Exhibit 10.14
PURCHASE AGREEMENT
AMONG
UBIQUITEL, LLC,
UBIQUITEL HOLDINGS, INC.
AND
BET ASSOCIATES, L.P.
DATED AS OF DECEMBER 28, 1999
RELATING TO:
$8,000,000
UBIQUITEL LLC 12% SENIOR SUBORDINATED NOTES
DUE DECEMBER 28, 2007
AND
WARRANTS TO PURCHASE 9.75% OF THE
SHARES OF COMMON STOCK OF UBIQUITEL HOLDING CO.
TABLE OF CONTENTS
Page
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SECTION 1. SALE AND PURCHASE OF NOTES AND WARRANTS........................1
SECTION 2. THE CLOSING....................................................1
SECTION 3. DEFINITIONS....................................................2
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES...............13
4.1 Corporate Existence, Power and Authority......................13
4.2 Capitalization................................................14
4.3 Subsidiaries..................................................14
4.4 Business......................................................14
4.5 No Defaults or Conflicts......................................14
4.6 Disclosure Materials; Other Information.......................15
4.7 Litigation....................................................16
4.8 Taxes.........................................................16
4.9 ERISA.........................................................16
4.10 Legal Compliance..............................................16
4.11 Permits; Licenses and Approvals...............................16
4.12 Patents.......................................................17
4.13 Status Under Certain Statutes.................................17
4.14 Key Employees.................................................17
4.15 Properties....................................................17
4.16 Suppliers and Customers.......................................17
4.17 Environmental Compliance......................................18
4.18 Indebtedness..................................................18
4.19 Disaster......................................................19
4.20 Impact of the Sprint Agreements...............................19
4.21 Offering of Notes and Warrants................................19
SECTION 5. REPRESENTATIONS AND COVENANTS OF THE PURCHASER................19
SECTION 6. PREPAYMENTS AND REPAYMENTS....................................20
6.1 Mandatory Prepayments.........................................20
6.2 Optional Prepayments..........................................21
6.3 Mandatory Repayment Upon Change of Control Event..............22
6.4 Miscellaneous.................................................22
SECTION 7. AFFIRMATIVE COVENANTS.........................................23
7.1 Use of Proceeds...............................................23
7.2 Financial Information.........................................23
(i)
7.3 Compliance Certificates.......................................25
7.4 Inspection....................................................25
7.5 Maintenance of Existence; Properties and Franchises;
Compliance with Law; Taxes; Insurance.........................25
7.6 Office for Payment............................................26
7.7 Notices.......................................................26
7.8 Payment of Dividends by Subsidiaries..........................27
7.9 Board Observation Rights......................................27
7.10 Environmental Matters.........................................27
7.11 Reservation of Shares.........................................28
7.12 Listing of Shares.............................................28
7.13 Delivery of Information for Rule 144A Transactions............28
7.14 Senior Credit Facility........................................28
7.15 Evidence of Equity Funds......................................29
SECTION 8. NEGATIVE COVENANTS............................................29
8.1 Restricted Payments...........................................29
8.2 Sale of Substantial Portion of Assets; Subsidiaries...........29
8.3 Permitted Indebtedness........................................30
8.4 Certain Ratios................................................31
8.5 No Change in Business.........................................33
8.6 Consolidation or Merger.......................................33
8.7 HSR Act.......................................................33
8.8 Transactions with Affiliates..................................34
8.9 Liens, Etc....................................................34
8.10 No Restrictions on Dividends..................................35
8.11 Private Placement Status......................................35
8.12 No Dilution or Impairment; No Changes in Capital Stock........35
8.13 Limitation on Creation of Subsidiaries........................35
SECTION 9. SUBORDINATION.................................................36
9.1 Agreement to Be Bound.........................................36
9.2 Priority of Senior Indebtedness...............................36
9.3 Liquidation; Dissolution; Bankruptcy..........................37
9.4 No Prejudice or Impairment; Reinstatement.....................38
9.5 Subrogation...................................................38
9.6 Obligations Unaffected........................................39
9.7 Definition of Senior Indebtedness.............................39
9.8 Effectiveness of Acceleration of Notes and
Exercise of Remedies..........................................39
9.9 Turnover; Miscellaneous Subordination Provisions..............40
SECTION 10. CONDITIONS TO PURCHASER'S OBLIGATIONS.........................40
10.1 Final Documentation of Senior Credit Facility.................41
10.2 Accuracy of Representations and Warranties....................41
10.3 Compliance with Agreements; No Defaults.......................41
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10.4 Officer's Certificate.........................................41
10.5 Proceedings...................................................41
10.6 Opinion of Counsel............................................41
10.7 Other Documents and Opinions..................................41
10.8 Equity Contribution...........................................41
SECTION 11. AMENDMENT; WAIVER; CONSENT....................................41
SECTION 12. EXCHANGE OF NOTES; ACCRUED INTEREST; CANCELLATION OF
SURRENDERED NOTES; REPLACEMENT................................43
SECTION 13. DEFAULTS......................................................44
SECTION 14. REMEDIES......................................................46
SECTION 15. RESTRICTIONS ON TRANSFER......................................47
SECTION 16. EXPENSES......................................................48
SECTION 17. HOME OFFICE PAYMENTS..........................................50
SECTION 18. NOTICES.......................................................50
SECTION 19. MISCELLANEOUS.................................................51
19.1 Entire Agreement..............................................51
19.2 Survival......................................................51
19.3 Counterparts..................................................51
19.4 Headings......................................................51
19.5 Binding Effect; Benefit and Assignment........................51
19.6 Severability..................................................52
19.7 Governing Law.................................................52
19.8 Currency......................................................52
19.9 Late Payments.................................................52
19.10 Guarantee of Subsidiaries.....................................52
19.11 Consent To Jurisdiction And Service Of Process................56
19.12 Waiver Of Jury Trial..........................................57
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Exhibit A - Form of Note
Exhibit B - Form of Warrant
Exhibit C - Disclosure Schedule
Exhibit D - Opinion of Counsel to the Company
Exhibit E - Joinder for Guarantor Subsidiaries
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PURCHASE AGREEMENT dated as of December 28, 1999 by and among UBIQUITEL, LLC, a
Delaware limited liability corporation ("Ubiquitel"), UBIQUITEL HOLDINGS, INC.,
a Delaware corporation ("UHC" and together with Ubiquitel, each a "Company" and
together, the "Companies"), and BET ASSOCIATES, L.P., a Delaware limited
partnership (the "Purchaser").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
SECTION 1. SALE AND PURCHASE OF NOTES AND WARRANTS
(a) Ubiquitel agrees to sell to the Purchaser and, subject to the
terms and conditions hereof and in reliance upon the representations and
warranties of the Companies contained herein or made pursuant hereto, the
Purchaser agrees to purchase from Ubiquitel on the Closing Date specified in
Section 2 hereof, a Note or Notes in the aggregate principal amount of
$8,000,000. UHC agrees to sell to the Purchaser and, subject to the terms and
conditions hereof and in reliance upon the representations and warranties of the
Companies contained herein or made pursuant hereto, the Purchaser agrees to
purchase from UHC on the Closing Date specified in Section 2 hereof, Warrants to
purchase 2,489,075 shares, representing 9.75% of the fully diluted Common Stock
of UHC. The aggregate purchase price to be paid to the Companies by the
Purchaser for such Notes and Warrants is $8,000,000, of which 99.9% shall be
allocated to the Notes and 0.1% to the Warrants.
(b) As used herein, "Notes'" means $8,000,000 aggregate principal
amount of Ubiquitel's 12% Senior Subordinated Notes Due December 28, 2007 issued
pursuant to this Purchase Agreement. Each Note will be substantially in the form
set forth as Exhibit A hereto. Interest on the Notes shall accrue from the
Closing Date and shall be payable quarterly, in arrears, on the first day of
January, April, July and October of each year, commencing April 1, 2000, at the
interest rates and in the manner specified herein and in the form of Note. As
used herein, "Warrants" means the warrants to purchase 2,489,075 shares of
Voting Common Stock issued pursuant to this Purchase Agreement. Each Warrant
shall be substantially in the form set forth in Exhibit B hereto. The Warrants
shall be exercisable at a nominal value at any time prior to the tenth
anniversary of the Closing Date, subject to adjustment as provided in the form
of Warrant.
SECTION 2. THE CLOSING
(a) Subject to the terms and conditions hereof, the closing of the
purchase and sale of the Notes and Warrants to be purchased by the Purchaser
(the "Closing") will take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ at 1:00 P.M., local time, on
December 28, 1999 or such other time and date as shall be mutually agreed to by
the Companies and the Purchaser. Such time and date are herein referred to as
the "Closing Date."
(b) Subject to the terms and conditions hereof, on the Closing Date
(i) Ubiquitel will deliver to the Purchaser the Notes registered in the name of
the Purchaser in the form of a single Note in the denomination of $8,000,000 or
such other Authorized Denomination as may be specified by the Purchaser and UHC
will deliver the Warrants registered in the name of the Purchaser in the form of
a single Warrant or such other denomination as may be specified by the Purchaser
and (ii) the Purchaser will deliver to Ubiquitel, on behalf of the Companies by
wire transfer of immediately available funds an amount equal to the purchase
price for such Notes and Warrants (as specified in Section 1(a) hereof).
SECTION 3. DEFINITIONS
(a) For purposes of this Agreement, the Notes and the Warrants, the
following definitions shall apply (such definitions to be equally applicable to
both the singular and plural forms of the terms defined):
"Additional Amount" has the meaning set forth in Section 13(b) hereof.
"Additional Common Stock" has the meaning set forth in Section 6.4(c)
hereof.
"Affiliate", when used with respect to any Person, means (i) if such
Person is a corporation, any officer or director thereof and any Person which
is, directly or indirectly, the beneficial owner (by itself or as part of any
group) of more than ten percent (10%) of any class of any equity security
(within the meaning of the Securities Exchange Act) thereof, and, if such
beneficial owner is a partnership, any general partner thereof, or if such
beneficial owner is a corporation, any Person controlling, controlled by or
under common control with such beneficial owner, or any officer or director of
such beneficial owner or of any corporation occupying any such control
relationship, (ii) if such Person is a partnership, any general partner thereof,
and (iii) any other Person which, directly or indirectly, controls or is
controlled by or is under common control with such Person. For purposes of this
definition, "control" (including the correlative terms "controlling",
"controlled by" and "under common control with"), with respect to any Person,
shall mean possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise; provided that no
lender or agent for the lenders under the Senior Credit Facility shall be deemed
to be an Affiliate of the Companies.
"Annualized Consolidated EBITDA" for any period means Consolidated EBITDA
times a fraction the numerator of which is four and the denominator which is the
number of fiscal quarters of UHC in such period.
"Authorized Denomination" with respect to the Notes means a principal
amount of at least $500,000, multiplied by the percentage, if any, of the
original principal of the Notes that shall have been prepaid.
"Board" or "Board of Directors" means, with respect to any Person which is
a corporation, a business trust or other entity, the board of directors or other
group, however designated, which is charged with legal responsibility for the
management of such Person, or any
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committee of such board of directors or group, however designated, which is
authorized to exercise the power of such board or group in respect of the matter
in question.
"Business Days" means any day, other than a Saturday, Sunday or legal
holiday, on which banks in the location of the offices of the Companies provided
for in Section 7.7 hereof are open for business.
"Capital Expenditures" means, for any period, amounts added or required to
be added to the property, plant and equipment or other fixed assets account on
the Consolidated balance sheet of the Companies and the Subsidiaries, prepared
in accordance with GAAP, in respect of (a) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, leaseholds
and any other real or personal property, (b) to the extent not included in
clause (a) above, materials, contract labor and direct labor relating thereto
(excluding amounts properly expensed as repairs and maintenance in accordance
with GAAP) and (c) software development costs to the extent not expensed.
"Capital Lease" as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in conformity
with generally accepted accounting principles, is accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person means all rental obligations
under Capital Leases that, under GAAP, are or will be required to be capitalized
on the books of such Person, in each case taken at the amount thereof accounted
for as Indebtedness in accordance with such principles.
"Change of Control Event" means the occurrence of any of the following
events:
(a) any person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act, whether or not UHC has any capital stock subject to
such Section) together with any affiliates and associates of any such person or
member of such group (within the meaning of Rule 12b-2 under the Securities
Exchange Act, whether or not UHC has any capital stock subject to such Section),
shall at any time beneficially own (within the meaning of Rule 13d-3 under the
Securities Exchange Act, whether or not UHC has any capital stock subject to
such Section) shares of Common Stock of UHC which represents in excess of either
(A) fifty percent (50%) of the total votes entitled to be cast by all
outstanding shares of the Common Stock of UHC or (B) fifty percent (50%) of all
outstanding shares of the Common Stock of UHC; or
(b) a consolidation or merger involving the Companies in which
shares of the resulting or surviving corporation representing 50% or more of the
voting power of such corporation are owned by Persons other than Persons who
were shareholders of UHC or members of Ubiquitel prior to such consolidation or
merger; or
(c) the sale, lease, transfer or other disposition of all or
substantially all of the consolidated assets of either Company in a single
transaction or series of related transactions; or
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(d) at any time, a majority of the members of the Board of Directors
of UHC are persons other than persons each of whom was designated pursuant to
UHC's Shareholder's Voting Agreement, dated as of November 23, 1999, or was both
nominated as a director for his or her then current term by UHC's Board of
Directors and was recommended by the Board of Directors of UHC to UHC's
shareholders or members for election as a member of the Board and; or
(e) in the case of Ubiquitel, ownership by any Person other than UHC
of any membership interest in Ubiquitel.
"Closing" has the meaning set forth in Section 2 hereof.
"Closing Dates" has the meaning set forth in Section 2 hereof.
"Code" means the Internal Revenue Code of 1916, as amended, and the
regulations and interpretations thereunder.
"Commission" means the Securities and Exchange Commission and any other
similar or successor agency of the federal government administering the
Securities Act or the Securities Exchange Act.
"Common Stock" means the Voting Common Stock and Non-Voting Common Stock
of UHC.
"Companies" or "Company", as the context requires, means UHC and
Ubiquitel, their successors and assigns.
"Consolidated," when used with reference to any term, mean that term as
applied to the accounts of UHC (or other specified Person) and all of its
Subsidiaries (or other specified group of Persons), or such of its Subsidiaries
as may be specified, consolidated (or combined) in accordance with GAAP and with
appropriate deductions for minority interests in Subsidiaries.
"Consolidated Current Assets" shall mean the consolidated current assets
of UHC and its Subsidiaries.
"Consolidated Current Liabilities" shall mean the consolidated current
liabilities of UHC and its Subsidiaries, but excluding the current portion of
any long-term Indebtedness which would otherwise be included therein.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income before interest income, Consolidated Interest Expense and provision for
taxes and without giving effect to any extraordinary gains or losses, gains or
losses from sales of assets (other than inventory sold in the ordinary course of
business).
"Consolidated EBITDA" for any period shall mean Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated Net Income for such
period.
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"Consolidated Indebtedness" shall mean, at any time, all Indebtedness of
UHC and its Subsidiaries determined on a consolidated basis (arising under
Interest Rate Protection Agreements), except to the extent amounts are owing
with respect thereto upon the termination of the respective agreement
constituting such Indebtedness) plus any original issue discount attributable to
such Indebtedness.
"Consolidated Interest Expenses" shall mean, for any period, the total
consolidated cash interest expense of UHC and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) payable
during such period in respect of all Indebtedness of UHC and its Subsidiaries,
on a consolidated basis, for such period (including, without duplication, that
portion of Capitalized Leases of UHC and its Subsidiaries representing the
interest factor for such period).
"Consolidated Net Income" shall mean, for any period, net income of UHC
and its Subsidiaries for such period determined on a consolidated basis (after
provision for taxes); provided, however, the net income of any Subsidiary of
UHC, which is not a wholly-owned subsidiary and for which the investment of UHC
therein is accounted for by the equity method of accounting, shall have its net
income included in the Consolidated Net Income of UHC and its Subsidiaries only
to the extent of the amount of cash dividends or distributions paid by such
Subsidiary to UHC.
"Consolidated Revenues" shall mean, for any period, the total consolidated
revenues of UHC and its Subsidiaries for such period determined on a
consolidated basis, including, without limitation, all access, airtime, long
distance, travel-out, travel-in, roaming-in, and operator service revenues from
travel-out expenses or long distance expenses; provided, however, Consolidated
Revenues shall not include revenue from handset sales.
"Consolidated Senior Indebtedness" shall mean, at any time, an amount
equal to the amount of all Consolidated Indebtedness at such time less the
outstanding principal amount of the Senior Subordinated Notes at such time.
"Disclosure Materials" has the meaning set forth in Section 4.6(a) hereof.
"Disclosure Schedule" means the schedule attached as Exhibit C to this
Purchase Agreement. Each entry on the Disclosure Schedule shall refer to the
particular section of this Purchase Agreement to which such entry relates.
"Distributions on Common Stock" has the meaning set forth in Section
6.4(b) hereof.
"Environmental Lien" has the meaning set forth in Section 8.12(a) hereof.
"ERISA" has the meaning set forth in Section 4.9(a) hereof.
"Event of Default" has the meaning set forth in Section 14 hereof.
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"Financing Debts" means each of the items described in clauses (a) through
(f) of the definition of the term "Indebtedness" and, without duplication, any
Guarantees of such items.
"Fixed Charge Coverage Ratios" for any period means the ratio of (x)
Consolidated EBITDA less the amount of all Capital Expenditures, made by the
Borrower or any of its Subsidiaries for such period to (y) Fixed Charges for
such period.
"Fixed Charges" for any period means the sum of (i) Consolidated Interest
Expense for such period, (ii) the aggregate principal amount of all scheduled
payments of Indebtedness (including the principal portion of rentals under
Capitalized Lease Obligations but excluding repayment of revolving loans not
accompanied by a permanent reduction to the Commitment of the lender to provide
such revolving loans) required to be made during such period and (iii) taxes
paid by UHC and its Subsidiaries during such period.
"GAAP" means generally accepted accounting principles as from time to time
in effect, including the statements and interpretations of the United States
Financial Accounting Standards Board; provided, however, for purposes of
compliance with Section 9 and the related definitions, "GAAP" means such
principles as in effect on the date hereof, as applied by UHC and its
Subsidiaries in the preparation of the most recent financial statements referred
to in Section 4.6(a), that in the event of a change in generally accepted
accounting principles after such date, either UHC or the Majority Noteholders
may request a change in the definition of "GAAP", in which case the parties
hereto shall negotiate in good faith with respect to an amendment of this
Purchase Agreement implementing such change.
"Guarantee" means, with respect to the Companies (or other specified
Person):
(a) any guarantee by the Companies (or such specified Person) of the
payment or performance of, or any contingent obligation by the Companies (or
such specified Person) in respect of, any Indebtedness or other obligation of
any primary obligor;
(b) any other arrangement whereby credit is extended to a primary
obligor on the basis of any promise or undertaking of the Companies (or such
specified Person) including any binding "comfort letters. or "keep well
agreement" written by the Companies (or such specified Person), to a creditor or
prospective creditor of such primary obligor, to (i) pay the Indebtedness of
such primary obligor, (ii) purchase an obligation owned by such primary obligor,
(iii) pay for the purchase or lease of assets or services regardless of the
actual delivery thereof or (iv) maintain the capital, working capital, solvency
or general financial condition of such primary obligor;
(c) reimbursement obligations, whether contingent or matured, of the
Companies (or such specified Person) with respect to letters of credit, bankers
acceptances, surety bonds, other financial guarantees and Interest Rate
Protection Agreements, in each case whether or not any of the foregoing are
reflected on the balance sheet of the Companies (or such specified Person) or in
a footnote thereto; provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee and the amount of Indebtedness resulting
from such Guarantee shall be the
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maximum amount that the guarantor may become obligated to pay in respect of the
obligations (whether or note such obligations are outstanding at the time of
computation).
"HSR Acts" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement Act of 1976,
as heretofore or hereafter amended.
"Hazardous Materials" means any pollutant, toxic substance, hazardous
waste, material, compound, element or chemical identified as such or determined
to be hazardous or toxic by a governmental agency under the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA), 42 U.S.C. 9601
et seq., the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901 et
seq., the Toxic Substances Control Act (TSCA), 15 U.S.C. 2601 et seq., the Water
Pollution Control Act (CWA), 33 U.S.C. 1251 et seq., the Clean Air Act (CAA), 42
U.S.C. 7501 et seq., the Occupational Safety and Health Act (OSHA), 29 U.S.C.
655 and any other federal, state, local or municipal laws, statutes, ordinances,
codes, rules or regulations imposing liability or establishing standards of
conduct for environmental protection. The term "Hazardous Materials" shall also
include raw materials used or stored by the Companies, building components
(including but not limited to asbestos-containing materials) and manufactured
products containing Hazardous Materials.
"Indebtedness" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified upon the Consolidated balance
sheet of the Companies (or other specified Person) as liabilities, but in any
event including (without duplication):
(a) borrowed money;
(b) indebtedness evidenced by notes, debentures or similar
instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets, services or securities,
including related noncompetition, consulting and stock repurchase obligations
(other than ordinary trade accounts payable within six months after the
incurrence thereof in the ordinary course of business);
(e) reimbursement obligations, whether contingent or matured, with
respect to letters of credit, bankers acceptances, surety bonds, other financial
guarantees and Interest Rate Protection Agreements (without duplication of other
Indebtedness supported or guaranteed thereby);
(f) liabilities secured by any Lien existing on property owned or
acquired by the Companies (or such specified Person), whether or not the
liability secured thereby shall have been assumed; and
(g) all Guarantees in respect of Indebtedness of others.
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"Investment" means, with respect to any Person, (i) any loan, advance or
extension of credit by such Person to, and any contributions to the capital of,
any other Person, (ii) any Guarantee by such Person or (iii) any interest in any
capital stock or other securities of any other Person.
"Interest Rate Protection Agreements" means any interest rate swap,
interest rate cap, interest rate hedge or other contractual arrangement that
converts variable interest rates into fixed interest rates, fixed interest rates
into variable interest rates or other similar arrangements.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security interest of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same effect as any of the foregoing,
any assignment or other conveyance of any right to receive income and any
assignment of receivables with recourse against the assignor), any filing of a
financing statement as debtor under the Uniform Commercial Code or any similar
statute and any agreement to give or make any of the foregoing.
