================================================================================
LOAN AGREEMENT
dated as of July 25, 1997
among
OPCS PHILADELPHIA HOLDINGS, INC.
Borrower,
ERICSSON INC.,
as Administrative Agent,
and
THE LENDERS NAMED HEREIN
================================================================================
* Portions of this Exhibit were omitted and has been filed separately with the
Secretary of the Commission pursuant to the Company's Application Requesting
Confidential Treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended, on March 26, 1998.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND RULES OF INTERPRETATION
1.01. Definitions........................................................... 1
1.02. Rules of Interpretation............................................... 33
1.03. Accounting Terms...................................................... 33
ARTICLE II
THE LOANS
2.01. The Advances.......................................................... 34
2.02. Making the Advances................................................... 35
2.03. Fees.................................................................. 37
2.04. Interest.............................................................. 37
2.05. Interest Rate Determination........................................... 38
2.06. Optional Conversion of Advances....................................... 39
2.07. Payments and Computations............................................. 40
2.08. Sharing of Payments, Etc.............................................. 41
2.09. Use of Proceeds....................................................... 42
2.10. The Notes............................................................. 42
2.11. First LIBOR Method and Second LIBOR Method............................ 42
2.12. Reduction or Termination of the Commitments........................... 42
ARTICLE III
REPAYMENT AND PREPAYMENT OF THE LOANS
3.01. Repayment............................................................. 43
3.02. Mandatory Prepayments of Loans........................................ 44
3.03. Optional Prepayments of Loans......................................... 47
3.04. Certain Matters Relating to Repayments and Prepayments................ 47
ARTICLE IV
ILLEGALITY, INCREASED COSTS, CAPITAL ADEQUACY AND INDEMNITIES
4.01. Illegality............................................................ 47
4.02. Additional Costs and Capital Adequacy................................. 48
4.03. Taxes................................................................. 49
4.04. Survival.............................................................. 51
ii
Page
----
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Corporate Authority................................................... 51
5.02. Governmental Approvals................................................ 53
5.03. Title to Properties................................................... 53
5.04. Financial Statements.................................................. 53
5.05. No Material Adverse Effect, Etc....................................... 54
5.06. Franchises, Patents, Copyrights, Etc.................................. 54
5.07. FCC Licenses, Etc..................................................... 54
5.08. Litigation............................................................ 54
5.09. No Materially Adverse Contracts, Etc.................................. 54
5.10. Compliance with Other Instruments, Laws, Etc.......................... 54
5.11. Tax Status............................................................ 55
5.12. No Default............................................................ 55
5.13. Holding Company and Investment Company Acts........................... 55
5.14. Absence of Financing Statements, Etc.................................. 55
5.15. FCC Matters........................................................... 55
5.16. Tariffs............................................................... 56
5.17. Disclosure............................................................ 56
5.18. Burdensome Obligations................................................ 56
5.19. Solvency.............................................................. 56
5.20. Security Interests.................................................... 56
5.21. Certain Transactions.................................................. 56
5.22. Business Plans........................................................ 57
5.23. Employee Benefit Plans................................................ 57
5.24. Regulations U and X................................................... 58
5.25. Environmental Compliance.............................................. 58
5.26. Joint Ventures, Etc................................................... 59
5.27. Material Contracts.................................................... 60
5.28. Representations in Other Loan Documents............................... 60
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
6.01. Maintenance of Office................................................. 60
6.02. Records and Accounts.................................................. 60
6.03. Corporate Existence; Maintenance of Licenses.......................... 60
6.04. Maintenance of Properties............................................. 61
6.05. Insurance............................................................. 62
6.06. Taxes................................................................. 63
iii
Page
----
6.07. Inspection of Properties and Books.................................... 63
6.08. Compliance with Laws, Contracts, FCC Licenses and Permits............. 64
6.09. Further Assurances.................................................... 64
6.10. Authorization from Landlord/Mortgagee, Etc............................ 65
6.11. Attornment and Recognition Agreements................................. 65
6.12. Expense Allocation Agreement.......................................... 65
6.13. Maintenance of Restricted Subsidiary.................................. 65
6.14. Reporting Requirements; Notices....................................... 65
6.15. Financial Covenants of the Borrower................................... 73
6.16. Certified Copies of Insurance Policies................................ 76
6.17. Mortgage Liens........................................................ 76
6.18. New Restricted Subsidiaries........................................... 76
6.19. C-Block Subsidiaries.................................................. 77
6.20. Post-Closing Matters.................................................. 77
ARTICLE VII
CERTAIN NEGATIVE COVENANTS OF THE BORROWER
7.01. Restrictions on Indebtedness.......................................... 78
7.02. Restrictions on Liens................................................. 81
7.03. No Contingent Obligations............................................. 83
7.04. Restrictions on Investments........................................... 83
7.05. Distributions......................................................... 85
7.06. Merger, Consolidation, Disposition of Assets, Etc..................... 89
7.07. Sale and Leaseback.................................................... 93
7.08. Compliance with Environmental Laws.................................... 93
7.09. Employee Benefit Plans................................................ 93
7.10. New Subsidiaries...................................................... 94
7.11. Transactions with Affiliates.......................................... 94
7.12. Permitted Business.................................................... 96
7.13. Charter Amendments.................................................... 96
7.14. Accounting Changes.................................................... 96
7.15. Prepayments, Etc., of Indebtedness.................................... 96
7.16. Amendment, Etc., of Material Contracts................................ 97
7.17. Restrictions on Restricted Subsidiaries............................... 97
7.18. Partnerships.......................................................... 97
7.19. Default Under the Equipment Acquisition Agreement..................... 98
7.20. Collections of Receivables............................................ 98
ARTICLE VIII
CONDITIONS TO THE INITIAL ADVANCE
iv
Page
----
8.01. Terms and Conditions of Transaction................................... 98
8.02. Due Diligence......................................................... 98
8.03. Validity of Liens..................................................... 98
8.04. Search Reports and Related Documents.................................. 99
8.05. Certificates of Insurance............................................. 99
8.06. Solvency Certificate..................................................100
8.07. Opinions of Counsel to the Borrower...................................100
8.08. Opinion of Counsel to the Grandparent and the Parent..................100
8.09. Opinion of FCC Counsel................................................100
8.10. Opinion of Counsel to the Administrative Agent........................100
8.11. Payment of Fees.......................................................100
8.12. Approvals, Permits; FCC Licenses......................................100
8.13. Delivery of Operating Business Plans..................................101
8.14. Security Agreements...................................................101
8.15. Guaranties............................................................102
8.16. Mortgages, Etc........................................................103
8.17. Attornment and Recognition Agreements.................................103
8.18. Material Agreements...................................................103
8.19. Litigation............................................................104
8.20. Insurance Certificates................................................104
8.21. No Default............................................................104
8.22. No Material Adverse Change............................................104
8.23. Corporate Documents...................................................104
8.24. Intercreditor Agreement...............................................106
8.25. Support Agreement.....................................................106
8.26. Amendment to Equipment Acquisition Agreement..........................106
8.27. Acknowledgement of Assignment.........................................106
8.28. Other Information.....................................................107
ARTICLE IX
ADDITIONAL CONDITIONS TO ADVANCES
9.01. Conditions Precedent to an Initial Advance Based on
Attributed Expenses with Respect to Any Operating Subsidiary
or License Subsidiary..............................................107
9.02. Conditions to All Advances............................................107
ARTICLE X
EVENTS OF DEFAULT; ACCELERATION; ETC.
10.01. Events of Default and Acceleration...................................109
v
Page
----
ARTICLE XI
THE ADMINISTRATIVE AGENT
11.01. Authorization and Action.............................................113
11.02. Administrative Agent's Reliance, Etc.................................114
11.03. Ericsson and Affiliates..............................................115
11.04. Lender Credit Decision...............................................115
11.05. Indemnification......................................................115
11.06. Successor Administrative Agents......................................116
ARTICLE XII
MISCELLANEOUS
12.01. Amendments, Etc......................................................117
12.02. Notices, Etc.........................................................118
12.03. No Waiver; Remedies..................................................119
12.04. Costs, Expenses......................................................119
12.05. Right of Set-off.....................................................122
12.06. Binding Effect.......................................................122
12.07. Assignments and Participations.......................................122
12.08. Governing Law........................................................126
12.09. Execution in Counterparts............................................126
12.10. Confidentiality......................................................127
12.11. Consent to Jurisdiction..............................................128
12.12. Matters Relating to the Collateral Agent.............................128
12.13. Amendments, Etc., to Intercreditor Agreement.........................128
12.14. Certain FCC Actions..................................................129
12.15. Waiver of Jury Trial.................................................129
vi
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Draw Request
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Services Agreement
Exhibit D-2 - Form of Operating Agreement
Exhibit E-1 - Form of Borrower Security Agreement
Exhibit E-2 - Form of Parent Pledge Agreement
Exhibit E-3 - Form of Operating Subsidiary Security Agreement
Exhibit E-4 - Form of License Subsidiary Security Agreement
Exhibit F - Form of Real Estate Mortgage Option
Exhibit G - Form of Subordination Agreement
Exhibit H-1 - Form of Limited Recourse Parent Guaranty
Exhibit H-2 - Form of Subsidiary Guaranty
Exhibit I - Form of Intercreditor Agreement
Exhibit J - Form of Support Agreement
Schedules
Schedule 1.01 - Core BTAs, Dependent BTAs and Other BTAs
Schedule 5.01(b) - Subsidiaries
Schedule 5.06 - Intellectual Property
Schedule 5.07 - FCC Licenses
Schedule 5.25 - Environmental Matters
Schedule 5.26 - Permitted Joint Ventures
Schedule 5.27 - Material Contracts
Schedule 6.15(a) - Revenue
Schedule 6.15(c) - Leverage Ratio
Schedule 7.04 - Investments
Schedule 8.16 - Mortgaged Property
LOAN AGREEMENT
This Agreement is made as of July 25, 1997, by and among (a) OPCS
PHILADELPHIA HOLDINGS, INC., a Delaware corporation (the "Borrower"), (b) the
lenders listed on the signature pages hereof and (c) ERICSSON INC., a Delaware
corporation ("Ericsson"), as administrative agent for the Lenders (together with
any successor thereto appointed pursuant to Section 11.06, the "Administrative
Agent").
ARTICLE I
DEFINITIONS AND RULES OF INTERPRETATION
Section 1.01. Definitions.
Administrative Agent. See the preamble hereto.
Administrative Agent's Account. The account of the Administrative Agent
maintained by the Administrative Agent with [*] at its office at [*] for the
account of [*] (or such other account as the Administrative Agent from time to
time may specify).
Administrative Agent's Office. The Administrative Agent's office set forth
in Section 12.02 and, upon the appointment of a successor Administrative Agent
pursuant to Section 11.06, such address as shall be provided by such successor
Administrative Agent, or in either case such office as the Administrative Agent
from time to time may designate.
Advances. An advance by a Lender to the Borrower pursuant to Article II,
and refers to a Base Rate Advance or a Eurodollar Rate Advance.
Affiliate. As to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person. For purposes of this definition, control of a Person shall include
the power, direct or indirect, (a) to vote 50% or more of the securities or
other interests having ordinary voting power for the election of directors or
other managing Persons of such Person or (b) to direct or cause direction of the
management and policies of such Person whether by contract or otherwise.
Agents. Collectively, the Administrative Agent and the Collateral Agent.
Applicable Area. With respect to any Permitted BTA, any portion of the
geographic area covered thereby, other than any portion thereof as to which the
right to provide PCS services to POPs located in such portion shall have been
sold in a Restricted Sale.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
2
Applicable Lending Office. With respect to any Lender, for Base Rate Loans,
the office of such Lender specified as its domestic lending office and, for
LIBOR Loans, the office of such Lender specified as its LIBOR lending office, in
either case on the signature pages hereof or in the Assignment and Acceptance
pursuant to which it became a Lender, or such other offices of such Lender as
such Lender may from time to time specify to the Administrative Agent.
Applicable Margin. With respect to any Advance that is:
(a) a Base Rate Advance, [*] per annum until [*] and [*] per annum
thereafter, and
(b) a LIBOR Advance, [*] per annum until [*] and [*] per annum
thereafter.
Approved Annual Operating Business Plan. With respect to each fiscal year
of the Borrower, beginning with its fiscal year ending December 31, 1998, the
annual business operating plan delivered by the Borrower pursuant to
Section 6.14(a) with respect to such fiscal year, but only if the Required
Lenders shall have approved such plan for such fiscal year.
Approved Full Term Operating Business Plan. Unless and until the Borrower
in its discretion shall have delivered to the Lenders a revised full-term
operating plan that the Required Lenders shall have approved, the full-term
operating plan delivered by the Borrower pursuant to Section 8.13(b), and
thereafter the most recent full-term operating plan delivered by the Borrower
that the Required Lenders shall have approved.
Assignment and Acceptance. An Assignment and Acceptance substantially in
the form of Exhibit C.
Attributed Expenses. At any date and with respect to any Permitted BTA or
the right to provide PCS services to POPs within any geographic area included in
a Permitted BTA, the aggregate amount of all Ericsson Related Expenses and Other
Costs incurred primarily with respect to, or used primarily for the normal
commercial operation of, a PCS System for such Permitted BTA or such geographic
area, other than, in the case of any Permitted BTA (other than the Philadelphia
BTA) the FCC License for which has been the subject of a C-Block General License
Revocation Event, any such Ericsson Related Expenses in respect of equipment
that shall have been installed and shall be used for a normal commercial
operation of another Permitted BTA on or before the date on which such Permitted
BTA shall become an Excluded BTA.
Balance Sheet Date. December 31, 1996.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
3
Base Rate. A fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at any date be equal to the higher of:
(a) the rate of interest per annum announced publicly by ▇▇▇▇▇▇
Guaranty Trust Company of New York as its prime or base rate on such date,
and
(b) 1/2 of 1% per annum above the Federal Funds Rate on such date.
Base Rate Advance. An Advance bearing interest calculated by reference to
the Base Rate.
Base Rate Loans. Loans bearing interest calculated by reference to the Base
Rate.
Borrower. See the preamble hereto.
Borrower Security Agreement. See Section 8.14(a).
Borrowing Base. At any date:
(a) prior to [*]
(i) Net Ericsson Related Expenses as of such date, plus
(ii) the lesser of:
(A) (1) [*] of the Maximum Commitment as of such date,
minus
(2) on and after [*], one half of
Permitted Interest Expense as of such date, and
(B) the greater of:
(1) the aggregate amount of Net Other Costs and Handset
Costs as of such date, minus the aggregate principal
amount of the Advances theretofore prepaid pursuant
to Section 3.02(e), and
(2) the lesser of:
(I) [*] of Net Ericsson Related Expenses as of
such date, and
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
4
(II) the aggregate amount of Net Other Costs and
Handset Costs incurred as of such date, plus
(iii) Permitted Interest Expense as of such date, and
(b) thereafter:
(i) the aggregate principal amount of the Advances outstanding on
such date, minus
(ii) the aggregate amount, without duplication, of all Attributed
Expenses with respect to any right to provide PCS services to any POPs
that shall have been subject to a Restricted Sale, and any Permitted
BTA that shall have become an Excluded BTA, on or before such date.
Borrowing Base Certificate. A certificate, in form and substance
satisfactory to the Administrative Agent, duly certified by the chief or
principal financial or accounting officer of the Borrower, stating the amount of
the Borrowing Base as of the date of such certificate and setting forth in
reasonable detail the calculation of the amount thereof.
BTA. Any "basic trading area" as set forth on the Rand ▇▇▇▇▇▇▇ 1992
Commercial Atlas & Marketing Guide, 123rd Edition, and utilized by the FCC in
dividing the 50 states, the District of Columbia and the United States
territories into 493 BTAs for the purpose of licensing PCS Systems.
BTA Cluster. Any group of Permitted BTAs for which one or more License
Subsidiaries have FCC Licenses and that consists of a Core BTA and its related
Dependent BTAs.
Business Day. Any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York City are authorized or required by law or
other governmental action to close and, if the applicable Business Day relates
to any LIBOR Advance, a day on which dealings are not carried on in the London
interbank market.
Capital Expenditures. Amounts paid or Indebtedness incurred by the Borrower
in connection with the purchase or lease by the Borrower of assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with GAAP.
Capitalized Leases. Leases under which the Borrower is the lessee or
obligor, the discounted future rental-payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.
5
Cash Equivalents. Any Investments of the Borrower or any of its
Subsidiaries of the types permitted under clauses (b), (c), (d) and (e) of
Section 7.04 having a maturity of not greater than 270 days from the date of
acquisition thereof.
Cash Management Agreement. The Cash Management Agency Agreement dated
November 7, 1996 among Enterprises and the Grandparent from time to time parties
thereto.
C-Block General License Revocation Event. Any action by the FCC the effect
of which is to revoke, annul, rescind, cancel, suspend or terminate all FCC
Licenses issued in connection with the FCC's C-block auction (including those
held by License Subsidiaries), regardless of whether the Persons owning such FCC
Licenses were in default thereunder.
C-Block FCC License. Any FCC License sold in the FCC's C-block auction.
C-Block Subsidiary. Each Subsidiary of the Parent that, as of the date
hereof, holds an FCC License listed in Part II of Schedule 1.01.
CERCLA. The Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 USCA Section 9601 et seq.
Closing Date. The meaning specified in the introductory clause of Article
VIII.
Collateral. All "Collateral" and "Pledged Collateral" referred to in the
Collateral Documents and all other property that is or is intended to be subject
to any Lien in favor of the Collateral Agent for the benefit of Secured Parties.
Collateral Agent. Mellon Bank, N.A. or any successor thereto appointed
pursuant to Section 6.1 of the Intercreditor Agreement.
Collateral Documents. The Security Agreements, the Mortgages and any other
agreement that purports to create a Lien in favor of the Collateral Agent for
the benefit of the Secured Parties.
Commitment. With respect to any Lender, has the meaning specified in
Section 2.01.
Communications Act. The Communications Act of 1934, as amended, and the
rules and regulations issued thereunder, as from time to time in effect.
Confidential Information. Information that the Borrower or any of its
Affiliates furnishes to the Administrative Agent or any Lender in a writing
designated as confidential, but Confidential Information does not include any
such information that is or becomes
6
generally available to the public or that is or becomes available to the
Administrative Agent or such Lender from a source other than the Borrower or any
of its Affiliates.
Consolidated. The consolidation of accounts in accordance with GAAP of the
Borrower and its Restricted Subsidiaries.
Contingent Obligation. As to any Person, any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including without
limitation any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor;
(b) to advance or supply funds
(i) for the purchase or payment of any such primary obligation,
or
(ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain net worth, solvency or other
financial statement condition of the primary obligor;
(c) to purchase Property, securities or services primarily for the
purpose of assuring the beneficiary or holder of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation; or
(d) otherwise to assure, protect from loss, or hold harmless the
beneficiary or holder of such primary obligation against loss in respect
thereof;
provided that the term "Contingent Obligation" shall not include the indorsement
of instruments for deposit or collection in the ordinary course of business. The
term "Contingent Obligation" shall also include the liability of a general
partner in respect of the recourse liabilities of the partnership in which it is
a general partner. The amount of any Contingent Obligation of a Person shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
7
Convert, Conversion and Converted. A conversion of Advances of one Type
into Advances of the other Type pursuant to Sections 2.05 or 2.06.
Core BTA. Any of the Philadelphia BTA, any other BTA with POPs exceeding
1,000,000 and any BTA that is designated as a "Core BTA" on Part A of Schedule
1.01, as such schedule may be updated from time to time in accordance with
Section 6.14(s), and in each case for which the FCC License therefor is held by
a License Subsidiary.
Debt Service. For any period, the aggregate scheduled amount of interest
required to be paid and principal required to be repaid by the Borrower and its
Restricted Subsidiaries (in each case, without duplication) during such period
on all Indebtedness of the Borrower and its Restricted Subsidiaries outstanding
during all or any part of such period (excluding (a) the amount of any
prepayment pursuant to Section 3.02(a), (b) or (c) or any similar prepayment
under a Permitted Loan Agreement and (b) interest capitalized under loans where
such loans provide for the funding of interest costs) and owing to Persons other
than the Borrower and its Restricted Subsidiaries, whether such interest and
principal were or are required to be reflected as an item of expense or
capitalized, including payments in respect of Capitalized Leases and including
scheduled payments of commitment fees, agency fees, facility fees, origination
fees, balance-deficiency fees and similar fees or expenses in connection with
Indebtedness.
Default. Any Event of Default and any event or condition that, with the
giving of notice, the lapse of time, or both, would become an Event of Default.
Dependent BTA. With respect to any Core BTA, any other BTA within the same
MTA as that of such Core BTA and any other BTA that the Borrower and the Lenders
may agree is a Dependent BTA with respect to such Core BTA and that is
designated as a "Dependent BTA" with respect to such Core BTA on Part B of
Schedule 1.01, as such schedule may be updated from time to time in accordance
with Section 6.14(s).
