updated by Borrower with the prior written consent of QUALCOMM. "Budget Breakdown" shall have the meaning assigned in Section 2.6(b). "Business" shall mean the business of development, operation and use of the Licenses (and, subject to the terms and conditions set forth in the Vendor Facilities, other new licenses and/or concessions issued to any member of the Borrower Group) and pursuant thereto the installation and operation of terrestrial-based wireless telecommunications systems in Mexico and, to the extent integral to such wireless terrestrial-based telecommunications systems, long-distance telecommunications systems in Mexico. "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required by law to close in New York City or in the Federal District of Mexico; provided that, when used in conjunction with any Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. "Business Plan" shall mean the Business Plan dated as of March 19, 1999, as updated from time to time as provided in Section 7.1(d). "Capital Lease" as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person. 4 "Capital Stock" of any Person shall mean any and all shares, interest, rights to purchase, warrants, options, participations or other equivalents of or interest in (however designated) the common or preferred equity or preference share capital of such Person, including partnership interests. "Capitalized Interest Commitment" shall mean, with respect to each Capitalized Interest Lender, the amount set forth on Schedule 2.3 as such Lender's "Capitalized Interest Commitment," as such amount may be adjusted from time to time pursuant to the terms of this Agreement. "Capitalized Interest Commitment Percentage" shall mean, with respect to any Capitalized Interest Lender, the percentage equivalent of such Lender's Capitalized Interest Commitment divided by the Total Capitalized Interest Commitment. "Capitalized Interest Facility" shall mean the extension of credit to Borrower by the Capitalized Interest Lenders as set forth in Section 2.3. "Capitalized Interest Lenders" shall mean any Lender having a Capitalized Interest Commitment. "Capitalized Interest Loans" shall mean loans made to Borrower by Capitalized Interest Lenders under the Capitalized Interest Facility pursuant to this Agreement. "Capitalized Interest Loan Request" shall have the meaning set forth in Section 2.6(c). "Capitalized Lease Obligations" shall mean all obligations under Capital Leases of any Person in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP. "Cash Flow Forecast" shall mean the Initial Cash Flow Forecast, as the same shall be updated as required pursuant to Section 7.1(e). "Change of Control" shall mean (i) the failure at any time and for any reason prior to the consummation of a Qualified Public Offering of (a) the Original Mexican Shareholders to own at least 51% of the voting Capital Stock of Holdings, or (b) Leap to own, directly or indirectly through a wholly-owned Subsidiary, at least 20% of the Capital Stock of Holdings, or (ii) at any time after the consummation of a Qualified Public Offering, any transaction or series of transactions whereby (A) any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of voting Capital Stock of Holdings representing 35% or more of the combined voting power of all voting stock of Holdings, or (B) during any period of 18 consecutive months, commencing before or after the date of this Agreement, individuals who at the beginning of such 18 month period were directors of Holdings, together with such directors who are approved by directors who were directors at the beginning of such period, shall cease for any reason to constitute a majority of board of directors of Holdings; or (iii) any Person or two or more Persons acting in concert shall have 5 acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of Holdings, or (iv) the failure for any reason of Holdings to own (beneficially and of record) all of the Capital Stock of each of Borrower, Pegaso, PCS and Personnel Co. (other than one share of such Capital Stock which is owned, and shall continue to be owned, by another member of the Borrower Group). Notwithstanding the foregoing, any such transaction or series of transactions described in clause (ii) above shall not constitute a Change of Control if the Original Mexican Shareholders, Leap and their wholly-owned Subsidiaries continue to own, directly or indirectly, in the aggregate a greater percentage of the voting Capital Stock of Holdings than any other Person or two or more Persons acting in concert. "Charter Documents" shall mean, with respect to any Person, the articles of incorporation, by-laws, partnership agreements or such other documents or instruments which are required to be registered or lodged in the place of incorporation or organization of such Person and which establish the legal existence of such Person. With respect to Holdings, the term "Charter Documents" shall also include the Joint Venture Agreement. "Citibank" shall mean Citibank, N.A., a national banking association. "Class", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Syndicated Working Capital Loans, Term Loans, Vendor Working Capital Loans or Capitalized Interest Loans. "Closing Date" shall mean the date upon which each condition set forth in Section 5.1 has been satisfied, or waived by each Lender. "Commitment" shall mean, (a) with respect to each Syndicated Lender, its Syndicated Working Capital Commitment or its Term Loan Commitment, as the case may be, (b) with respect to each Vendor Working Capital Lender, its Vendor Working Capital Commitment, and (c) with respect to each Capitalized Interest Lender, its Capitalized Interest Commitment. "Commitment Termination Date" shall mean, for any Lender, (a) with respect to such Lender's Syndicated Working Capital Commitment, the date that is 364 days after Closing Date, subject to Section 2.10(b), (b) with respect to such Lender's Vendor Working Capital Commitment, the Scheduled Maturity Date, and (c) with respect to such Lender's Capitalized Interest Commitment, the Scheduled Maturity Date; provided, in each case, that if any such date is not a Business Day, the relevant Commitment Termination Date for such Lender shall be the immediately preceding Business Day. When the term "Commitment Termination Date" is used in this Agreement without reference to any particular Lender or Facility, such term shall, in such instance, be deemed to be a reference to the latest Commitment Termination Date of any of the Lenders under any Facilities then in effect hereunder. "Common Agreement" shall mean the Common Agreement dated as of December 15, 1998 among each member of the Borrower Group, Citibank N.A., as Intercreditor Agent, Citibank Mexico, S.A., Grupo Financiero Citibank, as Collateral Agent, Citibank International 6 plc, as Alcatel Administrative Agent, and ABN AMRO Bank N.V., as QUALCOMM Administrative Agent. "Contingent Obligations" shall mean as to any Person any obligation of such Person Guaranteeing or intending to Guarantee any Indebtedness ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure, indemnify or hold harmless the owner of such primary obligation against loss in respect thereof (other than indemnity obligations arising in the ordinary course of business), provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined in good faith. "Counter-Guarantors" shall mean collectively Leap and Alejandro Burillo Azcarraga. "Counter-Guaranties" shall mean collectively each of those guaranty agreements, dated as of the date hereof, executed by the Counter-Guarantors, respectively, in favor of QUALCOMM. "Covered Pops" shall mean, as of any date of determination, Pops for those geographical areas as to which (a) Borrower has the right under valid, enforceable and effective Licenses owned by Borrower to provide PCS and WLL services, and (b) Borrower has, as of such date of determination, constructed or intends to construct facilities to provide such services. "Deemed Capitalized Interest Loan Request" shall have the meaning set forth in Section 2.6(c). "Default" shall mean any event, act or condition which, with the giving of notice, lapse of time, fulfillment of any condition or any combination thereof, would become an Event of Default. "Dollars" or "$" shall mean the lawful currency of the United States. "Eligible Assignee" shall mean (i) a commercial bank organized under the laws of the United States, or any state thereof, (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the "OECD"), or a political subdivision of any such country, which is acting 7 through a branch or agency located in the United States; which, in each case (under clauses (i) and (ii) above) has a combined capital and surplus of at least two hundred million dollars ($200,000,000); (iii) a Person that is primarily engaged in the business of banking and that is a Lender or a Subsidiary or Affiliate of a Lender; or (iv) a finance company, financial institution, fund or any other Person that has a combined capital and surplus of at least two hundred million dollars ($200,000,000) and is approved in writing by Administrative Agent and QUALCOMM (which approval shall not be unreasonably withheld); provided, however, that none of the Borrower Group or their respective Affiliates (other than Affiliates that are commercial banks, finance companies, financial institution or funds that would otherwise qualify hereunder) shall qualify as an Eligible Assignee. "Environmental Claims" shall mean, with respect to any Person, any notice, claim, administrative, regulatory or