"Majority Noteholders" means the holder or holders, at the time, of at
least a majority of the aggregate principal amount of the Notes then
outstanding.
"Market Price" has the meaning set forth in Section 6.4(g) hereof.
"Material Adverse Effect" means a material adverse effect on the assets,
properties, liabilities, business, affairs, results of operations or condition
(financial or otherwise) of Ubiquitel and its Subsidiaries on a consolidated
basis
"Non-Voting Common Stock" means the non-voting common stock, par value
$.001 per share, of UHC.
"Note" or "Notes" has the meaning set forth in Section 1(b) hereof.
"Other Managers" means any person or entity with which Sprint PCS has
entered into an agreement similar to the Sprint Management Agreement under which
the person or entity designs, constructs and managers a service area network and
offers and promotes Sprint PCS Products or Services.
"Outstanding" or "outstanding" means, when used with reference to the
Notes as of a particular time, all Notes theretofore duly issued except (i)
Notes theretofore reported as lost, stolen, mutilated or destroyed or
surrendered for transfer, exchange or replacement, in respect of which new or
replacement Notes have been issued by Ubiquitel, (ii) Notes theretofore paid in
full and (iii) Notes theretofore canceled by Ubiquitel; except that for the
purpose of determining whether holders of the requisite principal amount of
Notes have made or concurred in any declaration, waiver, consent, approval,
notice, annulment of acceleration or other communication under this Agreement or
under any Notes, Notes registered in the name of, as well as Notes
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owned beneficially by, UHC, any Subsidiary or any of their Affiliates shall not
be deemed to be outstanding.
"Payment Blockage Period" has the meaning set forth in Section 10.2(b)
hereof.
"Permitted Liens" means (i) Liens for taxes not yet due or Liens for taxes
being contested in good faith and by appropriate proceedings, for which adequate
reserves have been established, and provided that any proceedings commenced for
the enforcement of such Liens have been duly suspended, (ii) Liens in respect of
property or assets of the Companies or any Subsidiary imposed by law (such as
carriers', warehousemen's, landlords' and mechanics' liens), which were incurred
in the ordinary course of business and, in each case, were not incurred in
connection with the borrowing of money, and (x) which do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Companies or any
Subsidiary and (y) which either relate to sums not yet delinquent or are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or assets subject to
such Lien, provided that adequate reserves have been established for any such
Liens being contested, (iii) pledges or deposits (other than any Lien imposed by
ERISA) in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation, (iv)
easements, rights-of-way and minor defects or irregularities in title not
interfering in any material respect with the ordinary conduct of the business of
the Companies or any of their Subsidiaries, (v) Liens securing the performance
of bids, tenders, contracts, statutory obligations, surety, customs and appeal
bonds and other obligations of like nature, incurred as an incident to and in
the ordinary course of business and not to secure the repayment of borrowed
money, (vi) other Liens not exceeding $500,000 and (vii) Liens permitted
pursuant to the Senior Credit Facility.
"Person" or "person" means an individual, corporation, partnership, firm,
association, joint venture, trust, unincorporated organization, government,
governmental body, agency, political subdivision or other entity.
"Potential Default" means a condition or event which, with notice or lapse
of time or both, would constitute an Event of Default.
"Preferred Stock" means any class of the capital stock of a corporation
(whether or not convertible into any other class of such capital stock) which
has any right, whether absolute or contingent, to receive dividends or other
distributions of the assets of such corporation (including, without limitation,
amounts payable in the event of the voluntary or involuntary liquidation,
dissolution or winding-up of such corporation), which right is superior to the
rights of another class of the capital stock of such corporation.
"Prepayment Premium" has the meaning set forth in Section 6.2(a) hereof.
"Purchase Agreement" means this Purchase Agreement (together with exhibits
and schedules) as from time to time supplemented or amended or as the terms
hereof may be waived.
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"Purchaser" means BET Associates, L.P., a Delaware limited partnership,
its successors and assigns.
"Restricted Payment" means (i) every dividend or other distribution paid,
made or declared by the Companies or any Subsidiary on or in respect of any
class of its capital stock, (ii) every payment in connection with the
redemption, purchase, retirement or other acquisition by or on behalf of the
Companies or any Subsidiary of any shares of the UHC or membership interests of
Ubiquitel or a Subsidiary's capital stock, whether or not owned by the Companies
or any Subsidiary, (iii) any prepayments or repayments of principal made on
Indebtedness expressly subordinated to the Notes (unless such payments are
scheduled, or are at maturity, in each case on the dates established for such
payments at the time such Indebtedness was incurred) and (iv) every payment by
or on behalf of the Companies or any Subsidiary (whether as repayment or
prepayment of principal or as interest or otherwise) on or with respect to (A)
any obligation to repay money borrowed owing to any Affiliate of the Companies
or of any Subsidiary, or (B) any obligation, to any Person, of any Affiliate of
the Companies or of any Subsidiary, which obligation is assumed or guaranteed by
the Companies or a Subsidiary; provided, however, (a) that the restrictions of
the foregoing clauses (i) and (ii) shall not apply to (1) any dividend,
distribution or other payment on or in respect of capital stock of the Companies
to the extent payable in shares of the capital stock of the Companies or (2) the
redemption of the Non-Voting Common Stock for an aggregate redemption price not
in excess of $16,000, (b) that none of the foregoing clauses shall apply to any
payments from a Subsidiary to the Companies or from a Subsidiary to a
wholly-owned Subsidiary (including, without limitation, dividends and other
distributions), (c) that none of the foregoing clauses shall apply to any
purchases by the Companies from a wholly-owned Subsidiary of additional capital
stock of such wholly-owned Subsidiary, (d) that none of the foregoing clauses
shall apply to any payments, distributions or other transfers or actions on or
with respect to the Notes, Warrants or to holders of Notes under the Purchase
Agreement and (e) none of the foregoing clauses shall apply to Indebtedness of
the Companies to a wholly-owned Subsidiary. For purposes of this definition,
"capital stock" shall also include warrants and other rights and options to
acquire shares of capital stock (whether upon exercise, conversion, exchange or
otherwise).
"Rule 144" means (i) Rule 144 under the Securities Act as such Rule is in
effect from time to time, and (ii) any successor rule, regulation or law, as in
effect from time to time.
"Rule 144A" means (i) Rule 144A under the Securities Act as such Rule is
in effect from time to time and (ii) any successor rule, regulation or law, as
in effect from time to time.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules, regulations and interpretations thereunder.
"Securities Exchange Acts" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules, regulations and interpretations
thereunder.
"Senior Credit Facility" means the senior credit facility dated December
28, 1999 among the lenders party thereto in their capacities as lenders
thereunder and Paribas, a French banking organization acting through its New
York Branch, as agent, together with the related documents
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thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including without limitation, increasing
the amount of available borrowings thereunder or adding Subsidiaries of the
Company as additional borrowers or guarantors thereunder) all or any portion of
the Indebtedness under such agreement or any successor or replacement agreement
and whether by the same or any other agent, lender or group of lenders.
"Senior Indebtedness" has the meaning set forth in Section 9.7 hereof.
"Share" or "shares" shall mean the shares of Voting Common Stock obtained
or obtainable upon exercise of the Warrants and shall also include any capital
stock or other securities into which such shares of Voting Common Stock are
changed and any capital stock or other securities resulting from or comprising a
reclassification, combination or subdivision of, or a stock dividend on, such
Shares. In the event that any Shares are sold either in a public offering
pursuant to a registration statement under Section 6 of the Securities Act or
pursuant to Rule 144, then the transferees of such Shares shall not be entitled
to any benefits under this Agreement with respect to such Shares and such Shares
shall no longer be considered to be "shares" for purposes of Section 17 hereof
or any consent or waiver provision of this Agreement.
"Sprint Agreements" means the Sprint Management Agreement, Sprint Services
Agreement, the Sprint License Agreements and all other contracts, agreements or
understandings entered into between UHC or any of its Subsidiaries on the one
hand and Sprint Corporation or any of its Affiliates, on the other hand.
"Sprint Communications Company, L.P." means Sprint Communications Company,
L.P., a Delaware limited partnership.
"Sprint License Agreements" means collectively the (i) Sprint Trademark
and Service ▇▇▇▇ License Agreement, dated September --, 1998, among Sprint
Communications Company, L.P. and the Borrower, and (ii) Sprint Spectrum
Trademark and Service ▇▇▇▇ Agreement, dated September _, 1998, among Sprint
Spectrum, L.P. and UHC.
"Sprint Management Agreements" means the Sprint PCS Management Agreement,
made September __, 19_, among Sprint Spectrum L.P., SprintCom, Inc. and
Southwest PCS, L.P. WirelessCo, L.P. and Ubiquitel L.L.C., a Washington
corporation, as amended, modified or supplemented from time to time in
accordance with the provisions hereof.
"Sprint PCS" means any or all of the following affiliates who are License
holders and signatories to the Management Agreement: Sprint Spectrum L.P., a
Delaware limited partnership, SprintCom, Inc., a Kansas corporation, PhillieCo
Partners I, L.P., a Delaware limited partnership, ▇▇▇ Communications PCS, L.P.,
a Delaware limited partnership, and American PCS Communications, LLC, a Delaware
limited liability company. Each entity listed above is an affiliate to each of
the other listed entities.
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"Sprint PCS Network" shall mean the national wireless network and business
activities to be developed by Sprint PCS, UHC and Other Managers in the United
States and certain of its territories and possessions, which network includes
the Service Area Network.
"Sprint PCS Products and Services" means all types and categories of
wireless communications services and associated products that are designated by
Sprint PCS (whether now existing or developed and implemented in the future) as
products and services to be offered by Sprint PCS, UHC and other Sprint-related
parties as the products and services of the Sprint PCS Network for fixed and
mobile voice, short message and other data services under the FCC's rules for
broadband personal communications services, including all local area service
plans. Sprint PCS Products and Services do not include wireline products
services, including local exchange service, wireline long distance service, and
wireline-based Internet access.
"Sprint Services Agreement" means that certain Sprint PCS Services
Agreement executed by the Borrower and Sprint Spectrum L.P. and any documents
incorporated by reference in said agreement.
"Sprint Spectrum L.P." means Sprint Spectrum L.P., a Delaware limited
partnership.
"SprintCom. Inc." shall mean SprintCom, Inc., a Kansas corporation.
"Subordinated Indebtedness" means (i) the principal of, premium, if any,
and interest arising with respect to the Notes and (ii) all other obligations of
either Company or any Subsidiary arising out of or in connection with this
Purchase Agreement or the Notes or any other documents relating to the Notes or
the Purchase Agreement.
"Subsidiary" means any corporation, association or other entity of which
more than 50% of the total voting power of shares of stock or other equity
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is, at the time as of
which any determination is being made, owned or controlled, directly or
indirectly, by either Company or one or more of its Subsidiaries, or both.
References herein to a "wholly-owned Subsidiary" mean a Subsidiary all of whose
outstanding capital stock (and any rights of any kind to acquire such capital
stock) is owned by the Company or another wholly-owned Subsidiary, except only
for directors' qualifying shares which represent a minority interest in such
Subsidiary and which are required or deemed advisable with respect to any
Subsidiary organized under the laws of a jurisdiction outside of the United
States (and provided that any directors holding such directors' qualifying
shares are nominated, and can be removed, by the Company or another wholly-owned
Subsidiary).
"Subsidiary Guarantor" has the meaning set forth in Section 19.10 hereof.
"UHC" means Ubiquitel Holdings, Inc., a Delaware corporation.
"Ubiquitel" means Ubiquitel, LLC, a Delaware limited liability company.
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"Voting Common Stock" means the voting common stock, par value $.001 per
share, of UHC.
"Warrants" has the meaning set forth in Section 1(b) hereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
Each of the Companies represents and warrants to the Purchaser as follows
as of the date hereof and as of the Closing Date:
4.1 Corporate Existence, Power and Authority.
(a) Each Company is a corporation or limited liability company, duly
organized, validly existing and in good standing under the laws of its state or
other jurisdiction of incorporation. Each Company is duly qualified, licensed
and authorized to do business and is in good standing in each jurisdiction in
which it owns or leases any material property or in which the conduct of its
business requires it to so qualify or be so licensed, except for such
jurisdictions where the failure to so qualify or be so licensed would not have a
Material Adverse Effect.
(b) No proceeding has been commenced looking toward the dissolution
or merger of either Company or the amendment of its respective certificate or
articles of incorporation (or similar governing documents) or limited liability
company certificate of formation or operating agreement. Neither Company nor any
Subsidiary is in violation in any respect of its certificate or articles of
incorporation or by-laws (or similar governing documents) with respect to a
Subsidiary organized under the laws of a jurisdiction outside of the United
States) or its limited liability company certificate of formation or operating
agreement.
(c) Each Company and each Subsidiary has all requisite corporate or
limited liability company power, authority and legal right to own or to hold
under lease and to operate the properties it owns or holds and to conduct its
business as now being conducted.
(d) Each Company has all requisite power, authority and legal right
to execute, deliver, enter into, consummate and perform this Purchase Agreement,
the Notes and the Warrants, including, without limitation, the issuance by
Ubiquitel of the Notes and the issuance by UHC of the Warrants and the Shares as
contemplated herein and therein. The execution, delivery and performance of the
Purchase Agreement, the Notes and the Warrants by each Company (including,
without limitation, the issuance by Ubiquitel of the Notes and the issuance by
UHC of the Warrants and the Shares as contemplated herein and therein) have been
duly authorized by all required corporate, limited liability company and other
actions. The Purchase Agreement constitutes, and the Notes and Warrants when
issued will constitute, the legal, valid and binding obligations of the Company
which is a party thereto, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to the rights of creditors generally. The Shares when issued will
be duly authorized, validly issued, fully paid and non-assessable.
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4.2 Capitalization.
(a) The authorized capital stock of UHC consists of 291,000,000
shares of stock, consisting of (a) 150,000,000 shares of Voting Common Stock,
(b) 16,000,000 shares of Non-Voting Common Stock and (c) 125,000,000 shares of
Preferred Stock. On the date hereof, 3,417,000 shares of Voting Common Stock
were outstanding, 16,000,000 shares of Non-Voting Common Stock were outstanding
and 17,008,500 shares of Preferred Stock were outstanding and all such
outstanding shares were duly authorized, validly issued and outstanding and
fully paid and non-assessable.
(b) The only shares of Common Stock reserved for issuance by UHC are
(i) 17,008,500 shares reserved for issuance to holders of Series A preferred
stock, (ii) shares to be issued upon exercise of the Warrants, (iii) shares to
be issued upon exercise of warrants issued pursuant to the Senior Credit
Facility, (iv) 2,040,000 shares are reserved for issuance under UHC's employee
stock option plan, pursuant to which no options were granted and outstanding as
of December 28, 1999, but an option to purchase 250,000 of such shares has been
committed.
(c) Except as described in Section 4.2(b) or as disclosed on the
Disclosure Schedule, there are no outstanding options, warrants, rights,
convertible securities or other agreements or plans under which UHC may become
obligated to issue, sell or transfer shares of its capital stock or other
securities.
(d) There are outstanding registration rights with respect to all of
UHC's issued and outstanding Common Stock and Preferred Stock.
(e) UHC is the sole member of Ubiquitel LLC and is the sole owner of
all of the outstanding membership interests in Ubiquitel.
4.3 Subsidiaries.
(a) The only Subsidiary on the Closing Date will be Ubiquitel.
Ubiquitel is wholly owned by UHC and UHC is Ubiquitel's sole member. Neither of
the Companies has any Investments in any other Person.
(b) Ubiquitel is not subject to any agreement, order or similar
restriction that may affect or limit its ability to pay dividends to UHC other
than the Senior Credit Facility.
4.4 Business. Each of the Companies is engaged solely in the business of
developing, operating and managing a Sprint PCS Network pursuant to the Sprint
Agreements. Neither Company currently engages in, or has any intention of
engaging in, any other business.
4.5 No Defaults or Conflicts.
(a) No Event of Default or Potential Default has occurred and is
continuing.
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(b) Neither Company is in violation or default under any indenture,
agreement or instrument to which it is a party or by which it or its properties
may be bound where the violation or default could reasonably be expected to have
a Material Adverse Effect.
(c) The execution, delivery and performance by each Company of the
Purchase Agreement, the Notes, the Warrants and any of the transactions
contemplated hereby (including, without limitation, the issuance of the Notes,
the Warrants and the Shares as contemplated herein and therein) does not and
will not (i) violate or conflict with, with or without the giving of notice or
the passage of time or both, any provision of (A) the respective articles or
certificates of incorporation, by-laws, limited liability company certificate of
formation or operating agreement of either Company (or similar governing
documents) or (B) any law, rule, regulation, order, judgment, writ, injunction,
decree, agreement, indenture or other instrument applicable to the Companies or
any of their respective properties, (ii) result in the creation of any security
interest or Lien upon any of either Company's properties, assets or revenues,
(iii) require the consent, waiver, approval, order or authorization of, or
declaration, registration, qualification or filing with, any Person (whether or
not a governmental authority and including, without limitation, any shareholder
approval) or (iv) cause antidilution clauses of any outstanding securities to
become operative or give rise to any preemptive rights.
4.6 Disclosure Materials; Other Information.
(a) The Company has previously furnished to the Purchaser a
consolidated pro forma balance sheet of UHC as of the Closing Date (the
"Disclosure Material").
The financial statements referred to in the preceding sentence fairly
present in all material respects the financial condition of the Companies as of
the date thereof and have been prepared in accordance with GAAP consistently
applied.
(b) Neither Company is aware of any material liabilities, contingent
or otherwise, of either Company that have not been disclosed in the financial
statements referred to in Section 4.6(a) above or otherwise disclosed in the
Disclosure Material.
(c) The financial projections included in the Disclosure Material
conform with the internal operating forecasts of the Companies, are
mathematically accurate, were based on assumptions that the Companies in good
faith believed to have been reasonable when made and have been prepared in good
faith, although actual results may differ materially from such projections.
(d) None of the Disclosure Material contained as of its date or
contains on the date hereof an untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were and are made, not
misleading;
(e) There is no fact known to either Company which is not in the
Disclosure Material which could reasonably be expected to have a Material
Adverse Effect.
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4.7 Litigation. Except as set forth in the Disclosure Schedule, there is
no action, suit, proceeding, investigation or claim pending or threatened in
law, equity or otherwise before any court, administrative agency or arbitrator
which either (i) questions the validity of the Purchase Agreement, the Notes,
the Warrants or the Shares or any action taken or to be taken pursuant hereto or
thereto or (ii) could reasonably be expected to have a Material Adverse Effect.
4.8 Taxes. Neither Company has filed or been required to file any federal,
state, local or other tax returns and reports. Each Company has paid or caused
to be paid all taxes (including interest and penalties) that are due and
payable, except those which are being contested by it in good faith by
appropriate proceedings and in respect of which adequate reserves are being
maintained on its books in accordance with generally accepted accounting
principles consistently applied. Neither Company has any material liabilities
for taxes other than those incurred in the ordinary course of business and in
respect of which adequate reserves are being maintained by it in accordance with
generally accepted accounting principles consistently applied.
4.9 ERISA. Each Company is in compliance in all material respects with all
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and interpretations thereunder (collectively
"ERISA"). Neither Company has engaged in any "prohibited transaction" which
would subject it to a tax or penalty on prohibited transactions imposed by ERISA
or by the Code. With respect to each such plan (other than any multi-employer
plan) that is intended to meet the qualification requirements of Section 401(a)
of ERISA, all amendments have been adopted and all other steps have been taken
that are required to have been adopted or taken as of the date hereof in order
to maintain the continuing qualified status of such plan, and the continuing
exemption of any trust funding or forming part of such plan, from the date of
establishment of such plan to the date hereof. No liability to the Pension
Benefit Guaranty Corporation has been or is expected to be incurred with respect
to any such plan. There has been no "reportable event", as defined in ERISA,
with respect to any such plan, and no event or condition exists which presents a
material risk of termination of any such plan by the Pension Benefit Guaranty
Corporation.
4.10 Legal Compliance.
(a) Each Company has complied with all applicable laws, rules,
regulations, orders, licenses, judgments, writs, injunctions, decrees or
demands, except to the extent that failure to comply would not have a Material
Adverse Effect.
(b) There are no adverse orders, judgments, writs, injunctions,
decrees or demands of any court or administrative body, domestic or foreign, or
of any other governmental agency or instrumentality, domestic or foreign,
outstanding against either Company.
4.11 Permits; Licenses and Approvals. Each Company possesses such
franchises, licenses, permits, consents, approvals and other authority
(governmental or otherwise) from any Person as are necessary for the conduct of
its business as now being conducted and each Company will be able to obtain such
franchises, licenses, permits, consents, approvals and other authority
(governmental or otherwise) as may be necessary for the conduct of its business
as proposed to be conducted) and none is in default in any material respects
under any of such
16
franchises, licenses, permits, consents, approvals or other authority, except
for (i) any failures to possess a franchise, license, permit, consent, approval
or other authority or (ii) any such defaults which (in the case of clause (i) or
(ii)) do not and will not (individually or in the aggregate) have a Material
Adverse Effect.
4.12 Patents, Trademarks and Other Rights. Each Company possesses all
patents, patent rights, trademarks, trademark rights, trade names, and trade
name rights (each of which is listed on the Disclosure Schedule) and copyrights
as are necessary to conduct its business as now being conducted and as proposed
to be conducted, except for any failures to possess a patent, patent right,
trademark, trademark right, trade name, trade name right or copyright which
failures (individually or in the aggregate) do not and could not reasonably be
expected to have a Material Adverse Effect. The activities and conduct of
business by each Company do not conflict with or infringe upon any intellectual
property rights of others, and neither Company has received any notice that any
such claim of conflict or infringement has been asserted by any Person.
4.13 Status Under Certain Statutes. Neither Company is: (i) a "public
utility company" or a "holding company", or an "affiliate" or a "subsidiary
company" of a "holding company", or an "affiliate" of such a "subsidiary
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, (ii) a "public utility" as defined in the Federal Power Act,
as amended, or (iii) an "investment company" or an "affiliated person" thereof
or an "affiliated person" of any such "affiliated person", as such terms are
defined in the Investment Company Act of 1940, as amended.
4.14 Key Employees. Each Company has good relationships with its employees
and has not had and does not expect any substantial labor problems. Neither
Company has any knowledge as to any intentions of any key employee or any key
group of employees to leave the employ of either Company.