Distribution. Any of the following with respect to any Person:
(a) the declaration or payment of any cash dividend, dividend in kind
or cash equity distributions on or in respect of any shares of any class of
Stock of such Person, other than dividends payable solely in shares of
common stock (or equivalent interests) of the such Person;
(b) the purchase, redemption, or other retirement of any shares of any
class of Stock of such Person;
(c) the return of capital by Person to its shareholders (or holders of
interests equivalent to shares) as such;
8
(d) any other distribution on or in respect of any shares or
equivalent interests of any class or series of Stock of such Person; or
(e) if such Person is the Borrower, any payment of principal, premium
or interest, or any other amount, in respect of Subordinated Debt of the
Borrower.
Dollars or $. Dollars in lawful currency of the United States of America.
Draw Request. See Section 2.02.
EBTDA. For any period, the sum, determined on a Consolidated basis, of
(a) Net Income of the Borrower and its Restricted Subsidiaries for
such period, plus
(b) to the extent deducted in determining Net Income, the sum of each
of the following for such period:
(i) depreciation, amortization and other non-cash charges;
(ii) income-tax expense; and
(iii) interest not being paid as an express feature of the
related debt instrument.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by any Loan Party or any
ERISA Affiliate, other than a Multiemployer Plan.
Enterprises. Omnipoint Communications Enterprises, Inc., a Delaware
corporation, together with its successors.
Environmental Laws. Any federal, state or local law, statute, rule or
regulation or common law relating to the environment or occupational health and
safety, including any statute, regulation or order pertaining to
(a) treatment, storage, disposal, generation and transportation of
industrial, toxic or hazardous substances or solid or hazardous waste;
(b) air, water or noise pollution;
(c) groundwater and soil contamination;
9
(d) the release or threatened release into the environment of
industrial, toxic or hazardous substances, or solid or hazardous waste,
including without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals;
(e) the protection of wildlife, marine sanctuaries and wetlands,
including without limitation all endangered and threatened species;
(f) underground and other storage tanks or vessels, abandoned,
disposed or discarded barrels, containers and other closed receptacles;
(g) health and safety of employees and other persons; and
(h) manufacture, processing, use, distribution, treatment, storage,
disposal, transportation or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or oil or petroleum products,
by-products or breakdown products or solid or hazardous waste,
including (i) CERCLA; (ii) RCRA; (iii) the Toxic Substance Control Act, as
amended, 15 USCA Section 2601 et seq.; (iv) the Water Pollution Control Act, as
amended, 33 USCA Section 1251 et seq.; (v) the Clean Air Act, as amended,
42 USCA Section 7401 et seq.; (vi) the Hazardous Material Transportation Act, as
amended, 49 USCA Section 1801 et seq.; (vii) the Superfund Amendments and
Reauthorization Act of 1986; and (viii) all rules, regulations, judgments,
decrees, injunctions and restrictions thereunder and any analogous state law. As
used above, the terms "release", "threatened release", "hazardous substance" and
"environment" shall have the meaning set forth in CERCLA, and the terms "solid
waste" and "dispose" (or "disposal") shall have the meaning set forth in the
RCRA.
Environmental Permits. See Section 5.25(d).
Equipment Acquisition Agreement. The Acquisition Agreement for Ericsson CMS
40 Personal Communications Systems (PCS) Infrastructure Equipment dated as of
April 16, 1996, as amended as of July 25, 1997 among Ericsson, Omnipoint
Communications Inc., Omnipoint MB Holdings, Inc. and the Borrower, as further
amended, supplemented or otherwise modified from time to time.
Ericsson. See the preamble hereto.
10
Ericsson Related Expenses. With respect to any Permitted BTA and any date:
(a) the aggregate purchase price paid (excluding (x) all amounts paid
or incurred on a date before the date that such Permitted BTA shall have
become a Permitted BTA, other than those paid or incurred by or on behalf
of the Grandparent or any of its Affiliates and (y) if no License
Subsidiary then holds a C-Block FCC License for the Philadelphia BTA and
such Permitted BTA is another BTA for which a C-Block FCC License is held
by a License Subsidiary, all amounts paid or incurred with respect to such
Permitted BTA on or after any date on which a Proposed C-Block General
License Revocation Event shall have occurred), or being paid with the
proceeds of an Advance hereunder simultaneously with the making of such
Advance, by the Borrower and its Subsidiaries for:
(i) CMS 40/PCS 1900 or IS-661 equipment and software purchased
from Ericsson pursuant to the Equipment Acquisition Agreement for use
primarily in the Applicable Area of such Permitted BTA or the
Applicable Areas of such Permitted BTA and one or more other Permitted
BTAs and integral to the PCS Systems to be built out in such
Applicable Area or Applicable Areas, including without limitation base
stations, switching and other network infrastructure, software,
materials and the installation of the same, in each case whether
manufactured or provided by Ericsson or purchased by Ericsson from
other sources and resold to the Borrower or any of its Restricted
Subsidiaries under the Equipment Acquisition Agreement, and
(ii) services provided by Ericsson relating to the design,
engineering and other related services integral to such systems, minus
(b) the aggregate amount of all later refunds or reductions of or
other adjustments to the original purchase price for any of such equipment,
software or services.
ERISA. The Employee Retirement Income Security Act of 1974, as amended, and
the rules and regulations issued thereunder as from time to time in effect.
ERISA Affiliate. Any Person that is treated as a single employer with the
Borrower under Section 414 of the IRC.
ERISA Event. With respect to any Loan Party or any ERISA Affiliate,
(a) a Reportable Event,
11
(b) the withdrawal of any Loan Party or any ERISA Affiliate from a
Plan during a plan year in which it was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA,
(c) the filing of a notice of intent to terminate a Plan under a
distress termination of the Plan under Section 4041(c) of ERISA, or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or
(e) the occurrence of any other event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Plan or to cause the imposition of any liability (other than PBGC premiums
due but not delinquent under Section 4007 of ERISA) in excess of $250,000
under Title IV of ERISA.
Event of Default. Any of the events specified in Section 10.01.
Excess Cash Flow. With respect to any fiscal year,
(a) EBTDA for such fiscal year, plus
(b) the aggregate amount of interest paid by the Borrower or any of
its Restricted Subsidiaries on any Indebtedness owing to the Grandparent or
any Affiliate thereof (other than the Borrower and its Restricted
Subsidiaries) during such fiscal year, minus
(c) proceeds from the sale of FCC Licenses, Stock of License
Subsidiaries and rights to provide PCS services by the Borrower and its
Restricted Subsidiaries, to the extent such proceeds would be included in
EBTDA for such fiscal year, minus
(d) income-tax payments, capital expenditures net of new financing
proceeds, aggregate scheduled principal payments under any Indebtedness of
the Borrower and its Restricted Subsidiaries (including payments on amounts
owing to the FCC with respect to BTA licenses) (other than mandatory
prepayments out of Excess Cash Flow), in each case during such fiscal year,
plus (if negative) or minus (if positive), as the case may be,
(e) differences between beginning and ending Working Capital
(excluding for purposes of any determination of working capital receivables
past due more than
12
60 days, inventory and current portions of long-term Indebtedness) in
respect of such fiscal year.
Excess Proceeds. With respect to any disposition of any FCC License, any
Stock of a License Subsidiary or any right to provide PCS services to any POPs,
the Net Cash Proceeds of thereof, whether received at the time of such sale or
at any time thereafter, after deducting from such proceeds the amount of any
prepayment as a result of a thereof pursuant to Section 3.02(f) with respect to
such sale and any prepayments of other providers of vendor financing to the
Borrower pursuant to provisions substantially the same as the applicable
provisions of this Agreement.
Excluded BTA. At any date:
(a) any Core BTA as to which the right to provide PCS services with
respect to any POPs shall have theretofore been sold in a Restricted Sale
(except for any Restricted Sale of any right to provide PCS services to
POPs located in any geographic area specified in Part C of Schedule 1.01
with respect to any Core BTA);
(b) any Dependent BTA with respect to any Core BTA that shall be an
Excluded BTA as of such date;
(c) any BTA that is not a Core BTA or Dependent BTA with respect to
which the right to provide PCS services to more than [*] of the total POPs
of such BTA Cluster shall have theretofore been sold in a Restricted Sale;
(d) any BTA the FCC License for which shall have been disposed of
pursuant to Section 7.06(b)(iii), other than a disposition to a Qualified
Joint Venture permitted under such Section and Section 7.05;
(e) if at such date no License Subsidiary shall hold a C-Block FCC
License for the Philadelphia BTA, any BTA as to which the related FCC
License shall have been the subject of a C-Block General License Revocation
Event that occurred [*] or more days prior to such date or as to which to
which the related FCC License shall have been the subject of Permitted
Transfer that occurred [*] or more days prior to such date, in either case
unless a License Subsidiary shall then hold an FCC License or the right to
provide PCS services on terms and conditions acceptable to the Required
Lenders with respect to such BTA covering at least [*] MHz of spectrum; and
(f) any BTA with respect to which the right to provide PCS services to
any portion thereof has been transferred to a Qualified Joint Venture as to
which an event of the nature described in Section 10.01(e) shall have
occurred with respect to any holder of
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
13
any equity interest in such Qualified Joint Venture, unless the Grandparent
shall have unconditionally guaranteed, in a manner in form and substance
satisfactory to the Required Lenders, an aggregate principal amount (plus
interest and costs of collection) of the Advances at any time outstanding
equal to the lesser of the aggregate principal amount of the Advances at
any time outstanding and the Attributed Expenses relating to such BTA.
Excluded Other Costs. [*]
Expense Allocation Agreement. The Expense Allocation Agreement dated as of
July 25, 1997 among the Borrower, Enterprises and the Grandparent.
FCC. The Federal Communications Commission or any Governmental Body
succeeding to the functions thereof.
FCC License. Any mobile telephone, cellular telephone, microwave, paging or
other license, authorization, certificate of compliance, franchise, approval or
permit, whether for the construction or the operation of any PCS System, granted
or issued by the FCC and any other federal Governmental Body with respect to any
BTA.
Federal Funds Rate. The fluctuating interest rate per annum equal for each
day during such period to the weighted average of the rates on overnight
federal-funds transactions with members of the Federal Reserve System arranged
by federal-funds brokers, as published for such day (or, if such day is not a
Business Day, for the next-preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three federal-funds brokers of recognized standing
selected by it.
First LIBOR Method. The terms and provisions of this Agreement relating to
LIBOR Advances specified as being applicable when the First LIBOR Method is
applicable under Section 2.11.
Fiscal Quarter. A fiscal quarter of the Borrower and its Consolidated
Subsidiaries.
GAAP. See Section 1.03.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
14
Governmental Body. Any nation or government, any state or other political
subdivision thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator.
Grandparent. Omnipoint Corporation, a Delaware corporation, and its
successors.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA that is maintained or contributed to by any
Loan Party or any ERISA Affiliate or that was so maintained or contributed to
and in respect of which the Borrower or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event that such plan has been or were
to be terminated the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guaranties. See Section 8.15(b).
Guarantors. Collectively, the Parent and, as of any date, any Person that
shall theretofore have delivered a Guaranty.
Handset Costs. An amount equal to the lesser of:
(a) the number of handsets purchased by the Borrower or an Operating
Subsidiary from Ericsson and its Affiliates that could be used in Permitted
BTAs, multiplied by [*]; and
(b) [*] of the aggregate purchase price for such handsets, net of
any refunds, reductions or other adjustments thereto.
Indebtedness. As to any Person, at a particular time, all items that
constitute, without duplication,
(a) obligations of such Person in respect of borrowed money or for the
deferred purchase price of Property (other than trade payables incurred in
the ordinary course of business);
(b) obligations of such Person evidenced by notes, bonds, debentures
or similar instruments;
(c) obligations of such Person with respect to any conditional-sale or
title-retention agreement;
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
15
(d) obligations of such Person arising under acceptance facilities and
the amount available to be drawn under all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn
thereunder to the extent such Person shall not have reimbursed the issuer
in respect of the issuer's payment of such drafts;
(e) all liabilities secured by any Lien on any Property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof (other than carriers', warehousemen's, mechanics',
repairmen's or other like non-consensual Liens arising in the ordinary
course of business);
(f) obligations of such Person under Capitalized Leases;
(g) amounts owed by such Person to the FCC on any FCC License;
(h) all Contingent Obligations of such Person; and
(i) interest that is accreted or otherwise accrued and unpaid on
Subordinated Debt.
Intercreditor Agreement. See Section 8.24.
Interest Period. While the First LIBOR Method is applicable and Loans are
accruing interest at LIBOR, the period commencing on the date on which interest
on the Loans shall accrue at LIBOR as provided herein and ending on the last day
of such period, determined as provided below, and thereafter each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of such period, determined as provided below, or, if
earlier, on the last day on which the Loans shall accrue interest at LIBOR.
While the Second LIBOR Method is applicable, for each LIBOR Advance comprising
part of the same Loan, the period commencing on the date of such LIBOR Advance
or the date of the Conversion of any Base Rate Advance into such LIBOR Advance
and ending on the last day of such period, determined as provided below, and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period, determined
as provided below. The duration of each such Interest Period shall be three
months; provided that:
(a) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next-succeeding Business Day; provided
that, if such extension would cause the last day of such Interest Period to
occur in the next-following calendar month, the last day of such Interest
Period shall occur on the next-preceding Business Day, and
16
(b) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the third-following calendar month, such Interest Period shall end
on the last Business Day of such third-following calendar month.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of capital Stock or Indebtedness
of, or for loans, advances, capital contributions or transfers of property to,
or in respect of any guaranties (or other commitments as described under
Contingent Obligations), or obligations of, any Person. In determining the
aggregate amount of Investments outstanding at any particular time:
(a) the amount on any date of any Investment represented by a
Contingent Obligation shall be taken at not less than the principal amount
of the obligations as to which such Contingent Obligation exists and that
are still outstanding on such date;
(b) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid;
(c) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution);
(d) there shall not be deducted in respect of any Investment any
amounts received as earnings on such Investment, whether as dividends,
interest or otherwise, except that accrued interest included as provided in
the foregoing clause (b) may be deducted when paid;
(e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof; and
(f) there shall be included as an Investment (i) each receivable
(other than with respect to sales of handsets and accessories thereto) that
is payable more than three months following the date of the sale giving
rise thereto and (ii) each receivable with respect to sales of handsets and
accessories thereto that is payable more than six months following the date
of the sale giving rise thereto.
IRC. The Internal Revenue Code of 1986, as amended from time to time, and
the rules and regulations issued thereunder as from time to time in effect.
17
Lender. Ericsson, unless and until it shall have assigned to other Persons
all of its rights and obligations as a Lender hereunder, and any other Person
that becomes a Lender by reason of an Assignment and Acceptance in accordance
with the terms of this Agreement.
LIBOR. For any applicable Interest Period, a simple per annum interest rate
(rounded upward, if necessary, to the nearest 1/100th of one percent) equal to
(a) (i) the rate per annum that appears on Page 3750 of the Dow ▇▇▇▇▇
& Company Telerate screen or any successor page as the composite offered
rate for London interbank deposits, in an amount approximately equal to the
amount of the requested Loan for a three-month period, as shown under the
heading "USD" as of 11:00 a.m. (London time), two Business Days before the
first day of such Interest Period, or
(ii) if the rate specified in clause (i) cannot be determined, the
rate per annum equal to the arithmetic mean of the rates shown on the LIBO
page of Reuters Money Service at approximately 11:00 a.m. (London time),
two Business Days before the first day of such Interest Period in an amount
approximately equal to the amount of the requested Loan, divided by
(b) one, minus the LIBOR Reserve Rate, stated as a decimal.
LIBOR Advance. An Advance bearing interest calculated by reference to
LIBOR.
LIBOR Reserve Rate. For any Interest Period for all LIBOR Advances
comprising part of the same Loan, the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the interest rate on LIBOR Advances is determined) having a term equal to such
Interest Period.
License Subsidiary. At any date, each Subsidiary of the Borrower and each
C-Block Subsidiary that holds an FCC License for a Permitted BTA, other than any
C-Block Subsidiary the pledge of the shares of Stock of which shall have been
released pursuant to the applicable Security Agreement.
Lien. Any mortgage, pledge, hypothecation, assignment, deposit or
preferential arrangement, encumbrance, lien (statutory or other), or other
security agreement or security interest of any kind or nature whatsoever,
including any conditional sale or other title
18
retention agreement and any Capitalized Lease or other financing lease having
substantially the same economic effect as any of the foregoing.
Limited Recourse Parent Guaranty. See Section 8.15(a).
Loan. A loan consisting of simultaneous Advances of the same Type made by
the Lenders.
Loan Documents. This Agreement, the Notes, the Collateral Documents, the
Guaranties, the Subordination Agreement between the Grandparent and the
Borrower, the Intercreditor Agreement, the Support Agreement, the Equipment
Acquisition Agreement, any mortgage or deed of trust entered into pursuant to
Section 6.17 and any other agreements or documents contemplated hereby or
thereby and all schedules, exhibits and annexes thereto.
Loan Parties. Collectively, the Borrower, the Grandparent and each
Guarantor.
Marketing Expenses. With respect to any period, the sales and marketing
expenses of the Borrower and its Restricted Subsidiaries for such period,
including, without limitation, any such expenses incurred during such period in
respect of sales literature and advertising, promotions; subscriber acquisition
services; amounts allocable during such period to marketing expenses in respect
of travel, entertainment, sales training, office expenses and research; and the
difference (if negative) between revenues from sales of handsets during such
period and the cost of such handsets, as determined on a basis consistent with
the Borrower's accounting methods that are consistent with GAAP.
Material Adverse Effect. An effect resulting from any circumstance or event
of whatever nature (including any adverse determination in any litigation) which
does, or could reasonably be expected to:
(a) materially and adversely impair the validity or enforceability of
any of the Loan Documents or the Administrative Agent's, the Collateral
Agent's or any Lender's rights or remedies with respect thereto;
(b) materially and adversely impair the ability of the Borrower to pay
any amounts owing hereunder or under any other Loan Document in accordance
with their terms;
(c) cause a Default;
(d) materially and adversely affect the business, property, prospects,
operations, or financial or other condition of the Borrower, the Parent or
the Grandparent; or
19
(e) materially and adversely impair or affect the Collateral or
Lender's Liens on the Collateral or the priority of such Liens.
Material Contract. With respect to any Person, each contract to which such
Person is a party involving aggregate consideration payable to or by such Person
of $5,000,000 or more in any 12-month period or otherwise material to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of such Person.
Materials of Environmental Concern. Any chemicals, pollutants or
contaminants, hazardous substances (as such term is defined under CERCLA), solid
wastes and hazardous wastes (as such terms are defined under the RCRA), toxic
materials, oil or petroleum and petroleum products, by products or breakdown
products or any other material subject to regulation under any Environmental
Laws.
Maturity Date. The earlier of
(a) [*], and
(b) the date of the acceleration of the Advances pursuant to
Section 3.02(d) or 10.01.
Maximum Commitment. At any date, an amount equal to (a) $120,000,000, minus
(b) the aggregate amount by which the Maximum Commitment has been permanently
reduced pursuant to Section 2.12 on or prior to such date.
Mortgages. See Section 8.16.
MTA. Any "major trading area" as set forth on the Rand ▇▇▇▇▇▇▇ 1992
Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38-39 and utilized
by the FCC in dividing the 50 states, the District of Columbia and United States
territories into 51 MTAs for the purpose of licensing PCS Systems.
Multiemployer Plan. A "multiemployer plan" as defined in Sections
4001(a)(3) and 3(37) of ERISA, and to which any Loan Party or any ERISA
Affiliate is making, or is obligated to make, contributions or has made, or been
obligated to make, contributions.
Necessary Authorizations. All approvals and licenses from, and all filings
and registrations with, any governmental or other regulatory authority,
including each FCC License held by a License Subsidiary and all grants,
approvals, licenses, filings and registrations under the Communications Act,
necessary in order to enable the Borrower and its Restricted Subsidiaries to
own, construct, maintain and operate PCS Systems.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
20
Net Cash Proceeds. With respect to any transaction by any Person, the
aggregate amount of cash received from time to time by or on behalf of such
Person in connection with such transaction, after deducting therefrom only
(a) reasonable and customary brokerage commissions, underwriting fees
and discounts, legal fees, finder's fees and other similar fees and
commissions, and
(b) the amount of taxes payable in connection with or as a result of
such transaction,
in each case to the extent, but only to the extent, that the amounts so deducted
are, at the time of receipt of such cash, actually paid to a Person that is not
an Affiliate of the Borrower and are properly attributable to such transaction
or to the asset that is the subject thereof.