judicial action, suit, judgment, demand or other communication (whether written or oral) by any other Person alleging or asserting such Person's liability (contingent or otherwise) for investigatory costs, cleanup or environmental remediation costs, governmental response costs, damages to natural resources or other property of such Person, personal injuries, fines or penalties arising out of, based on or directly or indirectly resulting from (i) the generation, presence, use, handling, transportation, storage, treatment, disposal or release or threatened release into the environment of any Hazardous Material at any location, whether or not owned by such Person, (ii) exposure to any Hazardous Materials, (iii) any fact, circumstance, condition or occurrence forming the basis of any violation, or alleged violation, of any Environmental Law, or (iv) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. The term "Environmental Claim" shall include, (a) any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) any and all claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment. "Environmental Law" shall mean any statute, law, rule, regulation, code, ordinance, order, decree, judgment, injunction, notice, policy having the force of law, or binding agreement issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters. "Eurocurrency Liabilities" shall have the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurodollar Loan" shall mean any Loan bearing interest at the Eurodollar Rate. "Eurodollar Rate" shall mean, for any Interest Period for each Eurodollar Loan, the rate per annum (rounded upward, if necessary, to the nearest whole multiple of 1/16 of 1% per annum) appearing on Telerate Page 3750 as of 11:00 A.M. (London time) on the date (as to any Interest Period, the "Determination Date") that is two Business Days before the first day of 8 such Interest Period, as LIBOR for a period equal to such Interest Period. In the event that Telerate Page 3750 shall cease to report such LIBOR or, in the reasonable judgement of the Required Syndicated Lenders, shall cease to accurately reflect such LIBOR, then the "Eurodollar Rate" with respect to such Interest Period for such Eurodollar Loan shall be the rate per annum equal to the average of the rate per annum at which deposits in U.S. dollars are offered by the principal office of each of the Reference Banks in London, England to leading banks in the London interbank market at 11:00 A.M. (London time) on the Determination Date in an amount substantially equal to such Reference Bank's Eurodollar Loan comprising part of the related Borrowing and for a period equal to such Interest Period or, if no Reference Bank has a Eurodollar Loan constituting part of the related Borrowing, the rate per annum at which deposits in U.S. dollars are offered by the principal office of Citibank in London, England to leading banks in the London interbank market at 11:00 A.M. (London time) on the Determination Date in an amount substantially equal to the aggregate of all Eurodollar Loans constituting part of the related Borrowing and for a period equal to such Interest Period. The Eurodollar Rate for any Interest Period for each Eurodollar Loan shall be determined by Administrative Agent on the basis of the applicable rate appearing on Telerate Page 3750 as aforesaid (or the applicable rates furnished to and received by Administrative Agent from the Reference Banks) on the Determination Date for such Interest Period, subject, however, to the provisions of Section 2.13. "Eurodollar Rate Reserve Percentage" of any Lender for any Interest Period for any Eurodollar Borrowing shall mean the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period. "Event of Default" shall have the meaning set forth in Section 9.1. "Excluded Taxes" shall mean, with respect to Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by Borrower under Section 4.6(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender's failure to comply with Section 4.4(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 4.4(a). 9 "Existing Equity" shall mean the equity capital contributed to Holdings by the Existing Shareholders and the New Shareholders (in consideration for Capital Stock of Holdings issued to such shareholders) prior to the Closing Date. "Existing Equity Commitments" shall mean (i) the commitments of the Original Mexican Shareholders as set forth in Article III of the Joint Venture Agreement and in resolutions adopted at various shareholder meetings pursuant to which such Persons have become obligated to contribute specified amounts of equity capital to Holdings on or prior to the dates specified therein in consideration for Capital Stock to be issued by Holdings and (ii) any obligation of Alcatel existing or under negotiation on the date hereof to purchase equity capital of Holdings. "Existing Shareholders" shall have the meaning set forth in the Joint Venture Agreement. "Exposure" shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Loans and its LC Exposure, if any, at such time. "Facility" shall mean, respectively, each of the Syndicated Working Capital Facility, the Vendor Working Capital Facility, and the Capitalized Interest Facility. "Federal Funds Rate" shall mean, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by Administrative Agent. "Fees" shall mean all amounts payable pursuant to, or referred to in, Section 3.1. "Fiscal Year" shall mean the accounting year of any member of the Borrower Group, as the case may be. "Foreign Lender" shall mean any Lender (other than QUALCOMM) that is organized under the laws of a jurisdiction other than Mexico. "GAAP" shall mean generally accepted accounting principles in Mexico as in effect from time to time, it being understood and agreed that determinations in accordance with GAAP (i) for purposes of Section 7, including defined terms as used therein, are subject (to the extent provided therein) to Section 1.3 and shall include U.S. GAAP reconciliations, and (ii) for the purposes of any other Section, to the extent that GAAP is limited, qualified or modified in any such particular Section of this Agreement, such determinations are subject to such limitations, qualifications or modifications as are set forth in such Section (but only as applied to such Section). 10 "Good Faith Contest" shall mean, with respect to the payment of Taxes or any other claims or liabilities by any Person, the satisfaction of each of the following conditions: (i) the validity or amount thereof is being diligently contested in good faith by such Person by appropriate proceedings timely instituted, (ii) during the period of such contest, the enforcement of any contested item is effectively stayed, (iii) during the period of such contest, such Person maintains sufficient reserves for the payment of such Taxes or other claims or liabilities if determined adversely, and (iv) such contest and any resultant failure to pay or discharge the claimed or assessed amount is not reasonably likely to have a Material Adverse Effect. "Government of Mexico" shall mean the Government of Mexico, including any instrumentality, subdivision, authority, agency, ministry or statutory or legal entity or person (whether autonomous or not) thereof. "Governmental Authority" shall mean the government of the United States, Mexico or any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "GTE" shall mean GTE Data Services Mexico, S.A. de C.V., a sociedad anonima de capital variable organized under the laws of Mexico. "GTE Deferred Fee" shall mean the portion of the fee payable to Leap Wireless Mexico pursuant to the Operator Agreement the payment of which is deferred in connection with a possible investment by GTE Corporation, or any of its affiliates, in Borrower. "GTE Operator Agreement" shall mean the Management and Operator Agreement between Leap Wireless Mexico and GTE. "Guarantors" shall mean (i) Pegaso PCS, (ii) Personnel Co. (iii) Holdings, and (iv) any other Subsidiary of a member of the Borrower Group executing a Guaranty Agreement as required by Section 7.5. "Guaranty" by any Person shall mean any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing in any manner any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), (ii) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation or (iii) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term "Guaranty" shall not include (x) endorsements for collection or deposit in the ordinary course of business, or (y) indemnity or hold harmless provisions included in contracts entered into in the ordinary course of business. The term "Guaranty" or "Guaranteed" used as a verb has a correlative meaning. 