4.15 Properties. Neither Company owns real estate. Except as set forth on
the Disclosure Schedule, each Company has a valid leasehold interest in, each of
its properties. Certain real property used by each Company in the conduct of
their respective businesses is held under lease (as identified on the Disclosure
Schedule), and neither Company is aware of any pending or threatened claim or
action by any lessor of any such property to terminate any such lease. None of
the properties leased by either Company is subject to any Liens, which might
materially and adversely affect the assets, properties, liabilities, business,
affairs, results of operations, condition (financial or otherwise) or prospects
of either Company on a consolidated basis.
4.16 Suppliers and Customers.
(a) (i) Each Company has adequate sources of supply for its business
as currently conducted and as proposed to be conducted, (ii) each has
satisfactory relationships with all of its material sources of supply of goods
and services and (iii) each does not anticipate any material problem with any
such material sources of supply.
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(b) Each Company has satisfactory relationships with all of its
material customers and each does not anticipate any material problems with any
of them.
(c) Neither Company has any knowledge that the customer base of
either Company might materially decrease.
4.17 Environmental Compliance.
(a) There is no Hazardous Material about or in, in material
violation of law, any real property owned or, to the best of the Company's
knowledge, leased by either Company.
(b) There is no (and has not been any) off-site disposal or on-site
disposal at any locations currently or formerly owned or occupied by either
Company as a result of which disposal there would exist a risk that either
Company would incur a material liability (determined on a consolidated basis) or
obligation under federal, state or local environmental or other laws,
regulations or ordinances.
(c) Neither Company nor any prior or present owner, operator,
tenant, subtenant or invitee of any of the real property (including
improvements) currently or formerly owned or occupied by either Company has:
(i) used, installed, stored, spilled, released, transported,
disposed of or discharged any Hazardous Material upon, into, beneath, from
or affecting such real property (including improvements) in violation of
applicable law, or
(ii) received any verbal or written notice, citation,
subpoena, summons, complaint or other correspondence or communication from
any person with respect to the presence of Hazardous Material upon, into,
beneath, or emanating from or affecting any of the real property
(including improvements) currently or formerly owned or occupied by the
Company which (in case of clause (i) and/or (ii)) would (individually or
in the aggregate) result in a liability or obligation on the part of each
Company, unless such liability or obligation would not have a material
adverse effect on the assets, properties, liabilities, business, affairs,
results of operation, condition (financial or otherwise) or prospects of
the Companies on a consolidated basis.
(d) There has been no intentional or unintentional, gradual or
sudden, release, disposal or discharge upon, into or beneath the real property
(including improvements) currently or formerly owned or occupied by either
Company, that has caused or is causing soil or groundwater contamination which
under applicable environmental laws, regulations or ordinances requires
investigation or remediation or otherwise creates a material liability or
obligation (determined on a consolidated basis) on the part of the Companies.
4.18 Indebtedness. The Disclosure Schedule sets forth (i) the amount of
all Indebtedness of the Company outstanding on the date of this Agreement, (ii)
any Lien with respect to such Indebtedness and (iii) a brief description of each
instrument or agreement governing such Indebtedness. The Company has delivered
to the Purchaser a complete and
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correct copy of each such instrument or agreement (including all amendments,
supplements or modifications thereto). No default in payment or any other
material default exists with respect to or under any such Indebtedness or any
instrument or agreement relating thereto.
4.19 Disaster. Neither the business nor the properties of either Company
is currently affected (or has been affected at any time since December 28, 1999)
by any fire, explosion, accident, strike, lockout or other dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which could reasonably be
expected to have a Material Adverse Effect.
4.20 Impact of the Sprint Agreements. All rights and obligations of UHC
under the Sprint Agreements have been assigned to Ubiquitel and such agreements
are in full force and effect. The performance by the Companies of their
respective obligations under the Sprint Agreements could not reasonably be
expected to have a materially adversely affect on the assets, properties,
business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Companies on a consolidated basis.
4.21 Offering of Notes and Warrants. Neither Company nor any agent or
other Person acting on its behalf has, directly or indirectly, (i) offered any
of the Notes, Warrants or any similar security of either Company (A) by any form
of general solicitation or general advertising (within the meaning of Regulation
D under the Securities Act) or (B) for sale to or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any Person other than the Purchaser and certain institutional investors each of
which either Company reasonably believed was an "accredited investor" within the
meaning of Regulation D under the Securities Act or (ii) done or caused to be
done (or has omitted to do or to cause to be done) any act which act (or which
omission) would result in bringing the issuance or sale of the Notes, Warrants
or Shares within the provisions of Section 5 of the Securities Act.
SECTION 5. REPRESENTATIONS AND COVENANTS OF THE PURCHASER
(a) The Purchaser hereby makes the representations and warranties to
the Companies contained in this Section 5, as of the date hereof and as of the
Closing Date hereunder. The Purchaser has all requisite power, authority and
legal right to execute, deliver, enter into, consummate and perform this
Purchase Agreement. The execution, delivery and performance of this Purchase
Agreement by the Purchaser have been duly authorized by all required partnership
actions. The Purchaser has duly executed and delivered this Purchase Agreement,
and this Purchase Agreement constitutes the legal, valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to the rights of creditors generally.
(b) The Purchaser hereby represents to the Companies (as of the date
hereof and as of the Closing Date hereunder) that the Purchaser is capable of
evaluating the risk of its investment in the Notes, the Warrants and the Shares
being purchased by it and is able to bear the economic risk of such investment,
that it is purchasing the Notes, the Warrants and the
19
Shares to be purchased by it for its own account, that it understands that the
Notes, the Warrants and the Shares are "restricted securities" as such term is
used in the Securities Act and therefore cannot be resold unless they are
registered under the Securities Act or an exemption from registration is
available, and that the Notes and Warrants are being purchased by the Purchaser
for investment and not with a present view to any distribution thereof in
violation of applicable securities laws. It is understood that the disposition
of the Purchaser's property shall at all times be within the Purchaser's
control. If the Purchaser should in the future decide to dispose of any of its
Notes, Warrants or Shares, it is understood that it may do so but only in
Authorized Denominations (in the case of the Notes) and in compliance with the
Securities Act, applicable securities laws and this Purchase Agreement. The
Purchaser hereby represents to the Companies that the Purchaser is an
"accredited investor" as defined in Rule 501(a) under the Securities Act.
SECTION 6. PREPAYMENTS AND REPAYMENTS
6.1 Mandatory Prepayments. In the event of any sale, lease or other
transfer of assets (an "Asset Disposition") by either of the Companies or any
Subsidiary (other than Indebtedness permitted to be incurred, the sale of
inventory in the ordinary course of business and other asset sales permitted to
be made pursuant to the Senior Credit Facility (as in effect on the date hereof)
and not giving rise to a required prepayment or reduction in commitment
thereunder) or the incurrence of any Indebtedness (other than pursuant to the
Senior Credit Facility (as in effect on the date hereof) and not giving rise to
a required prepayment or reduction in commitment thereunder) or completion of
any equity financing by either of the Companies or any Subsidiary thereof
Ubiquitel shall prepay the Notes then outstanding, after repayment of the Senior
Credit Facility (or after receipt of any required consents or waivers from the
lenders under the Senior Credit Facility) in the following amounts:
(a) 100% of the cash proceeds (net of other reasonable costs
associated with such transaction) of such Asset Disposition;
(b) l00% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such transaction) of
any such Indebtedness; and
(c) 100% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such transaction) of
such equity financing.
Upon any prepayment of the principal amount of any Notes under this
Section 6.1, Ubiquitel shall also pay the holder or holders of any such Notes
any accrued and unpaid interest to the date of prepayment (or repayment). If, on
any such prepayment date, the aggregate principal amount of the Notes
outstanding is less than the amount required to be prepaid on such date,
Ubiquitel shall prepay all Notes in full. The aggregate principal amount of each
prepayment of Notes pursuant to this Section 6.1 shall be allocated among all
Notes at the time outstanding, in proportion, as nearly as practicable, to the
respective unpaid principal amounts of such Notes. Ubiquitel's obligation to
prepay the Notes under this Section 6.1 in the amounts required by this Section
6.1 shall be fixed until there is no longer any remaining aggregate principal
amount of outstanding Notes, and Ubiquitel shall not receive any credit or
offset with respect to such obligation as a result of any prepayment under
Section 6.2, hereof. Ubiquitel shall give the
20
holders of Notes written notice of each scheduled prepayment under this Section
6.1(a) at least thirty (30) and not more than sixty (60) days prior to the
scheduled prepayment date for such prepayment. Notwithstanding the foregoing, no
such prepayments shall be required under this Section 6.1 if (i) the Senior
Credit Facility does not require the proceeds from such asset sale, lease or
transfer, such incurrence of Indebtedness or from such equity financing to be
applied to repay amounts owing under the Senior Credit Facility (ii) not less
than $10,000,000 of Indebtedness is outstanding under the Senior Credit Facility
and (iii) Paribas is not at such time a lender to UHC or any Subsidiary of UHC
(other than Ubiquitel and its Subsidiaries at such time).
6.2 Optional Prepayments.
(a) Subject to the other provisions of this Section 6.2, (i) at any
time within the first 12 months following the Closing date, if either Company
completes a private or public offering of debt and/or equity in an amount of not
less than one hundred million dollars at any time on or after the Closing Date,
Ubiquitel may prepay all or part of the principal amount of outstanding Notes at
a price equal to (1) the aggregate principal amount of the Notes to be prepaid,
plus (2) all accrued and unpaid interest on the principal amount of the Notes to
be prepaid, plus (3) a premium equal to one percent (1%) of the principal amount
of the Notes to be prepaid, and (ii) at any time on or after the Closing Date,
Ubiquitel may prepay all or part of the principal amount of outstanding Notes at
a price equal to (1) the aggregate principal amount of the Notes to be prepaid,
plus (2) all accrued and unpaid interest on the principal amount of the Notes to
be prepaid, plus (3) a premium (the "Prepayment Premium") equal to the following
applicable percentage of the principal amount being prepaid (based upon the
period in which the prepayment is made):
Period in which Prepayment is Made Percentage
---------------------------------- ----------
Closing Date through December 28, 2000 7%
December 28, 2000 through December 28, 2001 5%
December 28, 2001 through December 28, 2002 3%
December 28, 2002 through December 28, 2003 2%
December 28, 2003 through December 28, 2004 1%
On or after December 28, 2004 0%
(b) The right of Ubiquitel to prepay Notes pursuant to this Section
6.2 shall be conditioned upon its giving notice of prepayment, signed by its
sole member, to the holders of Notes not less than thirty (30) days and not more
than sixty (60) days prior to the date upon which the prepayment is to be made
specifying (i) the registered holder of each Note to be prepaid, (ii) the
aggregate principal amount being prepaid, (iii) the date of such prepayment,
(iv) the accrued and unpaid interest (to but not including the date upon which
the prepayment is to be made) and (v) the calculation of the Prepayment Premium
with respect to such prepayment; provided, however, in order for such notice to
be effective and to be deemed given, it must include a statement from Ubiquitel
that either no consents from any holders of any Senior Indebtedness are
necessary for any such prepayment or all necessary consents have been obtained
and without such statement such notice shall not be effective and shall not be
deemed to
21
be given and Ubiquitel may not prepay the Notes in accordance with such notice
under this Section 6,2, and neither any such statement nor this proviso shall,
in and of itself, impose any obligation or liability on any holder of Notes
relative to any holder of Senior Indebtedness. Notice of prepayment under this
Section 6.2 having been so given, the aggregate principal amount of the Notes so
specified in such notice, all accrued and unpaid interest thereon and the
Prepayment Premium on such aggregate principal amount, shall all become due and
payable on the specified prepayment date.
(c) If any prepayment under Section 6.1 or this Section 6.2 does not
repay in full the aggregate principal amount of all Notes then outstanding, then
the aggregate amount of such prepayment of the principal amount of Notes shall
be allocated among all Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts of such Notes.
6.3 Mandatory Repayment Upon Change of Control Event. In the event of the
occurrence of a Change of Control Event, Ubiquitel shall notify the holders of
the Notes as soon as practicable and in any event within five (5) Business Days
thereafter, and the holders of the Notes shall thereafter for a period of sixty
(60) days have the right to demand repayment of all or part of the Notes by
Ubiquitel at a price equal to the principal amount thereof plus accrued interest
to date of payment. Payment by Ubiquitel shall occur not later than ten (10)
days after receipt of notice demanding repayment. Prior to delivering the
notification referred to in the preceding sentence, but in any event within 30
days following any Change of Control Event, Ubiquitel shall (i) repay in full
and terminate all commitments under Indebtedness under the Senior Credit
Facility, and all other Senior Indebtedness the terms of which require repayment
upon a Put Triggering Event, or offer to repay in full and terminate all
commitments under the Senior Credit Facility and all other such Senior
Indebtedness and to repay the Indebtedness owed to each lender which has
accepted such offer, or (iii) obtain the requisite consents under the Senior
Credit Facility and all other Senior Indebtedness to permit the purchase of the
Notes as provided above.
6.4 Miscellaneous.
(a) Nothing in this Section 6 shall in any way limit or affect the
rights or remedies of a holder of Notes, or the covenants and obligations of the
Companies, whether under Section 7, 8 or 13 or any other provision of this
Agreement.
(b) If any prepayment (or repayment) date under this Section 6 is
not a Business Day, such prepayment (or repayment) shall be made on the next
succeeding Business Day.
(c) Neither Company nor any Subsidiary shall repurchase any
outstanding Notes unless either of the Companies either (i) offers to purchase
all then outstanding Notes or (ii) offers to purchase Notes from the holders in
proportion to the respective unpaid principal amount of Notes held by each
holder. In any such repurchase by a Company, if all Notes are not being
repurchased, then the amount of Notes to be repurchased shall be allocated among
all Notes held by holders which accept such Company's repurchase offer so that
the Notes are
22
repurchased from such holders in proportion to the respective unpaid principal
amount of Notes held by each such holder which accepts such Company's offer (or
in such other proportion as agreed by all such holders who accept such Company's
offer). Nothing in this Section 6.4(c) shall (i) obligate a holder of Notes to
accept a Company's repurchase offer or (ii) prevent such Company from prepaying
Notes in accordance with the terms of (and this Section 6.4(c) shall not apply
to) Section 6.1 or Section 6.2 of this Purchase Agreement.
SECTION 7. AFFIRMATIVE COVENANTS
The Company covenants and agrees as follows:
7.1 Use of Proceeds. The Companies will use the net proceeds realized from
the sale of the Notes and the Warrants (i) to fund the operating expenses of the
Companies in connection with the construction and operation of a PCS System in
the Reno/Tahoe market under an affiliation agreement among Sprint Spectrum L.P.,
Wireless Co., L.P. and the Companies and related agreements with Sprint and (ii)
for general corporate purposes including closing costs and fees. No portion of
such proceeds will be used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying, within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended from time to time, any
"margin stock" as defined in said Regulation U, as amended from time to time, or
for the purpose of purchasing, carrying or trading in securities within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System,
as amended from time to time, or for the purpose of reducing or retiring any
indebtedness which both (i) was originally incurred to purchase any such margin
stock or other securities and (ii) was directly or indirectly secured by such
margin stock or other securities. None of the assets of the Companies includes
any such "margin stock," and neither Company has any present intention of
acquiring any such "margin stock."
7.2 Financial Information.
(a) The Companies will maintain, and cause each Subsidiary to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
accordance with generally accepted accounting principles consistently applied.
(b) The Companies will deliver the following to each holder of a
Note, Warrant or Shares:
(i) within ninety (90) days after the close of each fiscal
year of UHC, (x) a Consolidated balance sheet of each Company and the
Subsidiaries as of the end of such fiscal year, (y) Consolidated
statements of income and expenses and Consolidated statements of changes
in shareholders' equity and cash flows for each Company and the
Subsidiaries for such fiscal year (all in reasonable detail) and
comparative figures for the immediately preceding fiscal year, all such
balance sheets and statements to be in reasonable detail and certified
(without qualification as to the scope or manner of the audit) by
independent public accountants of recognized national standing selected by
UHC and (z) in reasonable detail, management's discussion and analysis of
the results of
23
operations and the financial condition of each Company and the
Subsidiaries as of the end of the year covered by the financial
statements;
(A) within forty-five (45) days after the close of each of the
first three (3) fiscal quarters of UHC, (x) the internally prepared
Consolidated balance sheet of each Company and the Subsidiaries as
of the end of such fiscal quarter, (y) Consolidated statements of
income of changes in shareholders' equity and of cash flows of each
Company and the Subsidiaries for such fiscal quarter and for the
portion of the fiscal year then ended (all in reasonable detail) and
comparative figures for the same period in the preceding fiscal year
and (z) in reasonable detail, management's discussion and analysis
of the results of operations and the financial condition of each
Company and the Subsidiaries as of the end of the period covered by
the financial statements;
(ii) as soon as practicable, copies of any annual, special or
interim audit reports or management or comment letters with respect to the
Company or its Subsidiaries or their operations submitted to the Company
by independent public accountants;
(iii) soon as practicable, copies (x) of all financial
statements, proxy material or reports sent to the Company's or any
Subsidiary's stockholders, (y) of any public or press releases and (z) of
all reports or registration statements filed with the Commission pursuant
to the Securities Act or the Securities Exchange Act;
(iv) as soon as practicable and without duplication of any of
the above items, any other materials furnished to holders of Senior
Indebtedness (including without limitation any compliance certificates
furnished in respect of such Senior Indebtedness); and
(v) as soon as practicable, such other information, as may
reasonably be requested by a holder of Notes, regarding the assets,
properties, liabilities, business, affairs, results of operations or
condition (financial or otherwise) of the Company or any Subsidiary.
All such financial statements shall be prepared in accordance with generally
accepted accounting principles consistently applied (except for any change in
accounting principles specified in the accompanying certificate and except that
any interim financial statements may omit notes and may be subject to normal
year-end adjustments).
(c) Without limiting any other provisions of this Section 7.2, the
Companies agree that, if requested in writing by any holder of Notes, Warrants
or Shares, they will not deliver to such holder (until otherwise instructed by
such holder) (x) any non-public information or non-public materials regarding
the Companies or any Subsidiary (whether such information or materials is
described in this Section 8.2 or otherwise) and (y) any information (whether or
not included in clause (x)) which such holder specifies that it does not want to
receive.
24
7.3 Compliance Certificates. All financial statements delivered pursuant
to Section 7.2(b)(i) or (ii) shall be accompanied by a certificate of the chief
financial officer or the chief executive officer of UHC stating that to the
knowledge of the signer no Event of Default or Potential Default exists, or, if
any such Event of Default or Potential Default shall exist, the nature and
period of existence thereof. Each certificate of the chief financial officer or
the chief executive officer shall in addition state, if there exists an Event of
Default or a Potential Default, what the Companies propose to do with respect
thereto. Each certificate of the chief financial officer or the chief executive
officer accompanying financial statements delivered pursuant to this Section 7.3
shall in addition set forth in reasonable detail the computations necessary to
establish compliance with Sections 8.1, 8.3 and 8.5 hereof.
7.4 Inspection. At the request of the Majority Noteholders (not more than
once in any calendar year unless a Potential Default or Event of Default
exists), the Companies will permit such holder (or holders) and any authorized
representative of such holder (or holders) to visit and inspect any of the
properties of each Company and any Subsidiaries, to examine their respective
books and records and to discuss with their officers their books and records and
the assets, properties, liabilities, business, affairs, results of operations or
condition (financial or otherwise) of the Companies or any Subsidiary, all at
such reasonable times and as often as may be reasonably requested.
7.5 Maintenance of Existence; Properties and Franchises; Compliance with
Law; Taxes; Insurance. The Companies will, and will cause each Subsidiary to:
(a) maintain their respective corporate or limited liability company
existence, rights and other franchises in full force and effect; provided that
the Companies may terminate the corporate or limited liability company existence
of any of their respective Subsidiaries (provided that UHC may not terminate the
limited liability company existence of Ubiquitel), or permit the termination or
abandonment of rights or other franchises, if in the opinion of such Company it
is no longer in the Company's best interests to maintain such existence, rights
or other franchises and such termination or abandonment will not be prejudicial
in any material respect to the holders of the Notes;
(b) maintain their respective tangible assets in good repair,
working order and condition so far as reasonably necessary or advantageous to
the proper carrying on of their respective businesses;
(c) comply in all material respects with all applicable laws and
with all applicable orders, rules, rulings, certificates, licenses, regulations,
demands, judgments, writs, injunctions and decrees, the noncompliance with which
could reasonably be expected to have a Material Adverse Effect;
(d) pay promptly when due all taxes, fees, assessments and other
governmental charges imposed upon their respective properties, assets or income
and all claims or indebtedness (including, without limitation, materialmen's,
vendor's, workmen's and like claims) which might become a Lien upon such
properties or assets; provided that payment of any such tax, fee, assessment,
charge, claim or indebtedness shall not he necessary so long as it is
25
being contested on good faith by appropriate proceedings and failure to make
such payment will not have a material adverse effect on the assets, properties,
liabilities, business, affairs, results of operations, condition (financial or
otherwise) or prospects of the Company on a consolidated basis; and
(e) keep insured, by financially sound and reputable insurers, all
their respective properties of a character customarily insured by entities
similarly situated, against loss or damage of the kinds and in amounts
customarily insured against by such entities and with such deductibles or
coinsurance as is customary.
7.6 Office for Payment, Exchange and Registration. So long as any of the
Notes is outstanding, Ubiquitel will maintain an office or agency where Notes
may be presented for payment, exchange, conversion or registration of transfer
as provided in this Agreement. Such office or agency initially shall be the
office of Ubiquitel set forth in Section 19 hereof, which place may from time to
time be changed by notice to the holders of all Notes then outstanding.