Net Income. For any period, net income (or loss), determined on a
Consolidated basis, of the Borrower and its Restricted Subsidiaries determined
in accordance with GAAP for such period.
Net Ericsson Related Expenses. At any date:
(a) the aggregate amount of Ericsson Related Expenses as of such date,
minus
(b) the aggregate amount of all Restricted Ericsson Expenses as of
such date.
Net Other Costs. At any date:
(a) Other Costs as of such date, minus
(b) Restricted Other Costs as of such date.
Non-Qualified Joint Venture. Any Person that is not a Qualified Joint
Venture or a Wholly Owned Subsidiary of the Borrower.
Notes. The Notes substantially in the form of Exhibit A issued by the
Borrower hereunder.
Omnipoint Services. Omnipoint Communications Services, Inc., a Delaware
corporation, together with its successors.
Operating Cash Flow. For any period,
21
(a) Net Income for such period, plus
(b) to the extent deducted or accrued in determining Net Income, the
sum of each of the following for such period:
(i) depreciation, scheduled amortization of principal of
Indebtedness and other non-cash charges,
(ii) income tax expense and
(iii) interest expense;
provided that there shall be excluded from Operating Cash Flow (without
duplication) the following to the extent that any of the same shall have been
included in Net Income for such period:
(a) the income (or deficit) of any Person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Borrower or any of its Restricted Subsidiaries;
(b) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of income accrued
during such period;
(c) any aggregate net gain (but not any aggregate net loss) during
such period arising from the sale, exchange or other disposition of capital
assets (such term to include all fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets, and all securities);
(d) any write-up of any asset; and
(e) any net income or gain or loss during such period (but, in the
case of any loss, only to the extent that such loss, net of any gains
during such period, shall be $5,000,000 or less) from any change in
accounting, from any discontinued operations or the disposition thereof,
from any extraordinary events or from any prior-period adjustments.
Operating Subsidiary. Enterprises and any other Restricted Subsidiary of
the Borrower that is engaged in the business of building out and operating one
or more BTAs on behalf of one or more License Subsidiaries.
22
Other Costs. The aggregate purchase price paid or being paid (including
amounts paid or incurred with respect to any Permitted BTA on a date before the
date that such Permitted BTA shall have become a Permitted BTA) with the
proceeds of an Advance hereunder simultaneously with the making of such Advance
for
(a) equipment and services approved by Ericsson (but excluding
equipment and services provided by Ericsson under the Equipment Acquisition
Agreement) that are:
(i) integral to the PCS Systems to be built out in Applicable
Areas of Permitted BTAs for which Ericsson Related Expenses have been
incurred and other BTAs in the same BTA Cluster,
(ii) purchased by the Borrower or an Operating Subsidiary, and
(iii) purchased in connection with infrastructure-related
construction, engineering and design relating to equipment purchased
from Ericsson, including site-acquisition costs and
microwave-relocation costs, and
(b) Real Estate located in any such Applicable Area with an aggregate
acquisition price not exceeding $1,000,000 and in each such case that is
subject to a first-priority Lien in favor of the Collateral Agent and that
is acquired in connection with the operation of mobile switching centers,
base station controllers, base transceiver stations and/or home location
registers;
but excluding, unless and to the extent otherwise consented to in writing by the
Administrative Agent, any Excluded Other Costs.
Other Taxes. See Section 4.03(b).
Ownership Fraction. At any date, a fraction, expressed as a percentage,
that is equal to:
(a) [*]
(b) [*]
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
23
Parent. OPCS Corp., a Delaware corporation, together with its successors.
Parent Pledge Agreement. See Section 8.14(b).
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA, or any Governmental Body succeeding to the functions thereof.
PCS. The business of providing mobile communications services through the
use of microcells on microwave broadband frequencies with numerous low-power
transmitters, each serving a small area, but excluding cellular telephone
services.
PCS System. A PCS radio-telephone system constructed and operated pursuant
to an FCC License therefor held by a License Subsidiary.
Permitted BTA. At any date:
(a) any BTA located within the Philadelphia MTA and for which the FCC
License is held by a License Subsidiary as of such date, and
(b) any other BTA for which an FCC License is held by a License
Subsidiary as of such date, but only if such BTA is within an MTA approved
by Ericsson after reviewing (i) a business plan prepared by the Grandparent
with respect to the build-out of the BTAs within such MTA for which FCC
Licenses are held by License Subsidiaries, (ii) business conditions
relating to the repayment of Advances in respect of such MTA and (iii)
other business considerations considered relevant by Ericsson and after
receiving internal credit approvals,
but excluding any BTA that shall have become an Excluded BTA on or before such
date.
Permitted Disaggregation [*]
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
24
(i) [*]
(ii) [*]
(iii) that has no term burdensome on such License Subsidiary for
which there is no comparable term included in such C-Block FCC
License, except for any such term that shall have been approved by the
Required Lenders or that would be applicable to C-Block FCC Licenses
generally whether or not any disaggregation thereof shall have
occurred.
Permitted Interest Expense. At any date prior to [*] interest accrued and
paid or payable on the Advances (whether or not paid) through [*] and at any
date on or after [*], the lesser of (a) interest accrued and paid or payable on
the Advances (whether or not paid) through [*], and (b) [*] of the Net Ericsson
Related Expenses as of [*].
Permitted Liens. See Section 7.02.
Permitted Loan Agreement. As defined in the Intercreditor Agreement.
Permitted Stock Transfer. Any direct or indirect issuance, sale, assignment
or other transfer of shares of Stock of the Borrower (whether by the Borrower or
the Parent) after the date hereof, as to which all of the following conditions
shall have been satisfied as of the date of such transfer:
(a) after giving effect to such transfer, no Default shall have
occurred and be continuing;
(b) after giving effect to such transfer, the Parent shall own at
least a majority of each class and series of Stock of the Borrower then
outstanding;
(c) the transferee shall have entered into a guaranty in form and
substance satisfactory to the Required Lenders, except that recourse
thereon shall be limited to the Stock of the Borrower held by such
transferee, and shall have pledged such Stock (and delivered any stock
certificates evidencing such Stock) to the Collateral Agent pursuant to a
pledge agreement in form and substance satisfactory to the Required
Lenders;
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
25
(d) the Stock and stockholders of the Borrower shall not be subject or
parties to any agreement under which the shareholder of a majority of the
outstanding Voting Stock of the Borrower would not have day-to-day control
of the operations of the Borrower or that would be binding on any Person
acquiring such Stock by reason of realization thereon by the Collateral
Agent;
(e) all outstanding Stock of the Borrower shall be subject to
restrictions on transfer satisfactory in form and substance to Ericsson to
prevent its transfer to a competitor of Ericsson;
(f) the consideration received for such transfer shall be equal to the
fair-market value of the Stock transferred, as determined in good faith by
the Board of Directors of the Grandparent; and
(g) the entire proceeds of such transfer shall have been contributed
to the Borrower.
Permitted Transfer. For purposes of Section 7.06(b)(iii)(D)(2), a
disposition, whether or not for any consideration, of a [*] in whole, or that is
a Permitted Disaggregation, in respect of a Permitted BTA as to which all of the
following are true:
(a) The Borrower or any of its Restricted Subsidiaries owes
Indebtedness to the FCC in respect of such FCC License and, after giving
effect to such disposition, neither the Borrower nor any Restricted
Subsidiary shall have any liability in respect of such Indebtedness, except
that, in the case of any Permitted Disaggregation in respect of a [*] FCC
License a License Subsidiary may remain liable in respect of a portion of
the Indebtedness in respect of such [*] FCC License equal to the amount
thereof, multiplied by a fraction, the numerator of which is the amount of
spectrum retained by such License Subsidiary in connection with such
Permitted Disaggregation and the denominator of which is [*] MHz.
(b) The transferee of such FCC License is to the FCC or a Wholly Owned
Subsidiary of the Grandparent other than the Borrower or a Subsidiary of
the Borrower.
(c) Such disposition, if other than to the FCC, is effected by a
written agreement in form and substance reasonably satisfactory to the
Required Lenders under which:
(i) such transferee agrees that, while any Advances are
outstanding:
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
26
(A) for so long as it shall own or hold such FCC License, it
will remain a Wholly Owned Subsidiary of the Grandparent, shall
engage in no activities other than the holding of such FCC
License and have no liabilities other than Indebtedness owing to
the FCC in respect of such FCC License;
(B) for so long as it shall own or hold such FCC License, it
shall not voluntarily allow such FCC License or any rights
thereunder to provide PCS services to be used other than by the
Borrower or a Restricted Subsidiary; and
(C) it shall not voluntarily transfer such FCC License or
any rights thereunder to any Person other than to the Borrower, a
Restricted Subsidiary or the FCC, and
(ii) such transferee confirms that the Administrative Agent and
the Lenders are third-party beneficiaries of the obligations of the
transferee thereunder.
Person. Any natural person, corporation, firm, joint venture, limited
liability company, partnership, association, enterprise, trust or other entity
or organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
Philadelphia BTA. [*]
Plan. With respect to any Loan Party or any ERISA Affiliate, at any time,
an employee pension benefit plan as defined in Section 3(2) of ERISA (other than
a Multiemployer Plan) that is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the IRC and
(a) is maintained for the employees of the Borrower or any ERISA
Affiliate, or
(b) was so maintained and in respect of which the Borrower or any
ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event that such plan has been or were to be terminated.
POPs. With respect to any BTA or geographic area included therein, the
population of such BTA or geographic area, as set forth in the 1990 census of
the United States by the United States Census Bureau.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
27
Portion of Excess Proceeds. With respect to any Person, the sale of any BTA
and any date, a ratable portion (determined by reference to the respective
amounts of the Advances, other vendor-financing advances and capital (including
Subordinated Debt) contributed to the Borrower by such Person and other Persons,
in each case as determined immediately after giving effect to any prepayment of
Advances and other vendor-financing advances as a result of such sale) of the
Excess Proceeds relating to such sale.
Preceding Fiscal Quarter. See Section 7.05(d).
Property. All types of real, personal, tangible, intangible or mixed
property, including each FCC License held by a License Subsidiary.
Proposed C-Block General License Revocation Event. Any notice of proposed
rulemaking or other proposal by the FCC as to the possible adoption of any rule
or taking of any action that would be a C-Block General License Revocation Event
or any other event or circumstance that with the passage of time would become a
C-Block General License Revocation Event or that would be a C-Block General
License Revocation Event but for the existence of any stay or injunction then in
effect with respect thereto.
Qualified Joint Venture. [*]
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
28
[*]
Rate Hedging Agreements. Any and all agreements, devices or arrangements
designed to protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities or exchange transactions, including, but not limited to
dollar-denominated or cross-currency interest-rate exchange agreements,
forward-currency-exchange agreements, interest-rate-cap or dollar-protection
agreements, forward-rate-currency or interest-rate options, puts and warrants,
and any and all cancellations, buy backs, reversals, terminations or assignments
of any of the foregoing.
RCRA. The Resource Conservation and Recovery Act of 1976, as amended, 42
USCA Section 6901 et seq.
Real Estate. Any parcel of real property or any facility currently (or for
purposes of compliance with Environmental Laws, formerly) owned, operated or
controlled by the Borrower or any of its Restricted Subsidiaries.
Register. See Section 12.07(c).
Reportable Event. The occurrence of any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder with respect to a Plan.
Required Lenders. At any time, Lenders owed at least a majority in interest
of the sum of
(a) the then-outstanding aggregate unpaid principal amount of the
Advances owing to the Lenders, and
(b) the then-outstanding undrawn Commitments.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
29
Required Operation Improvement Date. [*]
Required Operation Test Date. [*]
Restricted Ericsson Expenses. At any date, the aggregate amount, without
duplication, of all Attributed Expenses relating to Ericsson Related Expenses
with respect to any Permitted BTA that shall have become an Excluded BTA or any
geographic area within a Permitted BTA for which the right to provide PCS
services shall have been disposed of pursuant to an FCC License Partition
permitted under Section 7.06(b)(iii) on or before such date.
Restricted Sale. Any of the following:
(a) with respect to any FCC License (in its entirety) or any Stock of
a License Subsidiary, any sale, assignment or other transfer thereof, other
than (i) any transfer to a Qualified Joint Venture permitted under
Section 7.06(b)(iii)(C) and, in the case of any FCC License, a disposition
permitted under Section 7.06(b)(iii)(D) (other than, subject to clause (b)
below, Section 7.06(b)(iii)(D)(2)(I)(x)(b));
(b) the occurrence of the second Required Operation Test Date after
any Required Operation Improvement Date, unless, on or before such second
Required Operation Test Date:
(i) [*]
(ii) the Borrower shall then be in compliance with generally
accepted industry standards applicable at the time (reflecting
appropriate adjustments for non-recurrent activity) for call blocking
and dropped calls with respect to such BTA; and
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
30
(c) with respect to any right to provide PCS services to any POPs in a
BTA covered by an FCC License, the sale, assignment or other transfer of
such right if:
(i) prior to such transfer (and all other prior transfers of such
right with respect to such POPs) the transferor had the right to
provide PCS services to such POPs using at least [*] MHz of spectrum
under the related FCC License and after such transfer the transferor
had the right to provide PCS services to such POPs using less than [*]
MHz of spectrum under the related FCC License, or
(ii) prior to such transfer (and all other prior transfers of
such right with respect to such POPs) the transferor had the right to
provide PCS services to such POPs using [*] MHz of spectrum under the
related FCC License and after such transfer the transferor had the
right to provide PCS services to such POPs using less than [*] MHz of
spectrum under the related FCC License,
other than any such transfer to a Qualified Joint Venture permitted under
Section 7.06(b)(iii)(C).
The consideration received in connection with any Restricted Sale described in
clause (b) above shall be deemed to be the consideration received in connection
with any disposition of the FCC License or the Stock of the License Subsidiary
that shall have occurred prior to the date specified in such clause (b) with
respect to the Philadelphia BTA.
Restricted Other Costs. At any date, the aggregate amount, without
duplication, of all Attributed Expenses relating to Other Costs with respect to
any Permitted BTA that shall have become an Excluded BTA, or portion of a
Permitted BTA that shall not be part of the Applicable Area thereof, as of such
date.
Restricted Subsidiary. At any date, each Subsidiary of the Borrower and
each C-Block Subsidiary that is not a Subsidiary of the Borrower at such date
but whose C-Block Subsidiary Guaranty shall not have been terminated as of such
date, other than any Subsidiary of the Borrower that is a Non-Qualified Joint
Venture or whose sole activity is the holding of an equity interest in a
Non-Qualified Joint Venture.
Revenue. For any period, with respect to the Borrower and its Restricted
Subsidiaries, on a Consolidated basis,
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
31
(a) the sum, without duplication, of
(i) gross ▇▇▇▇▇▇▇▇ to subscribers, net of taxes and other direct
pass-through charges,
(ii) (if positive) revenue from the sale of equipment in the
ordinary course of business, net of the cost of such equipment,
(iii) so-called "roamer revenue", net of direct pass-through
charges, and
(iv) other revenue (in the case of resales net of associated
direct costs),
in each case as determined in accordance with GAAP, minus
(b) all revenue arising from payments by Affiliates (except where the
Affiliate is acting as a reseller of goods or services),
in each case as determined with respect to such period.
Second LIBOR Method. The terms and provisions of this Agreement relating to
LIBOR Advances specified as being applicable when the Second LIBOR Method is
applicable under Setion 2.11.
Secured Parties. Collectively, the Administrative Agent, the Collateral
Agent, the Lenders and the other agents and lenders parties to the Intercreditor
Agreement.
Security Agreement. See Section 8.14(c).
Services Agreement. The Services Agreement dated as of January 1, 1997
between Omnipoint Services and an Operating Subsidiary.
Solvent. With respect to any Person on a particular date, the condition
that on such date,
(a) the present fair salable value of the assets of such Person is
greater than the total amount that will be required to pay the probable
liabilities of such Person as and when they become due, including
Contingent Obligations, of such Person;
(b) such Person is paying, and believes that it will be able to pay in
the future, its debts generally as and when they become due; and
32
(c) such Person is not engaged in business or a transaction, or is not
about to engage in business or a transaction, for which such Person's
Property would constitute an unreasonably small amount of capital.
Stock. With respect to any Person, any and all shares of capital stock,
partnership or other interests or units, participations or equivalent rights of
or in such Person and interests, participations, warrants, convertible
securities or other equivalents (however designated) therein or with respect
thereto.
Subordinated Debt. Indebtedness of the Borrower as to which the holder
thereof has executed a Subordination Agreement.
Subordination Agreement. A Subordination Agreement in substantially the
form of Exhibit G.
Subsidiary. As to any Person, any corporation, association, partnership,
joint venture or other business entity of which such Person and/or any
Subsidiary of such Person (excluding in the case of the Borrower Subsidiaries
other than Restricted Subsidiaries), directly or indirectly, either
(a) in respect of a corporation, owns or controls more than 50% of the
outstanding capital Stock having ordinary voting power to elect a majority
of the board of directors or similar managing body, irrespective of whether
a class or classes shall or might have voting power by reason of the
happening of any contingency, or
(b) in respect of an association, partnership, joint venture or other
business entity, is entitled to share in more than 50% of the profits and
losses, however determined.
Subsidiary Guaranty. See Section 8.15(b).
Subsidiary Security Agreement. See Section 8.14(c).
Support Agreement. See Section 8.25.
Taxes. See Section 4.03(a).
Termination Date. [*]
Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Loan.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
33
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
Wholly Owned. As applied to any Subsidiary of a Person, a Subsidiary all
the outstanding shares (other than directors' qualifying shares, if required by
law) of every class of Stock of which are at the time owned by such Person or by
one or more Wholly Owned Subsidiaries of such Person or by such Person and one
or more Wholly Owned Subsidiaries of such Person.
Working Capital. With respect to any date, the difference between the
"current assets" and "current liabilities" of the Borrower and its Restricted
Subsidiaries on a Consolidated basis as of such date in accordance with GAAP.
Section 1.02. Rules of Interpretation. (a) A reference to any document or
agreement shall include such document or agreement as amended, modified or
supplemented from time to time in accordance with its terms and the terms of
this Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as in effect in the State of New York,
have the meanings assigned to them therein.
(h) Reference to a particular "Section" or Exhibit refers to that section
or that exhibit to this Agreement, unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
34
Section 1.03. Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Administrative Agent shall be prepared in accordance with the
following ("GAAP"):
(a) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors in
effect at December 31, 1996, and
(b) to the extent consistent with such principles, the accounting
practice of the Borrower reflected in its financial statements for the year
ended at the date referred to in clause (a) above;
provided that, if such Board after the date hereof shall promulgate or adopt
principles that are materially different from those in effect at December 31,
1996, the Borrower and the Lenders will endeavor in good faith to amend this
Agreement in order to amend (i) the definition of GAAP to include such different
principles, and (ii) the other provisions of this Agreement so as to reflect in
substance the same limitations and restrictions as in effect prior to such
amendment to the definition of GAAP. Prior to the effective date, if any, of any
such amendment, GAAP shall, however, continue to include only the principles
specified in clause (a) of the preceding sentence.
ARTICLE II
THE LOANS
Section 2.01. The Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (the "Advances") to the
Borrower on any Business Day from the date hereof until the earlier of
(a) the Termination Date, and
(b) the termination of the Commitments pursuant to Section 3.02(d) or
10.01,
up to an aggregate principal amount not to exceed the amount set forth opposite
such Lender's name on the signature pages hereof or, if such Lender has entered
into an Assignment and Acceptance, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 12.07(c) (such
Lender's "Commitment"). Each Loan shall be in an amount equal to at least
U.S.$1,000,000 (or, if less, the aggregate remaining unused amounts of all
Lenders' Commitments) (unless such Loan is made in order to pay Ericsson any
amount owing to Ericsson or any Affiliate thereof, in which case there shall be
35
no minimum amount for such Advance) and shall consist of Advances of the same
Type made on the same day by the Lenders ratably according to their respective
Commitments.
In no event shall the aggregate principal amount of all Advances
outstanding on any date exceed the lesser of:
(a) the Maximum Commitment as of such date, and
(b) the Borrowing Base as of such date.
Section 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.02(b), each Loan shall be made on notice, given not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Loan in the case of a Loan consisting of LIBOR Advances (or, while the
First LIBOR Method is applicable, such shorter period to which the
Administrative Agent may consent), or the first Business Day prior to the date
of the proposed Loan in the case of a Loan consisting of Base Rate Advances, by
the Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier or telex. Each such notice of a Loan (a "Draw
Request") shall be by telecopier or telex, confirmed immediately in writing,
substantially in the form of Exhibit B hereto, specifying therein:
(i) the requested date of such Loan (which shall be a Business Day);
(ii) the requested Type of Advances comprising such Loan; provided
that
(A) while the First LIBOR Method is applicable, the Borrower may
not request Advances of one Type while there are Advances of the other
Type outstanding, and
(B) while the Second LIBOR Method is applicable, the Borrower may
not request that Advances be LIBOR Advances if, after giving effect to
such Advances, there would be more than three different Interest
Periods then in effect;
(iii) the requested aggregate principal amount of such Loan; and
(iv) the account to which the proceeds of such Loan shall be paid.