11 "Guaranty Agreements" shall mean any agreement by which a Guarantor Guarantees the obligations of Borrower under this Agreement, including the Pegaso Guaranty Agreement. "Guaranty Fee" shall have the meaning set forth in the QUALCOMM Guaranty. "Guaranty Trust Agreement" shall mean the Irrevocable Administration and Guaranty Trust Agreement executed by the Counter-Guarantors and the trustee thereunder, with respect to the Stock Options granted to the Counter-Guarantors. "Hazardous Materials" shall mean (i) all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, (ii) any other chemicals, materials or substances defined as or included in the definition "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wasted," "toxic substances," "toxic pollutants," "contaminants" or "pollutants," or words of similar import, under any applicable Environmental Law and (iii) any other chemical, material, substance or waste of any nature regulated pursuant to any Environmental Law. "Holdings" shall mean Pegaso Telecomunicaciones, S.A. de C.V., a sociedad anonima de capital variable organized under the laws of Mexico. "Indebtedness" shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money, (ii) all obligations of such Person for the deferred purchase price of property or services, other than the GTE Deferred Fee and trade accounts payable arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable (and are paid) within 90 days of the date the respective goods are delivered or the respective services are rendered, (iii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iv) the currently available amount of all letters of credit issued for the account of such Person and all outstanding reimbursement obligations with respect to such letters of credit, (v) all liabilities secured by any Lien on any property owned by such Person, (vi) any Guaranty of Indebtedness by such Person, (vii) all obligations under trade or bankers' acceptances, (viii) Capitalized Lease Obligations, (ix) all net obligations under agreements providing for swaps, ceiling rates, ceiling and floor rates, contingent participation or other hedging mechanisms with respect to the payment of interest or the convertibility of currency, (x) all obligations under any conditional sale agreement or other title retention agreement and (xi) all Contingent Obligations of such Person. "Indemnified Taxes" shall mean Taxes other than Excluded Taxes. "Independent Accountant" shall mean PricewaterhouseCoopers LLP or any replacement therefor of international recognized standing appointed by the Borrower Group. "Initial Budget" shall mean the Borrower Group's budget for the 18-month period commencing on the Closing Date in form and substance satisfactory to QUALCOMM, which 12 shall set forth the aggregate projected expenditures of the Borrower Group for each Permitted Usage Category set forth therein for the eighteen (18) months following the Closing Date. "Initial Cash Flow Forecast" shall mean the Borrower Group's cash flow forecast for the six month period beginning April 1, 1999, in form and substance reasonably satisfactory to QUALCOMM. "Interest Adjustment Date" shall mean (i) the date that is on the one-year anniversary of the Closing Date, and (ii) each date, prior to, but not including, the Scheduled Maturity Date, that is ninety (90) days following the previous Interest Adjustment Date. "Interest Election Request" shall mean a request by Borrower to convert or continue a Borrowing in accordance with Section 2.8. "Interest Payment Date" shall mean each date on which interest is payable on the Loans. "Interest Period" shall mean, with respect to each Eurodollar Loan, the period commencing on the date of the making or continuation of or conversion to such Eurodollar Loan and ending one, three or six months thereafter, as Borrower may elect in the applicable Interest Election Request; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (c) below) that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day; (b) any Interest Period applicable to a Eurodollar Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Business Day of the appropriate subsequent calendar month; (c) no Interest Period with respect to a Eurodollar Loan of any Facility shall end after the Commitment Termination Date for such Facility; (d) no Interest Period applicable to a Eurodollar Loan shall have a duration of less than one month, and if any Interest Period applicable to such Eurodollar Loan would be for a shorter period, such Interest Period shall not be available hereunder; and (e) subject to the foregoing clauses (a) through (d), until the earlier of (i) ninety (90) days after the Closing Date and (ii) the date on which the Total Syndicated Working Capital Commitment is increased pursuant to Section 2.9(f) up to $100,000,000, the Interest Period with respect to each Eurodollar Loan shall be the period commencing on the date of the making or continuation of or conversion to such Eurodollar Loan and ending one month thereafter. 13 "Investment Company Act of 1940" shall mean the U.S. Investment Company Act of 1940, and the rules and regulations promulgated thereunder. "Issuing Bank" shall mean Citibank, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.4(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. "Joint Venture Agreement" shall mean the Joint Venture Agreement, entered into as of July 16, 1998 by and among the Pegaso Comunicaciones y Servicios, S.A. de C.V., Corporativo del Valle de Mexico, S.A. de C.V., Alejandro Burillo Azcarraga, Leap Mexico, Holdings, International Equity Investments, Inc., NI MEDIA EQUITY, LLC, and LAIF X Ltd., as in effect on the Closing Date. "Judgment Currency" shall have the meaning set forth in Section 11.15. "LC Disbursement" shall mean a payment made by the Issuing Bank pursuant to a Letter of Credit. "LC Exposure" shall mean, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of Borrower at such time. The LC Exposure of any Syndicated Lender at any time shall be its Syndicated Working Capital Commitment Percentage of the total LC Exposure at such time. "Leap" shall mean Leap Wireless International, Inc., a corporation organized under the laws of Delaware. "Leap Wireless Mexico" shall mean Leap Wireless Mexico S.A. de C.V., a corporation organized under the laws of Mexico. "Leap Mexico" shall mean Leap PCS Mexico, Inc., a corporation organized under the laws of California, formerly known as QUALCOMM PCS Mexico, Inc. "Lenders" shall mean the Syndicated Lenders, the Capitalized Interest Lender and the Vendor Working Capital Lender and any other Person that shall have become a party hereto pursuant to an Assignment Agreement, other than any such Person that ceases to be a party hereto pursuant to an Assignment Agreement. "Letter of Credit" shall mean any letter of credit issued pursuant to this Agreement. "LIBOR" shall mean the rate at which deposits in U.S. dollars are offered to leading banks in the London interbank market. 14 "Licenses" shall mean the Frequency Band Concessions (as defined in the Common Agreement) and the Telecommunication Networks Concession (as defined in the Common Agreement) and any other licenses granted to the Borrower by the Secretaria de Comunicaciones y Transportes in connection with the Business. "Lien" shall mean any security interest, mortgage, pledge, assignment by way of security, charge, lease, easement, servitude, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever including (i) any conditional sale or other title retention agreement, any financing or similar statement or notice filed under any recording or notice statute, and any lease having substantially the same effect as any of the foregoing, and (ii) any designation (except as contemplated by this Agreement) of loss payees or beneficiaries or any similar arrangement under any insurance contract. "Loan" shall mean a Syndicated Working Capital Loan, a Vendor Working Capital Loan, or a Capitalized Interest Loan, and "Loans" shall mean all of such loans, collectively, unless the context otherwise requires. "Loan Document Currency" shall have the meaning set forth in Section 11.14. "Loan Documents" shall mean, collectively, the following agreements and instruments: (i) this Agreement, (ii) the Pagares, (iii) each Guaranty Agreement, (iv) the Reimbursement Agreement, (v) Administrative Agent's Fee Letter, (vi) the QUALCOMM Fee Letter, (vii) the Stock Options, (viii) any Letter of Credit or related Letter of Credit application, (ix) the QUALCOMM Guaranty, (x) an agreement dated as of the Closing Date among QUALCOMM and the members of the Borrower Group regarding the waiver of certain conditions under Section 5.2, and (xi) any other agreements or instruments that may be executed and delivered in favor of Administrative Agent or one or more Lenders pursuant to or in connection with this Agreement or any of the above-listed documents. "Material Adverse Effect" shall mean an event, circumstance, occurrence or condition which has caused or could reasonably be expected to cause, as of any date of determination, a material and adverse effect on (i) the business, assets, liabilities, operations, prospects or condition (financial or otherwise) of the Borrower Group (taken as a whole), (ii) the ability of Borrower to perform Borrower Obligations or the ability of the Borrower Group (taken as a whole) to perform its (or their) material Obligations under the Loan Documents (including its (or their) ability to pay its (or their) obligations under the Loan Documents as such obligations become due), (iii) the legality, validity or enforceability of any of the Loan Documents or (iv) the rights of or benefits available to the Lenders under the Loan Documents; provided, however, that, after the Closing Date, clause (ii) of this definition shall apply only for purposes of Sections 5.3(c) and 9.1(k). "Maturity" or "maturity" shall mean the earlier of (i) the Scheduled Maturity Date and (ii) the date on which (A) the Loans have been accelerated pursuant to Section 9.2 or (B) the Loans have been prepaid in full and the Commitments terminated pursuant to this Agreement. "Mexico" shall mean the United Mexican States. 