7.7 Notices. The Company will give notice to all holders of Notes promptly
after an executive officer, the treasurer or chief accounting officer of the
Company learns (other than by notice from all of such holders) of the existence
of any of the following:
(a) any Event of Default or any Potential Default;
(b) any default under any other Indebtedness (or under any
indenture, mortgage or other agreement relating to any Indebtedness) in excess
of $100,000 in respect of which either Company or any Subsidiary is liable;
(c) any action or proceeding which has been commenced or threatened
against either Company or any of its Subsidiaries and which, if adversely
determined, could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the assets, properties, liabilities,
business, affairs, results of operations or condition (financial or otherwise)
of either Company on a consolidated basis or the ability of either Company to
perform its obligations under the Purchase Agreement or the Notes;
(d) any dispute which may exist between either Company or any of the
Subsidiaries and any governmental regulatory body which could reasonably be
expected to, individually or in the aggregate, materially adversely affect the
normal business operations of either Company or any of the Subsidiaries or the
assets, properties, liabilities, business, affairs, results of operations or
condition (financial or otherwise) of the Company on a consolidated basis or the
ability of either Company to perform its obligations under the Purchase
Agreement or the Notes; and
(e) any (i) "reportable event" (as such term is defined in Section
4043(b) of ERISA), (ii) "complete withdrawal" or "partial withdrawal" (within
the meaning of Sections 4203 and 4205 of ERISA) from a multi-employer plan (as
defined in Section 3(37) of ERISA) or (iii) "prohibited transaction" (as such
term is defined in Section 406 of ERISA and Section 4975 of the Internal Revenue
Code of 1986, as amended) in connection with any employee benefit
26
pension plan (as defined in Section 3(2) of ERISA), maintained or contributed to
(or required to be maintained or contributed to) by either Company, any
Subsidiary of either Company or any other Person treated with either Company as
a single employer pursuant to Section 414(b), (c), (m) or (o) of the Code
(including, without limitation, any multi-employer plan), or any trust created
thereunder, which in the case of clause (i), (ii) or (iii) may, either
individually or in the aggregate, result in a liability which would materially
adversely affect the assets, properties, liabilities, business, affairs, results
of operations, condition (financial or otherwise) or prospects of either Company
on a consolidated basis or the ability of either Company to perform its
obligations under the Purchase Agreement or the Notes.
Such notice (i) with respect to (a) or (b), shall specify the nature and period
of existence of any such Potential Default, Event of Default or other default
and what either Company proposes to do with respect thereto and (ii) with
respect to (c), (d) or (e), shall specify the nature of any such matter referred
to in such clause, what action either Company or any Subsidiary proposes to take
with respect thereto and what action any other relevant Person is taking or
proposes to take with respect thereto.
7.8 Payment of Dividends by Subsidiaries. Except as restricted by
applicable law or contract, each Company will cause its Subsidiaries to pay
dividends or make other distributions or advances to such Company, to the extent
of funds legally available therefor and to the extent permitted by the Senior
Credit Facility, in sufficient amounts and at sufficient times to enable such
Company to have sufficient earnings and funds to pay on a timely basis all
amounts due with respect to Senior Indebtedness and the Notes and any other
amounts due under this Agreement.
7.9 Board Observation Rights. The holders of the Notes shall receive prior
notice of any meetings of the Board of Directors called by UHC and of any
actions to be taken by the Board by written consent without a meeting of the
Board. The holders of the Notes shall, subject to the execution of
Confidentiality Agreements with the Company in form and substance reasonably
satisfactory to such holders and the Company, have the right to review the
records of all meetings and actions of the Board of Directors of the UHC.
7.10 Environmental Matters.
(a) The Companies and each Subsidiary shall keep any property either
owned or occupied by the Companies or any Subsidiary free and clear of any Liens
imposed for failure to comply with any environmental laws, regulations or
ordinances (each, an "Environmental Lien"), to the extent any such Environmental
Lien could reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of either of the
Companies or any Subsidiary and the Companies and each Subsidiary, as the case
may be, shall keep all such property in material compliance with all
environmental laws, regulations and ordinances; provided, however, the Companies
or any Subsidiary shall have the right at its cost and expense, and acting in
good faith, to contest, object or appeal by appropriate legal proceeding the
validity of any Environmental Lien.
27
(b) Each of the Companies will defend, indemnify and hold harmless
each current, former and future holder of Notes, its employees, officers,
directors, stockholders, partners, agents, representatives and assigns, from and
against any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits and claims, joint or several, and any costs, disbursements and
expenses (including reasonable attorneys' fees and expenses and reasonable costs
of investigation) of whatever kind or nature, known or unknown, contingent or
otherwise, arising out of or in any way related to (i) the presence, disposal,
release, removal, discharge, storage or transportation of any Hazardous Material
upon, into, from or affecting any real property (including improvements) owned
or occupied (or formerly owned or occupied) by either Company or any Subsidiary;
and (ii) any judicial or administrative action, suit or proceeding, actual or
threatened, relating to Hazardous Material upon, in, from or affecting any real
property (including improvements) owned or occupied (or formerly owned or
occupied) by either Company or any Subsidiary; and (iii) any violation of any
environmental law, regulation or ordinance by either Company or any Subsidiary
or any of their agents, tenants, subtenants or invitees; and (iv) the imposition
of any Environmental Lien for the recovery of costs expended in the
investigation, study or remediation of any environmental liability of(or
asserted against) either Company or any Subsidiary. This Section 7.11(b) and
Section 7.11(c) below shall survive any payment, conversion or transfer of Notes
and any termination of this Agreement.
(c) To the extent that either Company or any Subsidiary is strictly
liable without regard to fault under any environmental law, regulation or
ordinance, such Company's obligation to the holders of Notes under any of the
indemnification provisions of this Purchase Agreement shall likewise be strict
without regard to fault with respect to the violation of any environmental law,
regulation or ordinance which results in any liability to any of the indemnified
persons referred to in Section 7.11(b) above.
7.11 Reservation of Shares. UHC shall at all times keep reserved, free
from preemptive rights, out of its authorized Common Stock a number of shares of
Common Stock sufficient to provide for the exercise of the exercise rights
provided in the Warrants.
7.12 Listing of Shares. If any shares of the UHC's Voting Common Stock are
listed on any national securities exchange, then UHC will take such action as
may be necessary, from time to time, to obtain approval for the listing of all
outstanding Shares on such exchange.
7.13 Delivery of Information for Rule 144A Transactions. If a holder of
Notes, Warrants or Shares proposes to transfer any such Notes, Warrants or
Shares pursuant to Rule 144A under the Securities Act (as in effect from time to
time), the Companies agree to provide (upon the request of such holder or the
prospective transferee) to such holder and (if requested) to the prospective
transferee any financial or other information concerning each Company and the
Subsidiaries which is required to be delivered to any transferee of such Notes,
Warrants or Shares pursuant to such Rule 144A.
7.14 Senior Credit Facility. Not later than June 30, 2000, Ubiquitel shall
have satisfied the conditions precedent to borrowing under the Senior Credit
Facility as in effect on the date
28
hereof, and the lenders party to the Senior Credit Facility shall have advanced
to Ubiquitel a Loan thereunder.
7.15 Evidence of Equity Funds. Within five (5) Business Days following
Closing, the Company shall provide to Purchaser evidence reasonably acceptable
to Purchaser that not less than $17,000,000 of proceeds from the sale of
Preferred Stock is held in unrestricted accounts solely within the control of
the UHC.
SECTION 8. NEGATIVE COVENANTS
The Companies further covenant and agree as follows:
8.1 Restricted Payments. Neither Company nor any Subsidiary will declare
or make or permit to be declared or made any Restricted Payment; provided,
however, that (a) UHC may repurchase shares of its Common Stock (or repurchase
options to purchase shares of its Common Stock) or pay (or repurchase) stock
appreciation rights granted by UHC, as long as each of the following three
conditions is satisfied: (i) such shares, options or stock appreciation rights
are outstanding under, and such repurchase or payment is made pursuant to, UHC's
incentive plans approved by its Board of Directors with the concurrence of a
majority of UHC's independent directors, (ii) when such repurchase or payment is
made there exists no Event of Default or Potential Default, both immediately
before and immediately after giving effect to such Investment and (iii) such
repurchase or payment is permitted under the terms of any Senior Indebtedness
(and under any agreement under which any Senior indebtedness is outstanding) and
(b) any Restricted Payment expressly permitted to be made pursuant to the terms
of the Senior Credit Facility, without reliance on any consent or waiver, shall
be permitted to be made.
8.2 Sale of Substantial Portion of Assets; Subsidiaries.
(a) Neither Company nor any Subsidiary will sell, transfer, lease or
otherwise dispose of any assets to any Person (other than to the Companies or to
a wholly-owned Subsidiary, and other than assets consisting of inventory being
disposed of in the ordinary course of business and other than assets which are,
contemporaneously with such disposition (or within one hundred eighty (180) days
thereafter), being replaced with other substantially similar (or improved)
assets which are used by the Companies or any Subsidiary for substantially the
same purpose as the assets being replaced) to the extent the aggregate assets so
sold, transferred, leased or disposed of during the twelve (12) month period
ending on such sale, transfer, lease or disposition (i) had an aggregate book
value of fifteen percent (15%) or more of the consolidated total assets of each
Company and the Subsidiaries at the end of the most recent fiscal quarter
preceding such sale, transfer, lease or disposition or (ii) accounted for
fifteen percent (15%) or more of the consolidated revenues of each Company and
the Subsidiaries as shown on the consolidated income statement of the Company
for the most recent fiscal quarter or the then preceding fiscal year;
(b) Neither Company nor any Subsidiary will sell, transfer or
otherwise dispose of any capital stock of any Subsidiary, except to the
Companies or to another Subsidiary; provided, however, that this Section 8.2(b)
shall not prevent the Companies or a Subsidiary from
29
selling, transferring or otherwise disposing of the capital stock of a
Subsidiary if such sale, transfer or other disposition does not violate Section
8.2(a) hereof.
(c) The Companies will not create or permit the creation of any Lien
on any shares of the stock of any Subsidiary except Liens to secure Senior
Indebtedness.
(d) Notwithstanding the foregoing, nothing contained in this Section
8.2 shall restrict the sale of any assets permitted to be sold pursuant to the
Senior Credit Agreement, so long as the proceeds of such sale are applied in
accordance with the terms of Section 6.1 of this Purchase Agreement.
8.3 Permitted Indebtedness. Neither Company nor any Subsidiary will
create, incur or assume any Indebtedness other than:
(a) Indebtedness represented by or incurred under the Notes and the
Purchase Agreement and all Senior Indebtedness;
(b) Indebtedness incurred to prepay or repay in full the remaining
outstanding principal amount of Notes and all other amounts due thereon or under
the Purchase Agreement;
(c) Indebtedness existing on the Closing Date and identified on the
Disclosure Schedule;
(d) Indebtedness incurred solely as an extension, renewal,
refinancing or replacement of Indebtedness of the Companies under clause (c)
above (but excluding any Indebtedness under clause (c) above to the extent such
Indebtedness is repaid with the proceeds from the sale of the Notes and
Warrants), provided that any such extension, renewal or refinancing (A) shall be
on terms which on balance are substantially as favorable to the Companies as the
terms of such existing Indebtedness (other than changes in the amount of the
interest rate and other than the imposition of additional Liens permitted by
Section 8.9(h) hereof) and (B) shall not be in a greater principal amount or
have a shorter average life or earlier maturity than such existing Indebtedness;
(e) Interest Rate Protection Agreements required by the Senior
Credit Facility or incurred for hedging purposes in the ordinary course of
business;
(f) Capitalized Leases, to the extent the aggregate amount of
Capitalized Lease Obligations under all Capital Leases when aggregated with the
amount of Indebtedness permitted by Section 8.3(g) (I) incurred during any one
year shall not exceed $200,000 and (II) outstanding at any one time shall not
exceed $1,250,000;
(g) Indebtedness incurred to pay all or a portion of the purchase
price of equipment or machinery used in the ordinary course of business of the
Company or any of its Subsidiaries or any Indebtedness incurred to refinance
such Indebtedness, provided that the aggregate principal amount of all
Indebtedness secured by Liens permitted by this clause (g),
30
when aggregated with the amount of Indebtedness permitted by Section 8.3(f) does
not exceed at any one time outstanding the amounts permitted pursuant to 8.3(f);
and;
(h) Additional Indebtedness in an amount which does not exceed
$3,300,000 (which Indebtedness may or may not be incurred pursuant to the Senior
Credit Facility).
8.4 Certain Ratios.
(a) Capital Expenditures (i) UHC will not, and will not permit any
of its Subsidiaries to, make or commit to make any expenditure for fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with generally accepted
accounting principles and including Capitalized Lease Obligations (collectively,
"Capital Expenditures"), except that UHC and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount thereof does not exceed during any
fiscal year, the amount set forth below opposite such date:
Fiscal Year Ended Amount
----------------- ------
December 31, 2000 $25,000,000
December 31, 2001 5,500,000
December 31, 2002 and thereafter 4,500,000
(ii) Notwithstanding anything to the contrary contained in
Section 8.4(a)(i), to the extent that Capital Expenditures incurred during
any period set forth in Section 8.4(a)(i) are less than the amount set
forth opposite such period above, 100% of such unused amount may be
carried forward to the immediately succeeding fiscal year and utilized to
make Capital Expenditures in excess of the amount permitted above in the
following fiscal year; provided, that, (x) amounts carried forward from
the immediately preceding fiscal year, if any, shall be utilized in full
during the next fiscal year to incur Capital Expenditures before the
relevant amount set forth opposite such next fiscal year shall be utilized
to incur Capital Expenditures during such fiscal year and (y) no amounts
once carried forward to the next fiscal year may be carried forward again
to any fiscal year thereafter.
(b) Fixed Charge Coverage Ratio. UHC will cause Ubiquitel not to
permit, and Ubiquitel will not permit, the Fixed Charge Coverage Ratio for any
fiscal quarter ending on a date set forth below, to be less than the ratio set
forth below opposite such date:
Fiscal Quarter Ended Ratio
-------------------- -----
June 30, 2003 0.825:1.00
September 30, 2003 and thereafter 0.9075:1.00
(c) Interest Coverage Ratio. UHC will cause the Borrower not to
permit, and the Borrower will not permit, the ratio of its Consolidated EBITDA
for any fiscal quarter ending
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on a date set forth below to its Consolidated Interest Expense for such fiscal
quarter, to be less than the ratio set forth opposite such date below:
Fiscal Quarter Ended Ratio
-------------------- -----
March 31, 2003 1.00:1.00
June 30, 2003 1.25:1.00
September 30, 2003 1.45:1.00
December 31, 2003 1.65:1.00
June 30, 2004 2.25:1.00
December 31, 2004 and thereafter 2.90:1.00
(d) Minimum Covered POPS. The percentage of the population of
potential Subscribers in geographic areas where Ubiquitel has completed the
construction of facilities necessary to permit Subscribers in such area to
utilize Ubiquitel's wireless services at the end of any fiscal quarter set forth
below (the "Covered Population") shall not be less than the percentage of the
population set forth opposite such date below:
Fiscal Quarter Ended Percentage
-------------------- ----------
September 30, 2000 42.0%
December 31, 2000 57.0%
March31, 2001 62.0%
December 31, 2001 67.0%
December 31, 2002 69.5%
March 31, 2003 69.5%
June 30, 2003 69.5%
September 30, 2003 and thereafter 72.0%
(e) Leverage Ratios. (A) Consolidated Indebtedness to Annualized
Consolidated EBITDA. UHC will cause Ubiquitel not to permit, and Ubiquitel will
not permit, the ratio of Consolidated Indebtedness as at the end of any fiscal
quarter ended on a date set forth below to Annualized Consolidated EBITDA for
any fiscal quarter ending on a date set forth below to be greater than the ratio
set forth opposite such date below:
Fiscal Quarter Ended Ratio
-------------------- -----
March 31, 2003 8.65:1.00
June 30, 2003 7.50:1.00
September30, 2003 6.35:1.00
December 31, 2003 and thereafter 5.75:1.00
(f) Minimum Subscribers. UHC will cause Ubiquitel not to permit, and
Ubiquitel will not permit, the number of its Subscribers at the end of any month
occurring during a fiscal quarter ended on a date set forth below to be less
than the number of Subscribers set forth opposite such date set forth below:
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Fiscal Quarter Ended Amount
--------------------
September 30, 2000 2,125
December 31, 2000 4,675
March 31,2001 6,800
June 30, 2001 9,350
September 30, 2001 11,390
December 31, 2001 13,770
March 31, 2002 15,895
June 30, 2002 18,530
September 30, 2002 20,740
December 31, 2002 22,865
March 31, 2003 25,330
June 30, 2003 27,880
September 30, 2003 30,345
December 31, 2003 and thereafter 32,810
8.5 No Change in Business. Neither Company nor any of the Subsidiaries
will change substantially the character of its business as conducted on the
Closing Date as represented in Section 4.4 hereof except for reasonable
extensions thereof.
8.6 Consolidation or Merger. Neither Company will consolidate with or
merge with or into any other Person, unless, with respect to UHC only:
(a) at the time of effectiveness of the transaction no Event of
Default or Potential Default has occurred and is continuing and immediately
after the effectiveness of the transaction no Event of Default or Potential
Default will exist;
(b) the surviving Person is a corporation organized under the laws
of a state of the United States; and
(c) if such surviving Person is a corporation other than the
consolidating or merging Company, all liabilities and obligations of UHC under
the Purchase Agreement, the Notes and the Warrants shall remain in effect and
shall have been expressly assumed by such surviving Person (pursuant to a
document in form and substance reasonably satisfactory to the Purchaser and its
counsel) as if such surviving Person were "UHC" hereunder and thereunder.
If UHC is party to a merger as a result of which a Change of Control Event
occurs, the holders of Notes shall have the right to require such Company to
repay the Notes as provided in Section 6.3 hereof
8.7 HSR Act. When and if requested to do so by any holder of the Notes,
the Companies will (i) promptly furnish to such holder information as may be
requested to allow such holder to comply with the HSR Act and (ii) make any
filing that may be required of the Company under the HSR Act.
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8.8 Transactions with Affiliates. Except with respect to agreements
disclosed on the Disclosure Schedules, the Companies will not, and will not
permit any Subsidiary to, directly or indirectly, enter into any transaction or
agreement (including, without limitation, the purchase, sale, distribution,
lease or exchange of any property or the rendering of any service) with any
Affiliate of either Company or of any Subsidiary, other than a wholly-owned
Subsidiary of either Company, unless such transaction, agreement or general
arrangement (a) is approved by the Board with the concurrence of a majority of
the independent directors and (b) is on terms that are no less favorable to the
Companies or such Subsidiary, as the case may be, than those which might be
obtained at the time of such transaction from a Person who is not such an
Affiliate provided, however, that this Section 8.9 shall not limit, or be
applicable to, (i) employment arrangements with (and general salary and benefit
compensation for) any individual who is an employee of either Company or any
Subsidiary if such arrangements are approved by the Board, (ii) the payment of
reasonable and customary regular fees to directors of the Companies who are not
employees of the Companies, (iii) the Companies' existing Agreements with
Spectrasite LLC and the ▇▇▇▇▇▇ Group and (iv) other transactions permitted
pursuant to the Senior Credit Facility (as in effect on the date hereof).
8.9 Liens, Etc. The Company will not create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any Lien upon or with
respect to any of its assets, properties or income, other than the following:
(a) Liens securing amounts payable under Senior Indebtedness;
(b) purchase money liens or purchase money security interests upon
or in any property acquired or held by the Companies or any Subsidiary in the
ordinary course of business to secure the purchase price of such property or to
secure Indebtedness incurred and used solely for the purpose of financing the
acquisition of such property, provided that the principal amount of Indebtedness
secured by each such lien or interest in each item of property shall not exceed
the cost of the item subject thereto and that any such lien or interest shall
not apply to any other property, assets or income of the Company or any
Subsidiary;
(c) Liens on property of the Companies subject to, and securing only
Capital Leases, provided that the aggregate amount of Capital Leases shall not
exceed the amount permitted pursuant to Section 8.3(f).
(d) Liens existing on such property at the time of its acquisition
by the Company or a Subsidiary (other than any such Lien created in
contemplation of such acquisition) and provided further, that the aggregate
Indebtedness secured hereby shall not exceed the amount permitted pursuant to
Section 8.3(g);
(e) Liens on real property of the Company or a Subsidiary which
Liens are incurred to finance the acquisition of, or construction on, such real
property and which real property is part of the office, building or plant
facilities of the Company or its Subsidiaries, including surrounding real
property, provided that any such real property referred to in this clause (iii)
is acquired or developed in the ordinary course of the business of the Company
or its Subsidiaries and not for purposes of investment;
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(f) Liens existing on the date hereof and described on the
Disclosure Schedule;
(g) Liens securing Indebtedness permitted under Section 8.3(h);
(h) Liens incurred pursuant to the refinancing of obligations
secured by Liens permitted by clauses (b) through (g) above, provided that such
Liens shall secure new obligations not in excess of the outstanding principal
amount of such obligations being refinanced and that such Liens shall encumber
only such portions of the property, assets and income of the Companies or any
Subsidiaries as were previously encumbered by Liens securing such obligations
being refinanced (except that in the refinancing or renewal of Senior
Indebtedness from banks the Company or a Subsidiary may grant Liens on
additional property or assets); and
8.10 No Restrictions on Dividends. Neither Company nor any Subsidiary will
create (or permit to exist) any consensual restrictions (whether by agreement or
otherwise) that may affect or limit the ability of any Subsidiary to pay
dividends or to make other distributions of any or all of its assets to either
Company or to any Subsidiary except the Senior Credit Facility and other than
restrictions permitted pursuant to the Senior Credit Facility.
8.11 Private Placement Status. Neither Company nor any agent nor other
Person acting on such Company's behalf will do or cause to be done (or will omit
to do or to cause to be done) any act which act (or which omission) would result
in bringing the issuance or sale of the Notes or Shares within the provisions of
Section 5 of the Securities Act (other than in accordance with a registration
and qualification of Shares under Section 17 hereof).
8.12 No Dilution or Impairment; No Changes in Capital Stock. UHC (a) will
not permit the par value or the determined or stated value of any shares of
Common Stock receivable upon the exercise of the Warrants to exceed the amount
payable therefor upon such exercise, (b) will take all such action as may be
necessary or appropriate in order that UHC validly and legally issue fully paid
and nonassessable shares of its Common Stock free from all taxes, Liens and
charges with respect to the issue thereof, (c) will not take any action which
results in any adjustment of the exercise price under the Warrants if the total
number of shares of UHC's Common Stock (or other securities), issuable after the
action upon the exercise of all of the then outstanding Warrants would exceed
the total number of shares of Common Stock (or other securities) then authorized
by UHC's certificate of incorporation and available for the purpose of issuance
upon such exercise and (d) will not have any authorized Common Stock or
securities convertible into or exchangeable for Common Stock (and will not issue
any Common Stock or securities convertible into or exchangeable for Common
Stock) other than its existing authorized Common Stock, except that UHC may
increase the number of such authorized shares of its Common Stock as long as
such additional shares have the same terms as those shares authorized as of the
date hereof.