Each Draw Request shall be accompanied by a Borrowing Base Certificate that,
among other things, shows the Borrowing Base as of the date of such Draw Request
and such additional documents as may be required by Article IX.
36
Each Lender shall, before 12:00 noon (New York City time) on the date of
such Loan, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account in same-day
funds, such Lender's ratable portion of such Loan. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Articles VIII and IX, the Administrative Agent will wire transfer
same-day funds in the aggregate principal amount of such Loan to such account as
the Borrower shall have specified in its Draw Request. If the Administrative
Agent shall receive such funds and if such applicable conditions shall be
fulfilled prior to 12:00 A.M. (New York City time) on the date of any proposed
Loan, the Administrative Agent shall commence the wire transfer (or direct its
bank to commence the wire transfer) of such funds to such account by 2:00 P.M.
(New York City time).
(b) Anything in subsection (a) above to the contrary notwithstanding, (i)
the Borrower may not select LIBOR Advances for any Loan if the aggregate amount
of such Loan is less than $5,000,000 or if the obligation of the Lenders to make
LIBOR Advances shall then be suspended pursuant to Section 2.05 or 4.01 and (ii)
there shall be no more than three Interest Periods for LIBOR Advances at any one
time in effect.
(c) Each Draw Request shall be irrevocable and binding on the Borrower. In
the case of any Loan that the related Draw Request specifies is to be comprised
of LIBOR Advances and while the Second LIBOR Method is applicable, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Draw Request for such Loan the applicable conditions set forth in Articles
VIII and IX, including any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such
Lender as part of such Loan when such Advance, as a result of such failure, is
not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Loan that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Loan, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Loan in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Advances comprising
such Loan and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay
37
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's Advance as part of such Loan for purposes of this
Agreement.
(e) The failure of any Lender to make the Advance to be made by it as part
of any Loan shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Loan, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be made
by such other Lender on the date of any Loan.
Section 2.03. Fees. [*]
(b) Syndication Fee. If Ericsson shall sell or otherwise assign all or any
portion of any Advances owing to it or its Commitment hereunder to any Person
other than an Affiliate of Ericsson, the Borrower shall pay to Ericsson such fee
as is actually payable to any such Person in connection with such sale or
assignment, up to a maximum amount equal to [*] of the aggregate principal
amount of the Advances or Commitment so sold or assigned.
(c) Agents' Fees. The Borrower shall pay to the Administrative Agent (if
other than Ericsson or any of its Affiliates) and the Collateral Agent for their
own respective accounts such reasonable and customary fees as may from time to
time be agreed between the Borrower and each such Agent.
Section 2.04. Interest. (a) The Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from and including the
date of such Advance through but excluding the date on which such principal
amount shall be paid in full, at the following rates per annum:
(i) During such periods as such Advance is a Base Rate Advance, a rate
per annum equal at all times to the sum of (A) the Base Rate in effect from
time to time, plus (B) the Applicable Margin in effect from time to time
and applicable to such Advance, payable in arrears quarterly on the last
day of each March, June, September and December during such periods and on
the Maturity Date.
(ii) During such periods as such Advance is a LIBOR Advance, a rate
per annum equal at all times during each Interest Period for such Advance
(or, if the First
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH ▇▇▇ ▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ is applicable, during each Interest Period while such Advance
is outstanding as a LIBOR Advance) to the sum of (A) LIBOR for such
Interest Period for such Advance, plus (B) the Applicable Margin in effect
from time to time and applicable to such Advance, payable in arrears on the
last day of such Interest Period and on the date on which such Advance
shall be Converted or repaid or prepaid, in whole or in part.
(b) Upon the occurrence and during the continuance of an Event of Default
under Section 10.01(a), the Borrower shall pay interest on
(i) the unpaid principal amount of each Advance owing to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to [*] per annum above the
rate per annum then required to be paid on such Advance pursuant to clause
(a)(i) or (a)(ii) above, and
(ii) the amount of any interest, fee or other amount payable hereunder
that is not paid when due, from the date such amount shall be due until
such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at
all times to [*] per annum above the rate per annum then required to be
paid on Base Rate Advances pursuant to clause (a)(i) above.
Section 2.05. Interest Rate Determination. (a) If, with respect to any
LIBOR Advances, the Required Lenders notify the Administrative Agent that LIBOR
for any Interest Period for such Advances will not adequately reflect the cost
to such Required Lenders of making, funding or maintaining their respective
LIBOR Advances for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon
(i) each LIBOR Advance will automatically, on the last day of the
then-existing Interest Period therefor, Convert into a Base Rate Advance,
and
(ii) (A) while the First LIBOR Method is applicable, the
obligation of the Lenders to make or to Convert Advances into, LIBOR
Advances shall be suspended as of the last day of the then-existing
Interest Period therefor, and
(B) while the Second LIBOR Method is applicable, the obligation
of the Lenders to make, or to Convert Advances into, LIBOR Advances
shall be suspended immediately,
until such time as the Administrative Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
39
(b) On the date on which the aggregate unpaid principal amount of all LIBOR
Advances shall be reduced, by payment or prepayment or otherwise, to less than
[*] such Advances shall automatically Convert into Base Rate Advances.
(c) Upon the occurrence and during the continuance of any Event of Default
under Section 10.01(a),
(i) each LIBOR Advance will automatically, on the last day of the
then-existing Interest Period therefor, Convert into a Base Rate Advance,
and
(ii) (A) while the First LIBOR Method is applicable, the
obligation of the Lenders to make, or to Convert Advances into, LIBOR
Advances shall be suspended as of the last day of the then-existing
Interest Period therefor, and
(B) while the Second LIBOR Method is applicable, the
obligation of the Lenders to make, or to Convert Advances into, LIBOR
Advances shall be suspended immediately.
(d) If the Administrative Agent cannot determine LIBOR for any LIBOR
Advances,
(i) the Administrative Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such LIBOR
Advances,
(ii) each such Advance will automatically, on the last day of the
then-existing Interest Period therefor, Convert into a Base Rate Advance,
and
(iii) (A) while the First LIBOR Method is applicable, the
obligation of the Lenders to make, or to Convert Advances into, LIBOR
Advances shall be suspended as of the last day of the then-existing
Interest Period therefor, and
(B) while the Second LIBOR Method is applicable, the obligation
of the Lenders to make, or to Convert Advances into, LIBOR Advances
shall be suspended immediately,
until the Administrative Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist.
Section 2.06. Optional Conversion of Advances. The Borrower may on any
Business Day, upon notice given to the Administrative Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Conversion and
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
40
subject to the provisions of Sections 2.07 and 2.09, Convert all Advances of one
Type comprising the same Loan into Advances of the other Type; provided that,
(a) while the Second LIBOR Method is applicable,
(i) any Conversion of LIBOR Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such
LIBOR Advances, and
(ii) the Borrower may not Convert Base Rate Advances into LIBOR
Advances if, (x) after giving effect to such Conversion, there would
be more than three Interest Periods in effect or (y) the Advances to
be Converted would be less than the minimum amount specified in
Section 2.02(b), and
(b) while the First LIBOR Method is applicable, the Borrower may not
Convert any Advances of one Type into Advances of the other Type unless it
Converts all Advances of one Type into Advances of the other Type.
Each such notice of a Conversion shall, within the restrictions specified above,
specify (a) the date of such Conversion, and (b) the Advances to be Converted.
Each notice of Conversion shall be irrevocable and binding on the Borrower.
Section 2.07. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same-day funds. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest or arrangement fees and other amounts ratably (other
than amounts payable pursuant to Section 4.02, 4.03 or 12.04(c)) to the Lenders
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon the Administrative Agent's
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 12.07(d), from and after
the effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest or fees are
41
payable. Each determination by the Administrative Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the
next-succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or usage fee, as the case may
be; provided that, if such extension would cause payment of interest on or
principal of LIBOR Advances to be made in the next-following calendar month,
such payment shall be made on the next-preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due and owing to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(e) To the extent permitted by law, all payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff or
counterclaim. Without limitation of the preceding sentence, to the extent
permitted by law, the Borrower's obligation to pay all amounts due under the
Loans shall not be affected by any circumstance whatsoever, including:
(i) any set-off, counterclaim, recoupment, deduction, abatement,
suspension, diminution, reduction, defense or other right which the
Borrower may have against Ericsson for any reason whatsoever arising under
or pursuant to the Equipment Acquisition Agreement or otherwise relating to
the purchase of goods, other property or services from or by Ericsson;
(ii) any defect in the condition, design, operation or fitness for use
of, or any damage to or loss or destruction of, any equipment or material
provided by Ericsson;
(iii) any actual or alleged default by Ericsson or any other Person
under the Equipment Acquisition Agreement; or
42
(iv) any other fact or circumstance relating to the Equipment
Acquisition Agreement.
No payment hereunder shall affect any rights of the Borrower under any other
agreement with Ericsson.
Section 2.08. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 4.02, 4.03 or 12.04(c)) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided that, if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (a) the amount of such Lender's required repayment to (b) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.08 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
Section 2.09. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower shall use such proceeds) for the general corporate
and working-capital purposes of the Borrower and its Restricted Subsidiaries,
including the payment of interest hereunder.
Section 2.10. The Notes. The Borrower irrevocably authorizes each Lender to
make or cause to be made an appropriate notation on the Schedule attached to
such Lender's Note of the making of Loans or the receipt of payments. The amount
of the Loans set forth on such Schedule shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Schedule shall not
limit or otherwise affect the obligations of the Borrower hereunder or under the
Notes to make payments of principal of or interest on the Notes when due.
Section 2.11. First LIBOR Method and Second LIBOR Method. The First LIBOR
Method shall be applicable at all times until such time as the Second LIBOR
Method becomes applicable. If there is a Lender in addition to or other than
Ericsson (other than an Affiliate of Ericsson) and the Administrative Agent at
the direction of the Required Lenders
43
shall have notified the Borrower that the Second LIBOR Method shall be
applicable, the Second LIBOR Method shall become applicable immediately as of
the date of such notice; provided that, if any LIBOR Advances are then
outstanding, the Second LIBOR Method shall become applicable on the last day of
the then-existing Interest Period for such LIBOR Advances. After becoming
applicable, the Second LIBOR Method shall remain applicable at all times
thereafter.
Section 2.12. Reduction or Termination of the Commitments. (a) Optional
Reduction. The Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Commitments; provided that each such partial reduction:
(i) shall be in an aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof (or, if less, the aggregate
remaining unused amounts of all Lenders' Commitments), and
(ii) shall be made ratably among the Lenders in accordance with their
respective Commitments.
(b) Mandatory Reduction. The Maximum Commitment shall be automatically and
permanently reduced as follows:
(i) on any date on which a Core BTA that was a Permitted BTA shall no
longer be a Permitted BTA, by the amount of the Attributed Expenses of such
Core BTA and its Dependent BTAs as of such date;
(ii) on any date on which the Maximum Commitment shall exceed (A) the
aggregate POPs of all Permitted BTAs as of such date (excluding any POPs
with respect to such BTAs with respect to which the right to provide PCS
services shall have been sold in Restricted Sales), multiplied by (B)
[*], by the amount of such excess; and
(iii) as of any date on which Advances are prepaid pursuant to
Section 3.02(a), (b), (c) or (f) or Section 3.03, by the aggregate
principal amount of the Advances so prepaid.
Each such reduction shall be made ratably among the Lenders in accordance with
their respective Commitments.
(c) Termination. On the Termination Date, the then-remaining undrawn
Commitments of the Lenders shall be automatically terminated.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
44
ARTICLE III
REPAYMENT AND PREPAYMENT OF THE LOANS
Section 3.01. Repayment. (a) On the last day of each calendar quarter
specified below (or, if such day is not a Business Day, on the next-preceding
Business Day), the Borrower will repay a ratable aggregate principal amount of
each Advance forming part of the same Loan equal to the percentage specified in
the table below opposite such calendar quarter of the greatest aggregate
principal amount of Advances outstanding on any date prior to the date of such
repayment.
================================================================================
Calendar Quarter Percentage
--------------------------------------------------------------------------------
From and including the first calendar
quarter of [*] to and including [*]
the last calendar quarter of [*]
--------------------------------------------------------------------------------
From and including the first calendar
quarter of [*] to and including [*]
the last calendar quarter of [*]
--------------------------------------------------------------------------------
From and including the first calendar
quarter of [*] to and including [*]
the last calendar quarter of [*]
================================================================================
(b) On the Maturity Date, the Borrower shall repay the aggregate
then-outstanding principal amount of all Advances, together with any and all
accrued and unpaid interest thereon and all other amounts due and owing
hereunder, under the Notes and under the other Loan Documents.
Section 3.02. Mandatory Prepayments of Loans. (a) No later than three
Business Days after its receipt of any Net Cash Proceeds referred to in clause
(i) below, the Borrower shall prepay Advances in an aggregate principal amount
equal to
(i) the Net Cash Proceeds from the direct or indirect sale of any
assets of the Borrower and/or any of its Restricted Subsidiaries (other
than (A) any sale of inventory and other goods in the ordinary course of
business, (B) any sale of an FCC License, the Stock of a License Subsidiary
or any right to provide PCS services to any POPs and (C) any sale of
equipment and other assets) that is otherwise permitted under this
Agreement during any calendar year, to the extent such aggregate Net Cash
Proceeds received during such calendar year shall exceed [*] multiplied by
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
45
(ii) a fraction, (A) the numerator of which is the aggregate principal
amount of the Advances outstanding at the time of such sale, and (B) the
denominator of which is such aggregate principal amount, plus the aggregate
principal amount of all Indebtedness outstanding at the time of such sale
under all Permitted Loan Agreements the loans under which are required to
be prepaid with such Net Cash Proceeds, to the extent the Intercreditor
Agreement permits such prepayment.
No prepayment of any Advances pursuant to this subsection (a) shall reduce the
principal amount of such Advances required to be repaid on any date pursuant to
Section 3.01(a). No prior prepayment of Advances shall reduce the principal
amount of the Advances required to be prepaid pursuant to this subsection (a).
(b) If, at any time after the occurrence of any Restricted Sale with
respect to any FCC License, the Stock of any License Subsidiary or any right to
provide PCS services to any POPs within a BTA as a result of which any
Indebtedness under any Permitted Loan Agreement is required to be prepaid, the
Borrower shall make any Distribution (other than a Distribution permitted under
Section 7.05(d)) in respect of its Stock or any Indebtedness owing to the
Grandparent or any Affiliate thereof (other than the Borrower and its Restricted
Subsidiaries), the Borrower will notify the Administrative Agent of its
intention to make such Distribution at least 10 Business Days prior to the
proposed date of such Distribution and, if the Required Lenders shall so require
by the proposed date of such Distribution and the Borrower shall make such
Distribution, shall prepay then-outstanding Advances within five Business Days
after receipt of notice of such requirement from the Administrative Agent in an
aggregate principal amount equal to the same proportion of the Lenders' Portion
of Excess Proceeds in respect of such sale or assignment as such Distribution
bore to the Parent's Portion of Excess Proceeds in respect of such sale or
assignment, until such time as an aggregate amount equal to the Excess Proceeds
in respect of such sale or assignment shall have been paid to the Lenders, other
providers of vendor financing to the Borrower and its Restricted Subsidiaries
and the Parent. Any prepayment pursuant to this subsection (b) shall be applied
to the prepayment of a ratable aggregate principal amount of Advances forming
part of the same Loan then outstanding and shall not reduce the principal amount
of Advances required to be repaid on any date pursuant to Section 3.01(a). No
prior prepayment of Advances shall reduce the principal amount of the Advances
required to be prepaid pursuant to this subsection (b).
(c) By April 30 of each calendar year beginning in [*], the Borrower shall
prepay outstanding Advances in an aggregate principal amount equal to the lesser
of:
(i) [*] of any Excess Cash Flow in respect of the immediately
preceding fiscal year, multiplied by a fraction, (x) the numerator of which
is the aggregate principal amount of the Advances then outstanding, and (y)
the denominator of which is the aggregate principal amount then outstanding
of all Advances and all other loans
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
46
under each Permitted Loan Agreement that are required to be prepaid out of
Excess Cash Flow, and
(ii) the amount, if any, by which the aggregate principal amount of
the Advances outstanding on the date of such prepayment exceeds (A) the
Borrowing Base as of such date, minus (B) the amount calculated under
clause (a)(ii) of the definition of "Borrowing Base" as of such date.
Any prepayment pursuant to this subsection (c) shall be applied to the
prepayment of a ratable aggregate principal amount of Advances forming part of
the same Loan then outstanding and shall not reduce the principal amount of
Advances required to be repaid on any date pursuant to Section 3.01(a), to the
extent that such Advances are outstanding on such date. No prior prepayment of
Advances shall reduce the principal amount of the Advances required to be
prepaid pursuant to this subsection (c).
(d) The Borrower shall prepay all outstanding Advances, and the Lenders'
Commitments hereunder shall terminate, upon the termination of the Equipment
Acquisition Agreement as a result of a default thereunder by the Borrower.
(e) (i) On each July 5 and January 4, beginning with [*], the Borrower
shall be required to prepay the amount, if any, by which the then-
outstanding principal amount of the Advances on the immediately preceding
Test Date shall exceed:
(A) [*] of Net Ericsson Related Expenses as of such Test Date
(assuming for purposes of such definition that unfilled purchase
orders outstanding on such Test Date (or delivered on or prior to the
related date on which a prepayment would be required to be made under
this subsection (e)) for the delivery of equipment within the six
months following such date would be included as Net Ericsson Related
Expenses and including in such amount the purchase price of equipment
delivered but not fully paid for and for which the remaining purchase
price is reasonably expected to be payable within the six months
following such Test Date), plus
(B) [*] of Permitted Interest Expense as of such Test Date.
Any such prepayment shall be applied to the prepayment of a ratable
aggregate principal amount of Advances forming part of the same Loan as the
Borrower shall specify, and shall be applied to the ratable reduction of
the amounts by which the Advances are required to be repaid on any date
pursuant to Section 3.01(a). No prior prepayment of Advances shall reduce
the principal amount of the Advances required to be prepaid pursuant to
this subsection (e).
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
47
(ii) "Test Date" means each [*].
(f) If on any date the aggregate principal amount of outstanding Advances
shall exceed either the Maximum Commitment or the Borrowing Base, the Borrower
shall prepay an amount equal to such excess. Any such prepayment shall be
applied to the prepayment of a ratable aggregate principal amount of Advances
forming part of the same Loan as the Borrower shall specify, and shall be
applied to the ratable reduction of the amounts by which the Advances are
required to be repaid on any date pursuant to Section 3.01(a). No prior
prepayment of Advances shall reduce the principal amount of the Advances
required to be prepaid pursuant to this subsection (f).
Section 3.03. Optional Prepayments of Loans. The Borrower may, upon at
least two Business Days' notice to the Administrative Agent stating the proposed
prepayment date and the aggregate principal amount of the Advances to be prepaid
on such date, and if such notice is given the Borrower shall, prepay the
outstanding principal amount of the Advances then outstanding in whole or
ratably in part. Any such prepayment of less than the entire aggregate principal
amount of the Advances then outstanding shall be applied to the prepayment of a
ratable aggregate principal amount of Advances forming part of the same Loans.
Any prepayment of Advances pursuant to this Section 3.03 shall be applied to the
reduction of the amounts by which such Advances are required to be repaid
pursuant to Section 3.01(a) on the repayment dates next occurring after the date
of such prepayment.
Section 3.04. Certain Matters Relating to Repayments and Prepayments. (a)
On the date on which Advances are to be repaid or prepaid, and if less than all
Loans are to be repaid or prepaid, if the Second LIBOR Method is applicable and
if both Base Rate Loans and LIBOR Loans are outstanding, the Borrower will
specify whether the Loan to be repaid or prepaid shall be a Base Rate Loan or a
LIBOR Loan and, if a LIBOR Loan is to be repaid or prepaid and more than one
LIBOR Loan is outstanding, which such LIBOR Loan shall be prepaid.
(b) All prepayments and repayments pursuant to this Article III shall be
accompanied by such additional amounts as are sufficient to pay accrued and
unpaid interest on the principal amount of the Advances then being prepaid or
repaid.