15 "New Shareholders" shall have the meaning set forth in the Joint Venture Agreement. "Obligation Currency" shall have the meaning set forth in Section 11.15. "Obligations" shall mean all Borrower Obligations and all other obligations of members of the Borrower Group now existing or hereinafter arising, direct or indirect, absolute or contingent, due or to become due, under any of the Loan Documents, including, without duplication, (i) the principal of and interest on the Loans, the reimbursement obligations of Borrower in connection with Letters of Credit, the reimbursement obligations of the Borrower Group pursuant to the Reimbursement Agreement and all other obligations, advances, debts and liabilities of members of the Borrower Group, including indemnities, and fees and interest incurred under, arising out of or in connection with the this Agreement or any other Loan Document (whether or not evidenced by any note, bond or other instrument and whether or not for the payment of money), (ii) the obligations of Borrower to make deposits to the cash collateral account described in Section 2.4(j), and (iii) the expenses of any exercise by Administrative Agent or any Lender of its rights or remedies under this Agreement or any other Loan Document, together with attorneys' fees and court costs. "Operator Agreement" shall mean the Management and Operator Agreement between Borrower and Leap Wireless Mexico. "Original Mexican Shareholders" shall mean Pegaso Comunicaciones y Servicios, S.A. de C.V., Corporativo del Valle de Mexico, S. A. de C. V. and Alejandro Burillo Azcarraga. "Other Taxes" shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. "Pagare" or "Pagares" shall have the meaning set forth in Section 2.11(d). "Pegaso Guaranty Agreement" shall mean the Guaranty Agreement dated as of the Closing Date as executed by each of the Guarantors in favor of Administrative Agent for the benefit and on behalf of Lenders. "Pegaso PCS" shall mean Pegaso PCS, S.A. de C.V., a sociedad anonima de capital variable organized under the laws of Mexico. "Permit" shall have the meaning set forth in Section 6.7. "Permitted Lien" shall have the meaning set forth in Section 6.01 of the Common Agreement as in effect on the date hereof. "Permitted Usage Category" shall mean one or more of the following categories of expenditures, as the context shall require: (i) network operating expenses, general and administrative expenses, sales and marketing expenses, Taxes and interest expense (except that 16 no proceeds of Syndicated Working Capital Loans may be used to pay any interest due on any Loans under this Agreement or the Pagares), other than handset purchases (ii) handset purchases, (iii) capital expenditures not financed under the Vendor Facilities and (iv) all amounts due and payable on the Closing Date under the QUALCOMM Bridge Notes, and any other non-interest financing costs and expenses payable under or in connection with the Loan Documents. "Person" shall mean any natural person, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or Governmental Authority or other entity. "Personnel Co." shall mean Pegaso Recursos Humanos, S.A. de C.V., a sociedad anonima de capital variable organized under the laws of Mexico. "Pesos" or "Ps." shall mean the lawful currency of Mexico. "Pops" shall mean population, as based on specific population estimates of geographic areas as determined in accordance with those population estimates provided by Comision Federal de Telecomunicaciones of Mexico in connection with the bidding for and award of the Licenses. "QUALCOMM" shall mean QUALCOMM Incorporated, a corporation organized under the laws of Delaware. "QUALCOMM Bridge Notes" shall mean the pagares dated April 16, 1999 and April 29, 1999, each between Borrower and QUALCOMM, evidencing loans by QUALCOMM to Borrower in the aggregate principal amount of $20,119,444. "QUALCOMM Credit Agreement" shall mean the Amended and Restated Credit Agreement dated as of December 15, 1998, between Borrower, the lenders thereunder and ABN AMRO Bank N.V., as QUALCOMM Administrative Agent. "QUALCOMM Event" shall mean, so long (i) as any Obligations owing to Administrative Agent or any Syndicated Lender remain unpaid or unsatisfied, (ii) any Syndicated Working Capital Loans, Term Loans or Letters of Credit remain outstanding, or (iii) any Syndicated Lender has any Commitment or any Exposure under this Agreement, any of the following: (a) any event constituting a "Guarantor Event of Default" under the QUALCOMM Guaranty; (b) any actual or purported repudiation, revocation or rescission by QUALCOMM of the QUALCOMM Guaranty, or QUALCOMM's obligations under the QUALCOMM Guaranty; or (c) the QUALCOMM Guaranty shall cease to remain in full force and effect. "QUALCOMM Fee Letter" shall mean that letter agreement dated the date hereof by and among the Borrower Group and QUALCOMM regarding the payment of fees and other compensation in connection with the delivery by QUALCOMM of the QUALCOMM Guaranty. "QUALCOMM Guaranty" shall mean that Guaranty Agreement, dated as of the date hereof, between QUALCOMM and Administrative Agent pursuant to which QUALCOMM 17 has guaranteed the obligations of Borrower under this Agreement and the Pagares as therein provided. "Qualified Public Offering" shall mean a public offering of common stock of Holdings, (i) in which the offering is made by Holdings and the proceeds are to used by Holdings in its Business, (ii) the amount received by Holdings (net of commissions, discounts and expenses) is not less than $75,000,000, and (iii) such offering results in the common stock (or depository receipts with respect thereto) of Holdings being listed on a national securities market in the United States or in the European Union. "Reference Banks" shall mean Citibank, ABN AMRO Bank N.V. and Societe Generale. "Register" shall have the meaning provided in Section 11.4(c). "Registered Financial Institution" shall mean a bank or other financial institution duly registered in the Registry of Foreign Banks of Mexico, Financing Entities, Pension Funds and Investments Funds. "Registration Rights Agreements" shall mean the Registration Rights Agreement dated as of July 16, 1998 by and among Holdings and the Sponsors as amended as of the date hereof. "Reimbursement Agreement" shall mean that Reimbursement Agreement dated as of the date hereof by and among the members of the Borrower Group and QUALCOMM, with respect to Borrower's reimbursement obligations to QUALCOMM in connection with any payments made by QUALCOMM under the QUALCOMM Guaranty. "Related Parties" shall mean, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates. "Required Capitalized Interest Lenders" shall mean, at any time, the Capitalized Interest Lenders having Exposures under the Capitalized Interest Facility and unused Capitalized Interest Commitments representing at least 51% of the sum of the total Exposures under the Capitalized Interest Facility and unused Capitalized Interest Commitments of all Capitalized Interest Lenders at such time. "Required Lenders" shall mean, at any time, all of the following: (a) the Required Syndicated Lenders, (b) the Required Vendor Working Capital Lenders, and (c) the Required Capitalized Interest Lenders. "Required Syndicated Lenders" shall mean, at any time, the Syndicated Lenders having Exposures under the Working Capital Facility and unused Working Capital Commitments (or, following the Commitment Termination Date, Term Loans) representing at least 51% of the sum of the total Exposures under the Working Capital Facility and unused Working Capital Commitments (or, following the Commitment Termination Date, Term Loans) 18 of all Syndicated Lenders at such time; provided, however, that references to "Required Syndicated Lenders" shall be deemed to be references to "Required Lenders" (and clause (a) of the definition of "Required Lenders" shall be disregarded) if (i) the Exposures of all Syndicated Lenders shall have been reduced to zero, (ii) all Syndicated Working Capital Commitments, all Term Loan Commitments and all LC Exposures shall have been terminated, (iii) all Syndicated Working Capital Loans and all Term Loans shall have been repaid, (iv) no Letters of Credit shall be outstanding, and (v) all other Obligations payable to any Syndicated Lender or to the Administrative Agent shall have been paid in full. "Required Vendor Working Capital Lenders" shall mean, at any time, the Vendor Working Capital Lenders having Exposures under the Vendor Working Capital Facility and unused Working Capital Commitments representing at least 51% of the sum of the total Exposures under the Vendor Working Capital Facility and unused Working Capital Commitments of all Vendor Working Capital Lenders at such time. "Responsible Officer" shall mean, with respect to any member of the Borrower Group, the President, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer or General Counsel of such member, or any Person having a similar function. "Satisfaction of QUALCOMM Conditions Precedent Letter" shall mean that letter of QUALCOMM to Administrative Agent indicating that the conditions precedent set forth in Section 5.2 and 5.3 have occurred or been waived, in each case to the satisfaction of QUALCOMM. "SEC" shall mean the U.S. Securities and Exchange Commission. "Scheduled Maturity Date" shall mean the date that is 18 months after the Closing Date; provided, that if such date is not a Business Day, the Scheduled Maturity Date shall be the immediately preceding Business Day. "Senior Indebtedness" shall have the meaning set forth in Annex A to the Common Agreement as in effect on the date hereof . "Sponsors" shall mean collectively all of the shareholders of Holdings, which as of the date hereof are Leap Mexico, the Original Mexican Shareholders and the New Shareholders. "Sponsors Negative Pledge Agreement" shall mean the Negative Pledge Agreement, dated as of April 12, 1999, pursuant to which each of the Sponsors has agreed not to grant a Lien to any third party on the Capital Stock of Holdings held by such Sponsor, to the extent provided therein. "Stock Options" shall mean collectively the Stock Option Agreements of even date herewith granted by Holdings in favor of QUALCOMM and each of the Counter-Guarantors. 