8.13 Limitation on Creation of Subsidiaries. UHC will not, and will not
permit any of its Subsidiaries to, establish, create or acquire any new
Subsidiary.
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SECTION 9. SUBORDINATION
9.1 Agreement to Be Bound. All Subordinated Indebtedness shall, to the
extent and in the manner hereinafter set forth, be subordinated and subject in
right of payment to the prior payment in full in cash of all Senior
Indebtedness. Each holder of Subordinated Indebtedness, whether upon original
issue or upon transfer or assignment thereof, by its acceptance thereof agrees
that the Subordinated Indebtedness shall be subject to the provisions contained
in this Section 9. The subordination provisions of this Section 9 shall be for
the benefit of the holders of the Senior Indebtedness, may be enforced directly
by such holders and may not be amended without the consent of such holders.
9.2 Priority of Senior Indebtedness.
(a) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration, required prepayment or otherwise, all Senior Indebtedness shall
first be paid in full in cash before any payment is made of any kind or
character, whether in cash, properties, securities or otherwise, (or any assets
are applied voluntarily or involuntarily) on account of Subordinated
Indebtedness.
(b) No payment on account of or otherwise in connection with the
Subordinated Indebtedness, shall be made, and no assets shall be applied to the
purchase or other acquisition or retirement of the Subordinated Indebtedness,
for so long as there exists a default or an event of default involving failure
to pay when due any Senior Indebtedness or for a period (the "Payment Blockage
Period") of up to one hundred eighty (180) days after both of the following have
occurred: (A) there exists and is continuing an event of default on any Senior
Indebtedness and (B) written notice of such event of default shall have been
given (by the Company or by holders of such Senior Indebtedness) to the holders
of Notes, stating that this Section 9.2(b) is therefore applicable; provided
that any Payment Blockage Period arising as a result of this Section 9.2 shall
terminate immediately upon the waiver or cure of such event of default or if
such Senior Indebtedness is no longer outstanding; provided, further, that in
any three hundred sixty (360) consecutive day period the aggregate number of
days in all Payment Blockage Periods shall not exceed one hundred eighty (180)
days; provided, further, that no event of default on Senior Indebtedness
resulting in a Payment Blockage Period may constitute the basis for a subsequent
Payment Blockage Period unless the event of default has been cured or waived for
a period of at least ninety (90) days (it being acknowledged that any subsequent
action or any breach of any financial covenants, commencing after the date of
commencement of such Payment Blockage Period, that in either case would give
rise to an event of default pursuant to any provisions under which an event of
default previously existed or was continuing would constitute a new event of
default for this purpose). As used in this paragraph, an "event of default" is
an event of default (x) as defined in any Senior Indebtedness or in the
instrument under which the same is outstanding and (y) which would permit the
acceleration of such Senior Indebtedness prior to its maturity. Any notice to be
given to holders of Notes under this Section 9.2(b) shall be deemed properly
given if given using the addresses for holders of Notes provided pursuant to
Section 20 hereof.
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(c) In the event that any money, property or securities is received
by the holder of a Note in violation of this Section 9.2 or Section 9.3 hereof,
the holder thereof shall hold the same in trust for the benefit of the holders
of Senior Indebtedness, and shall deliver the same in kind to the Company.
9.3 Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment or distribution of assets of either Company
(whether in cash, property or securities) to creditors upon any dissolution or
winding-up or total or partial liquidation or reorganization of either Company,
whether voluntary or involuntary, or in any bankruptcy, insolvency, receivership
or similar proceeding regarding such Company, all amounts due or to become due
upon all Senior Indebtedness then outstanding shall first be paid in full in
cash before any Subordinated Indebtedness shall be entitled to receive any
assets so paid or distributed in respect thereof (but without restricting the
rights of holders under Section 6 hereof); provided that with respect to the
foregoing, the holders of Notes may receive (and shall be entitled to retain)
securities which are subordinate to (at least to the extent that the Notes are
subordinate to Senior Indebtedness pursuant to the terms hereof) the payment of
all Senior Indebtedness then outstanding and have a maturity no earlier than the
maturity of the Notes and have an interest rate no greater than that of the
Notes. Upon any such dissolution or winding-up or liquidation, reorganization or
other proceeding, any payment or distribution of assets of a Company of any kind
or character, whether in cash, property or securities, to which Subordinated
Indebtedness would be entitled, except for these provisions, shall be paid by
such Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution directly to the
holders of Senior Indebtedness which was then outstanding (pro rata to each of
such holders on the basis of the respective amounts (to the extent known) of
Senior Indebtedness then held by such holders or their representatives), to the
extent necessary to pay all such Senior Indebtedness which was then outstanding
in full in cash, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of the Notes (but subject to the proviso to the preceding
sentence).
(b) Each holder of Notes by its acceptance hereof (x) irrevocably
authorizes and empowers (but without imposing any obligation on) each holder of
any Senior Indebtedness at the time outstanding, under (and only under) the
circumstances set forth in Section 9.3(a), if the holder of Notes shall fail to
do so prior to twenty (20) days before the expiration of the time to do so, to
file and prove all claims of such holder for its ratable share of payments or
distributions in respect of the Notes which are required to be paid or delivered
to the holders of Senior Indebtedness as provided in Section 9.3(a), in the name
of each such holder of the Notes or otherwise, as such holder of Senior
Indebtedness may determine to be necessary or appropriate for the enforcement of
the provisions of Section 9.3(a), and the holder of Notes may amend any such
claims regarding the Notes before or after such twentieth (20th) day (but not in
a manner inconsistent with the rights of holders of Senior Indebtedness under
this Section 9 other than this Section 9.3(b)) whether such claims are filed by
such holder of Notes or are filed, pursuant to this Section 9.3(b), by any
holder of Senior Indebtedness; and (y) under (and only under) the circumstances
set forth in Section 9.3(a), agrees to execute and deliver to each holder of
Senior
37
Indebtedness all such further instruments confirming the authorization
hereinabove set forth, and all such powers of attorney, proofs of claim,
assignments of claim and other instruments, and to take all such other action,
as may be reasonably requested by such holder in order to enable such holder to
enforce all claims upon or in respect of such Note holder's ratable share of
payments or distributions in respect of the Notes. Nothing in this Section
9.3(b), or any other provision hereof, shall give or be construed to give the
holder of any Senior Indebtedness any right to vote any Note, or any related
claim, or any portion of such Note or such claim, or to exercise any approval
rights, whether in connection with any resolution, arrangement, plan of
reorganization, compromise, settlement, election of trustees or otherwise.
Holders of Senior Indebtedness shall not create any liability to any person on
the part of any holders of Notes in connection with the exercise of any rights
granted under this Section 9.3(b).
9.4 No Prejudice or Impairment; Reinstatement.
(a) No right of any present or future holders of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired (i) by any act or failure to act on the part
of either Company, including without limitation any merger or consolidation of
either Company into or with any other Person, or any sale, lease or transfer of
any or all of the assets of either Company to any other Person, (ii) by any act
(in good faith) or failure (in good faith) to act by any such holder of Senior
Indebtedness, including, without limitation, the failure by such holder to
perfect a security interest in any security for the payment of Senior
Indebtedness or (iii) by any noncompliance by Ubiquitel with the terms and
provisions of any Note or this Purchase Agreement regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of the Senior Indebtedness may, without in any way affecting the subordination
hereunder, at any time or from time to time and in their absolute discretion,
change the manner, place, time or other terms of payment of, or renew or alter,
any Senior Indebtedness, or amend, modify or supplement any agreement or
instrument governing or evidencing such Senior Indebtedness or any other
document referred to therein, or exercise or refrain from exercising any of
their rights under the Senior Indebtedness, including, without limitation,
waiver of default thereunder and release of any collateral securing such Senior
Indebtedness, all without notice to or assent from the holders of the Notes. The
absence of any notice to, or knowledge by, any holder of Notes or the existence
or occurrence of any of the matters or events set forth in this paragraph (a)
shall not impair or otherwise affect the rights of the holders of Senior
Indebtedness against holders of Notes under the subordination provisions of this
Section 9.
(b) The provisions of this Section 9 shall continue to be effective,
or be reinstated, as the case may be, if at any time any payment in respect of
any Senior Indebtedness is rescinded or must otherwise be restored or returned
by the holders of such Senior Indebtedness.
9.5 Subrogation. Subject to the payment in full in cash of all Senior
Indebtedness, the holders of the Notes shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets of
Ubiquitel made on the Senior Indebtedness until the principal of, premium, if
any, and interest on (and any other amounts due with respect to) the
38
Notes and all other amounts due under this Agreement shall be paid in full;
provided that any holder of any Note shall have the right, in its sole
discretion, to waive such subrogation rights without affecting such holder's
rights with respect to any Note held by such holder or under this Agreement
(which rights shall continue in full force and effect). For the purposes of such
subrogation, no payments or distributions to the holders of Senior Indebtedness
of any cash, property or securities to which the holders of the Notes would be
entitled except for the provisions of this Section 9 shall, as among Ubiquitel,
its creditors other than the holders of Senior Indebtedness, and the holders of
Notes, be deemed to be a payment by Ubiquitel to or on account of Senior
Indebtedness, it being understood that these provisions in this Section 9 are,
and are intended, solely for the purpose of defining the relative rights of the
holders of the Notes, on the one hand, and the holders of Senior Indebtedness,
on the other hand.
9.6 Obligations Unaffected. Nothing contained in this Section 9 is
intended to or shall impair as among Ubiquitel, its creditors other than the
holders of Senior Indebtedness, and the holders of the Notes, the obligation of
Ubiquitel which shall be absolute and unconditional, to pay to the holders of
the Notes the principal of, premium, if any, and interest on the Notes, as and
when the same shall become due and payable in accordance with their terms, or to
affect the relative rights of the holders of the Notes and creditors of
Ubiquitel other than the holders of Senior Indebtedness. Nothing herein (other
than Section 9.8) shall prevent any holder of the Notes from exercising any
remedies otherwise permitted by applicable law upon the occurrence of an Event
of Default, subject to the rights, if any, under these provisions of the holders
of Senior Indebtedness.
9.7 Definition of Senior Indebtedness. The term "Senior Indebtedness"
shall mean the principal of, premium, if any, interest (including, without
limitation, all interest on the Senior Indebtedness accruing after the
commencement of any insolvency, liquidation or other proceeding of the type
referred to in Section 9.3 hereof and any additional interest that would have
accrued but for the commencement of such proceeding whether or not the claim for
such interest is allowed under applicable law) on, and all other obligations of
any type with respect to Indebtedness outstanding under the Senior Credit
Facility and obligations in respect of letters of credit. Interest Rate
Protection Agreements, indemnities, fees and expenses and all obligations under
any Interest Rate Protection Agreement (including guarantees thereof and other
Indebtedness of Ubiquitel incurred pursuant to Section 8.3(h)) in all such cases
whether outstanding on the date hereof or hereinafter incurred; the term "Senior
Indebtedness" shall not include the principal of loans or the amount of letter
of credit obligations under the Senior Credit Facility or any other agreement
evidencing Senior Indebtedness in excess of $28,300,000.
9.8 Effectiveness of Acceleration of Notes and Exercise of Remedies.
(a) Until the Senior Indebtedness under the Senior Credit Facility
shall have been paid in full in cash, any declaration that all or any portion of
the unpaid principal amount of the Notes shall be due and payable shall not be
effective and holders of Notes shall not initiate any action to seek or enforce
collection or enforcement of any Notes, including initiating or joining in the
filing of a petition seeking a bankruptcy proceeding of the Companies, until the
earliest of (i) any insolvency, bankruptcy, receivership, assignment for the
benefit of creditors,
39
reorganization, arrangement with creditors or similar proceeding of or regarding
the Companies, or any dissolution, winding-up, liquidation or marshaling of the
assets and liabilities of the Company shall have been commenced by or against
the Companies, (ii) the acceleration of the maturity of any Senior Indebtedness
or any initiation of any judicial proceedings by the holders of any Senior
Indebtedness to collect such Senior Indebtedness, (iii) the expiration of one
hundred and eighty (180) days following occurrence of an Event of Default
hereunder (provided such Event of Default is continuing) or (iv) either (x) the
Companies or any Subsidiary commences a liquidation of assets or (y) holders of
such Senior Indebtedness seek to realize, or foreclose on, any security interest
in capital stock, membership interests or other assets of the Companies or any
Subsidiary securing such Senior Indebtedness.
(b) Except as provided in Section 9.8(a) hereof, nothing contained
in this Section 9 will limit the right of a holder of Notes to take any action
to accelerate the maturity of any Note or to pursue any rights or remedies under
any Note or the Purchase Agreement.
9.9 Turnover; Miscellaneous Subordination Provisions.
(a) If a payment or other distribution is made to any holder of
Subordinated Date that because of this Section 9 or other term or provision of
this Agreement should not have been made to it, such holder shall segregate such
payment or other distribution from its other funds and property and hold it in
trust for the benefit of, and upon written request, pay it over (in the same
form as received, with any necessary endorsement) to, the holders of Senior
Indebtedness as their interests may appear, or their agent or representative or
the trustee under the indenture or other agreements (if any) pursuant to which
Senior Indebtedness may have been issue, as their respective interests may
appear, for application (in the case of cash) to, or as collateral (in the case
of non-cash property or securities) for the payment or prepayment of, all
present and future obligations with respect to Senior Indebtedness remaining
unpaid to the extent necessary to pay such obligations in full in accordance
with their terms, after giving effect to concurrent payment or distribution to
or for the holders of Senior Indebtedness.
(b) A distribution may consist of cash, securities or other
property, by set off or otherwise, and payment or distribution on account of any
obligations with respect to the holders of Subordinated Indebtedness shall
include any redemption, purchase or other acquisition of the Subordinated
Indebtedness.
(c) For the purpose of this Section 9, all indebtedness now or
hereafter existing under the Senior Credit Facility shall not be deemed to have
been paid in full unless the holders or owners thereof shall have received
payment in full in cash or Cash Equivalents.
SECTION 10. CONDITIONS TO PURCHASER'S OBLIGATIONS
The Purchaser's obligation to purchase the Notes and Warrants hereunder is
subject to satisfaction of the following conditions at the Closing (any of which
may be waived by the Purchaser):
40
10.1 Final Documentation of Senior Credit Facility. The Credit Agreement
for the Senior Credit Facility shall have been executed by the Companies and
Paribas and the Purchaser shall have received such Agreement in form and
substance satisfactory to it from the Companies and Paribas.
10.2 Accuracy of Representations and Warranties. The representations and
warranties of the Companies herein or in any certificate or document delivered
pursuant hereto shall be correct and complete on and as of the Closing Date with
the same effect as though made on and as of the Closing Date (after giving
effect to the transactions contemplated by this Purchase Agreement).
10.3 Compliance with Agreements; No Defaults. The Companies shall have
performed and complied in all material respects with all agreements, covenants
and conditions contained in this Purchase Agreement, the Notes and the Warrants
and any other document contemplated hereby or thereby which are required to be
performed or complied with by the Company on or before the Closing Date. On the
Closing Date (after giving effect to the transactions contemplated hereby),
there shall be no Event of Default or Potential Default.
10.4 Officer's Certificate. The Purchaser shall have received a
certificate dated the Closing Date and signed by the chief executive officer and
chief financial officer of the Company, to the effect that the conditions of
Sections 10.2, 10.3, and 10.9 have been satisfied.
10.5 Proceedings. All corporate and other proceedings in connection with
the transactions contemplated by the Purchase Agreement, the Notes and the
Warrants, and all documents incident thereto, shall be in form and substance
satisfactory to the Purchaser and its counsel, and the Purchaser shall have
received all such originals or certified or other copies of such documents as
the Purchaser or its counsel may reasonably request.
10.6 Opinion of Counsel. The Purchaser shall have received an opinion
dated the Closing Date and addressed to the Purchaser of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
counsel for the Companies. Such opinion shall be in form and substance
satisfactory to the Purchaser and to the effect set forth in Exhibit D hereto.
10.7 Other Documents and Opinions. The Purchaser shall have received such
other documents and opinions, in form and substance satisfactory to the
Purchaser and its counsel, relating to matters incident to the transactions
contemplated hereby as the Purchaser may reasonably request.
10.8 Equity Contribution. UHC shall have received not less than
$17,000,000 from the sale of Preferred Stock, which funds shall no longer be
held in or subject to any escrow.
SECTION 11. AMENDMENT; WAIVER; CONSENT
(a) (i) This Purchase Agreement and the Notes may be amended (or any
provision hereof or thereof waived) only with the written consent of the
Majority Noteholders and (ii) the Warrants may only be amended (or any provision
thereof waived) only with the
41
written consent of the holders of a majority thereof; provided, that no such
amendment or waiver shall (1) change the fixed maturity of any Note, reduce the
rate or change the time of payment of interest thereon, reduce the principal
amount thereof, reduce any premium thereon, change the currency in which
payments are to be made, change the prepayment provisions of Section 6 hereof,
change the provisions of Section 14 or 17 hereof or change the registration
rights under Section 16 hereof, without the consent of the holder of the Note so
affected, (2) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such amendment or waiver, without the consent of the
holders of all the Notes then outstanding, (3) increase the percentage of the
amount of the Notes, the holders of which may declare the Notes to be due and
payable under Section 13 hereof, without the consent of the holders of all the
Notes then outstanding or (4) amend Section 9 hereof without the consent of the
holders of a majority of the Senior Indebtedness under the Senior Credit
Facility; and provided, further, that no amendment to the Warrant shall (x)
change the expiration date of any Warrant, change the exercise provisions of
Sections 4 and 6 thereof or change the registration rights under Section 16 or
17 hereof without the consent of the holder of the Warrant (or of Shares issued
upon exercise of the Warrants in the case of a change to Section 16 or 17
hereof) or (y) reduce the aforesaid percentage of Warrants the holders of which
are required to consent to any such amendment or waiver without the consent of
holders of such Warrants then outstanding.
(b) The Companies agree that all holders of Notes or Shares shall be
notified by the Companies in advance of any proposed amendment or waiver under
Section 11(a)(i), but failure to give such notice shall not in any way affect
the validity of any such amendment or waiver. In addition, promptly after
obtaining the written consent of the holders herein provided, the Companies
shall transmit a copy of any amendment or waiver which has been adopted to all
holders of Notes, Warrants or Shares then outstanding, but failure to transmit
copies shall not in any way affect the validity of any such amendment or waiver.
(c) The Companies and each holder of a Note, Warrant or Share then
or thereafter outstanding shall be bound by any amendment or waiver effected in
accordance with the provisions of this Section 11, whether or not any such Note
or Warrant shall have been marked to indicate such modification, but any Note or
Warrant issued thereafter shall bear a notation as to any such modification (but
the failure to bear any such notation shall not affect the validity of any such
subsequently issued Note or Warrant, which shall be enforceable in accordance
with its terms subject to any such modification).
(d) Any provision of this Agreement relating to the consent,
determination, decision or waiver of a holder or holders of Notes or Shares or
of the Majority Noteholders, as the case may be, means such holder's or Majority
Noteholders', as the case may be, consent, determination, decision or waiver, as
the case may be, in such holder's or Majority Noteholders', as the case may be,
sole discretion.
42
SECTION 12. EXCHANGE OF NOTES; ACCRUED INTEREST; CANCELLATION OF SURRENDERED
NOTES; REPLACEMENT
(a) Subject to Section 15 hereof, at any time at the request of any
holder of one or more of the Notes to Ubiquitel at its offices provided under
Section 7.7 hereof, Ubiquitel at its expense (except for any transfer tax or any
other tax arising out of the exchange) will issue and deliver to or upon the
order of the holder in exchange therefor new Notes, in such denomination or
denominations as such holder may request (which must be in denominations of
$500,000 or any larger multiple of $100,000, plus one Note in a lesser
denomination, if required), in aggregate principal amount equal to the unpaid
principal amount of the Note or Notes surrendered and substantially in the form
thereof, dated as of the date to which interest has been paid on the Note or
Notes surrendered (or, if no interest has yet been so paid thereon, then dated
the date of the Note or Notes so surrendered) and payable to such person or
persons or order as may be designated by such holder. Any such new Note shall
bear any notation required by Section 11 hereof.
(b) In the event that any Note is surrendered to Ubiquitel upon a
prepayment under Section 6 hereof, Ubiquitel shall pay all accrued and unpaid
interest on such Note or such portion thereof and thereupon interest shall cease
to accrue upon that portion of the principal amount of such Note which was
prepaid, and the right to receive, and any right or obligation to make, any
prepayment on such portion of the principal amount pursuant to Section 6 hereof
shall terminate all upon the date of such prepayment and upon presentation and
surrender of such Note to the Company.
(c) Upon any prepayment under Section 6 hereof, if only a portion of
the principal amount of a Note is prepaid, then such Note shall be surrendered
to Ubiquitel and Ubiquitel shall simultaneously execute and deliver to or on the
order of the holder thereof, at the expense of Ubiquitel, a new Note or Notes in
principal amount equal to the unused or unpaid portion of such Note.
(d) All Notes or portions thereof which have been prepaid under
Section 6 hereof, shall be canceled by Ubiquitel and no Notes shall be issued in
lieu of the principal amount prepaid.
(e) Upon receipt of evidence satisfactory to Ubiquitel of the loss,
theft, destruction or mutilation of any Note and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to Ubiquitel (if requested by Ubiquitel and unsecured in the case
of the Purchaser or an institutional holder), or in the case of any such
mutilation, upon surrender of such Note (which surrendered Note shall be
canceled by Ubiquitel), Ubiquitel will issue a new Note of like tenor in lieu of
such lost, stolen, destroyed or mutilated Note as if the lost, stolen, destroyed
or mutilated Note were then surrendered for exchange.