ARTICLE IV
ILLEGALITY, INCREASED COSTS, CAPITAL ADEQUACY AND INDEMNITIES
Section 4.01. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
LIBOR Loans, such Lender shall
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
48
forthwith give notice of such circumstances to the Borrower, the Administrative
Agent and the other Lenders and thereupon
(a) the Commitments of such Lender to make LIBOR Loans shall forthwith
be suspended until such notifying Lender shall have notified the
Administrative Agent and the Borrower that the circumstance giving rise to
such determination no longer exists (and if such notifying Lender shall
determine that such circumstance no longer exists it shall so notify the
Administrative Agent and the Borrower promptly after determining the same),
and
(b) the aggregate principal amount of such Lender's LIBOR Loans, if
any, shall be Converted automatically to Base Rate Loans on the last day of
each Interest Period applicable to such LIBOR Loans or within such earlier
period as may be required by applicable law.
Such Lender will designate a different Applicable Lending Office if such
designation will avoid the need for any suspension or Conversions described in
the preceding sentence and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
Section 4.02. Additional Costs and Capital Adequacy. (a) If any present or
future applicable law, which expression, as used herein, includes statutes,
rules and regulations thereunder and interpretations thereof by any competent
court having jurisdiction with respect thereto or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Lender
or the Administrative Agent by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall
(i) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special-deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of an
office of any Lender, or
(ii) impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, such Lender's Commitments, or any class of loans, or commitments
of which any of the Loans or such Lender's Commitments form a part,
and the result of any of the foregoing is to increase the cost to such Lender of
making, funding, issuing, renewing, extending or maintaining any of the Advances
or such Lender's Commitment (taking into account such Lender's then-existing
policies with respect to
49
maintaining capital), then the Borrower shall pay to the Administrative Agent
for the account of such Lender, within 15 days after demand from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, for such
increased costs.
(b) If any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) or the interpretation thereof
by a court or governmental authority with appropriate jurisdiction, that in any
case becomes effective after the date hereof, affects the amount of capital
required or expected to be maintained by any Lender or any corporation
controlling such Lender and such Lender determines that the amount of capital
required to be maintained by it is increased by or based upon the existence of
such Lender's commitment with respect to any Advances, the Borrower will pay to
such Lender, within 15 days after demand from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder.
(c) Each demand by a Lender pursuant to this Section 4.02 shall be
accompanied by a statement setting forth in reasonable detail the basis for such
demand and the computation of such amount, including any method by which such
cost was allocated to the Borrower. In determining the amount of any
compensation, such Lender may use any reasonable averaging or attribution
methods set forth in such demand, and any such methods so used shall be binding
on the Borrower. The amount specified in any such demand shall be conclusive
evidence of the amount owing, absent manifest error. Such Lender will designate
a different Applicable Lending Office if such designation will avoid the need
for or reduce the amount of any compensation under this Section 4.02 and will
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. By making any payment under this Section 4.02, the Borrower is not
waiving its right to contest that the amounts set forth in the certificates are
based on manifest error.
Section 4.03. Taxes. (a) Any and all payments by the Borrower hereunder or
under the Notes shall be made free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it in lieu of income taxes, by the jurisdiction under
the laws of which such Lender or the Administrative Agent (as the case may be)
is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its income, and franchise taxes imposed on it in lieu
of income taxes, by the jurisdiction of such Lender's Applicable Lending Office
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law
50
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Administrative Agent,
(i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.03) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 4.03) paid by
such Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 15 days from the date such
Lender or such Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Agent, at its address referred to in
Section 12.02, the original or a certified copy of a receipt evidencing payment
thereof. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e) below, the terms "United States" and "United
States person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of
51
each initial Lender and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender in the case of each other Lender, and from time to
time thereafter if requested in writing by the Borrower (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower with
Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, certifying that such
Lender is exempt from or entitled to a reduced rate of United States withholding
tax on payments of interest pursuant to this Agreement or the Notes. If the form
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from "Taxes" as
defined in Section 4.03(a). If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form 1001 or 4224, that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form described in Section 4.03(e) (other than if
such failure is due to a change in law occurring subsequent to the date on which
a form originally was required to be provided, or if such form otherwise is not
required under the first sentence of subsection (e) above), such Lender shall
not be entitled to indemnification under Section 4.03(a) with respect to Taxes
imposed by the United States; provided that should a Lender become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender shall reasonably request and at such
Lender's expense to assist such Lender to recover such Taxes.
(g) If the Borrower is required to pay any amounts to or for the account of
any Lender pursuant to this Section 4.03, such Lender will designate a different
Applicable Lending Office if such designation will avoid the need for or reduce
the amount of any such payment and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
Section 4.04. Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Article IV shall survive the payment in full of
principal and interest hereunder and under the Notes.
52
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders and the Administrative
Agent as follows:
Section 5.01. Corporate Authority. (a) Each Loan Party in existence on the
date hereof (or on any date on which these representations and warranties are
deemed repeated):
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation,
(ii) has all requisite corporate power to own its Property and conduct
its business as now conducted and as presently contemplated, and
(iii) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where such qualification is
necessary in order to conduct its business as now conducted except where a
failure to be so qualified would not have a Material Adverse Effect.
(b) Set forth on Schedule 5.01(b) hereto (as updated pursuant to Section
6.14(s)) is a complete and accurate list of all Subsidiaries of the Borrower,
showing (as to each such Subsidiary) the jurisdiction of its incorporation, the
number of shares of each class of Stock authorized, and the number outstanding,
on the date hereof and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by the Borrower, the number of shares
covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights at the date hereof and whether such Subsidiaries are
Restricted Subsidiaries. All of the outstanding Stock of each such Subsidiary
has been validly issued, is fully paid and non-assessable and is owned by the
Borrower or one or more of its Subsidiaries free and clear of all Liens, except
those created or permitted under the Loan Documents or as disclosed in such
Schedule (as so updated). Each such Subsidiary
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation,
(ii) has all requisite corporate power to own its Property and conduct
its business as now conducted and as presently contemplated, and
(iii) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where such qualification is
necessary in order to conduct its business as now conducted except where a
failure to be so qualified would not have a Material Adverse Effect.
53
(c) The execution, delivery and performance by each Loan Party of this
Agreement and the other Loan Documents to which it is or is to become a party,
and the consummation of the transactions contemplated hereby and thereby:
(i) are within the corporate authority of such Loan Party,
(ii) have been duly authorized by all necessary corporate proceedings,
(iii) do not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which such Loan Party
is subject or any judgment, order, writ, injunction, license or permit
applicable to such Loan Party or its Property, and
(iv) do not conflict with any provision of the corporate charter or
bylaws of, or any agreement or other instrument binding upon, the Borrower
or its Property.
(d) This Agreement has been, and each of the Notes and each other Loan
Document when delivered hereunder will have been, duly executed and delivered by
each Loan Party party thereto. This Agreement is, and each of the Notes and each
other Loan Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws relating to
or affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
Section 5.02. Governmental Approvals. The execution, delivery and
performance by each Loan Party of this Agreement and the other Loan Documents to
which such Loan Party is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained and for any subsequent informational filing with the Securities and
Exchange Commission.
Section 5.03. Title to Properties. The Borrower and each of its Restricted
Subsidiaries own all of the FCC Licenses listed on Schedule 5.07 hereto (other
than those listed therein which are owned by a C-Block Subsidiary) and all
assets of such Persons acquired since such date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any
54
mortgages, leases, conditional sales-agreements, title-retention agreements,
liens or other encumbrances except Permitted Liens.
Section 5.04. Financial Statements. There have been furnished to the
Administrative Agent the consolidated balance sheets, income statements and cash
flow statements of the Borrower and its Restricted Subsidiaries, as at the
Balance Sheet Date, and such balance sheets and statements of income and cash
flow have been certified by the Borrower's chief or principal financial or
accounting officer. Such balance sheets and statements of income and cash flow
have been prepared in accordance with GAAP and fairly present the financial
condition of the Borrower and its Restricted Subsidiaries as at the close of
business on the date thereof and the results of operations for the fiscal year
then ended. There are no Contingent Obligations of the Borrower or any of its
Restricted Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, that were not disclosed in such balance sheets and the
notes related thereto.
Section 5.05. No Material Adverse Effect, Etc. Since the Balance Sheet
Date, there has occurred no Material Adverse Effect and, except as permitted
hereunder, the Borrower has not made any Distribution.
Section 5.06. Franchises, Patents, Copyrights, Etc. Except as set forth in
Schedule 5.06, there are no franchises, licenses, patents, copyrights,
trademarks, trade names, or other intellectual property, individually or in the
aggregate, that are material for the conduct of the business of the Borrower or
any of its Restricted Subsidiaries, as now conducted or as presently
contemplated to be conducted. Set forth on Schedule 5.06 is a list of all
intellectual property material to the business or operations of the Borrower and
its Restricted Subsidiaries, as now conducted and as presently contemplated to
be conducted.
Section 5.07. FCC Licenses, Etc. Each FCC License for a Permitted BTA
listed in Part I of Schedule 5.07 is held by a License Subsidiary. Part II of
Schedule 5.07 lists all FCC Licenses held by License Subsidiaries that are
Subsidiaries of the C-Block Subsidiary Parent. The C-Block Subsidiary Parent has
filed or caused to be filed applications with the FCC for the transfer of all of
the capital stock of the License Subsidiaries holding all of the FCC Licenses
listed in Part II of Schedule 5.07 to the Borrower. Neither any FCC License nor
any material Necessary Authorization needed to comply with the provisions of
this Agreement is the subject of any pending or, to the best of the Borrower's
knowledge, threatened revocation or revocation proceeding.
Section 5.08. Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or, to the best of the Borrower's knowledge,
threatened against any Loan Party before any court, tribunal or administrative
agency or board (including the FCC) that, if adversely determined, might, either
in any case or in the aggregate, have a Material Adverse Effect or materially
impair the right of such Loan Party, to carry on business
55
substantially as now conducted, or result in any substantial and material
liability not adequately covered by insurance, or for which adequate reserves
are not maintained on the balance sheet of such Loan Party, or that questions
the validity of this Agreement or any of the Loan Documents, or any action taken
or to be taken pursuant hereto or thereto.
Section 5.09. No Materially Adverse Contracts, Etc. None of the Loan
Parties is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a Material Adverse Effect. None of the Loan Parties is a party to
any contract or agreement that has or is expected, in the judgment of such Loan
Party's officers, to have any Material Adverse Effect.
Section 5.10. Compliance with Other Instruments, Laws, Etc. None of the
Loan Parties is in violation of any provision of its charter documents, bylaws
or any agreement or instrument to which it may be subject or by which it or any
of its Properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or have a Material Adverse Effect.
Section 5.11. Tax Status. Each Loan Party and each of its Subsidiaries and
Affiliates
(a) has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it
is subject or filed extensions therefor;
(b) has paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings;
and
(c) has set aside on its books provisions reasonably adequate for the
payment of all taxes for all elapsed periods subsequent to the periods to
which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction in respect of any Loan Party or any of its
Subsidiaries or Affiliates, and the officers of the Borrower know of no basis
for any such claim.
Section 5.12. No Default. No Default has occurred and is continuing.
Section 5.13. Holding Company and Investment Company Acts. Neither any Loan
Party nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935.
Neither any Loan Party nor any of its
56
Subsidiaries is an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", or an entity "controlled" by
an "investment company", as such terms are defined in the Investment Company Act
of 1940, as amended.
Section 5.14. Absence of Financing Statements, Etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or Property of the Borrower or any of its Restricted Subsidiaries
or any rights relating thereto.
Section 5.15. FCC Matters. Except for the filing of tariffs with the FCC,
each Loan Party has duly and timely filed all filings which are required to be
filed by it under the Communications Act, the failure to file which could
reasonably be expected to have a Material Adverse Effect and is in all material
respects in compliance with the Communications Act, including the rules and
regulations of the FCC applicable to it, the failure to be in compliance with
which could reasonably be expected to have a Material Adverse Effect. No failure
to pay any Indebtedness owing to the FCC in respect of any C-Block FCC License
has occurred, except in accordance with the orders, rules and regulations of the
FCC.
Section 5.16. Tariffs. No action to change, alter, rescind or otherwise
terminate the tariffs containing service regulations or any rates and charges
for commercial mobile radio services which, if adversely determined, would have
a Material Adverse Effect, is pending or known by the Borrower to be under
consideration.
Section 5.17. Disclosure. This Agreement and the statements and documents
referred to herein or delivered to the Administrative Agent and/or the Lenders
by or on behalf of the Borrower pursuant hereto, taken together, contain no
untrue statement of a material fact or fail to state a material fact which would
be necessary to make the statements (taken as a whole) herein and therein not
misleading at such time.
Section 5.18. Burdensome Obligations. No Loan Party is a party to or bound
by any franchise, agreement, deed, lease or other instrument, or subject to any
legal restriction which, in the opinion of the management of the Borrower, is so
unusual or burdensome, in the context of its business, as in the foreseeable
future might materially and adversely affect or impair the revenue or operating
cash flow of such Loan Party, or the ability of such Loan Party to perform the
obligations to be performed by it under the Loan Documents to which such Loan
Party is a party. The Borrower does not presently anticipate that future
expenditures by the Borrower or any of its Subsidiaries needed to meet the
provisions of federal or state statutes, orders, rules or regulations will be so
burdensome as to affect or
57
impair, in a materially adverse manner, the business or condition, financial or
otherwise, of the Borrower or any of its Subsidiaries.
Section 5.19. Solvency. Each Loan Party is, individually and together with
its Subsidiaries, and after giving effect to the incurrence of all Indebtedness
as and when contemplated by the Loan Documents will be, Solvent.
Section 5.20. Security Interests. The security interests granted under the
Collateral Documents constitute valid, binding and continuing duly perfected
first-priority Liens in and to the Collateral (except for Permitted Liens that
have priority under applicable law or as provided herein or in the Intercreditor
Agreement) in favor of the Collateral Agent, for the benefit of the Secured
Parties.
Section 5.21. Certain Transactions. None of the officers, directors or
employees of the Borrower is presently a party to any transaction with the
Borrower (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of such the Borrower, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner. The Borrower has delivered a complete and correct copy of
the Expense Allocation Agreement and the Cash Management Agreement to the
Administrative Agent. The Borrower is not a party to any management, operating,
license or other agreement providing for the payment of any amount to any of its
Affiliates, except for the Expense Allocation Agreement or as permitted under
Section 7.11.
Section 5.22. Business Plans. The Approved Full-Term Operating Business
Plan and Approved Annual Operating Business Plan, if any, have been prepared in
all material respects in accordance with GAAP (except for the treatment of
Indebtedness owing to the FCC, which has been reflected in such plans at
historical cost).
Section 5.23. Employee Benefit Plans. (a) Each Employee Benefit Plan and
each Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the IRC,
including the provisions thereunder respecting prohibited transactions. The
Borrower and each of its Subsidiaries has made all required contributions to
each Employee Benefit Plan and each Multiemployer Plan. To the extent
applicable, the Borrower has heretofore delivered to the Administrative Agent
the most recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under Section
103(d) of ERISA, with respect to each Guaranteed Pension Plan.
58
(b) Under each Employee Benefit Plan that is an employee welfare benefit
plan within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits
are due unless the event giving rise to the benefit entitlement occurs prior to
plan termination (except as required by Title I, Subtitle B, Part 6 of ERISA).
The Borrower, each of its Subsidiaries and each ERISA Affiliate may terminate
each such Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of such Loan Party or such
ERISA Affiliate without liability to any Person.
(c) Each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated funding
deficiency, the notice or lien provisions of Section 302(f) of ERISA, or
otherwise, has been timely made. No waiver of minimum funding standards or
extension of amortization periods has been requested or received with respect to
any Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Borrower, any of its Subsidiaries or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Event, or any other
event or condition that presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. None of the Borrower, any of its
Subsidiaries or any ERISA Affiliate has instituted or intends to institute
proceedings to terminate a Guaranteed Pension Plan. No event requiring notice to
the PBGC under Section 302(f)(4)(A) of ERISA has occurred with respect to any
Guaranteed Pension Plan and no amendment with respect to which security is
required under Section 307 of ERISA has been made or is reasonably expected to
be made to any Guaranteed Pension Plan. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within 12 months prior to
the date of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
(d) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate has incurred or expects to incur any material liability (including
secondary liability) to any Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan under Section 4201 of ERISA or
as a result of a sale of assets described in Section 4204 of ERISA. Neither any
Loan Party nor any ERISA Affiliate has been notified that any Multiemployer Plan
is in reorganization or insolvent under and within the meaning of Section 4241
or Section 4245 of ERISA or that any Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA.
Section 5.24. Regulations U and X. No portion of any Loan shall be used or
obtained for the purpose of purchasing or carrying any "margin security" or
"margin stock"
59
as such terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Section 5.25. Environmental Compliance. The Borrower has taken all
necessary steps to investigate the past and present condition and usage of its
Real Estate and the operations conducted thereon and, based upon such diligent
investigation, makes the following representations:
(a) The Borrower and each of its Subsidiaries is in compliance with
all applicable Environmental Laws relating to the operation of its business
and the use and occupancy of any Real Estate. There is no pending or
threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information
request by any governmental entity relating to any Environmental Law
involving the Borrower or any of its Subsidiaries.
(b) There have been no releases of any Materials of Environmental
Concern into the environment at any parcel of Real Estate or any facility
formerly or currently owned, operated or controlled by the Borrower or any
of its Subsidiaries. With respect to any such releases of any Materials of
Environmental Concern, the Borrower has given all required notices to
government entities. The Borrower is not aware of any releases of Materials
of Environmental Concern at parcels of Real Estate or facilities other than
those owned, operated or controlled by the Borrower or any of its
Subsidiaries that could reasonably be expected to have an impact on the
Real Estate or facilities owned, operated or controlled by the Borrower or
any of its Subsidiaries.
(c) Set forth in Schedule 5.25 is a list of all environmental reports,
investigations and audits relating to premises currently or previously
owned or operated by the Borrower and its Subsidiaries (whether conducted
by or on behalf of the Borrower, any of its Subsidiaries or a third party,
and whether done at the initiative of the Borrower or any of its
Subsidiaries or directed by a governmental entity or other third party)
which the Borrower or any of its Subsidiaries has in its possession or to
which it has access, and complete and accurate copies of each such report,
or the results of each such investigation or audit, have been provided to
the Administrative Agent.
(d) The Borrower and each of its Subsidiaries has filed all reports
and returns required to be filed by such Person under any Environmental
Laws. The Borrower and each of its Subsidiaries has obtained and is in
compliance with all licenses, permits, registrations, certificates,
consents, approvals or authorizations (collectively, "Environmental
Permits") required by all applicable Environmental Laws. No event has
occurred and is continuing that requires, or after notice or lapse
60
of time or both would requires, any modification or termination of any
Environmental Permit. Neither the Borrower nor any of its Subsidiaries (i)
has received any notice asserting the absence of any Environmental Permit
or (ii) has knowledge of any environmental law proposed or under
consideration, which, if effective, could have a Material Adverse Effect.
(e) Neither the Borrower nor any of its Subsidiaries, nor any of the
Real Estate, is subject to any applicable Environmental Laws requiring the
performance of site assessments for Materials of Environmental Concern, or
the removal or remediation of Materials of Environmental Concern, or the
giving of notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement by
virtue of the transactions set forth herein and contemplated hereby, or as
a condition to the effectiveness of any transactions contemplated hereby.
Section 5.26. Joint Ventures, Etc. Except as set forth in Schedule 5.26,
the Borrower is not engaged in any joint venture or partnership with any other
Person, and each joint venture or partnership listed in such Schedule is a
Qualified Joint Venture.
Section 5.27. Material Contracts. As of the date of this Agreement, neither
the Borrower nor any of its Restricted Subsidiaries is a party to any Material
Contract or any agreement with any director, officer or employee, except as set
forth in Schedule 5.27.
Section 5.28. Representations in Other Loan Documents. Each of the
representations by any Loan Party in any of the other Loan Documents is true as
of the date hereof.
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan or Note or any
fees or expenses are outstanding or any Lender has any Commitment hereunder:
Section 6.01. Maintenance of Office. The Borrower shall maintain, and shall
cause each of its Restricted Subsidiaries to maintain, its chief executive
office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (except in the case of the
Operating Subsidiary the chief executive office for which is at ▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ 07927) or in the applicable Collateral Document, as the
case may be, except that the Borrower or any such Restricted Subsidiary may
change its chief executive office on not less than 30 days' advance written
notice to the Administrative Agent and after taking all such action as may be
necessary or
61
appropriate or requested by the Collateral Agent or the Administrative Agent to
continue the perfection of the Collateral Agent's security interest in the
Collateral.
Section 6.02. Records and Accounts. The Borrower shall, and shall cause
each of its Subsidiaries to:
(a) keep true and accurate records and books of account in which full,
true and correct entries shall be made in accordance with GAAP, and
(b) maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of
its Properties, contingencies and other reserves.