19 "Subsidiary" shall mean, for any Person, any other Person (whether now existing or hereafter organized) for which at least a majority of the securities or other ownership interests having ordinary voting power for the election of directors or other managers are at the time owned or controlled by such first Person or one or more Subsidiaries of such first Person or any combination thereof. "Syndicated Lender" shall mean any Lender having a Syndicated Working Capital Commitment or a Term Loan Commitment. "Syndicated Working Capital Commitment" shall mean, with respect to each Syndicated Lender, the amount set forth on Schedule 2.1 as such Syndicated Lender's "Syndicated Working Capital Commitment", as such amount may be adjusted from time to time pursuant to the terms of this Agreement. "Syndicated Working Capital Commitment Percentage" shall mean, with respect to any Syndicated Lender, the percentage equivalent of such Syndicated Lender's Syndicated Working Capital Commitment divided by either (a) if the Term-Out Option shall not have become effective for any reason, the Total Syndicated Working Capital Commitment or (b) if, subject to the terms and conditions hereof, the Term-Out Option shall have become effective, the Total Term Loan Commitment. "Syndicated Working Capital Facility" shall mean the extension of credit to Borrower by the Syndicated Lenders as set forth in Section 2.1. "Syndicated Working Capital Loans" shall mean loans made to Borrower by the Syndicated Lenders under the Syndicated Working Capital Facility pursuant to this Agreement, as described in clause (a) of Section 2.1. "Syndication" shall have the meaning assigned in Section 2.16. "System" shall mean the wireless broadband PCS system to be constructed and rolled out by the Borrower Group pursuant to the Business Plan. "Taxes" shall mean all taxes of every kind (including gross and net income, gross and net receipts, capital gains, excess profits and minimum taxes, taxes on tax preferences, capital, net worth, franchise, sales, use value-added, stamp, documentary, excise, property and other similar taxes), charges and withholdings, levies, imposts, duties, fees and deductions imposed by any Governmental Authority, together with all interest, additions to tax, penalties and similar add-ons payable with respect thereto. "Tax Return" shall mean any return, declaration, report, claim for refund or information return or statement relating to Taxes or any amendment thereto, and including any schedule or attachment thereto. "Term Loans" shall mean loans made to Borrower by the Syndicated Lenders under the Syndicated Working Capital Facility pursuant to this Agreement, as described in clause (c) of Section 2.1, subject to the exercise of the Term-Out Option pursuant to Section 2.10(b). 20 "Term Loan Commitment" shall mean, with respect to each Syndicated Lender, (a) if, subject to the terms and conditions hereof, the Term-Out Option shall have become effective, an amount equal to such Syndicated Lender's Syndicated Working Capital Commitment, and (b) if the Term-Out Option shall not have become effective for any reason, zero. "Term-Out Option" shall have the meaning set forth in Section 2.10(b). "Total Capitalized Interest Commitment" shall mean Fifteen Million Dollars ($15,000,000), as such amount may be increased pursuant to Section 2.12(d). "Total Commitment" shall mean, as of the date of determination, the aggregate amount of the Total Capitalized Interest Commitment plus the Total Working Capital Commitment. "Total Syndicated Working Capital Commitment" shall mean (a) Sixty Million Dollars ($60,000,000), or (b) to the extent, if any, increased pursuant to Section 2.9(f), an amount up to One Hundred Million Dollars ($100,000,000), as such amount, in each case, may be reduced pursuant to Section 2.9(g). "Total Term Loan Commitment" shall mean, as of the date of determination, the aggregate amount of the Term Loan Commitments of all Syndicated Lenders. "Total Vendor Working Capital Commitment" shall mean Forty Million Dollars ($40,000,000), as such amount may be adjusted pursuant to Section 2.9(f). "Total Working Capital Commitment" shall mean the sum of the Total Syndicated Working Capital Commitment and the Total Vendor Working Capital Commitment, which shall be an aggregate amount equal to One Hundred Million Dollars ($100,000,000); provided that after the Commitment Termination Date applicable to Syndicated Working Capital Loans, if the Term-Out Option shall have become effective, the "Total Working Capital Commitment" shall mean the sum of the Total Term Loan Commitment and the Total Vendor Working Capital Commitment. "Type", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Eurodollar Rate or the Base Rate. "Underwriting Fee" shall mean the "Underwriting Fee" under and as defined in the QUALCOMM Fee Letter. "United States" or "U.S." shall mean the United States of America. "U.S. GAAP" shall mean generally accepted accounting principles in the United States. "Usury Permit" shall have the meaning set forth in Section 7.7. 21 "Vendor Facilities" shall mean the credit facilities provided to Borrower under the QUALCOMM Credit Agreement and the Alcatel Credit Agreement. "Vendor Post-Closing Agreement" shall mean the Agreement Regarding Closing Conditions dated as of February 26, 1999, among each member of the Borrower Group, Citibank, N.A., as Intercreditor Agent, Citibank Mexico, S.A., Grupo Financiero Citibank, as Collateral Agent, Citibank International Plc, as Alcatel Administrative Agent, and ABN AMRO Bank N.V., as QUALCOMM Administrative Agent. "Vendor Working Capital Commitment" shall mean, with respect to each Vendor Working Capital Lender, the amount set forth on Schedule 2.2 as such Vendor Working Capital Lender's "Vendor Working Capital Commitment", as such amount may be adjusted from time to time pursuant to the terms of this Agreement. "Vendor Working Capital Commitment Percentage" shall mean, with respect to any Vendor Working Capital Lender, the percentage equivalent of such Vendor Working Capital Lender's Vendor Working Capital Commitment divided by the Total Vendor Working Capital Commitment. "Vendor Working Capital Facility" shall mean the extension of credit to Borrower by the Vendor Working Capital Lenders as set forth in Section 2.2. "Vendor Working Capital Lender" shall mean QUALCOMM and, following the Commitment Termination Date applicable to Syndicated Working Capital Loans, any other Lender having a Vendor Working Capital Commitment. "Vendor Working Capital Loans" shall mean loans made to Borrower by Vendor Working Capital Lenders under the Vendor Working Capital Facility pursuant to this Agreement. "Working Capital Commitment" shall mean, with respect to each Working Capital Lender, such Working Capital Lender's Syndicated Working Capital Commitment or Vendor Working Capital Commitment, as the case may be. "Working Capital Facilities" shall mean the Syndicated Working Capital Facility and the Vendor Working Capital Facility. "Working Capital Lender" shall mean any Lender having a Working Capital Commitment. "Working Capital Loans" shall mean Syndicated Working Capital Loans and Vendor Working Capital Loans. 22 1.2 Other Interpretive Provisions. (a) All terms defined in this Agreement shall have their defined meanings when used in the other Loan Documents and any certificate or other document made or delivered pursuant hereto, unless the context clearly indicates otherwise. (b) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, recital, schedule and exhibit references are to this Agreement unless otherwise specified. (c) References to the words "include" or "including" shall be deemed to be followed by "without limitation" or "but not limited to", whether or not they are followed by such phrases or words of similar import. (d) The word "or" is not exclusive. (e) All terms defined in this Agreement in the singular form shall be equally applicable to both the singular and plural forms of the terms defined and the masculine, feminine or neuter gender shall include all genders. (f) References in any Loan Document to any statute, decree, regulation or other Applicable Law shall be construed as a reference to such statute, law, decree, regulation or other Applicable Law as re-enacted, redesignated, amended or extended from time to time, except as otherwise provided in such Loan Document. (g) References in any Loan Document to any other document or agreement shall (unless otherwise expressly indicated) be deemed to include references to such other document or agreement as amended, varied, supplemented or replaced from time to time in accordance with the terms of such document or agreement and this Agreement and to include any appendices, schedules, exhibits, clarification letters, side letters and disclosure letters executed in connection therewith. (h) References to any Person or Persons shall be construed as a reference to any successors or assigns of such Person or Persons to the extent permitted under the Loan Documents and, in the case of any Governmental Authority, any Person succeeding to its functions and capacities. 