43
SECTION 13. DEFAULTS
(a) Any of the following shall constitute an "Event of Default":
(i) Ubiquitel defaults in the payment (whether or not such
payment is prohibited under Section 9 hereof) of (A) any part of the
principal of or premium, if any, on any Note, when the same shall become
due and payable, whether at maturity or at a date fixed for prepayment or
by acceleration or otherwise, and such default in the payment of principal
or premium shall have continued for five (5) Business Days or (B) the
interest on any Note, when the same shall become due and payable, and such
default in the payment of interest shall have continued for ten (10)
Business Days; or
(ii) either Company defaults in the performance of any other
agreement or covenant contained in the Purchase Agreement or the Notes and
such default shall not have been remedied within thirty (30) days after
written notice thereof shall have been given to either Company by any
holder or holders of the Notes (such Company to give forthwith to all
other holders of the Notes at the time outstanding written notice of the
receipt of such notice, specifying the default referred to therein); or
(iii) any representation or warranty by either Company herein
or in any certificate delivered by either Company pursuant hereto proves
to have been incorrect in any material respect when made; or
(iv) the maturity of Indebtedness of either Company or any
Subsidiary in excess of $1,000,000 in the aggregate shall have been
accelerated as a result of an event of default under any indenture,
agreement or instrument evidencing such Indebtedness or under which there
is at the time outstanding such Indebtedness; or
(v) a final judgment or order which, either alone or together
with other final judgments or orders against either Company or any
Subsidiary, exceeds an aggregate of $1,000,000 (which is not covered by
insurance) is rendered by a court of competent jurisdiction against such
Company or any Subsidiary and such judgment or order shall have continued
undischarged or unstayed for sixty (60) days after entry thereof;
(vi) either Company or any Subsidiary shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to
pay its debts; or a receiver or trustee is appointed for either Company or
any Subsidiary or for substantially all of its assets and, if appointed
without its consent, such appointment is not discharged or stayed within
sixty (60) days; or proceedings under any law relating to bankruptcy,
insolvency or the reorganization or relief of debtors are instituted by or
against either Company or any Subsidiary, and, if contested by it, are not
dismissed or stayed within sixty (60) days; or any writ of attachment or
execution or any similar process is issued or levied against either
Company or any Subsidiary or any significant part of its property and is
not released, stayed, bonded or vacated within sixty (60) days after its
issue or levy; or either
44
Company or any Subsidiary takes corporate or limited liability company
action in furtherance of any of the foregoing; or
(vii) (a) any provision of the Sprint Agreements shall cease
to be in full force and effect or Sprint Corporation or any of its
Affiliates shall deny or disaffirm its obligations under any such
agreement and such cessation, denial or disaffirmance results in a
Material Adverse Effect, (b) Sprint PCS shall exercise its right to
purchase the Operating Assets under Section 11.6.1 of the Sprint
Management Agreement (c) Sprint PCS shall exercise its rights with respect
to the Disaggregated License under Section 11 .6.2 of the Sprint
Management Agreement, (d) an Event of Termination shall occur or any event
that if not cured or notice were to be given of such event would
constitute an Event of Termination under the Sprint Management Agreement
shall occur (whether or not waived) or (e) Sprint PCS shall amend or
modify any Program Requirements (as defined in the Sprint Management
Agreement), guidelines or policies set forth in the Sprint Agreements
which the Majority Noteholders determine could reasonably be expected to
have a material adverse effect on the performance, business, property,
assets, nature of assets, liabilities, condition or prospects of UHC and
its Subsidiaries; provided, however, that an Event of Default under this
clause (vii) shall be deemed not to occur if at such time an event of
default substantially comparable hereto shall be included in the Senior
Credit Facility and such event of default shall be waived thereunder.
(b) If an Event of Default occurs pursuant to any of clauses
(i) through (vii) of Section 13(a) hereof (but subject to the limitations
contained in Section 9.8), then and in each such event any holder or
holders of Notes which, at the time, holds or hold at least sixty percent
(60%) in aggregate principal amount of the Notes then outstanding may at
any time (unless all Events of Default shall theretofore have been waived
or remedied) at its or their option, by written notice or notices to the
Company, declare all the Notes then held by such holder or holders to be
due and payable. Upon any such declaration all Notes held by such holder
or holders shall forthwith immediately mature and become due and payable,
or upon the occurrence of an Event of Default pursuant to clause (vi) of
Section 13(a) hereof with respect to Ubiquitel (in which case no
declaration is required), all Notes shall forthwith immediately mature and
become due and payable; in each case (referred to in this sentence) the
payments then due and payable on such Notes shall consist of the entire
unpaid principal amount thereof, together with interest accrued thereon
and an amount equal to the "Additional Amount" (as defined below); all of
the foregoing shall occur without presentment, demand, protest or notice,
all of which are hereby waived. "Additional Amounts" shall mean, with
respect to any Note, as of the date of repayment of such Note after such
acceleration, an amount equal to (1) the Prepayment Premium that would be
payable if Ubiquitel had elected to prepay such Note pursuant to Section
6.3 hereof at the time of such acceleration; if an Event of Default
pursuant to clause (i) of Section 13(a) has occurred, and (2) 50% of such
Prepayment Premium, if an Event of Default pursuant to clause (i) of
Section 13(a) has not occurred. However, the foregoing acceleration rights
are subject to the following:
45
(i) if, at any time after the principal of any Notes shall so
become due and payable and prior to the date of maturity stated in
the Notes, all arrears of principal (excluding any principal which
would not then be due and payable if the acceleration had not
occurred) and interest on the Notes (with interest at the rate
specified in the Notes on any overdue principal and any overdue
premium and, to the extent legally enforceable, on any overdue
interest) shall be paid to the holders of Notes by or for the
account of Ubiquitel, then the Majority Noteholders, by written
notice or notices to Ubiquitel, may waive such Event of Default and
its consequences and rescind or annul any such declaration, but no
such waiver shall extend to or affect any subsequent Event of
Default or impair any right or remedy resulting therefrom;
(ii) if any holder or holders of Notes which, at the time,
holds or hold at least sixty percent (60%) in aggregate principal
amount of the Notes then outstanding exercises the above rights of
acceleration, then Ubiquitel shall notify each other holder of Notes
of the fact of such acceleration and each other holder shall,
without limiting any other rights hereunder, (A) have the right for
thirty (30) days after such notice from Ubiquitel to accelerate its
own Notes based on the Event or Events of Default on which such
acceleration was based (regardless of whether such Event or Events
of Default are then continuing), unless at the time there are no
outstanding Events of Default and any acceleration of any Notes has
been rescinded or (B) be deemed automatically (without any action by
such holder) to have accelerated its Notes if such holder has not
received such notice of an acceleration from Ubiquitel within ten
(10) days after such acceleration; provided that any such automatic
acceleration may take place regardless of whether the Event or
Events of Default on which the initial acceleration was based are
then continuing but such automatic acceleration shall not take place
if at the time any and all accelerations of any Notes have been
rescinded or annulled pursuant to subparagraph (i) above or
otherwise;
(iii) any holder may at any time rescind and annul any
acceleration with respect to its own Notes; and
(iv) if any holder of a Note shall give any notice or take any
other action with respect to a claimed Potential Default or Event of
Default, Ubiquitel, forthwith upon receipt of such notice or
obtaining knowledge of such other action, will give written notice
thereof to all other holders of the Notes then outstanding,
describing such notice or other action and the nature of the claimed
Potential Default or Event of Default.
SECTION 14. REMEDIES
(a) In case any one or more Events of Default shall occur and be
continuing, then any holder or holders of Notes which, at the time, holds or
hold at least sixty percent (60%) in aggregate principal amount of the Notes
then outstanding may, subject to the limitations
46
contained in Section 9.8, proceed to protect and enforce the rights of such
holder or holders by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in such Note or Notes for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or for any other remedy (including, without
limitation, damages). Nothing herein limits the rights and remedies of holders
of Shares.
(b) In case of a default in the payment of any principal of,
premium, if any, or interest on any Note, or default in the observance of any
other agreement or covenant of Ubiquitel in a Purchase Agreement or in a Note,
Ubiquitel will pay to the holder thereof or party thereto, in addition to any
interest or premium otherwise required, such further amount as shall be
sufficient to cover any and all costs and expenses of enforcement and collection
including, without limitation, reasonable attorneys' fees and expenses (whether
or not any suit or action is instituted and including without limitation those
fees and expenses permitted by statutory law and/or incurred at trial, on
appeal, on petition for review, in arbitration or mediation or in a bankruptcy
proceeding).
(c) No course of dealing and no delay on the part of any holder of
any Note, Warrant or the Share or the Purchaser in exercising any rights or
remedies shall operate as a waiver thereof or otherwise prejudice such holder's
or party's rights. No right or remedy conferred hereby or by any Note shall be
exclusive of any other right or remedy referred to herein or therein or
available at law, in equity, by statute or otherwise.
(d) Subject to Section 9, the Purchaser shall, in addition to other
remedies provided by law, have the right and remedy to have the provisions of
this Agreement (including without limitation Section 16 hereof) specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any breach or threatened breach of the provisions of this Agreement
(including without limitation Section 16 hereof) will cause irreparable injury
to the Purchaser and that money damages will not provide an adequate remedy
subject to Section 9. Nothing contained herein shall be construed as prohibiting
the Purchaser from pursuing any other remedies available to the Purchaser for
such breach or threatened breach, including, without limitation, the recovery of
damages from Ubiquitel.
SECTION 15. RESTRICTIONS ON TRANSFER
(a) Each holder of a Note or Warrant by acceptance thereof agrees
that it will not sell or otherwise dispose of any Notes, Warrants or Shares
unless (i) such Notes, Warrants or Shares have been registered under the
Securities Act and, to the extent required, under any applicable state
securities laws, or (ii) such Notes, Warrants or Shares are sold in accordance
with the applicable requirements and limitations of Rule 144 or Rule 144A and
any applicable state securities laws, or (iii) the Companies have been furnished
with an opinion or opinions from counsel to such holder (which counsel and
opinion(s) shall be reasonably satisfactory to the Companies and which counsel
may be inside counsel of such holder) to the effect that registration under the
Securities Act is not required for the transfer as proposed (which opinion may
be conditioned upon the transferee's assuming the obligations of a holder of
Notes,
47
Warrants or Shares under this Section) or (iv) the Companies have been furnished
with a letter from the Division of Corporate Finance of the Commission to the
effect that such Division would not recommend any action to the Commission if
such proposed transfer were effected without a registration statement effective
under the Securities Act. The Companies agree that within five (5) Business Days
after receipt of any opinion referred to in (iii) above, they will notify the
holder supplying such opinion whether such opinion is satisfactory to the
Companies" counsel. Notes may be transferred only in Authorized Denominations.
(b) Ubiquitel may endorse on all Notes, and UHC may endorse on all
Warrants and Share certificates a legend stating or referring to the transfer
restrictions contained in paragraph (a) above; provided that no such legend
shall be endorsed on any Notes, Warrants or Share certificates which, when
issued, are no longer subject to the restrictions of this Section 15; provided,
further, that if a transfer is made pursuant to clause (i), (ii) (other than
pursuant to Rule 144A) or (iv) of paragraph (a) or if an opinion of counsel
provided pursuant to clause (iii) of paragraph (a) concludes that the legend is
no longer necessary, the Companies will deliver upon transfer Notes, Warrants or
Share certificates, as the case may be, without such legends.
SECTION 16. EXPENSES
(a) Whether or not the transactions herein contemplated are
consummated, the Companies will pay (i) the reasonable costs and expenses of the
preparation and production of the Purchase Agreement and the issuance of the
Notes, Warrants and the Shares and the furnishing of all opinions by counsel for
the Company, (ii) the reasonable fees and disbursements of ▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP in connection with the Purchase Agreement, the Notes, the Warrants
and the transactions contemplated hereby and thereby (whether or not a closing
occurs hereunder and if a closing occurs the Company will make such payment on
the Closing Date) plus disbursements, (iii) the reasonable fees and expenses of
any investment banker, broker or finder engaged by or on behalf of (or acting
for) the Companies in connection with the Purchase Agreements or any of the
transactions contemplated hereby or thereby, (iv) the reasonable travel expenses
incurred by any Purchaser prior to the Closing Date in connection with due
diligence or negotiation of the terms of the Purchase Agreement, and (v) the
reasonable expenses incurred by any holder in connection with its exercise of
any rights of inspection under Section 7.5 hereof (but each holder's right to
expense reimbursement under this clause (v) shall only apply to (x) one (1) of
such holder's visits to the Company's facilities per year plus (y) all exercises
of inspection rights at any time when a Potential Default or Event of Default
has occurred). Upon the later of January 3, 1999 or one (1) Business Day of the
Closing Date, the Companies will pay a fee in the amount of $160,000
(representing 2% of the principal amount of the Notes) to the Purchaser. The
obligations of the Companies under this Section 17 shall survive the closing
hereunder, the payment or cancellation of the Notes, exercise or cancellation of
the Warrants and the termination of the Purchase Agreement.
(b) In addition to all other sums due hereunder or provided for in
this Agreement, the Companies shall pay to the Purchaser or its agents,
respectively, an amount sufficient to indemnify such persons (net of any taxes
on any indemnity payments) against all reasonable costs and expenses (including
reasonable attorneys' fees and expenses and reasonable
48
costs of investigation) and damages and liabilities incurred by the Purchaser or
its agents pursuant to any investigation or proceeding against any or all of the
Companies, the Purchaser, or their agents, arising out of or in connection with
the Purchase Agreement, the Notes or the Warrants (or any transaction
contemplated hereby or thereby or any other document or instrument executed
herewith or therewith or pursuant hereto or thereto), whether or not the
transactions contemplated by this Purchase Agreement are consummated, which
investigation or proceeding requires the participation of the Purchaser or its
agents or is commenced or filed against the Purchaser or its agents because of
the Purchase Agreement, the Notes or the Warrants or any of the transactions
contemplated hereby or thereby (or any other document or instrument executed
herewith or therewith or pursuant hereto or thereto), other than any
investigation or proceeding (x) in which it is finally determined that there was
gross negligence or willful misconduct on the part of the Purchaser or its
agents which was not taken by them in reliance upon any of the Companies'
representations, warranties, covenants or agreements in the Purchase Agreement,
the Notes or the Warrants or in any other documents or instruments contemplated
hereby or thereby or executed herewith or therewith or pursuant hereto or
thereto, (y) which relates to disputes among a Purchaser and its own partners,
shareholders or beneficiaries or (z) which relates to a Purchaser's disposition
of Notes, Warrants or Shares and the conduct of the Purchaser or its agents
giving rise to such investigation or proceeding was not taken by them in
reliance upon any of the Companies' representations, warranties, covenants or
agreements in the Purchase Agreement, the Notes or the Warrants or in any other
documents or instruments contemplated hereby or thereby or executed herewith or
therewith or pursuant hereto or thereto. The Companies shall assume the defense,
and shall have its counsel represent the Purchaser and such agents, in
connection with investigating, defending or preparing to defend any such action,
suit, claim or proceeding (including any inquiry or investigation); provided,
however, that the Purchaser, or any such agent, shall have the right (without
releasing the Companies from any of its obligations hereunder) to employ its own
counsel and either to direct its own defense or to participate in the Companies'
defense, but the fees and expenses of such counsel shall be at the expense of
such person unless (i) the employment of such counsel shall have been authorized
in writing by the Companies in connection with such defense or (ii) the
Companies shall not have provided their counsel to take charge of such defense
or (iii) the Purchaser, or such agent of the Purchaser, shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to the Companies, then in any of such
events referred to in clauses (i), (ii) or (iii) such counsel fees and expenses
(but only for one counsel for the Purchaser and its agents) shall be borne by
the Companies. Any settlement of any such action, suit, claim or proceeding
shall require the consent of both the Companies and such indemnified person
(neither of which shall unreasonably withhold its consent).
(c) The Companies agree to pay, or to cause to be paid, all
documentary, stamp and other similar taxes levied under the laws of the United
States of America or any state or local taxing authority thereof or therein in
connection with the issuance and sale of the Notes and the execution and
delivery of the Purchase Agreements and any other documents or instruments
contemplated hereby or thereby and any modification of any of the Notes or the
Purchase Agreements or any such other documents or instruments and will hold the
Purchaser harmless without limitation as to time against any and all liabilities
with respect to all such taxes.
49
(d) The obligations of the Companies under this Section 17 shall
survive the closing hereunder, the payment or cancellation of the Notes,
exercise or cancellation of the Warrants and the termination of the Purchase
Agreement.
SECTION 17. HOME OFFICE PAYMENTS
As long as the Purchaser or any payee named in the Notes delivered to the
Purchaser on the Closing Date, or any institutional holder which is a direct or
indirect transferee from the Purchaser or such payee, shall be the holder of any
Note, Ubiquitel will make payments (whether at maturity, upon mandatory or
optional prepayment, or otherwise) of principal, interest and premium, if any,
(i) by check payable to the order of the holder of any such Note duly mailed or
delivered to the Purchaser at such address as the Purchaser or such other holder
may designate in writing, or (ii) if requested by the Purchaser or such other
holder, by wire transfer to the Purchaser's or such other holder's (or its
nominee's) account at any bank or trust company in the United States of America,
notwithstanding any contrary provision herein or in any Note with respect to the
place of payment. If the Purchaser has provided an address for payments by wire
transfer, then the Purchaser shall be deemed to have requested wire transfer
payments under the preceding clause (ii). All such payments shall be made in
federal or other immediately available funds.
SECTION 18. NOTICES
Unless otherwise expressly specified or permitted by the terms hereof, all
notices, requests, demands, consents and other communications hereunder or with
respect to any Note or Warrant shall be in writing and shall be delivered by
hand or shall be sent by or telecopy (confirmed by registered, certified or
overnight mail or courier, postage and delivery charges prepaid), to the
following addresses:
(a) if to the Purchaser, to (i) BET Associates, L.P., c/o ▇▇. ▇▇▇▇▇
▇. Toll, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and (ii) BET
Associates, L.P., c/o ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
or at such other address as may have been furnished to the Companies by the
Purchaser in writing; or
(b) if to any other holder of a Note or Warrant, at such address as
the payee or registered holder thereof shall have designated to the Companies in
writing; or
(c) if to UHC, at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇▇ Traurig, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attn: ▇▇▇ ▇. ▇▇▇▇▇, or at such other address as may have been furnished in
writing by UHC to the Purchaser and to the other holders of Notes and Warrants;
or
(d) if to Ubiquitel, at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇▇ Traurig, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇ ▇. ▇▇▇▇▇, or at such other address as may have been
furnished in writing by Ubiquitel to the Purchaser and to the other holders of
Notes and Warrants.
50
Whenever any notice is required to be given hereunder, such notice shall be
deemed given and such requirement satisfied only when such notice is delivered
or, if sent by telecopier, when received, unless otherwise expressly specified
or permitted by the terms hereof.
SECTION 19. MISCELLANEOUS
19.1 Entire Agreement. The Purchase Agreement and, upon the closing
hereunder, the Notes and Warrants issued hereunder, together with any further
agreements entered into by the Purchaser and the Companies at the closing
hereunder, contain the entire agreement among the Purchaser and the Companies,
and supersede any prior oral or written agreements, commitments, terms or
understandings, regarding the subject matter hereof.
19.2 Survival. All agreements, representations and warranties contained in
this Agreement, the Notes, the Warrants or any document or certificate delivered
pursuant hereto or thereto shall survive, and shall continue in effect
following, the execution and delivery of the Purchase Agreement, the closings
hereunder and thereunder, any investigation at any time made by the Purchaser or
on its behalf or by any other Person, the issuance, sale and delivery of the
Notes and the Warrants, any disposition thereof and any payment or cancellation
of the Notes and any exercise or cancellation of the Warrants. All statements
contained in any certificate or other document delivered by or on behalf of the
Companies pursuant hereto shall constitute representations and warranties by the
Companies hereunder.
19.3 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
19.4 Headings. The headings and captions in this Agreement and the table
of contents are for convenience of reference only and shall not define, limit or
otherwise affect any of the terms or provisions hereof.
19.5 Binding Effect, Benefit and Assignment.
(a) The terms of this Agreement shall be binding upon, and inure to
the benefit of, the parties and their respective successors and permitted
assigns whether so expressed or not.
(b) The Companies may not assign any of their obligations, duties or
rights under this Agreement, or under the Notes or Warrants issued hereunder,
except with the Purchaser's consent.
(c) In addition to any assignment by operation of law, the Purchaser
may assign, in whole or in part, any or all of its rights (and/or obligations)
under this Agreement or under the Notes or Warrants to any permitted transferee
of any or all of its Notes, Warrants or Shares, and (unless such assignment
expressly provides otherwise) any such assignment shall not diminish the rights
the Purchaser would otherwise have under this Agreement or with respect to
51
any remaining Notes, Warrants or Shares held by the Purchaser; provided that
Notes may be transferred only in Authorized Denominations.
19.6 Severability. Any provision hereof or of the Notes, or Warrants which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
thereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereby waive any
provision of law which may render any provision hereof prohibited or
unenforceable in any respect.
19.7 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (other than any conflict of
laws rule which might result in the application of the laws of any other
jurisdiction).
19.8 Currency. All payments under this Agreement, the Notes or Warrants
shall be made in lawful money of the United States of America.
19.9 Late Payments. If Ubiquitel fails to pay any amount required to be
paid to a holder of Notes or a party under this Agreement, within twenty (20)
days after notice from such holder or such party demanding such payment, then
Ubiquitel agrees to pay such holder or such party interest on any such overdue
amount at the Default Rate (as defined in the Notes) from the date of such
notice from such holder or such party until such overdue amount is paid in full;
provided that this Section 20.9 shall not apply to overdue payments with respect
to the Notes, to the extent the Notes already provide that such overdue payments
shall bear interest at the Default Rate.
19.10 Guarantee of Subsidiaries
(i) The Guarantee Any wholly-owned Subsidiary of Ubiquitel
that may exist on or after the date hereof and that is incorporated under
the laws of a state of the United States (collectively, the "Subsidiary
Guarantors"), in order to induce the Purchaser to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by the Subsidiary Guarantors from the proceeds of
the Notes, hereby agree with the Purchaser as follows: the Subsidiary
Guarantors hereby unconditionally and irrevocably guarantee as primary
obligors and not merely as sureties the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all
obligations of the Companies under this Purchase Agreement, the Notes, the
Warrant and any other documents executed in connection (the "Guaranteed
Ob1igations"); provided, however, that no wholly-owned Subsidiary of
Ubiquitel shall be required to be a Subsidiary Guarantor if such
wholly-owned Subsidiary is not at such time a guarantor or otherwise
obligated under the Senior Indebtedness. If any or all of the indebtedness
of the Companies to the Purchaser becomes due and payable, the Subsidiary
Guarantors unconditionally promise to pay such indebtedness of the
Companies to the Purchaser, or order, on demand, together with any and all
reasonable expenses which may
52
be incurred by the Purchaser in collecting any of the indebtedness,
subject to the subordination provisions of this Agreement.