Section 6.03. Corporate Existence; Maintenance of Licenses. The Borrower
shall do or cause to be done, and shall cause each of its Restricted
Subsidiaries to do or cause to be done, all things necessary to:
(a) preserve and keep in full force and effect its corporate
existence;
(b) maintain in full force and effect:
(i) each FCC License with respect to the BTAs specified in
Schedule 5.07 (other than any such FCC License that has been
previously sold or transferred in accordance with this Agreement or
loss of any C-Block FCC License for a BTA other than the Philadelphia
BTA that has been subject to a General C-Block License Revocation
Event) and any other FCC Licenses from time to time held by any
License Subsidiary and cause each License Subsidiary at all times to
own each FCC License listed in Schedule 5.07 (other than any such FCC
License that has been previously sold or transferred in accordance
with this Agreement or loss of a C-Block License for any BTA other
than the Philadelphia BTA on account of a C-Block General License
Revocation Event) with respect thereto, free and clear of any Lien of
any kind, other than any Liens permitted under Section 7.02(g);
(ii) with respect to the construction, installation and
development of facilities for Permitted BTAs, all material Necessary
Authorizations appropriate to the level of development theretofore
achieved and sufficient to avoid noncompliance with the then
applicable minimum build-out requirements under the License for such
BTAs; and
(iii) with respect to the operation of those portions of such
BTAs the development of which has theretofore been completed, all
material Licenses,
62
copyrights, patents, franchises, Necessary Authorizations and other
rights as are necessary and sufficient to operate such completed
portions; and
(c) use, and cause the Grandparent to use, its best efforts to cause
the ownership of all capital stock of License Subsidiaries holding FCC
Licenses for the BTAs listed in Part II of Schedule 5.07 to be transferred
to the Borrower promptly after the date hereof, it being understood that
such transfer requires the FCC's consent.
The Borrower will, and will cause its Restricted Subsidiaries to, at all times
perform and observe all covenants and conditions on its part to be performed and
observed under FCC rules and regulations or otherwise with respect thereto with
respect to the FCC Licenses held by License Subsidiaries and not cause or,
except for a C-Block General License Revocation Event or Proposed C-Block
General License Revocation Event with respect to BTAs other than the
Philadelphia BTA, permit to exist any grounds for the FCC to revoke or suspend
or not to renew such License.
Section 6.04. Maintenance of Properties. The Borrower shall do or cause to
be done, and shall cause each of its Restricted Subsidiaries to do or cause to
be done, all things necessary to preserve and keep in full force and effect its
material franchises, employment contracts and permits. The Borrower shall, and
shall cause each of its Restricted Subsidiaries to,
(a) cause all of its Properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working
order (ordinary wear and tear excepted) and supplied with all necessary
equipment;
(b) cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the
Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
(c) continue to engage primarily in the businesses now conducted by it
and in related businesses; and
(d) continue in full force and effect all authorizations and approvals
required to conduct the businesses now conducted by it as appropriate to
the then level of construction, development and operation of PCS Systems
covered by FCC Licenses held by License Subsidiaries;
provided that nothing in this Section 6.04 shall prevent the Borrower or any of
its Restricted Subsidiaries from discontinuing the operation and maintenance of
any of its Properties if such
63
discontinuance is, in the judgment of the Borrower or such Restricted
Subsidiary, desirable in the conduct of its business and would not have a
Material Adverse Effect.
Section 6.05. Insurance. The Borrower shall obtain and maintain, and shall
cause each of its Restricted Subsidiaries to obtain and maintain, insurance with
respect to its properties and business with insurers that hold an A.M. Best
rating of "A" or better. The insurance coverage shall
(a) include, as a minimum, the types of policies and respective limits
as reflected in Section 13 of each Security Agreement;
(b) with respect to all liability insurance, name the Administrative
Agent and the Collateral Agent as additional insured;
(c) with respect to casualty insurance, name the Collateral Agent as
loss payee as its interest may appear; and
(d) provide that the insurer will give the Administrative Agent and
the Collateral Agent at least 30-days' prior written notice of the
cancellation or any material change in the coverage, aggregate limits or
any other provision of such insurance.
The Borrower shall deliver to the Administrative Agent and the Collateral Agent,
as required by Section 8.20, no later than March 31 in each calendar year and
otherwise promptly on request by the Administrative Agent or the Collateral
Agent, certificate(s) of insurance reflecting the requirements of this Section
6.05, each Security Agreement and each Mortgage, and setting forth any
deductibles applicable to any insurance coverage.
Section 6.06. Taxes. The Borrower shall duly pay and discharge, and cause
each of its Subsidiaries to duly pay and discharge, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
and its Real Estate, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of its
Property; provided that no such tax, assessment, charge, levy or claim need be
paid if the validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if the Borrower or any of its Subsidiaries
has set aside on its books adequate reserves with respect thereto; and provided
further that the Borrower shall pay all such taxes, assessments, charges, levies
or claims forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor.
Section 6.07. Inspection of Properties and Books. (a) The Borrower shall
permit, and shall cause each of its Subsidiaries to permit, the Administrative
Agent, the Lenders and
64
their other designated representatives to visit and inspect any of the
Properties of the Borrower or such Subsidiary, to examine the books of account
of the Borrower or such Subsidiary (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of the Borrower or
such Subsidiary with, and to be advised as to the same by, its officers, all at
such reasonable times and intervals as the Administrative Agent or any Lender
may reasonably request; provided that the Administrative Agent and each Lender
shall use reasonable commercial efforts not to interfere with the business of
the Borrower or any of its Subsidiaries.
(b) The Borrower authorizes the Administrative Agent and each Lender to
communicate directly with the independent certified public accountants of the
Borrower or any of its Subsidiaries and authorizes such accountants to disclose
to the Administrative Agent and the Lenders any and all financial statements and
other supporting financial documents and schedules including copies of any
management letter with respect to the business, financial condition and other
affairs of the Borrower and its Subsidiaries. At the reasonable request of the
Administrative Agent, the Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this Section
6.07(b). The Administrative Agent and the Lenders shall use commercially
reasonable efforts to coordinate the communications and disclosures to and from
the accountants and Administrative Agent and the Lenders.
Section 6.08. Compliance with Laws, Contracts, FCC Licenses and Permits.
The Borrower shall comply, and shall cause each of its Subsidiaries to comply,
in all material respects with
(a) the applicable laws, rules, regulations and orders wherever its
business is conducted, including without limitation compliance with all
Environmental Laws, all Environmental Permits, ERISA, the IRC, the
Communications Act and all FCC rules and regulations (including without
limitation compliance with FCC rules and regulations relating to
maintaining the status of the License Subsidiaries as designated entities
and small businesses);
(b) the provisions of its charter documents and by-laws;
(c) all Material Contracts to which it or any of its Subsidiaries is a
party and by which it or any of its Subsidiaries or any of its or their
Properties may be bound;
(d) all obligations with respect to any Employee Benefit Plan or
Multiemployer Plan; and
(e) all applicable decrees, orders, and judgments.
65
If any authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that the Borrower or any of its Subsidiaries may fulfill any of the
Borrower's or such Subsidiary's obligations hereunder or any of the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party, the
Borrower shall immediately take, or shall cause such Subsidiary immediately to
take, all reasonable steps within the power of the Borrower or such Subsidiary
to obtain such authorization, consent, approval, permit or license and furnish
the Administrative Agent evidence thereof.
Section 6.09. Further Assurances. (a) The Borrower shall cooperate, and
shall cause each of its Subsidiaries to cooperate, with the Lenders and the
Administrative Agent, and shall execute and pay, and shall cause each of its
Subsidiaries to execute and pay, as applicable, for the filing of all such
further instruments and documents, including, without limitation, such Uniform
Commercial Code financing statements and other security documents as the
Required Lenders, the Collateral Agent or the Administrative Agent shall
reasonably deem appropriate at any time in order to effectuate the security
interests to the Collateral Agent and to carry out to their satisfaction the
transactions contemplated by the Loan Documents.
(b) If at any time the granting of a Lien on the FCC License held by any
License Subsidiary, or in any proceeds of any sale or disposition thereof, shall
not violate then-applicable FCC regulations, the Borrower shall so notify the
Administrative Agent and shall, at its expense, promptly cause such License
Subsidiary to execute and deliver any and all such instruments, documents and
opinions of counsel and take such other action as either Agent may deem
desirable in order to grant in favor of the Collateral Agent on behalf of the
Secured Parties a Lien on such FCC License and/or the proceeds thereof.
Section 6.10. Authorization from Landlord/Mortgagee, Etc. The Borrower
shall request that any landlord, mortgagee and easement grantor of the Borrower
or any of its Restricted Subsidiaries agree to give the Collateral Agent and the
Administrative Agent, on a best-efforts basis, notice of any default by the
Borrower or such Restricted Subsidiary under the terms or conditions of any
agreement between the Borrower and/or such Restricted Subsidiary and any
landlord, mortgagee of any such landlord or easement grantor, and allow the
Collateral Agent to inspect or remove Collateral after the occurrence and
continuance of an Event of Default.
Section 6.11. Attornment and Recognition Agreements. The Borrower shall
obtain, and shall cause each of its Restricted Subsidiaries to obtain, all
attornment and recognition agreements from any landlord or landlord's mortgagee
of Real Estate leased or owned by the Borrower or any of its Restricted
Subsidiaries upon which any equipment with an aggregate purchase price in excess
of [*] is stored or located, in form and substance reasonably satisfactory to
the Administrative Agent. The Borrower shall use its best efforts to obtain all
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
66
attornment and recognition agreements from any landlord or landlord's mortgagee
of Real Estate leased or owned by the Borrower or any of its Restricted
Subsidiaries upon which all other Collateral not covered by the immediately
preceding paragraph is stored or located, in form and substance reasonably
satisfactory to Required Lenders.
Section 6.12. Expense Allocation Agreement. The Borrower shall comply with
the terms of the Expense Allocation Agreement and not consent to any waiver,
modification or amendment thereto.
Section 6.13. Maintenance of Restricted Subsidiary. The Borrower shall
cause Enterprises to remain a Restricted Subsidiary at all times at which this
Agreement is in force and effect.
Section 6.14. Reporting Requirements; Notices. The Borrower shall deliver
or cause to be delivered to the Administrative Agent on behalf of the Lenders
the following (in a sufficient number of copies to permit distribution to each
Lender):
(a) No later than 15 days prior to the end of each fiscal year of the
Borrower and until the first fiscal year ending after the date on which
EBTDA is greater than zero for two successive fiscal quarters, a proposed
annual operating business plan containing the statements listed in items
(i) through (vi) in this paragraph and the exhibits contained in the annual
operating business plan delivered pursuant to Section 8.13(a) for the
next-succeeding fiscal year. The proposed annual operating business plan
shall contain (i) internally prepared statements of income and expense of
the Borrower and its Restricted Subsidiaries in reasonable detail for the
applicable period prepared in all material aspects in accordance with GAAP
(except for the absence of footnotes), (ii) a schedule of all Capital
Expenditures estimated to be made during the period, (iii) a statement of
the amounts and times by which the Borrower and its Restricted Subsidiaries
need to raise additional capital to meet their obligations when due during
the period, (iv) projected balance sheets of the Borrower and its
Restricted Subsidiaries, (v) projected cash flow statements of the Borrower
and its Restricted Subsidiaries, and (vi) a statement listing all
assumptions which formed the basis for (i) through (v), each together with
supporting schedules in sufficient detail as needed and in all material
aspects in accordance with the Approved Annual Operating Business Plan
delivered pursuant to Section 8.13(a) and on a consistent basis.
(b) No later than August 14 of each fiscal year of the Borrower,
beginning with its 1998 fiscal year, a report, certified as true and
correct by the chief or principal financial or accounting officer of the
Borrower, that shows in reasonable detail, variances, if any, between the
actual operating performance of the Borrower
67
and its Restricted Subsidiaries and what was estimated for the first six
months of such fiscal year in the Approved Annual Operating Business Plan
for such fiscal year (or the Approved Full Term Operating Business Plan if
the Required Lenders have not approved a plan delivered pursuant to
Section 6.14(a) with respect to such fiscal year) and explains in
reasonable detail in form satisfactory to the Required Lenders the reasons
for the discrepancies between them, if any.
(c) As soon as practicable, but in any event not later than 45 days
after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower (beginning with its 1998 fiscal year), copies of the
internally prepared unaudited Consolidated balance sheets of the Borrower
and its Restricted Subsidiaries as of the end of such quarter and
Consolidated and consolidating statements of income and a Consolidated
statement of cash flows of the Borrower and its Restricted Subsidiaries for
the period commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter, and Consolidated and consolidating
statements of income and a Consolidated statement of cash flows of the
Borrower and its Restricted Subsidiaries for the period commencing at the
end of the previous fiscal year of the Borrower and ending with the end of
such quarter, all in reasonable detail and each setting forth in
comparative form:
(i) the figures for the prior year's corresponding fiscal
quarter, and
(ii) so long as the Borrower is required to deliver an operating
business plan pursuant to Section 6.14(a), any variances from the
Approved Annual Operating Business Plan (or the Approved Full Term
Operating Business Plan, if the Required Lenders have not approved a
plan delivered pursuant to Section 6.14(a) with respect to such fiscal
year),
if any, prepared in all material aspects in accordance with GAAP, together
with a certification by the principal financial or accounting officer of
the Borrower that the information contained in such financial statements
fairly presents the financial position of the Borrower and its Restricted
Subsidiaries on the date thereof (subject to year-end adjustments).
(d) As soon as practicable, but in any event no later than 90 days
after the end of each fiscal year of the Borrower, the audited Consolidated
balance sheets of the Borrower and its Restricted Subsidiaries as at the
end of such year, and the related audited Consolidated statements of income
and the audited Consolidated statement of cash flows of the Borrower and
its Restricted Subsidiaries for such year prepared in accordance with GAAP,
and so long as the Borrower is required to deliver an operating business
plan pursuant to Section 6.14(a), a separate variance analysis setting
forth in comparative form the figures for the previous fiscal year and any
variances from
68
the applicable period of the Approved Annual Operating Business Plan (or
the Approved Full Term Operating Business Plan, if the Required Lenders
have not approved a plan delivered pursuant to Section 6.14(a) with respect
to such fiscal year) in reasonable detail. Such balance sheets, statements
of income and statement of cash flows shall contain a certified audit
report of a nationally recognized independent certified public accounting
firm satisfactory to the Administrative Agent, which report shall contain
an unqualified opinion of such accounting firm, and an "agreed-upon
procedures" report pursuant to which the accountants:
(i) review the Borrower's statement that the Borrower is in
compliance with the provisions of the Expense Allocation Agreement,
(ii) perform the agreed upon review procedures applicable
thereto, and
(iii) confirm that in examining the financial statements of the
Borrower and its Restricted Subsidiaries they have not become aware of
any Default with respect to the Expense Allocation Agreement, or, if
such accountants shall have obtained knowledge of any then existing
Default they shall disclose in such report any such Default;
provided that such accountants shall not be liable to the Lenders for
failure to obtain knowledge of any Default. The annual financial statements
shall also be accompanied by a management letter of the Borrower's
accountants (only to the extent otherwise obtained by the Borrower).
(e) Simultaneously with the delivery of the financial statements
referred to in subsections (c) and (d) above,
(i) a statement certified by the principal financial or
accounting officer of the Borrower, in form and substance satisfactory
to the Administrative Agent, setting forth in reasonable detail
computations evidencing compliance with the covenants contained in
Sections 6.15 and 7.05, and, if in making the calculations required to
be made pursuant to Section 6.15(b), the Borrower would not be in
compliance with such covenant but for the inclusion therein of amounts
under Section 6.15(b)(i)(D)(1)(III), a certificate of the Grandparent
as to the amount of unrestricted cash, Cash Equivalents and undrawn
lines of credit available to be drawn, as of the date specified in
such Section for such calculations, in each case with respect to the
fiscal quarter or fiscal year, as the case may be, relating to the
financial statements then being delivered, and
69
(ii) a Borrowing Base Certificate showing the Borrowing Base as
of the last day of such fiscal quarter or fiscal year, as the case may
be.
(f) Within 45 days after the end of each fiscal quarter of the
Borrower, a report on
(i) with respect to each Operating Subsidiary:
(A) the number of cell sites constructed and cell sites
where equipment with an aggregate purchase price in excess of
[*] is located,
(B) the total number of customers,
(C) the number of new customers acquired,
(D) the number of customers who terminated their service,
(E) the average net monthly charges billed to customers
(excluding roaming charges), and
(F) aggregate roaming revenue,
(ii) payments by the Borrower or any of its Restricted
Subsidiaries to the Grandparent or any of its Affiliates (other than
payments by the Borrower or any of its Restricted Subsidiaries to one
another), or to any Subsidiary of the Borrower that is not a
Restricted Subsidiary, whether as dividends, payments under any
management, service or tax-allocation agreement or otherwise; and
(iii) equity contributions to the Borrower, the Persons providing
the same and any issuance or sale of shares of Stock or other equity
interests in the Borrower or any of its Subsidiaries,
during such fiscal quarter, together with a report showing variances from
the estimates previously provided to Administrative Agent and each Lender
in the Annual Approved Operating Business Plan (or the Approved Full Term
Operating Business Plan, if the Required Lenders have not approved a plan
delivered pursuant to Section 6.14(a) with respect to such fiscal year),
along with an explanation of discrepancies between the actual numbers and
the estimated numbers.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
70
(g) Within three Business Days after the filing or mailing thereof,
copies of all
(i) materials filed with the Securities and Exchange Commission
by the Borrower or any of its Subsidiaries or the Grandparent;
(ii) information sent to the stockholders of the Borrower or
lenders to the Borrower (exclusive of proprietary information); or
(iii) information and reports directly and materially related to
the Borrower and its Subsidiaries that the Grandparent would be
required to file with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, if the Grandparent were a
public company subject to the reporting requirements of such Act;
provided that, if the information or reports covered by this clause
(iii) contain proprietary information, the Borrower shall not be
obligated to provide the proprietary information hereunder unless
(A) the Person that is the source of the information or
reports is a public company, and
(B) such Person would then be required to file such
proprietary information with the Securities and Exchange
Commission.
(h) Within 45 days after the end of each fiscal quarter of the
Borrower, an accounts-receivable-aging report in respect of each Operating
Subsidiary.
(i) Within three Business Days after the Borrower shall have knowledge
of the occurrence and continuance thereof, written notice of the occurrence
and continuance of a Default, together with a statement of what action the
Borrower is taking or proposes to take with respect thereto. If any Person
shall give any notice or take any other action in respect of a claimed
default (whether or not constituting a Default) under this Agreement or any
other note, evidence of indebtedness, indenture or other obligation to
which or with respect to which the Borrower or any of its Restricted
Subsidiaries is a party or obligor, whether as principal, guarantor, surety
or otherwise, which could result in the party to whom such indebtedness is
owed having the right under its governing documents to accelerate such
indebtedness, and such acceleration would have a Material Adverse Effect,
the Borrower shall forthwith give written notice thereof to the
Administrative Agent, describing the notice or action and the nature of the
claimed default.
71
(j) As soon as possible, and in any event within 10 Business Days
(i) after making any such report, written notice of any violation
of any Environmental Law that the Borrower reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or
local environmental agency, and
(ii) after the Borrower shall become aware thereof, written
notice of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, or any federal, state or local environmental agency or
board, that, has the potential to materially affect the assets,
liabilities, financial conditions or operations of the Borrower or any
of its Subsidiaries or the security interests for the benefit of the
Secured Parties pursuant to any of the Collateral Documents.
(k) As soon as possible, and in any event within 10 days after the
Borrower or any ERISA Affiliate knows or has reason to know or believes
that any ERISA Affiliate knows or has reason to know or believes that any
ERISA Event has occurred, a statement of the chief financial officer of the
Borrower or such ERISA Affiliate describing such ERISA Event, together with
any correspondence with, or filings made with, the PBGC or Department of
Labor, and the action, if any, which the Borrower or such ERISA Affiliate
proposes to take with respect thereto.
(l) Promptly after
(i) filing the same with the Department of Labor or Internal
Revenue Service, (A) a copy of its initial actuarial statement
required to be submitted under Section 103(d) of ERISA and Annual
Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan, and (B) a notice of all subsequent filings
(with copies to be provided upon request of the Administrative Agent),
(ii) receipt or dispatch thereof, a copy of any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under
Sections 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under Sections 4041A, 4202, 4219,
4242 or 4245 of ERISA, and
(iii) becoming aware of the occurrence thereof, notice of (A) any
transaction that could result in the imposition of a penalty under
Section 502(i) of ERISA or an excise tax under Section 4975 against
the Borrower, any of its Subsidiaries or an ERISA Affiliate; (B) any
partial or complete withdrawal
72
from a Multiemployer Plan by the Borrower, any of its Subsidiaries or
an ERISA Affiliate; (C) a failure by the Borrower, any of its
Subsidiaries or an ERISA Affiliate to make a payment to a Plan
required to avoid imposition of a lien under Section 302(f) of ERISA;
(D) the adoption of an amendment to a Guaranteed Pension Plan
requiring the provision of security under Section 307 of ERISA; or (E)
any change in the actuarial assumptions or funding methods used for
any Guaranteed Pension Plan, where the effect of such change is to
materially increase the unfunded benefit liability or materially
reduce the obligation to make periodic contributions.