1.3 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. All financial statements to be furnished to Administrative Agent, QUALCOMM or the other Lenders pursuant to this Agreement shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto); provided that if at any time such computations utilize accounting principles different from those utilized in the financial statements furnished pursuant to Section 7.1(a), such financial statements shall be accompanied by reconciliation worksheets. 23 SECTION 2. THE CREDITS. 2.1 Syndicated Working Capital Facility. (a) Syndicated Working Capital Loan Commitments. Subject to the terms and conditions set forth in this Agreement, each Syndicated Lender agrees to make Syndicated Working Capital Loans to Borrower from time to time during the Availability Period applicable to the Syndicated Working Capital Facility in an aggregate principal amount that will not result in (i) such Lender's Exposure under the Syndicated Working Capital Facility exceeding such Lender's Syndicated Working Capital Commitment or (ii) the sum of all Syndicated Lenders' Exposures under the Syndicated Working Capital Facility exceeding the Total Syndicated Working Capital Commitment. The amount otherwise available for Borrowings of Syndicated Working Capital Loans as of any time of determination (other than to reimburse the Issuing Bank for an LC Disbursement as contemplated by Section 2.4(e)) shall be reduced by the LC Exposure as of such time of determination. Within the foregoing limits and subject to the terms and conditions set forth herein, Borrower may borrow, prepay and reborrow Syndicated Working Capital Loans. (b) Permitted Uses of Syndicated Working Loan Proceeds and Letters of Credit. Borrower shall use the proceeds of each Syndicated Working Capital Loan and any Letter of Credit issued under Section 2.4 solely for Permitted Use Category expenditures, and to support Permitted Use Category obligations, in amounts as outlined in the Budget and, with respect to Syndicated Working Capital Loans, to finance the reimbursement of an LC Disbursement as contemplated by Section 2.4(e), and for such other uses as may be approved by QUALCOMM in its sole and absolute discretion. (c) Term Loan Commitments. Subject to the terms and conditions set forth in this Agreement, each Syndicated Lender agrees to make Term Loans to Borrower on the Commitment Termination Date applicable to the Syndicated Working Capital Facility in an aggregate principal amount equal to the principal balance of such Syndicated Lender's Syndicated Working Capital Loans then outstanding plus such Syndicated Lender's unused Syndicated Working Capital Commitment on such date, so long as (i) the making of such Term Loans will not result in (A) such Lender's Exposure under the Syndicated Working Capital Facility exceeding such Lender's Term Loan Commitment or (B) the sum of all Syndicated Lenders' Exposures under the Syndicated Working Capital Facility exceeding the Total Term Loan Commitment, and (ii) the terms and conditions of Section 2.10(b) are satisfied upon the election of the Term-Out Option by Borrower. Within the foregoing limits and subject to the terms and conditions set forth herein, Borrower may borrow and prepay Term Loans. Once repaid, Term Loans may not be reborrowed. Once repaid by the proceeds of Term Loans, amounts under the Syndicated Working Capital Facility may not be re-borrowed. (d) Permitted Uses of Term Loan Proceeds. Borrower shall use the proceeds of the Term Loans solely for (i) the payment in full of the principal balance of all Syndicated Working Capital Loans outstanding on the Commitment Termination Date applicable to Syndicated Working Capital Loans and (ii) to the extent the aggregate principal balance of the 24 Term Loans exceeds the aggregate principal balance of such Syndicated Working Capital Loans, for Permitted Use Category expenditures in amounts as outlined in the Budget. 2.2 Vendor Working Capital Facility. (a) Vendor Working Capital Loan Commitments. Subject to the terms and conditions set forth in this Agreement, each Vendor Working Capital Lender agrees to make Vendor Working Capital Loans to Borrower from time to time during the Availability Period applicable to the Vendor Working Capital Facility in an aggregate principal amount that will not result in (i) such Lender's Exposure under the Vendor Working Capital Facility exceeding such Lender's Vendor Working Capital Commitment or (ii) the sum of all Vendor Working Capital Lenders' Exposures under the Vendor Working Capital Facility exceeding the Total Vendor Working Capital Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, Borrower may borrow, prepay and reborrow Vendor Working Capital Loans. (b) Permitted Uses of Vendor Working Loan Proceeds. Borrower shall use the proceeds of each Vendor Working Capital Loan solely for (i) Permitted Use Category expenditures in amounts as outlined in the Budget and (ii) such other uses as may be approved by QUALCOMM in its sole and absolute discretion. 2.3 Capitalized Interest Facility. (a) Capitalized Interest Loan Commitments. Subject to the terms and conditions set forth in this Agreement, each Capitalized Interest Lender agrees to make Capitalized Interest Loans to Borrower from time to time during the Availability Period applicable to the Capitalized Interest Facility in an aggregate principal amount that will not result in (i) such Lender's Exposure under the Capitalized Interest Facility exceeding such Lender's Capitalized Interest Commitment or (ii) the sum of all Capitalized Interest Lenders' Exposures under the Capitalized Interest Facility exceeding the Total Capitalized Interest Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, Borrower may borrow and prepay Capitalized Interest Loans. Once repaid, amounts under the Capitalized Interest Facility may not be re-borrowed. (b) Permitted Uses of Capitalized Interest Loan Proceeds. Borrower shall use the proceeds of each Capitalized Interest Loan solely for (i) interest payments to Working Capital Lenders on the Working Capital Loans, (ii) interest payments to Syndicated Lenders on the Term Loans, (iii) payments to the Issuing Bank for fees and costs related to the issuance of Letters of Credit, and (iv) payment to QUALCOMM of the Underwriting Fee and the Guaranty Fee. 2.4 Letters of Credit. (a) General. In addition to Borrower requesting Syndicated Working Capital Loans pursuant to Section 2.1, subject to the terms and conditions set forth herein, Borrower may request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to Administrative Agent and the Issuing Bank, at any time and from time to time during the 25 Availability Period applicable to the Syndicated Working Capital Facility. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by Borrower to, or entered into by Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), Borrower shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice, approved and signed by QUALCOMM in accordance with Section 2.6(b), requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, Borrower also shall submit a letter of credit application on the Issuing Bank's standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $10,000,000 and (ii) the sum of the total Syndicated Lenders' LC Exposures plus the aggregate principal amount of outstanding Syndicated Working Capital Loans shall not exceed the Total Syndicated Working Capital Commitments. (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Scheduled Maturity Date. (d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or Syndicated Lenders, the Issuing Bank hereby grants to each Syndicated Lender, and each Syndicated Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Syndicated Lender's Syndicated Working Capital Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Syndicated Lender hereby absolutely and unconditionally agrees to pay to Administrative Agent, for the account of the Issuing Bank, such Syndicated Lender's Syndicated Working Capital Commitment Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to Borrower for any reason. Each Syndicated Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including 26 any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement by paying to Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the date that such LC Disbursement is made, if Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on (i) the Business Day that Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.1 that such payment be financed with a Syndicated Working Capital Loan in an equivalent amount and, to the extent so financed, Borrower's obligation to make such payment shall be discharged and replaced by the resulting Syndicated Working Capital Loan. If Borrower fails to make such payment when due, Administrative Agent shall notify each Syndicated Lender of the applicable LC Disbursement, the payment then due from Borrower in respect thereof and such Syndicated Lender's Syndicated Working Capital Commitment Percentage thereof. Promptly following receipt of such notice, each Syndicated Lender shall pay to Administrative Agent its Syndicated Working Capital Commitment Percentage of the payment then due from Borrower, in the same manner as provided in Section 2.7 with respect to Loans made by such Syndicated Lender (and Section 2.7 shall apply, mutatis mutandis, to the payment obligations of Lenders), and Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from Syndicated Lenders. Promptly following receipt by Administrative Agent of any payment from Borrower pursuant to this