(ii) Bankruptcy. Additionally, the Subsidiary Guarantors
unconditionally and irrevocably guarantee the payment of any and all
indebtedness of the Companies to the Purchaser whether or not due or
payable by the Companies upon the occurrence of any of the events
specified in Section 9.3, and unconditionally and irrevocably promise to
pay such indebtedness to the Purchaser, or order, on demand, in lawful
money of the United States.
(iii) Nature of Liability. The liability of the Subsidiary
Guarantors hereunder is exclusive and independent of any security for or
other guarantee of the indebtedness of the Companies whether executed by
the Subsidiary Guarantors, any other guarantor or by any other party, and
the liability of the Subsidiary Guarantors hereunder shall not be affected
or impaired by: (a) any direction as to application of payment by the
Companies or by any other party; or (b) any other continuing or other
guarantee, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of the Companies; or (c) any payment on or in
reduction of any such other guarantee or undertaking; or (d) any
dissolution, termination or increase, decrease or change in personnel by
the Companies; or (e) any payment made to the Purchaser on the
indebtedness which the Purchaser repays the Companies pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and the Subsidiary Guarantors waive any right to
the deferral or modification of its obligations hereunder by reason of any
such proceeding.
(iv) Guarantee Absolute. No invalidity, irregularity or
unenforceability of all or any part of the indebtedness guaranteed hereby
or of any security therefor shall affect, impair or be a defense to this
Guarantee contained in this Section 19.10, and this Guarantee contained in
this Section 19.10 shall be primary, absolute and unconditional
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a
surety or guarantor except payment in full of the indebtedness guaranteed
herein.
(v) Independent Obligation. The obligations of the Subsidiary
Guarantors hereunder are independent of the obligations of any other
guarantor or of the Companies, and a separate action or actions may be
brought and prosecuted against the Subsidiary Guarantors whether or not
action is brought against any other guarantor or the Companies and whether
or not any other guarantor or any Companies be joined in any such action
or actions. The Subsidiary Guarantors waive, to the fullest extent
permitted by law, the benefit of any statue of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the
Companies or other circumstance which operates to toll any statute of
limitations as to the Companies shall operate to toll the statute of
limitations as to the Subsidiary Guarantors.
53
(vi) Authorization. The Subsidiary Guarantors authorize the
Purchaser without notice or demand, and without affecting or impairing its
liability hereunder, from time to time to:(a) change the manner, place or
terms of payment of, and/or change or extend the time of payment of,
renew, increase, accelerate or alter, any of the indebtedness (including
any increase or decrease in the rate of interest thereon), any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the guarantees herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;(b) take and hold
security for the payment of the Guaranteed Obligations and sell, exchange,
release, surrender, realize upon or otherwise deal with in any manner and
in any order any property by whomsoever at any time pledged or mortgaged
to secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset there
against;(c) exercise or refrain from exercising any rights against the
Companies or others or otherwise act or refrain from acting;(d) release or
substitute any one or more endorsers, guarantors, the Companies or other
obligors;(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Companies to its creditors other
than the Purchaser;(f) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of the Companies to the Purchaser
regardless of what liability or liabilities of the Companies remain
unpaid; and/or (g) consent to or waive any breach of, or any act, omission
or default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements.
(vii) Reliance. It is not necessary for the Purchaser to
inquire into the capacity or powers of the Companies or the officers,
directors, partners or agents acting or purporting to act on its behalf,
and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
(viii) Subordination. Any indebtedness of the Companies now or
hereafter held by the Subsidiary Guarantors is hereby subordinated to the
indebtedness of the Companies to the Purchaser; and such indebtedness of
the Companies to the Subsidiary Guarantors, if the Purchaser, after an
Event of Default has occurred, so requests, shall be collected, enforced
and received by the Subsidiary Guarantors as trustee for the Purchaser and
be paid over to the Purchaser on account of the indebtedness of the
Companies to the Purchaser, but without affecting or impairing in any
manner the liability of the Subsidiary Guarantors under the other
provisions of this Guarantee. Prior to the transfer by any of the
Subsidiary Guarantors of any note or negotiable instrument evidencing any
Guaranteed Obligations of the Companies to the Subsidiary Guarantors, the
Subsidiary Guarantors shall ▇▇▇▇ such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting
the generality of the foregoing, he Subsidiary Guarantors hereby agree
with the Purchaser that they will not exercise any right of subrogation
which they may at any time otherwise have a result of
54
this guarantee (whether contractual, under Section 509 of the Bankruptcy
Code, or otherwise) until all Guaranteed Obligations have been paid in
full in cash (it being understood that the Subsidiary Guarantors is not
waiving any right of subrogation that it may otherwise have but is only
waiving the exercise thereof as provided above).
(ix) Waiver. (a) The Subsidiary Guarantors waive any right to
require the Purchaser to (i) proceed against the Companies, any other
guarantor or any other party, (ii) proceed against or exhaust any security
held from the Companies, any other guarantor or any other party or (iii)
pursue any other remedy in the Purchaser's power whatsoever. The
Subsidiary Guarantors waive any defense based on or arising out of any
defense of the Companies, any other guarantor or any other party other
than payment in full of the Guaranteed Obligations, including without
limitation any defense based on or arising out of the disability of the
Companies, any other guarantor or any other party, or the unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Companies other than
payment in full of the Guaranteed Obligations. The Purchaser may exercise
any other right or remedy the Purchaser may have against the Companies or
any other party, without affecting or impairing in any way the liability
of the Subsidiary Guarantors hereunder except to the extent the Guaranteed
Obligations have been paid. The Subsidiary Guarantors waive any defense
arising out of any such election by the Purchaser, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Subsidiary Guarantors against
the Companies or any other party or any security.(b) The Subsidiary
Guarantors waive all presentments, demands for performance, protests and
notices, including without limitation notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Guarantee,
and notices of the existence, creation or incurring of new or additional
indebtedness. The Subsidiary Guarantors assume all responsibility for
being and keeping itself informed of the financial condition and assets of
the Companies, and of all other circumstances bearing upon the risk of
non-payment of the Guaranteed Obligations and the nature, scope and extent
of the risks which the Subsidiary Guarantors assumes and incurs hereunder,
and agrees that the Purchaser shall have no duty to advise the Subsidiary
Guarantors of information known to them regarding such circumstances or
risks.
(i) Guarantee Continuing. This Guarantee is a continuing one
and all liabilities to which it applies or may apply under the terms
hereof shall be conclusively presumed to have been created in reliance
hereon. No failure or delay on the part of the Purchaser or of any holder
of any Note in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which the Purchaser or any subsequent
holder of a Note would otherwise have. No notice to or demand on the
Subsidiary Guarantors in any case shall entitle the Subsidiary Guarantors
to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the
55
rights of the Purchaser or any holder, creator or purchaser to any other
or further action in any circumstances without notice or demand.
(ii) Binding Nature of Guarantee. This Guarantee shall be
binding upon the Subsidiary Guarantors and their successors and assigns
and shall inure to the benefit of the Purchaser and its successors and
assigns.
(iii) Judgments Binding. If claim is ever made upon the
Purchaser, any subsequent holder of a Note for repayment or recovery of
any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part
of said amount by reason of (a) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Companies) then and in
such event the Subsidiary Guarantors agrees that any such judgment,
decree, order, settlement or compromise shall be binding upon the
Subsidiary Guarantors notwithstanding any revocation hereof or the
cancellation of any Note, or other instrument evidencing any liability of
the Companies, and the Subsidiary Guarantors shall be and remain liable to
the aforesaid payees hereunder for the amount so repaid or recovered to
the same extent as if such amount had never originally been received by
any such payee.
(iv) Subordination of Rights of Purchaser. Notwithstanding
anything to the contrary within this Section 19.10, the rights of
Purchaser as against any and all Subsidiary Guarantors shall be
subordinated, and subject in right of payment, to the prior payment in
full in cash of all Senior Indebtedness to the extent and in the manner
set forth in Section 9 hereof.
19.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH OF THE
COMPANIES AND EACH CO-OBLIGOR SUBSIDIARY HEREBY CONSENTS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND IRREVOCABLY
AGREES THAT, SUBJECT TO THE ELECTION, ALL ACTIONS OR PROCEEDINGS RELATING TO
THIS AGREEMENT OR THE NOTES MAY BE LITIGATED IN SUCH COURTS. THE COMPANIES AND
EACH CO-OBLIGOR SUBSIDIARY ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENT, AND IRREVOCABLY
AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY (SUBJECT TO ANY APPEAL
AVAILABLE WITH RESPECT TO SUCH JUDGMENT) IN CONNECTION WITH THIS AGREEMENT OR
THE NOTES. THE CO-OBLIGOR SUBSIDIARIES HEREBY IRREVOCABLY APPOINT THE COMPANIES
TO SERVE AS THEIR AGENTS, TO RECEIVE ON THEIR BEHALF SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY
EACH OF THE COMPANIES AND EACH CO-OBLIGOR SUBSIDIARY TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. THE COMPANIES AND EACH CO-OBLIGOR SUBSIDIARY
56
HEREBY AGREE THAT SERVICE UPON EITHER OF THE COMPANIES BY MAIL SHALL CONSTITUTE
SUFFICIENT NOTICE AND SERVICE OF PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
OF THE PURCHASER TO BRING PROCEEDINGS OR OBTAIN OR ENFORCE JUDGMENTS AGAINST THE
COMPANIES OR ANY CO-OBLIGOR SUBSIDIARY IN THE COURTS OF ANY OTHER JURISDICTION.
19.12 WAIVER OF JURY TRIAL. EACH OF THE COMPANIES AND EACH CO-OBLIGOR
SUBSIDIARY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT THE NOTES THE
WARRANTS OR THE SHARES, OR ANY DEALINGS AMONG THEM RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION. EACH OF THE COMPANIES AND EACH CO-OBLIGOR SUBSIDIARY
ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF THE PURCHASER. THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR TO THE NOTES OR THE WARRANTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
UBIQUITEL HOLDINGS, INC.
By:___________________________________
Name:
Title:
UBIQUITEL, LLC
By:___________________________________
Name:
Title:
Accepted and agreed to as of the date
first above written by the undersigned
Purchaser:
BET ASSOCIATES, L.P.
By: ▇▇▇▇▇ ▇▇▇▇
Its General Partner
By:____________________________:
▇▇▇▇▇ ▇. Toll
Member
58
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER ANY APPLICABLE LAW OR REGULATION OF ANY STATE AND IS NOT TRANSFERABLE
EXCEPT UPON THE CONDITIONS SPECIFIED IN SECTION 16 OF THE PURCHASE AGREEMENT
REFERRED TO HEREIN.
UBIQUITEL, LLC
12% Senior Subordinated Note
Due December ___, 2007
Dated:
FOR VALUE RECEIVED, the undersigned Ubiquitel, LLC, a Delaware limited
liability company (herein, together with any successor, referred to as the
"Company"), hereby promises to pay to _____________or registered assigns, the
principal sum of____________ ($_____) on December __, 2007, with interest
(computed on the basis of a 360 day year) on the unpaid balance of such
principal sum from the date hereof at the interest rate of 12% per annum,
payable, in arrears, quarterly on the first day of January, April, July and
October of each year, commencing April 1, 2000 (which first interest payment
shall be for the period from and including [[the closing date]] through and
including March 31, 2000), until the entire principal amount hereof shall have
become due and payable, whether at maturity or at a date fixed for prepayment or
by acceleration or declaration or otherwise, and at the Default Rate on any
overdue installment of principal (including any overdue prepayment of principal)
and on any overdue premium and (to the extent permitted by law) on any overdue
installment of interest until paid (whether or not any subordination provision
or other circumstance prevents such payment). The "Default Rate" shall be a per
annum interest rate equal to the lesser of (A) 16% per annum and (B) the highest
rate permitted by law.
If any payment of interest due hereunder becomes due and payable on a day
which is not a Business Day (as defined in the Purchase Agreement referred to
below), the due date thereof shall be the next preceding day which is a Business
Day, and the interest payable on such next preceding Business Day shall be the
interest which would otherwise have been payable on the due date which was not a
Business Day.
Payments of principal and interest shall be made in lawful money of the
United States of America as provided in the Purchase Agreement referred to
below, to the address or account designated by the holder hereof for such
purpose.
This Note is issued pursuant to Purchase Agreement dated as of December
__, 1999 between the Company and BET Associates, L.P. (the "Purchase
Agreement").
A-1
This Note is subject to the provisions of and is entitled to the benefits
of the Purchase Agreement. The Purchase Agreement provides, inter alia, for
prepayments of principal upon the terms set forth therein. In addition, the
payment of the principal of, premium, if any, and interest on this Note is
subordinated in right of payment to the prior payment in full of certain other
obligations of the Company to the extent and in the manner set forth in the
Purchase Agreement. Each holder of this Note, by accepting the same, agrees to
and shall be bound by the provisions of the Purchase Agreement.
This Note is transferable only upon the terms and conditions specified in
the Purchase Agreement.
In case an Event of Default (as defined in the Purchase Agreement) shall
occur and be continuing, the principal of this Note may be declared, subject to
the subordination provisions, due and payable in the manner and with the effect
provided in the Purchase Agreement.
This Note is subordinated to Senior Indebtedness as provided in Section 9
of the Purchase Agreement.
No reference herein to the Purchase Agreement and no provision hereof or
thereof shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal hereof and interest hereon at the
respective times and places specified herein and in the Purchase Agreement, but
the maturity of all Notes may be accelerated upon an Event of Default only in
the manner set forth in Section 13(b) of the Purchase Agreement.
This Note is delivered in and shall be construed and enforced in
accordance with and governed by the laws of the State of New York (other than
any conflict of laws rules which might result in the application of the laws of
any other jurisdiction).
Subject to the provisions of Section 15 of the Purchase Agreement, the
Company may treat the person in whose name this Note is registered as the owner
and holder of this Note for the purpose of receiving payment of principal of,
premium, if any, and interest on this Note and for all other purposes
whatsoever, and the Company shall not be affected by any notice to the contrary
(except that the Company shall comply with the provisions of Section 12 of the
Purchase Agreement regarding the issuance of a new Note or Notes to permitted
transferees).
IN WITNESS WHEREOF, Ubiquitel, LLC has caused this Note to be dated and to
be executed and issued on its behalf by its duly authorized officer.
UBIQUITEL, LLC
By:___________________________________
Name:
Title:
A-2
EXHIBIT B
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY APPLICABLE LAW OR REGULATION OF ANY STATE AND IS NOT
TRANSFERABLE EXCEPT UPON THE CONDITIONS SPECIFIED IN SECTION 7(A) OF THIS
WARRANT.
UBIQUITEL HOLDINGS, INC.
WARRANT
Issue Date: December __, 1999
Void After: December __, 2009
This Warrant has been issued pursuant to the Purchase Agreement dated as of
December __, 1999 (the "Purchase Agreement") among Ubiquitel Holdings, Inc. (the
"Company"), Ubiquitel, LLC and BET Associates, L.P., and this Warrant and the
shares of Common Stock issuable upon exercise hereof (the "Warrant Shares")
shall be subject to, and entitled to the benefits of, the Purchase Agreement.
THIS CERTIFIES that, for value received, ____________ (the "Holder"), is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe for and purchase from Ubiquitel Holdings, Inc., a Delaware
corporation, at the Exercise Price per share determined as provided herein, up
to _________ fully paid and nonassessable shares of the Company's Voting Common
Stock, par value $0.001 per share (the "Common Stock").
1. Definitions.
Terms used herein but not defined shall have the meanings assigned to such
terms in the Purchase Agreement. As used herein the following terms, unless the
context otherwise requires, shall have for all purposes hereof the following
meanings:
"Appraised Value" means, in respect of any share of Common Stock on any
date herein specified, the value attributable to such share of Common Stock if
all of the assets of the Company and the Subsidiaries were sold for the
appraised value thereof as of the last day of a fiscal month to end within 60
days prior to such date specified, and thereafter liquidated in accordance with
the terms of the Company's Certificate of Incorporation as determined in good
faith by the Board of Directors of the Company.
"Business Day" means any day that is not (i) a Saturday or Sunday or (ii)
a day on which banks are required or permitted to be closed in the Commonwealth
of Pennsylvania.
"Current Market Price" means, in respect of the Common Stock on any date
herein specified, the average of the daily closing prices for the thirty (30)
consecutive trading days commencing forty five (45) trading days before such
date. The closing price for each day shall be the last reported sale price
regular way or, in case no such sale takes place on such day, the
B-1
average of the closing bid and asked prices regular way, in either case on the
principal national securities exchange or the NASDAQ National Market on which
the Company's Common Stock is listed or admitted to trading, or if the Company's
Common Stock is not listed or admitted to trading on any national securities
exchange or the NASDAQ National Market, the average of the highest reported bid
and lowest reported asked prices as furnished by the National Association of
Securities Dealers Inc. Automated Quotation System, or comparable system. If the
closing price cannot be so determined, then the Current Market Price shall be
determined (x) by the written agreement of the Company and the Holder, or (y) in
the event that no such agreement is reached within twenty (20) days after the
event giving rise to the need to determine the Current Market Price, by the
agreement of two arbitrators, one of whom shall be selected by the Company and
the other of whom shall be selected by the Holder.
2. Exercise Period. The purchase rights represented by this Warrant are
exercisable by the Holder, in whole or in part, at any time from time to time
during the Exercise Period, which shall commence at December __, 1999 (the
"Issue Date's.) and shall end at 5:00 p.m. Eastern Standard time on December __,
2009.
3. Exercise Price. The price per share at which this Warrant may be
exercised (the "Exercise Price") shall initially be $.01.
4. Exercise of Warrant. During the Exercise Period, this Warrant may be
exercised, in whole or in part and from time to time, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly executed at the principal
office of the Company (or such other office or agency of the Company as it may
designate) and upon payment of the Exercise Price of the shares thereby
purchased (the aggregate of the Exercise Price for all shares to be exercised
being referred to herein as the "Purchase Price"). Payment of the Purchase Price
may be made (i) by check or bank draft payable to the order of the Company, (ii)
by wire transfer to the account of the Company, or (iii) by delivery of this
Warrant with instructions that the Company retain as payment of the Purchase
Price the number of Warrant Shares remaining after distributing to the Holder
the number of shares determined by the formula in the next sentence (a "Cashless
Exercise"). In the event of a Cashless Exercise, the Holder shall receive the
number of Warrant Shares determined by multiplying the number of Warrant Shares
for which the Cashless Exercise is made by a fraction, the numerator of which
shall be the difference between the then Current Market Price per Warrant Share
and the Exercise Price, and the denominator of which shall be the then Current
Market Price per share of Common Stock. The remaining Warrant Shares for which
the Cashless Exercise has been made shall be deemed to have been paid by the
Company as the Exercise Price. Upon exercise, the Holder shall be entitled to
receive, promptly after payment in full, one or more certificates, issued in the
Holder's name or in such name or names as the Holder may direct, subject to the
limitations on transfer contained herein, for the number of shares of Common
Stock so purchased. The shares so purchased shall be deemed to be issued as of
the close of business on the date on which this Warrant shall have been
exercised.
5. Representations and Warranties.
The Company represents and warrants to the Holder as follows:
B-2
(a) Corporate Action. The Company has all requisite corporate power
and authority, and has taken all necessary corporate action, to execute and
deliver this Warrant, and to authorize and reserve for issuance, and to issue
and deliver upon payment of the Purchase Price, the Warrant Shares.
(b) No Violation. Neither the execution nor delivery of this
Warrant, nor the consummation of the actions herein contemplated, nor compliance
with the terms and provisions hereof will conflict with, or result in a breach
of, or constitute a default or an event permitting acceleration under, any of
the terms, provisions or conditions of the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, judgment, decree,
order, statute, rule or regulation or any other agreement, understanding or
instrument to which the Company is a party or by which it is bound.
6. Antidilution Adjustments.
6.1. Adjustment of Exercise Price. The Exercise Price shall be
subject to adjustment, from time to time, as follows:
(a) Adjustments for Stock Dividends, Recapitalizations, Etc. In case
the Company shall, after the Closing Date, (i) pay a stock dividend or make a
distribution (on or in respect of its Common Stock) in shares of its Common
Stock, (ii) subdivide the outstanding shares of its Common Stock, (iii) combine
the outstanding shares of its Common Stock into a smaller number of shares, or
(iv) issue by reclassification of shares of its Common Stock, any shares of
capital stock of the Company, then, in any such case, the current Exercise Price
in effect immediately prior to such action shall be adjusted to a price such
that if the Holder was to exercise this Warrant in full immediately after such
action, such Holder would be entitled to receive the number of shares of capital
stock of the Company which Holder would have owned immediately following such
action had such Warrant been exercised immediately prior thereto (with any
record date requirement being deemed to have been satisfied), and, in any such
case, such Exercise Price shall thereafter be subject to further adjustments
under this Section 6. An adjustment made pursuant to this subsection (a) shall
become effective retroactively immediately after the record date in the case of
a dividend or distribution and after the effective date in the case of a
subdivision, combination or reclassification.
(b) Distribution of Assets. In case the Company shall declare and
make any distribution of its assets (including cash and evidence of
indebtedness) to holders of Common Stock as a dividend, by way of return of
capital or otherwise, then the Holder shall be entitled upon exercise of this
Warrant for the purchase of any or all of the Warrant Shares, to receive the
amount of such assets which would have been payable to the Holder had the Holder
been the holder of such shares of Common Stock subject to such exercise on the
record date for the determination of stockholders entitled to such distribution.