(m) Within three Business Days after becoming aware of any setoff of
any claims (including, with respect to the Real Estate, environmental
claims), withholdings or other defenses to which any of the Collateral, or
the Collateral Agent's, the Administrative Agent's or the Lenders' rights
with respect to the Collateral, are subject, written notice thereof.
(n) Within 10 days after becoming aware thereof of
(i) any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrower or any of
its Subsidiaries or to which the Borrower or any of its Subsidiaries
is or becomes a party that could reasonably be expected to have a
Material Adverse Effect (which notice shall include a statement as to
the nature and status of the proceedings), or
(ii) any judgment not covered by insurance, final or otherwise,
against the Borrower or any of its Subsidiaries in an amount in excess
of $1,000,000,
written notice thereof.
(o) Within 120 days after the end of each fiscal year of the Borrower,
beginning with its fiscal year ended [*], and for so long as any Advances
are outstanding and exceed at such time (i) the Borrowing Base as of such
date minus (ii) the amount calculated under clause (a)(ii) of the
definition of "Borrowing Base" as of such date, a report that includes
calculations showing in reasonable detail the Borrower's Excess Cash Flow
for such fiscal year, if any, certified as correct by the Borrower's chief
or principal financial or accounting officer.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
73
(p) Within three Business Days after its receipt thereof, copies of
all material notices and correspondence received from or sent to the FCC
relating to any FCC License listed on Schedule 5.07.
(q) Not later than 30 days prior to the occurrence thereof, written
notice to the Administrative Agent of a change in (i) the business or
corporate name of any of the Loan Parties, (ii) the location of any of the
Collateral or (iii) the chief executive office or other locations of each
Loan Party or the location where the books and records of the Borrower or
any of its Subsidiaries are kept.
(r) Within 15 Business Days after the end of each fiscal quarter of
the Borrower, a report showing the respective aggregate principal amounts
of all Indebtedness outstanding as of the last day of such fiscal quarter
under each Permitted Loan Agreement.
(s) As soon as available and in any event within 30 days after the end
of each fiscal year of the Borrower and when necessary in connection with a
repetition of any representation or warranty referring thereto in
connection with any Draw Request, a report supplementing the Schedules
hereto, including, without limitation, (i) new Subsidiaries of the Borrower
and ownership of the Stock thereof, (ii) any change in the designation of
any BTA as set forth in, or any addition, deletion or other change to,
Schedule 1.01 and (iii) a description of such other changes in the
information included in such Schedules as may be necessary for such
Schedules to be accurate and complete in all material respects.
(t) Within 10 Business Days following the occurrence thereof, written
notice of the disposition of any FCC License owned or held by the Borrower
or any of its Subsidiaries, the right to provide PCS services to any POPs
included in any BTA relating to any such FCC License or any General C-Block
License Revocation Event, specifying the affected FCC License or POPs and
setting forth in reasonable detail the terms of such disposition.
(u) No later than the 10th Business Day after each Required Operation
Test Date, a report in form and scope and containing such information as
the Required Lenders may reasonably request concerning the rates of call
blocking and dropped calls with respect to all cells in the Philadelphia
BTA for the three-calendar-month period ended on the immediately preceding
Required Operation Test Date.
(v) Such other information concerning the business operations or
financial condition of any Loan Party or any of its Subsidiaries as the
Administrative Agent or any Lender shall from time to time reasonably
request.
74
Upon the Administrative Agent's receipt of any and all financial and other
information furnished by the Borrower pursuant to this Section 6.14 the
Administrative Agent shall promptly deliver copies thereof to each Lender.
Section 6.15. Financial Covenants of the Borrower. So long as any Loan,
Note or other of the obligations of the Borrower are outstanding hereunder or
any Lender has any Commitment, the Borrower will:
(a) Have earned for each fiscal quarter, prior to the first fiscal
quarter in which EBTDA shall have exceeded zero for [*] successive fiscal
quarters, Revenue of not less than the applicable amount shown on Schedule
6.15(a) with respect to such fiscal quarter.
(b) Maintain, with respect to each Fiscal Quarter, beginning with the
Fiscal Quarter ending on [*], the ratio of
(i) the amount equal to:
(A) Operating Cash Flow for such Fiscal Quarter and the
three Fiscal Quarters immediately preceding such Fiscal Quarter,
plus
(B) the aggregate amount of cash and Cash Equivalents held
by the Borrower and its Restricted Subsidiaries as of the first
day of the third Fiscal Quarter immediately preceding such Fiscal
Quarter, plus
(C) the aggregate principal amount of (x) the Advances made
to the Borrower, (y) advances made under other Permitted Loan
Agreements and (z) advances made in respect of other Indebtedness
permitted under Section 7.01 provided by Persons other than
Affiliates of the Borrower, in each case during such Fiscal
Quarter and the three Fiscal Quarters immediately preceding such
Fiscal Quarter, plus
(D) (1) the aggregate amount of:
(I) the lesser of the Maximum Commitment and the
Borrowing Base as of the last day of such Fiscal Quarter,
(II) the aggregate amount available to be drawn under
other Indebtedness permitted under Section 7.01 provided by
Persons other than Affiliates of the
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
75
Borrower by the Borrower or any of its Restricted
Subsidiaries for general corporate purposes as of such last
day, and
(III) [*]
(2) the aggregate principal amount of the Advances as of
such last day, plus
(E) the aggregate amount of equity contributions and cash
loans by way of Subordinated Debt made to the Borrower during
such Fiscal Quarter and the three Fiscal Quarters immediately
preceding such Fiscal Quarter, to
(ii) the sum of
(A) the aggregate scheduled amount of principal and interest
payable in cash in respect of Indebtedness of the Borrower and
its Restricted Subsidiaries (including, without limitation, in
respect of the Advances, payments under other Permitted Loan
Agreements, Capitalized Leases and Indebtedness owing to the FCC)
to Persons other than the Borrower or any of its Subsidiaries,
plus
(B) dividends paid by the Borrower pursuant to Section
7.05, plus
(C) Capital Expenditures by the Borrower and its Restricted
Subsidiaries, plus
(D) cash income taxes paid by the Borrower and its
Restricted Subsidiaries, plus
(E) mandatory prepayments of the Advances by the Borrower
pursuant to Section 3.02(a), (c) or, to the extent resulting from
a Restricted Sale described in Section 7.05(b)(iii)(C), (e) and
mandatory prepayments by the Borrower pursuant to any similar
provision contained in the other Permitted Loan Agreements, plus
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
76
(F) any fees paid pursuant to Section 2.03 and any other
similar fees paid in respect of any other Indebtedness by the
Borrower or any of its Restricted Subsidiaries,
in each case in respect of such Fiscal Quarter and the three Fiscal
Quarters immediately preceding such Fiscal Quarter,
to be not less than [*].
(c) Maintain, with respect to each Fiscal Quarter beginning with the
Fiscal Quarter ending on [*], a ratio of
(i) Consolidated Indebtedness of the Borrower and its Restricted
Subsidiaries as of the last day of such Fiscal Quarter (other than any
portion thereof reflecting the capitalization of accrued and unpaid
interest and other than any Subordinated Debt) to
(ii) an amount equal to
(A) [*] of Operating Cash Flow of the Borrower and its
Restricted Subsidiaries for such Fiscal Quarter and the Fiscal
Quarter immediately preceding such Fiscal Quarter, adjusted by
(B) [*] of the difference, whether positive or negative,
between:
(1) [*] of the aggregate amount of Marketing Expenses
for such Fiscal Quarter and the immediately preceding Fiscal
Quarter, and
(2) [*] of the aggregate amount of Marketing Expenses
for such Fiscal Quarter and the immediately preceding three
Fiscal Quarters,
of not more than the ratio set forth in Schedule 6.15(c) with respect to
such Fiscal Quarter.
Section 6.16. Certified Copies of Insurance Policies. Within 30 days after
the Closing Date, deliver to the Administrative Agent certified copies by the
applicable insurer(s) of all insurance policies that shall have been required to
have been delivered to the Administrative Agent by the Closing Date pursuant to
Section 8.05(b).
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
77
Section 6.17. Mortgage Liens. If the Borrower or any of its Restricted
Subsidiaries shall acquire any Real Estate and shall not at the time of such
acquisition incur Indebtedness with respect thereto pursuant to
Section 7.01(d)(ii)(B), the Borrower shall grant, or cause such Subsidiary to
grant, to the Collateral Agent on behalf of the Secured Parties a first-mortgage
Lien on such Real Estate in form and substance satisfactory to the Required
Lenders. Any Lien on any such Real Estate shall provide that it shall be
released upon the incurrence of any Indebtedness under Section 7.01(d)(ii)(B)
that is secured by a Lien on such Real Estate permitted under Section
7.02(d)(ii).
Section 6.18. New Restricted Subsidiaries. Upon the creation of any
Restricted Subsidiary not in existence on the date hereof, the Borrower shall at
its expense:
(a) duly execute and deliver, or cause such Restricted Subsidiary to
duly execute and deliver, to the Administrative Agent and the Collateral
Agent a Subsidiary Guaranty in respect of such Restricted Subsidiary (with
such changes thereto as either Agent may reasonably request);
(b) duly execute and deliver, or cause such Restricted Subsidiary to
duly execute and deliver, to the Administrative Agent and the Collateral
Agent, a Subsidiary Security Agreement (with such changes thereto as either
Agent may reasonably request) and such other mortgages, pledges,
assignments and other security agreements, in form and substance reasonably
satisfactory to the Agents, securing payment of all of the obligations of
such Restricted Subsidiary under its Guaranty and the obligations of the
Loan Parties under the Loan Documents and constituting Liens on all
Collateral described therein; and pledge, or cause to be pledged, to the
Collateral Agent on behalf of the Secured Parties, all authorized, issued
and outstanding capital stock of such Restricted Subsidiary; and execute
and/or deliver to the Administrative Agent each other document or
instrument required to be delivered in connection with the execution and
delivery of such Security Agreement pursuant to Sections 8.14(c)(1) through
(8);
(c) take whatever action (including without limitation the recording
of mortgages, the filing of Uniform Commercial Code financing statements,
the giving of notices and the endorsement of notices on title documents)
may be necessary or advisable in the opinion of either Agent to vest in the
Collateral Agent (or in any representative of the Collateral Agent
designated by it) valid and subsisting Liens on the properties purported to
be subject to the security agreements delivered pursuant to this
Section 6.18, enforceable against all third parties in accordance with
their terms;
(d) deliver to the Administrative Agent a signed copy of favorable
opinions, addressed to the Agents and the Lenders, of counsel for the
Borrower
78
acceptable to the Administrative Agent as to such matters relating to such
Restricted Subsidiary as either Agent may reasonably request; and
(e) at any time and from time to time, promptly execute and deliver
any and all further instruments and documents and take all such other
action as the Administrative Agent may deem desirable in obtaining the full
benefits of, or in preserving the Liens of, each security agreement
delivered pursuant to this Section 6.18 and mortgages and other agreements
and instruments entered into by such Restricted Subsidiary.
Section 6.19. C-Block Subsidiaries. While any C-Block Subsidiary shall be a
guarantor hereunder the Borrower will cause such C-Block Subsidiary to perform
and observe each covenant and condition hereunder applicable to, and as if such
Person were, a Subsidiary of the Borrower.
Section 6.20. Post-Closing Matters. By [*] the Borrower will cause the
parties thereto to enter into the Services Agreement and will cause the consent
contemplated thereby, in form and substance reasonably acceptable to the
Required Lenders and duly executed by the parties thereto, to be delivered to
the Administrative Agent.
ARTICLE VII
CERTAIN NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan or Note or fees
or expenses are outstanding or any Lender has any Commitment hereunder:
Section 7.01. Restrictions on Indebtedness. The Borrower shall not create,
incur, assume, guarantee or suffer to exist, or permit any of its Restricted
Subsidiaries to create, incur, assume, guarantee or suffer to exist,
contingently or otherwise, any Indebtedness other than (without duplication):
(a) In the case of the Borrower:
(i) Indebtedness to the Lenders arising under any of the Loan
Documents;
(ii) Indebtedness outstanding under a Permitted Loan Agreement,
except for any such Indebtedness described in clause (a)(v) below;
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
79
(iii) Indebtedness the proceeds of which are used to prepay
Advances pursuant to Section 3.02(f), but only so long as:
(A) the aggregate principal amount of such Indebtedness does
not exceed the aggregate principal amount of the Indebtedness
then being prepaid or repaid with such proceeds, in whole or in
part, and
(B) no portion of the principal amount of such Indebtedness
is scheduled to be repaid or has required prepayments prior to
the Maturity Date;
(iv) Subordinated Debt;
(v) Indebtedness the proceeds of which are used solely for
working-capital purposes, but only so long as the aggregate principal
amount of such Indebtedness outstanding on any date does not exceed
the lesser of:
(A) [*] of the Maximum Commitment at such time, and
(B) an amount that, when divided by the aggregate POPs of
the Applicable Areas of all BTAs for which License Subsidiaries
hold FCC Licenses as of such date, equals [*]; and
(vi) guaranties of Indebtedness permitted under clause (c)(ii) or
(iii) below;
(b) in the case of any of the Borrower's Restricted Subsidiaries:
(i) Indebtedness arising by way of a guaranty of Indebtedness of
the Borrower under any Permitted Loan Agreement, and
(ii) Indebtedness owing to the Borrower not evidenced by a note
or other instrument.
(c) In the case of any License Subsidiary,
(i) Indebtedness owing to the FCC in connection with the payment
of the deferred-purchase price of FCC Licenses held by such License
Subsidiary;
(ii) Indebtedness owing to any Person incurred in connection with
any extension of the maturity, or any refunding or refinancing, in
whole or in
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
80
part, of any Indebtedness described in clause (c)(i) above of such
License Subsidiary, but only to the extent that:
(A) such extending, refunding or refinancing is otherwise
permitted by this Agreement, and
(B) the principal amount of such Indebtedness shall not be
increased above the principal amount thereof outstanding
immediately prior to such extension, refunding or refinancing,
and the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such extension,
refunding or refinancing; and
(iii) purchase-money Indebtedness owing to the seller of (A) any
FCC License, (B) all of the stock, partnership interests or other
ownership interests in any Person holding an FCC License or (C) the
right to provide PCS services to any POPs covered by an FCC License,
in each case incurred by a License Subsidiary that holds no other
assets in order to acquire such FCC License, such ownership interests
or such right to provide PCS services, but only to the extent that
such Indebtedness is (x) unsecured and (y) non-recourse to the
Borrower or any Subsidiary of the Borrower other than such License
Subsidiary except as permitted under Section 7.03(c).
(d) In the case of the Borrower and its Operating Subsidiaries:
(i) purchase-money Indebtedness (in addition to all other
purchase-money Indebtedness permitted under this Section 7.01) and
guaranties of such purchase-money Indebtedness permitted under clause
(c)(ii) or (iii) above in an aggregate principal amount outstanding at
any one time not to exceed [*] of the Maximum Commitment at such time
(but, with respect to any such purchase-money Indebtedness, only to
the extent such purchase-money Indebtedness is in a principal amount
that does not exceed the fair market value of the property being
acquired);
(ii) (A) Capital Lease obligations at any one time outstanding
not to exceed [*] and
(B) Indebtedness incurred in the acquisition of Real Estate
or within six months after the date of acquisition of Real Estate
and that is secured by a Lien permitted under
Section 7.02(d)(ii),
but only so long as:
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
81
(I) the aggregate principal amount of Indebtedness under
clauses (A) and (B) above at any one time outstanding does not
exceed [*] and
(II) such Indebtedness is in a principal amount that does
not exceed the fair market value of the property being acquired
or leased;
(iii) purchase-money Indebtedness (in addition to any other
purchase-money Indebtedness described under clauses (i) and (ii) above
and clause (iv) below of this paragraph (d)) incurred in order to
acquire inventory (other than in respect of handsets and accessories
with respect thereto manufactured or supplied by Ericsson or Orbitel
or their respective Affiliates, but only to the extent such
Indebtedness is in a principal amount that does not exceed the fair
market value of the property being acquired); and
(iv) purchase-money Indebtedness (in addition to any
purchase-money Indebtedness described in clauses (a)(i), (a)(ii) and
(d)(i) above) incurred in connection with the purchase of equipment
and services the purchase price of which would be included in Excluded
Other Costs (except to the extent such Excluded Other Costs are
treated as Other Costs as provided in the definition of "Other
Costs"), in an aggregate principal amount at any one time outstanding
not to exceed [*] of the Maximum Commitment at such time, but only to
the extent such Indebtedness is in a principal amount that does not
exceed the fair market value of the property being acquired;
provided that, notwithstanding subsections (a) through (d) above, neither
the Borrower nor any of its Restricted Subsidiaries shall create, incur,
assume, guarantee or suffer to exist any Indebtedness on any date if the
aggregate principal amount of all Indebtedness of the Borrower and its
Restricted Subsidiaries (other than (x) any Indebtedness owing to the FCC
and without duplication of Indebtedness permitted hereunder and Guaranties
with respect to such Indebtedness and (y) any Subordinated Debt owing to
the Grandparent) would exceed [*] multiplied by the aggregate POPs of
all Applicable Areas of BTAs for which the Borrower and its Restricted
Subsidiaries hold FCC Licenses as of such date.
Indebtedness to the Grandparent or any of its Subsidiaries shall only be
permitted hereunder pursuant to subsection (a)(iv) above.
Section 7.02. Restrictions on Liens. The Borrower shall not (A) create or
incur or suffer to be created or incurred or to exist any Lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of its Property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
82
therefrom; (B) transfer any of such Property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (C) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title-retention or purchase-money security
agreement, device or arrangement; (D) suffer to exist for a period of more than
30 days after the same shall have been incurred any Indebtedness or claim or
demand against it that if unpaid might by law or upon bankruptcy or insolvency,
or otherwise, be given any priority whatsoever over its general creditors; or
(E) sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse; and
shall not permit any of its Restricted Subsidiaries to do any of the foregoing;
provided that the Borrower or any Restricted Subsidiary may create or incur or
suffer to be created or incurred or to exist the following (collectively,
"Permitted Liens"):
(a) Liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or Liens on Properties to secure claims
for labor, material or supplies in respect of obligations not overdue;
(b) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance;
(c) Liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
(d) encumbrances on Real Estate consisting of:
(i) easements, rights of way, zoning restrictions, restrictions
on the use of real property and defects and irregularities in the
title thereto, landlord's or lessor's liens under leases to which such
the Borrower or any of its Restricted Subsidiaries is a party, and
other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected
in the ordinary conduct of the business of the Borrower or any of its
Restricted Subsidiaries, which defects do not individually or in the
aggregate have a Material Adverse Effect on the business of the
Borrower or any of its Restricted Subsidiaries, and
(ii) with respect to Real Estate the acquisition price for which
is not included in Other Costs, mortgage (or deed of trust) Liens
(collectively, "Mortgage Liens") to secure the payment of Indebtedness
permitted to be incurred under Section 7.01(d)(ii)(B); provided that
83
(A) the amount secured by any Mortgage Lien shall not exceed
the sum of (1) the acquisition cost of the Real Estate acquired
by the Borrower or any of its Restricted Subsidiaries and (2) the
cost of any improvements constructed thereon, and
(B) the Borrower or such Restricted Subsidiary shall
simultaneously with the acquisition of the Real Estate in
question either:
(1) grant to the Collateral Agent a second mortgage (or
deed of trust), in form and substance satisfactory to the
Required Lenders, subordinate only to the Mortgage Lien, and
securing the obligations of the Borrower and its Restricted
Subsidiaries owing to lenders that are parties to the
Intercreditor Agreement, or
(2) cause the lender in whose favor the Mortgage Lien
is to be made to execute and deliver to the Collateral Agent
an option to purchase the Mortgage Lien, substantially in
the form of Exhibit F;
(e) Liens in favor of the Collateral Agent for the benefit of the
lenders and agents parties to the Intercreditor Agreement securing the
obligations permitted to be secured under the Intercreditor Agreement;
(f) deposits to secure the performance of bids, trade contracts (other
than in respect of Indebtedness for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds, and other
obligations of a like nature incurred in the ordinary course of business
not to exceed in the aggregate at any one time $5,000,000;
(g) Liens on FCC Licenses and proceeds of the sale or other
disposition thereof in favor of the FCC securing Indebtedness owing by
License Subsidiaries to the FCC or lenders of permitted Indebtedness
pursuant to Section 7.01(c)(ii); and
(h) Liens securing purchase-money Indebtedness permitted under
Section 7.01(d)(i), (ii), (iii) or (iv) owing to a Person that is not a
party to the Intercreditor Agreement; provided that such Liens cover only
the property acquired with the proceeds of such Indebtedness and the
proceeds of such property to the extent the applicable Uniform Commercial
Code provides for the automatic perfection of a security interest in such
proceeds.