paragraph, Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Syndicated Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Syndicated Lenders and the Issuing Bank as their interests may appear. Any payment made by a Syndicated Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of Syndicated Working Capital Loan as contemplated above) shall not constitute a Loan and shall not relieve Borrower of its obligation to reimburse such LC Disbursement. (f) Obligations Absolute. Borrower's obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein; (ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or this Agreement; 27 (iii) the existence of any claim, setoff, defense or other right that Borrower, any other party guaranteeing, or otherwise obligated with, Borrower, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank, Administrative Agent or any Lender or any other Person, whether in connection with this Agreement or any other related or unrelated agreement or transaction; (iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (v) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; and (vi) any other act or omission to act or delay of any kind of the Issuing Bank, Lenders, Administrative Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of Borrower's obligations hereunder. Neither Administrative Agent, the Syndicated Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by Borrower to the greatest extent permitted by applicable law) suffered by Borrower that are caused by the Issuing Bank's gross negligence or willful misconduct when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that (A) the Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit, (B) the Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit, (C) any action taken by the Issuing Bank in accordance with either of the foregoing clauses shall be deemed not to constitute gross negligence or willful misconduct and (D) this sentence shall establish the standard of care to be exercised by the Issuing Bank when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by applicable law, any standard of care inconsistent with the foregoing). 28 (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify Administrative Agent and Borrower by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve Borrower of its obligation to reimburse the Issuing Bank and the Syndicated Lenders with respect to any such LC Disbursement. (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that Borrower reimburses such LC Disbursement, at the rate per annum then applicable to Syndicated Working Capital Loans that are Base Rate Loans; provided that, if Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.12(b) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Syndicated Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Syndicated Lender to the extent of such payment. (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time with respect to Letters of Credit to be issued thereafter by written agreement among Borrower, Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. Administrative Agent shall notify the Syndicated Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 3.1(d). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit. (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that Borrower receives notice from Administrative Agent or the Required Syndicated Lenders (or, if the maturity of the Syndicated Working Capital Loans has been accelerated, Syndicated Lenders with an LC Exposure representing at least 51% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, Borrower shall deposit in an account with Administrative Agent, in the name of Administrative Agent and for the benefit of the Syndicated Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to Borrower described in clause (e), (f) or (g) of Section 9.1; provided, 29 further, that the Required Syndicated Lenders shall not give any such notice nor direct Administrative Agent to give any such notice in the case of any Event of Default of the type described in clause (b), (c) except if resulting from a breach of Section 8.1 or 8.4, (d), (k), (n) or (o) of Section 9.1 if, upon any such Event of Default, QUALCOMM shall have delivered to Administrative Agent, promptly upon request, a confirmation of the QUALCOMM Guaranty, and no other type of Event of Default nor any QUALCOMM Event shall have occurred and be continuing. Such deposit shall be held by Administrative Agent as collateral for the payment and performance of the obligations of Borrower under this Agreement. Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of Administrative Agent in such investments as may be usual and customary for collateral accounts of this type maintained by the Administrative Agent and at Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by Administrative Agent, first, to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, second, to the extent not so applied, shall be applied to satisfy other Obligations of Borrower then due and payable under this Agreement and, third, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of Borrower for the LC Exposure at such time. If Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to Borrower within three Business Days after the date when no Default shall exist or all the Obligations shall have been paid in full. 2.5 Loans and Borrowings. (a) Each Syndicated Working Capital Loan shall be made as part of a Borrowing consisting of Syndicated Working Capital Loans made by the Syndicated Lenders ratably in accordance with their respective Syndicated Working Capital Commitments; provided that if any Vendor Working Capital Loans are outstanding when any Additional Lender acquires all or a portion of QUALCOMM's Vendor Working Capital Commitment and Vendor Working Capital Loans as provided in Section 2.9(f), concurrently with the assignment by QUALCOMM to such Additional Lender of such Vendor Working Capital Loans and the deemed conversion of such Vendor Working Capital Loans to Syndicated Working Capital Loans pursuant to clause (B) of Section 2.9(f), such Additional Lender shall fund a Syndicated Loan (the proceeds of which shall be paid directly to the other Syndicated Lenders as a principal prepayment on their respective outstanding Syndicated Loans) in such amount as shall be sufficient to cause the Syndicated Loans outstanding by all Syndicated Lenders (after giving effect to such assignment) to be held by the Syndicated Lenders ratably in accordance with their respective Syndicated Working Capital Commitments, and, when such new Syndicated Loan is applied to the payment of such outstanding Syndicated Loans, Borrower shall pay any amounts due in respect thereof under Section 4.2. Each Vendor Working Capital Loan shall be made as part of a Borrowing consisting of Vendor Working Capital Loans made by the Vendor Working Capital Lenders ratably in accordance with their respective Vendor Working Capital Commitments. Each Capitalized Interest Loan shall be made as part of a Borrowing consisting of Capitalized Interest Loans made by the Capitalized Interest Lenders ratably in accordance with their respective 30 Capitalized Interest Commitments. Each Term Loan shall be made as part of a Borrowing consisting of Term Loans made by the Syndicated Lenders ratably in accordance with their respective Term Loan Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. (b) Subject to Section 2.13(c), each Borrowing shall be composed entirely of Base Rate Loans or Eurodollar Loans as Borrower may request in accordance with this Agreement. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of Borrower to repay such Loan in accordance with the terms of this Agreement. (c) At the time that each Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $2,500,000; provided that (i) a Base Rate Syndicated Working Capital Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Total Syndicated Working Capital Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.4(e), (ii) a Base Rate Vendor Working Capital Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Total Vendor Working Capital Commitment and (iii) a Base Rate Capitalized Interest Borrowing may be in any amount. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Borrowings outstanding. (d) There shall not be Eurodollar Loans outstanding at any one time having more than six (6) different Interest Periods. (e) Notwithstanding any other provision of this Agreement, Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing of Eurodollar Loans if the Interest Period requested with respect thereto would end after the relevant Commitment Termination Date. (f) No Borrowing of Vendor Working Capital Loans shall be permitted unless the Total Syndicated Working Capital Commitment shall then have been fully utilized, after giving effect to any concurrent Borrowing of Syndicated Working Capital Loans. 