(c) Adjustments for Issuances of Additional Stock. Subject to the
exceptions referred to in Section 6.1(e) hereof, in case the Company shall at
any time or from time to time after the Issue Date issue (in a transaction to
which Section 6.1(a) or 6.1(b) is not applicable) any
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additional shares of the Company's Common Stock ("Additional Common Stock"), for
a consideration per share either (i) less than the then Current Market Price per
share of the Company's Common Stock immediately prior to the issuance of such
Additional Common Stock, or (ii) without consideration, then (in the case of
either clause (i) or (ii)), and thereafter successively upon each such issuance,
the current Exercise Price shall forthwith be reduced to the price determined by
multiplying such current Exercise Price by a fraction, of which (1) the
numerator shall be (i) the number of shares of the Company's Common Stock
outstanding immediately prior to such issuance (on a fully diluted basis) plus
(ii) the number of shares of the Company's Common Stock which the aggregate
amount of consideration received by the Company upon issuance of the Additional
Common Stock would purchase at the then Current Market Price per share of the
Company's Common Stock, and (2) the denominator shall be (i) the number of
shares of the Company's Common Stock outstanding plus (ii) the number of shares
of Additional Common Stock; provided, however, that such adjustment shall be
made only if such adjustment results in a current Exercise Price less than the
current Exercise Price in effect immediately prior to the issuance of such
Additional Common Stock.
(d) Certain Rules in Applying the Adjustment for Additional Stock
Issuances. For purposes of any adjustment as provided in Section 6.1(c) hereof,
the following provisions shall also be applicable:
(1) Cash Consideration. In case of the issuance of Additional
Common Stock for cash, the consideration received by the Company therefor
shall be deemed to be the net cash proceeds received by the Company for
such Additional Common, Stock after deducting any commissions or other
expenses paid or incurred by the Company for any underwriting of, or
otherwise in connection with the issuance of, such Additional Common
Stock.
(2) Non-Cash Consideration. In case of the issuance of
Additional Common Stock for a consideration other than cash, or a
consideration a part of which shall be other than cash, the amount of the
consideration other than cash so received or to be received by the Company
shall be deemed to be the value of such consideration at the time of its
receipt by the Company as determined in good faith by the Board of
Directors of the Company, except that where the non-cash consideration
consists of the cancellation, surrender or exchange of outstanding
obligations of the Company (or where such obligations are otherwise
converted into shares of the Company's Common Stock), the value of the
non-cash consideration shall be deemed to be the principal amount of the
obligations canceled, surrendered, satisfied, exchanged or converted. If
the Company receives consideration, part or all of which consists of
publicly traded securities (i.e., in lieu of cash), the value of such
non-cash consideration shall be the aggregate market value of such
securities (based on the latest reported sale price regular way) as of the
close of the day immediately preceding the date of their receipt by the
Company.
(3) Options, Warrants, Convertibles, Etc. In case of the
issuance, whether by distribution or sale to holders of its Common Stock
or to others, by the Company of (i) any security that is convertible into
Common Stock or (ii) any rights,
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options or warrants to purchase the Company's Common Stock (other than
this Warrant and except as stated in Section 6.1(e) hereof), if inclusion
thereof in calculating adjustments under this Section 6.1 would result in
a current Exercise Price lower than if excluded, the Company shall be
deemed to have issued, for the consideration described below, the number
of shares of the Company's Common Stock into which such convertible
security may be converted when first convertible, or the number of shares
of the Company's Common Stock deliverable upon the exercise of such
rights, options or warrants when first exercisable, as the case may be
(and such shares shall be deemed to be Additional Common Stock for
purposes of Section 6.1(c) hereof). The consideration deemed to be
received by the Company at the time of the issuance of such convertible
securities or such rights, options or warrants shall be the consideration
so received determined as provided in Section 6.1(d)(1) and (2) hereof
after deducting any commissions or other expenses paid or incurred by the
Company for any underwriting of, or otherwise in connection with, the
issuance of such convertible securities or rights, options or warrants,
plus (x) any consideration or adjustment payment to be received by the
Company in connection with such conversion or, as applicable, (y) the
aggregate price at which shares of the Company's Common Stock are to be
delivered upon the exercise of such rights, options or warrants when first
exercisable (or, if no price is specified and such shares are to be
delivered at an option price related to the market value of the subject
Common Stock, an aggregate option price bearing the same relation to the
market value of the subject Common Stock at the time such rights, options
or warrants were granted). If, subsequently, (1) such number of shares
into which such convertible security is convertible, or which are
deliverable upon the exercise of such rights, options or warrants, is
increased or (2) the conversion or exercise price of such convertible
security, rights, options or warrants is decreased, then the calculations
under the preceding two sentences (and any resulting adjustment to the
current Exercise Price under Section 6.1(c) hereof) with respect to such
convertible security, rights, options or warrants, as the case may be,
shall be recalculated as of the time of such issuance but giving effect to
such changes (but any such recalculation shall not result in the current
Exercise Price being higher than that which would be calculated without
regard to such issuance). On the expiration or termination of such rights,
options or warrants, or rights to convert, the Exercise Price hereunder
shall be readjusted (up or down as the case may be) to such current
Exercise Price as would have been obtained had the adjustments made with
respect to the issuance of such rights, options, warrants or convertible
securities been made upon the basis of the delivery of only the number of
shares of the Company's Common Stock actually delivered upon the exercise
of such rights, options or warrants or upon the conversion of any such
securities and at the actual exercise or Exercise Prices (but any such
recalculation shall not result in the current Exercise Price being higher
than that which would be calculated without regard to such issuance).
(4) Number of Shares Outstanding. The number of shares of the
Company's Common Stock as at the time outstanding shall exclude all shares
of the Company's Common Stock then owned or held by or for the account of
the Company but shall include the aggregate number of shares of the
Company's Common Stock at the time deliverable in respect of the
convertible securities, rights, options and warrants
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referred to in Section 6.1 (d)(3) and 6.1(e) hereof, provided that to the
extent that such rights, options, warrants or conversion privileges are
not exercised, such shares of the Company's Common Stock shall be deemed
to be outstanding only until the expiration dates of the rights, warrants,
options or conversion privileges or the prior cancellation thereof.
(e) Exclusions from the Adjustment for Additional Stock Issuances.
No adjustment of the current Exercise Price under Section 6.1(c) hereof shall be
made as a result of or in connection with:
(1) the issuance of Shares upon exercise of this Warrant;
(2) the issuance of the Company's Common Stock to officers,
employees, directors and consultants of the Company or any Subsidiary, or
the grant to or exercise by any such persons of options to purchase Common
Stock of the Company, all (x) as part of incentive compensation for such
persons and (y) pursuant to the Company's stock option plans described on
the Disclosure Schedule to the Purchase Agreement or other incentive
plans, in each case adopted by the Company's Board of Directors, with
approval by a majority of the Company's independent directors and approval
by the Company's shareholders;
(3) the issuance of the Company's Common Stock upon exercise
of this Warrant to purchase Common Stock issued to [Banque Paribas] dated
as of the date hereof, or
(4) the issuance of the Company's Common Stock upon conversion
of the Company's Series A Preferred Stock.
(f) Accountant's Certification. Whenever the current Exercise Price
is adjusted as provided in this Section 6.1, the Company will promptly obtain a
certificate of a firm of independent public accountants of recognized national
standing selected by the Board of Directors of the Company (who may be the
regular auditors of the Company) setting forth the current Exercise Price as so
adjusted, the computation of such adjustment and a brief statement of the facts
accounting for such adjustment, and will mail to the Holder a copy of such
certificate from such firm of independent public accountants.
(g) Antidilution Adjustments under Other Securities. Without
limiting any other rights available hereunder to the Holder, if there is an
antidilution adjustment (x) under any security which is convertible into Common
Stock of the Company whether issued prior to or after the date hereof (except
for this Warrant) or (y) under any right, option or warrant to purchase Common
Stock of the Company whether issued prior to or after the date hereof which (in
the case of clause (x) or (y)) results in a reduction in the exercise or
purchase price with respect to such security, right, option or warrant or
results in an increase in the number of shares obtainable under such security,
right, option or warrant, then an adjustment shall be made under this Section
6.1(g) to the current Exercise Price hereunder. Any such adjustment under this
Section 6.1(g) shall be whichever of the following results in a lower current
Exercise Price: (A) a
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reduction in the current Exercise Price equal to the percentage reduction in
such exercise or purchase price with respect to such security, right, option or
warrant or (B) a reduction in the current Exercise Price which will result in
the same percentage increase in the number of Warrant Shares available under
this Warrant as the percentage increase in the number of shares available under
such security, right, option or warrant. Any such adjustment under this Section
6.1(g) shall only be made if it would result in a lower current Exercise Price
than that which would be determined pursuant to any other antidilution
adjustment otherwise required under this Warrant as a result of the event or
circumstance which triggered the adjustment to the security, right, option or
warrant described in clause (x) or (y) above (and if any such adjustment is so
made under this Section 6.1(g), then such other antidilution adjustment
otherwise required under this Section 6 shall not be made as a result of such
event or circumstance).
(h) Other Adjustments. In case any event shall occur as to which any
of the provisions of this Section 6.1 are not strictly applicable but the
failure to make any adjustment would not fairly protect the exercise rights
represented by this Warrant in accordance with the essential intent and
principles of this Section 6.1, then, in each such case, the Company shall
appoint a firm of independent public accountants of recognized national standing
selected by the Board of Directors of the Company (who may be the regular
auditors of the Company), which shall give their opinion upon the adjustment, if
any, on a basis consistent with the essential intent and principles established
in this Section 6.1, necessary to preserve, without dilution, the exercise
rights represented by this Warrant. Upon receipt of such opinion, the Company
will promptly mail copies thereof to the Holder and shall make the adjustments
described therein.
(i) Adjustment of Number of Warrant Shares. Whenever the Exercise
Price payable upon exercise of this Warrant is adjusted pursuant to this Section
6.1 (and "Exercise Price Adjustment"), the number of Warrant Shares purchasable
upon exercise of this Warrant shall simultaneously be adjusted by multiplying
the number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such Exercise Price Adjustment by the Exercise Price in effect
immediately prior to such Exercise Price Adjustment dividing the product so
obtained by the Exercise Price, as adjusted pursuant to this Section 6.1.
(j) Meaning of "Issuance". References in this Warrant to "issuances"
of stock by the Company include issuances by the Company of previously unissued
shares and issuances or other transfers by the Company of treasury stock.
6.2. Company's Consolidation or Merger. If the Company shall at any
time consolidate with or merge with or into another Person, or the Company shall
sell, transfer or lease all or substantially all of its assets, or the Company
shall change its Common Stock into property or other securities, then, in any
such case, the Holder shall thereupon (and thereafter) be entitled to receive,
upon the exercise of such Warrant, in whole or in part, the securities or other
property to which (and upon the same terms and with the same rights as) the
Holder would have been entitled if such exercise had occurred immediately prior
to such consolidation or merger, such sale of assets or such change (with any
record date requirement being deemed to have been satisfied), and such
conversion rights shall thereafter continue to be subject to further adjustments
under Section 6.1 hereof. The Company shall take such steps in connection with
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such consolidation or merger, such sale of assets or such change as may be
necessary to assure such Holder that the provisions of this Warrant and the
Purchase Agreement (including, without limitation, Section 15 of the Purchase
Agreement) shall thereafter be applicable in relation to any securities or
property thereafter deliverable upon the exercise of the Warrant, including, but
not limited to, obtaining a written obligation to supply such securities or
property upon such exercise and to be so bound by the Warrant.
6.3. Notice to Holders.
In case at any time
(i) the Company shall take any action which would require an
adjustment in the current Exercise Price pursuant to Section 6.1; or
(ii) there shall be any reorganization, reclassification or
change of the Company's Common Stock (other than a change in par value or
from par value to no par value or from no par value to par value), or any
consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or any sale,
transfer or lease of all or substantially all of the assets of the
Company; or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, in any one or more of such
cases, the Company shall give written notice to the Holder, not less than
twenty (20) days before any record date or other date set for definitive
action, of the date on which such action, distribution, reorganization,
reclassification, change, sale, transfer, lease, consolidation, merger,
dissolution, liquidation or winding-up shall take place, as the case may
be. Such notice shall also set forth such facts as shall indicate the
effect of any such action (to the extent such effect may be known at the
date of such notice) on the current Exercise Price and the kind and amount
of the shares and other securities and property deliverable upon exercise
of the Warrant. Such notice shall also specify any date as of which the
holders of the Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property deliverable upon any such
reorganization, reclassification, change, sale, transfer, lease,
consolidation, merger, dissolution, liquidation or winding-up, as the case
may be.
7. Transfer.
(a) Exercise or Transfer Without Registration. The Holder agrees not
to transfer this Warrant except in accordance with Section 15 of the Purchase
Agreement.
(b) Registration Rights. The Holder is entitled to the benefits of
Section 15 of the Purchase Agreement with respect to registration of the Warrant
Shares under the Securities Act.
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8. Further Covenants of the Company.
(c) Reservation of Stock. The Company shall at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this
Warrant, that number of Warrant Shares from time to time issuable upon the
exercise of this Warrant.
(d) No Liens. All Warrant Shares that are issued upon the exercise
of rights represented by this Warrant shall be fully paid, nonassessable, and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).
(e) Fractional Shares. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fraction of a share which would otherwise be
issuable in an amount equal to the same fraction of the highest market price per
share of Common Stock on the day of exercise, as determined by the Company.
9. Call and Put Provisions
9.1. Call Rights Upon the later of (a) the sixth anniversary of the
Issue Date and (b) the later of (x) one year after the Put Effective Date
(defined below) and (y) the date on which there are no limitations under any
agreements to which the Company is a party on the ability of the Company to
honor an Optional Put Notice (defined below), the Company may deliver a notice
(the "Optional Call Notice") of any redemption hereunder (an "Optional Call") to
Holder at its registered address appearing on the books and records of the
Company. The Optional Call Notice shall state (1) that the Company is exercising
its right to redeem this Warrant and (2) the date of redemption (the "Optional
Call Date"), which date and time shall be thirty (30) days after the date of
delivery of the Optional Call Notice. On the Optional Call Date, the Company
shall make payment of the Optional Call Amount (as defined below) to or upon the
order of the Holder as specified by the Holder in writing to the Company at
least one (1) business day prior to the Optional Call Date. If the Company
exercises its right to redeem this Warrant in accordance with this Section 9.1,
the Company shall make payment to the Holder of an amount in cash (the "Optional
Call Amount") equal to 120% of the Current Market Price multiplied by the number
of Warrant Shares issuable pursuant to this Warrant. Notwithstanding the
delivery of an Optional Call Notice, the Holder shall at all times prior to the
Optional Call Date maintain the right to exercise all or any portion of this
Warrant in accordance with the terms hereof and any portion so exercised after
receipt of an Optional Call Notice and prior to the Optional Call Date set forth
in such notice and payment of the aggregate Optional Call Amount shall be
deducted from the portion of this Warrant which is otherwise subject to
redemption pursuant to such notice.
9.2. Put Rights Upon the earlier of (a) a Change of Control, (b)
repayment by the Company or the Subsidiaries of at least 75% of the original
principal balance of the Senior Subordinated Notes, (c) an Event of Default and
(d) the fifth anniversary of the Issue Date, the Holder may deliver a notice
(the "Optional Put Notice") of a put hereunder (an "Optional Put") to the
Company; provided, however, no notice may be delivered if there exists or would
exist
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after giving effect to such put a default under any Senior Indebtedness. The
Optional Put Notice shall state (1) that the Holder is exercising its right to
put this Warrant, (2) the date of such put (the "Optional Put Date"), which date
and time shall be thirty (30) days after the date of delivery of the Optional
Put Notice and (3) payment instructions. On the Optional Put Date, the Company
shall make payment of the Optional Put Amount (as defined below) to or upon the
order of the Holder as specified by the Holder in the Put Notice. If the Holder
exercises its right to put this Warrant in accordance with this Section 9.2, the
Company shall make payment to the Holder of an amount in cash (the "Optional Put
Amount") equal to the Current Market Price multiplied by the number of Warrant
Shares issuable pursuant to this Warrant. Notwithstanding the delivery of an
Optional Put Notice, the Holder shall at all times prior to the Optional Put
Date maintain the right to exercise all or any portion of this Warrant in
accordance with the terms hereof and any portion so exercised after delivery of
an Optional Put Notice and prior to the Optional Put Date set forth in such
notice and receipt of the aggregate Optional Put Amount shall be deducted from
the portion of this Warrant which is otherwise subject to repurchase pursuant to
such notice.
9.3. Put and Call Expiration. The put and call provisions set forth
in this Article 9 shall expire after the completion by the Company of a
Qualified Public Offering. "Qualified Public Offering" shall mean a firm
commitment underwritten initial public offering pursuant to an effective
registration statement under the 1933 Act covering the offer or sale of any
securities of the Company for the account of the Company or any selling
shareholder in an offering which, after deducting for underwriters commissions
and expenses related to the issuance, provides proceeds to the Company of not
less than $30,000,000.
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10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor and dated as of the date of such
cancellation in lieu of this Warrant.
11. Remedies. The Company stipulates that the remedies at law of the
Holder in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not
adequate and may be enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of the
terms hereof or otherwise.
12. Miscellaneous. All notices, certificates and other communications from
or at the request of the Company to the Holder shall be mailed by first class,
registered or certified mail, postage prepaid, to such address as may have been
furnished to the Company in writing by the Holder. This Agreement and any of the
terms hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the
Commonwealth of Pennsylvania. The headings in this Agreement are for reference
only and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in
its corporate name by its duly authorized officer and to be dated as of the
issue date set forth on the first page of this Warrant.
UBIQUITEL HOLDINGS, INC.
By____________________________________
Name:
Title:
Attest:
____________________________________
Secretary
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NOTICE OF EXERCISE OF WARRANT
TO: UBIQUITEL HOLDINGS, INC.
1. Pursuant to the terms of the attached Warrant, the undersigned hereby
elects to purchase ________ shares of Common Stock of Ubiquitel Holdings, Inc.
(the "Company"), and tenders herewith payment of the Exercise Price of such
shares in full.
2. Pursuant to the terms of the attached Warrant, the undersigned hereby
elects to make a Cashless Exercise as provided for in Section 4 of such Warrant
with respect to ________ Warrant Shares.
(Check and complete the appropriate paragraph)
Please issue a certificate or certificates representing said shares of
Common Stock, in the name of the undersigned or in such other name(s) as is/are
specified immediately below or, if necessary, on an attachment hereto:
Name Address
---- -------
DATE:___________________________ HOLDER:_______________________________
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▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇
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MATTERS TO BE COVERED IN OPINION OF
COUNSEL TO THE COMPANY
1. Ubiquitel Holdings, Inc. is a corporation duly incorporated and validly
existing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and corporate authority to own its properties and
operate its business as presently conducted.
2. The authorized capital stock of Ubiquitel Holdings, Inc. consists
of________ shares of Voting Common Stock, ________ shares of Non-Voting Stock
and ________ shares of Preferred Stock. All of the outstanding shares of the
capital stock of the Company have been validly authorized and issued and are
fully paid and non-assessable. To the best of such counsel's knowledge, there
are no outstanding options, warrants, rights, convertible securities or other
agreements under which the Company may become obligated to issue, sell or
transfer shares of its capital stock or other securities, other than as
disclosed on the Disclosure Schedule.
3. Ubiquitel, LLC is a limited liability company, duly formed and validly
existing under the laws of its jurisdiction of incorporation and has all
requisite limited liability company power and authority to own its properties
and operate its business as presently conducted. [[Ubiquitel Holdings, Inc. is
the sole member of Ubiquitel, LLC and is the sole owner of its membership
interests.]]
4. The execution, delivery and performance by the Companies of the
Purchase Agreement (including the issuance of the Notes, the Warrants and the
Shares as contemplated by the Purchase Agreement) have been duly authorized by
all necessary corporate actions required on behalf of the Company. The Purchase
Agreement, the Notes and the Warrants have been duly executed and delivered by
the Companies and constitute a legal, valid and binding obligations of each
Company party thereto, subject to any applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws affecting the
enforcement of creditors' rights generally.
5. The execution, delivery and performance by each Co-obligor Subsidiary
organized under the laws of the State of New York of its joinder has been duly
authorized by all necessary corporate action by such Co-obligor Subsidiary.
6. None of the execution, delivery or performance by the Companies of the
Purchase Agreement (including without limitation the issuance of the Notes, the
Warrants and the Shares as contemplated by the Purchase Agreement) violates or
conflicts with or will violate or conflict with any provision of (A) the
articles of incorporation, bylaws, certificate of formation or operating
agreement of either Company, (B) any law, rule or regulation, (C) any order,
judgment, writ, injunction or decree known to such counsel applicable to such
Company or any of its
D-1
properties (or to which such Company or its properties may be bound), or (D) any
agreement, indenture or other instrument known to such counsel.
7. When issued upon exercise in accordance with the terms of the Warrants
the Shares will be validly issued, fully paid and non-assessable.
8. There are no taxes or other governmental charges payable by the
Companies or the Purchaser in connection with the execution, delivery and
performance by the Companies of the Purchase Agreement (including without
limitation the issuance of the Notes, the Warrants and the Shares under the
Purchase Agreement).
9. Based in part on representations of the Purchaser in the Purchase
Agreement, the offer, sale, purchase, issuance and delivery of the Notes and
Warrants pursuant to the Purchase Documents constitute exempted transactions
under the Securities Act of 1933, as amended (the "Act"), and neither the
registration of the Notes and Warrants under the Act nor the qualification of an
indenture with respect to the Notes under the Trust Indenture Act of 1939, as
amended, is required in connection with any such offer, sale, purchase, issue or
delivery of the Notes and Warrants. In addition, assuming the holder of a
Warrant is, at the time of exercise the Purchaser or a Person that acquired the
Warrant in accordance with the terms and conditions of Section 15 of the
Purchase Agreement, the issuance and delivery of Shares upon the exercise of the
Warrant by such holder will likewise constitute an exempted transaction under
the Act.
10. The offer, sale, purchase, issuance and delivery of the Notes pursuant
to the Purchase Documents do not violate Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
D-2
EXHIBIT E
JOINDER FOR GUARANTOR SUBSIDIARIES
The terms and provisions of the Purchase Agreement dated December 28, 1999
(the "Purchase Agreement") regarding the issuance of 12% Senior Subordinated
Notes of Ubiquitel, LLC in the aggregate principal amount of $8,000,000 are
hereby accepted and agreed to, and the undersigned, as a wholly-owned subsidiary
of Ubiquitel, LLC, hereby agrees to be a Guarantor Subsidiary as provided for in
Section 19.10 of the Purchase Agreement, with the effect set forth therein.
[[Wholly-owned Subsidiary]]
By:___________________________________
Name:
Title:
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