2.6 Requests for Borrowings. (a) Working Capital Borrowings and Term Loan Borrowings. To request a Working Capital Borrowing or a Term Loan Borrowing for the purposes described in Section 2.1(d)(ii), Borrower shall notify Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing, or (b) in the case of a Base Rate Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of the proposed Borrowing; provided that any such notice of a Base Rate Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.4(e) may be given not 31 later than 10:00 a.m., New York City time, on the date of the proposed Borrowing; and provided, further, that the Syndicated Loan to be funded by the Additional Lender described in the proviso to the first sentence of Section 2.5(a) shall not require any notice by Borrower, shall not be included as a Borrowing for the purpose of the limitation in the number of Borrowings outstanding under the proviso at the end of Section 2.5(c), and, subject to Section 2.9(f), if not made on the last day of the Interest Period for the Syndicated Loans prepaid by such new Syndicated Loan, if such Syndicated Loans are Eurodollar Loans, shall have an initial Interest Period equal to the period from the date of funding until the next occurring last day of an Interest Period for an outstanding Syndicated Loan or, if such Interest Period is not available hereunder, shall be a Base Rate Loan. To request a Term Loan Borrowing for the purposes described in Section 2.1(d)(i), Borrower shall notify Administrative Agent of such request as provided in Section 2.10(b). Each telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to Administrative Agent of a written Borrowing Request in the form of Exhibit B-1 approved by Administrative Agent and signed by Borrower and QUALCOMM. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.5: (i) the aggregate amount of the requested Borrowing; (ii) the date of such Borrowing, which shall be a Business Day; (iii) whether such Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period". If no election as to the Type of Working Capital Borrowing or Term Loan Borrowing is specified, then the requested Borrowing shall be a Base Rate Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this Section, Administrative Agent shall advise each Working Capital Lender, in the case of Borrowings of Working Capital Loans, or each Syndicated Lender, in the case of Borrowings of Term Loans, of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing. (b) Approval by QUALCOMM. QUALCOMM agrees to approve and sign any Borrowing Request for any Working Capital Loan under Section 2.1(a) or Section 2.2(a) or in connection with the issuance, amendment, renewal or extension any Letter of Credit under Section 2.4(b) so long as Borrower shall first have delivered to QUALCOMM a certificate, substantially in the form of Exhibit B-2, signed by an Authorized Officer of Borrower, stating that the requested Borrowing or Letter of Credit will be used to pay or support Permitted Usage Category expenses, which certificate shall include (i) a breakdown (the "Budget Breakdown") by Permitted Usage Category of the amount of expenditures and Letter of Credit support as of such date and (ii) the amount requested according to the unexpended and unsupported portion of such 32 Permitted Usage Categories as set forth in the Budget. Each delivery of a Borrowing Request signed by QUALCOMM in accordance with Section 2.6(a), and each delivery of a request for the issuance, amendment, renewal or extension of a Letter of Credit signed by QUALCOMM in accordance with Section 2.4(b), if made in conjunction with any Borrowing under the Syndicated Working Capital Facility (including any Borrowing of Syndicated Working Capital Loans and any Borrowing of Term Loans) or any issuance, amendment, renewal or extension of any Letter of Credit, shall be deemed to constitute (A) a confirmation on the date thereof by QUALCOMM of the QUALCOMM Guaranty and QUALCOMM's obligations thereunder and (B) a representation and warranty by QUALCOMM on the date thereof as to the matters specified in paragraph (d) of Section 5.3 or in paragraph (a) of Section 5.5, as the case may be. (c) Capitalized Interest Borrowings. To request a Capitalized Interest Borrowing, Borrower shall notify Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing, or (b) in the case of a Base Rate Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to Administrative Agent of a written Capitalized Interest Loan Request in the form of Exhibit C, approved by Administrative Agent and signed by Borrower. Each such telephonic and written Capitalized Interest Loan Request shall specify the following information in compliance with Section 2.5: (i) the aggregate amount of the requested Borrowing; (ii) the date of such Borrowing, which shall be a Business Day and (A) an Interest Payment Date, (B) a date on which fees are payable under this Agreement in connection with any Letter of Credit or (C) a date on which the Underwriting Fee is payable; (iii) whether such Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period". If no election as to the Type of Capitalized Interest Borrowing is specified, then the requested Capitalized Interest Borrowing shall be a Base Rate Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Capitalized Interest Borrowing, then Borrower shall be deemed to have selected an Interest Period of one month's duration. With respect to Capitalized Interest Loans to be made for the payment of interest on the Working Capital Loans, if Borrower has not delivered a Capitalized Interest Loan Request on or before the Business Day prior to the next succeeding Interest Payment Date, a Capitalized Interest Loan Request shall be deemed to have been made on such date (a "Deemed Capitalized Interest Loan Request") for a Base Rate Loan in the amount of the interest payment to become due and payable on such Interest Payment Date. Promptly following receipt of a Capitalized Interest Loan Request or a Deemed Capitalized Interest Loan Request in accordance with this Section, Administrative Agent shall 33 advise each Capitalized Interest Lender of the details thereof and of the amount of such Capitalized Lender's Capitalized Interest Loan to be made as part of the requested Borrowing. 2.7 Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of Administrative Agent most recently designated by it for such purpose by notice to the Lenders. Administrative Agent shall make such Loans available to Borrower by promptly crediting the amounts so received, in like funds, to an account of Borrower maintained with Administrative Agent in New York City and designated by Borrower in the applicable Borrowing Request or Capitalized Interest Loan Request; provided that Base Rate Syndicated Working Capital Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.4(e) shall be remitted by Administrative Agent to the Issuing Bank; provided, further, that Capitalized Interest Loans made to pay fronting fees in respect of Letters of Credit or any other amounts due and payable by Borrower to the Issuing Bank shall be remitted by Administrative Agent to the Issuing Bank; provided, further, that Capitalized Interest Loans made to pay interest on Working Capital Loans, interest due on Term Loans, or participation fees due in respect of Letters of Credit shall be (i) disbursed on behalf of Borrower directly to Administrative Agent for the ratable account of the Lenders (other than QUALCOMM) entitled to receive such payment of interest or fees (net of any amounts described in clause (ii) of this paragraph that are due and payable to QUALCOMM from such payment in accordance with the QUALCOMM Guaranty) and (ii) withheld by (or, to the extent QUALCOMM is not the sole Capitalized Interest Lender, paid to) QUALCOMM, as the "Guarantor" under the QUALCOMM Guaranty, to the extent QUALCOMM, as the "Guarantor" under the QUALCOMM Guaranty, is entitled to receive from the proceeds of such Capitalized Interest Loan payment of interest on Vendor Working Capital Loans or payment of the Guaranty Fee as and when due in accordance with the QUALCOMM Guaranty; and provided, further, that the new Syndicated Loan to be funded by the Additional Lender in accordance with the proviso to the first sentence of Section 2.5(a) shall be paid directly to the other Syndicated Lenders as contemplated in such sentence. (b) Unless Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to Administrative Agent such Lender's share of such Borrowing, Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to Administrative Agent, then the applicable Lender and Borrower severally agree to pay to Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrower to but excluding the date of payment to Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of Borrower, the interest rate applicable to Base Rate Loans. If 34 such Lender pays such amount to Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing. 2.8 Interest Elections. (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request or Capitalized Interest Loan Request, as the case may be, and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or Capitalized Interest Loan Request. Thereafter, Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered separate Borrowings. (b) To make an election pursuant to this Section, Borrower shall notify Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.6 if Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to Administrative Agent of a written Interest Election Request in a form approved by Administrative Agent and signed by Borrower. (c) Each telephonic and written Interest Election Request shall be in the form of Exhibit D to this Agreement, shall evidence the joint and several guarantee "avalado" by the Guarantors, shall be attached to the Pagare which evidences such Loans by Administrative Agent (if it holds possession of the Pagare) and otherwise by the relevant Lender, and shall specify the following information in compliance with Section 2.5: (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; (iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period". 35 If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then Borrower shall be deemed to have selected an Interest Period of one month's duration. (d) Promptly following receipt of a Interest Election Request with respect