84
Section 7.03. No Contingent Obligations. The Borrower shall not create,
incur, assume, guarantee or remain liable, or permit any of its Restricted
Subsidiaries to create, incur, assume, guarantee or remain liable, on any
Contingent Obligations other than:
(a) the Guaranties,
(b) guaranties of Indebtedness under other Permitted Loan Agreements
and
(c) guaranties permitted under Sections 7.01(a)(vi) and (d)(i) of
Indebtedness permitted under Section7.01(c)(ii) or (iii).
Section 7.04. Restrictions on Investments. The Borrower shall not make or
permit to exist or to remain outstanding, or permit any of its Restricted
Subsidiaries to make or permit to exist or to remain outstanding, any Investment
except:
(a) Investments in Rate Hedging Agreements in a notional principal
amount on any date reasonably related to the aggregate principal amount of
Indebtedness of the Borrower accruing interest at a floating rate, and only
so long as the purpose of such Investments shall be to hedge such
floating-rate interest and shall not be to speculate on interest rates;
(b) Investments in commercial paper maturing in 90 days or less from
the date of issuance which, at the time of acquisition by the Borrower or
any of its Restricted Subsidiaries, is accorded a rating of "A1" or better
by Standard & Poor's Ratings Group or "P1" or better by ▇▇▇▇▇'▇ Investors
Service, Inc. or an equivalent rating by another nationally recognized
credit-rating agency of similar standing;
(c) Investments in
(i) direct obligations of, or obligations guaranteed by, the
United States of America or any agency that constitutes a
full-faith-and-credit obligation of the United States of America, in
any case maturing in 12 months or less from the date of acquisition
thereof, and
(ii) repurchase agreements fully secured by underlying securities
of the type described in clause (i) above and issued by a bank or
trust company meeting the requirements of Section 7.04(d);
(d) Investments in certificates of deposit maturing within six months
from the date of issuance thereof (i) issued by a bank or trust company
organized under the laws of the United States or any state thereof, having
capital, surplus and undivided profits aggregating at least $500,000,000
and whose long-term certificates of deposit
85
are, at the time of acquisition thereof by the Borrower, rated "AA" or
better by Standard & Poor's Ratings Group or "A" or better by ▇▇▇▇▇'▇
Investors Service, Inc., or (ii) issued by any Lender;
(e) Investments in money-market funds (other than single-state funds)
that make investments in accordance with the regulations of the Securities
and Exchange Commission under the Investment Company Act of 1940, as
amended;
(f) loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of the
Borrower or any of its Restricted Subsidiaries;
(g) Investments by the Borrower in its Restricted Subsidiaries, by
Operating Subsidiaries in License Subsidiaries and by Restricted
Subsidiaries in the Borrower by way of loans;
(h) Investments by the Borrower or any of its Restricted Subsidiaries
in the following Persons (except as the Borrower and the Required Lenders
may otherwise agree):
(i) partnerships, but only to the extent permitted by
Section 7.18;
(ii) Qualified Joint Ventures; provided that the aggregate amount
of such Investments at any one time outstanding shall not exceed
[*]; and
(iii) Non-Qualified Joint Ventures; provided that the aggregate
amount of such Investments at any one time outstanding shall not
exceed [*],
in each case in addition to any other Investments in such Persons permitted
under this Section 7.04;
(i) loans, advances, installment sales or receivables that would
constitute Investments, in each case in respect of sales of handsets and
accessories thereto to retail end users on payment terms requiring full
payment within [*] days following such sales;
(j) Investments existing on the date hereof and listed on Schedule
7.04; and
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
86
(k) Investments by the Borrower or any of its Restricted Subsidiaries
consisting of seller take-back financing permitted under
Section 7.06(b)(iii)(C)(1).
The aggregate amount of any Investment consisting of non-cash consideration in
any Qualified Joint Venture or any Non-Qualified Joint Venture shall be the
greater of (A) the net book value of the assets (as determined in accordance
with GAAP) contributed thereto (or, in the case of a contribution of the right
to provide PCS services to only a portion of the POPs of a BTA, a ratable
portion of such net book value, determined with respect to the total POPs of
such BTA), net of any purchase-money Indebtedness of the Borrower or a
Restricted Subsidiary in respect thereof that is assumed by the acquiror
thereof, and (B) the fair-market value of the assets so contributed, as
determined in good faith by the Board of Directors of the Grandparent.
Section 7.05. Distributions. The Borrower shall not make, or permit any of
its Restricted Subsidiaries to make, any Distributions (other than a dividend or
other distribution of any shares of common Stock of the Borrower subject to the
Parent's pledge under the Parent Pledge Agreement) in respect of the Borrower's
Stock or any Subordinated Debt of the Borrower, except that the Borrower may:
(a) pay interest in respect of Subordinated Debt owing to the
Grandparent, but only if:
(i) at the time of and after giving effect to such payment, no
Default shall have occurred and be continuing, and
(ii) interest on such Subordinated Debt shall accrue at a rate
per annum not exceeding a fixed rate of [*] per annum (or, if approved
by the Required Lenders, such higher rate as is consistent with
then-available market rates);
(b) repay or prepay principal owing in respect of Subordinated Debt
owing to the Grandparent, but only if:
(i) at the time of and after giving effect to such repayment or
prepayment, no Default shall have occurred and be continuing,
(ii) the aggregate principal amount of all such Subordinated Debt
that is being repaid or prepaid at such time shall not exceed the sum
of:
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
87
(A) the difference, if any, between
(1) the maximum aggregate principal amount of the Loans
that could be then outstanding at such time under
Section 2.01, and
(2) the sum of:
(I) the aggregate principal amount of the Loans
that are actually outstanding at such time, and
(II) the aggregate principal amount of such
Subordinated Debt that shall have been repaid or
prepaid after the date of this Agreement and is
allocable to amounts that may be distributed pursuant
to this clause (A),
(B) the difference, if any, between
(1) the maximum aggregate principal amount of the
Indebtedness that could then be outstanding at such time
under other Permitted Loan Agreements, and
(2) the sum of
(I) the aggregate principal amount of the
Indebtedness that is actually outstanding thereunder at
such time, and
(II) the aggregate principal amount of such
Subordinated Debt that shall have been repaid or
prepaid after the date of this Agreement and is
allocable to amounts that may be distributed pursuant
to this clause (B), and
(C) the amount equal to
(1) the aggregate principal amount of such Subordinated
Debt that shall have been loaned to the Borrower within the
[*] days preceding the date of such repayment or prepayment,
minus
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
88
(2) the aggregate principal amount of such Subordinated
Debt that shall have been repaid within the [*] days
preceding the date of such repayment or prepayment and is
allocable to amounts that may be distributed pursuant to
this clause (C);
provided that
(x) any such repayment or prepayment on any date shall
be allocated to clause (A), (B) or (C) above for purposes of
determining whether any distribution may be made pursuant to
this clause (ii) in the following order of priority: first,
any such repayment or prepayment shall be allocated to
clause (C) above until any further allocation to such clause
on such date would cause the amount calculated pursuant to
such clause to be less than zero; second any such repayment
or prepayment shall be allocated to clause (B) above until
any further allocation to such clause on such date would
cause the amount calculated pursuant to such clause to be
less than zero; and third any such repayment or prepayment
shall be allocated to clause (A) above, and
(y) any such repayment or prepayment that is made with
proceeds of a borrowing under this Agreement or any
Permitted Loan Agreement shall not be taken into account for
the computation provided for in clause (A)(2)(II) or
(B)(2)(II) above; and
(iii) at any preceding date, no Default would have occurred if
such Subordinated Debt had not been outstanding;
(c) so long as no Default shall have occurred and be continuing at the
time of and after giving effect to such Distribution, make a Distribution
of an amount equal to the Net Cash Proceeds of any Restricted Sale with
respect to any FCC License, the Stock of any License Subsidiary or the
right to provide PCS services to any POPs, to the extent such Net Cash
Proceeds are not required to be applied to the prepayment of Advances
pursuant to Section 3.02 or of any other Indebtedness of the Borrower or
any of its Restricted Subsidiaries; and
(d) make other Distributions (other than Distributions in respect of
Subordinated Debt owing to Persons other than the Borrower or the
Grandparent), but only if at the time of and after giving effect to such
Distribution:
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
89
(i) no Default shall have occurred and be continuing,
(ii) the Borrower and its Restricted Subsidiaries shall have had
Consolidated EBTDA in excess of zero for each of its [*] consecutive
Fiscal Quarters ending with its Fiscal Quarter most recently ended
prior to the date of such Distribution (the "Preceding Fiscal
Quarter") and
(iii) the aggregate amount for all Distributions by the Borrower
during the fiscal year of the Borrower in which the date of such
Distribution occurs shall not exceed:
(A) Working Capital as of the last day of the Preceding
Fiscal Quarter, minus
(B) the aggregate amount of Debt Service payable by the
Borrower and its Restricted Subsidiaries during the [*] calendar
months next-following the Preceding Fiscal Quarter, minus
(C) the aggregate amount of any prepayment of Indebtedness
required to be made pursuant to Section 3.02(c) hereunder and any
other similar prepayment of Indebtedness of the Borrower from
Excess Cash Flow pursuant to a Permitted Loan Agreement during
the Borrower's then-current fiscal year and that has not
theretofore been made.
Section 7.06. Merger, Consolidation, Disposition of Assets, Etc. (a) The
Borrower shall not merge into or consolidate with any Person or permit any
Person to merge into it, and shall not permit any of its Restricted Subsidiaries
to do any of the foregoing.
(b) The Borrower shall not, and shall not permit any Restricted Subsidiary
to, become a party to or agree to or effect any disposition of assets, other
than:
(i) the disposition of assets in the ordinary course of business;
(ii) the disposition of obsolete assets or equipment no longer
necessary to the operation of the Borrower's or any Restricted Subsidiary's
business, consistent with sound and prudent practices;
(iii) so long as no Default shall have occurred and be continuing at
the time thereof,
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
90
(A) dispositions of rights to provide PCS services to any POPs
included in any Permitted BTA, so long as such dispositions are not
Restricted Sales;
(B) any sale of (w) FCC Licenses with respect to Permitted BTAs
that are not Core BTAs, (x) the Stock of any License Subsidiary
holding FCC Licenses for Permitted BTAs that are not Core BTAs, (y)
the right to provide PCS services with respect to POPs included in
Permitted BTAs in a transaction that constitutes a Restricted Sale, or
(z) any equipment or other assets used primarily for the operation of
any Permitted BTA the FCC License for which has been so sold or for
providing services to POPs for which the right to provide PCS services
shall have been so sold, but in any such case only if:
(1) of the aggregate value of the consideration received by
the Borrower and its Restricted Subsidiaries therefor (as
determined in good faith by the Board of Directors of the
Grandparent), no less than [*] shall be cash payable at the time
of such sale, no more than [*] shall be in the form of deferred
cash payments, and no such consideration shall be in any other
form,
(2) such consideration shall be at least equal to the
fair-market value (as determined in good faith by the Board of
Directors of the Grandparent) of the assets sold and
(3) no equipment and other assets are sold if such assets
are necessary for the normal commercial operation of any
Permitted BTA, or to provide PCS services to any POPs included in
any Permitted BTA, for which such a sale shall not have occurred;
(C) dispositions by way of capital contributions to Qualified
Joint Ventures or Non-Qualified Joint Ventures of FCC Licenses with
respect to Permitted BTAs that are not Core BTAs, the Stock of any
License Subsidiary holding FCC Licenses for Permitted BTAs that are
not Core BTAs, the right to provide PCS services with respect to POPs
included in Permitted BTAs, and any equipment and other assets used
primarily for the operation of any such Permitted BTA that has been so
disposed of, or to provide services to POPs for which the right to
provide PCS services shall have been so disposed of, so long as (x)
such disposition shall be in compliance with Section 7.04(h) and (y)
the aggregate value of the consideration received by the Borrower and
its Restricted Subsidiaries for such contribution shall at least be
equal to the fair-market value (as determined in good faith by the
Board of Directors of the Grandparent) of the assets so contributed;
and
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
91
(D) dispositions of (x) any FCC License (or portion thereof, in
the case of a Permitted Transfer that is a Permitted Disaggregation
disposed of pursuant to clause (2) below) in respect of a Permitted
BTA or (y) the Stock of any License Subsidiary holding an FCC License
for a Permitted BTA, but only if :
(1) all of the following are true:
(I) the sole consideration received in connection with
such disposition is another FCC License in respect of the
same BTA,
(II) the FCC License being acquired covers at least the
same amount of spectrum as the FCC License being disposed
of, and
(III) no License Subsidiary or other Loan Party shall
be liable for the payment of any Indebtedness owing to the
FCC in connection with the payment of any deferred-purchase
price for the FCC License being disposed of;
(2) all of the following are true:
(I) at the time of and after giving effect to such
disposition:
(x) if the FCC License (or portion thereof) being
so disposed of is for, or the License Subsidiary for
which the Stock is being so disposed of holds the FCC
License for, a Core BTA, either:
(a) a License Subsidiary shall hold either
(i) one or more FCC Licenses or (ii) the right to
provide, on terms and conditions satisfactory to
the Required Lenders, PCS services under FCC
Licenses held by third parties covering an
aggregate amount of spectrum that is equal to at
least the lesser of the amount of spectrum covered
by the FCC License being so disposed of and [*]
MHz, or
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
92
(b) such FCC License (or portion thereof) is
for the [*], and, after giving effect thereto, a
License Subsidiary shall hold either one or more
FCC Licenses, or the right to provide, on terms
and conditions satisfactory to the Required
Lenders, PCS services under FCC Licenses held by
third parties, covering at least (i) prior to [*],
[*] MHz of spectrum and (ii) thereafter (A) [*]
MHz of spectrum if the Borrower shall have
demonstrated to the reasonable satisfaction of the
Required Lenders that, as of the date of such
disposition, the rates of call blocking and
dropped calls with respect to all cells in the
Philadelphia BTA will conform to generally
accepted industry standards at the time, and (B)
[*] MHz otherwise, and
(y) in all other circumstances and after giving
effect to such disposition , a License Subsidiary shall
hold either (i) one or more FCC Licenses or (ii) the
right to provide, on terms and conditions satisfactory
to the Required Lenders, PCS services under FCC
Licenses held by third parties, covering at least [*]
Mhz of spectrum;
(II) no other asset is disposed of in connection with such
disposition;
(III) such disposition is by way of either (x) a sale that
complies with the requirements of subsection (B) above
(notwithstanding that at the time of such disposition such
disposition is not a Restricted Sale) or (y) a Permitted
Transfer; and
(IV) no License Subsidiary or other Loan Party shall be
liable for the payment of any Indebtedness owing to the FCC in
connection with the payment of the deferred-purchase price of the
FCC License being disposed of; or
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
93
(3) the Required Lenders shall have accepted as a Permitted BTA a
BTA in substitution for the BTA as to which such disposition shall
have occurred;
(iv) other dispositions of assets for their fair-market value, as
determined in good faith by the Borrower, solely for cash consideration in
an amount not to exceed [*] in the aggregate during the term of this
Agreement; and
(v) transfers of assets from the Borrower to any Restricted Subsidiary
or from a Restricted Subsidiary to the Borrower or another Restricted
Subsidiary, in each case to the extent that, after giving effect to such
transfer, the transferee would be in compliance with its obligations under
Section 7.12.
If the Borrower or any of its Restricted Subsidiaries shall make any
disposition of any assets pursuant to clause (iii)(D) above to a Qualified Joint
Venture, it shall not thereafter permit such Qualified Joint Venture to fail to
continue to qualify as a Qualified Joint Venture, except in a transaction
involving a disposition of the assets of such Qualified Joint Venture that is
otherwise permitted under this subsection (b). The Borrower shall not, and shall
not permit any Restricted Subsidiary to, contribute any assets to a Qualified
Joint Venture except to the extent reasonably necessary for the contemplated
operations of such Qualified Joint Venture.
(c) Except with the agreement of the Required Lenders, the Borrower shall
not permit any Restricted Subsidiary to issue or sell any Stock or other equity
interest in itself, other than to the Borrower or another Restricted Subsidiary
of the Borrower and only if such Stock is pledged as security under the
Collateral Documents.
Section 7.07. Sale and Leaseback. The Borrower shall not enter into, or
permit any of its Restricted Subsidiaries to enter into, any arrangement,
directly or indirectly, whereby the Borrower or any of its Restricted
Subsidiaries shall sell or transfer any Property owned by it in order then or
thereafter to lease such Property or lease other property that the Borrower or
such Restricted Subsidiary intends to use for substantially the same purpose as
the Property being sold or transferred.
Section 7.08. Compliance with Environmental Laws. The Borrower shall not,
and shall not permit any of its Subsidiaries to:
(a) use any of the Real Estate or any portion thereof for the
handling, processing, storage or disposal of Materials of Environmental
Concern, except in compliance with Environmental Laws;
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
94
(b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Materials of
Environmental Concern, except in compliance with Environmental Laws;
(c) generate any Materials of Environmental Concern on any of the Real
Estate, except in compliance with Environmental Laws;
(d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e., releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Materials of
Environmental Concern on, upon or into the Real Estate except in compliance
with Environmental Laws; or
(e) otherwise conduct any activity at any Real Estate, except in
compliance with Environmental Laws, or use any Real Estate in any manner
that would violate any Environmental Law or bring such Real Estate in
violation of any Environmental Law.
Section 7.09. Employee Benefit Plans. Neither the Borrower nor any ERISA
Affiliate shall, nor shall the Borrower permit any of its Subsidiaries to:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the IRC which could result in a
material liability for the Borrower;
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA,
whether or not such deficiency is or may be waived;
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower pursuant to Section 302(f) or Section 4068 of ERISA;
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities;
(e) fail to make when due any required contributions to a
Multiemployer Plan;
95
(f) withdraw (completely or partially) from any Multiemployer Plan
where such withdrawal is likely to result in a material liability of the
Borrower or an ERISA Affiliate;
(g) terminate or institute proceedings to terminate, any Guaranteed
Pension Plan, where such termination is likely to result in a material
liability of the Borrower or an ERISA Affiliate;
(h) make any amendment to any Guaranteed Pension Plan with respect to
which security is required under Section 307 of ERISA; or
(i) fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the IRC where such failure is
likely to result in material liability to the Borrower or an ERISA
Affiliate.
Section 7.10. New Subsidiaries. The Borrower shall not create or acquire
any Person other than Operating Subsidiaries, Licenses Subsidiaries, any Person
the sole asset of which consists of its partnership interest in a general or
limited partnership or equity interest in a corporation, and, to the extent
permitted under Section 7.04(h), Non-Qualified Joint Ventures.
Section 7.11. Transactions with Affiliates. The Borrower shall not enter
into, or permit any of its Restricted Subsidiaries to enter into:
(a) any agreement or arrangement providing for the payment of any
amounts to any of its Affiliates, except that:
(i) the Borrower may enter into the Expense Allocation Agreement
, and any Operating Subsidiary may enter into (A) the Cash Management
Agreement, (B) the Services Agreement and (C) one or more operating
agreements substantially in the form of Exhibit D-2 hereto, between
such Operating Subsidiary and a License Subsidiary;
(ii) the Borrower and its Restricted Subsidiaries may enter into
a tax-sharing agreement or arrangement pursuant to which the Borrower
and its Restricted Subsidiaries shall not make any payments or agree
to make any payments in lieu of income taxes unless the cumulative sum
of such payments does not exceed the cumulative sum of income taxes
that the Borrower and its Restricted Subsidiaries would have paid if
the Borrower and its Restricted Subsidiaries had always filed
income-tax returns as separate entities; and
(iii) the Borrower and its Restricted Subsidiaries may enter into
a management, consulting or other agreement, but only if such
agreement either
96
(A) relates to providing management, consulting or other
services to an Affiliate operating BTA markets and
(1) is on terms that are fair and reasonable and no
less favorable to the Borrower or such Restricted Subsidiary
than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate; and
(2) does not provide for the performance of services or
purchase or delivery of property by the Borrower or such
Restricted Subsidiary in a manner that, individually or
together with all other such agreements with Affiliates
operating BTA markets, would have a material adverse effect
on the ability of the Borrower or such Restricted Subsidiary
to build-out or operate any BTA or MTA for which it owns the
applicable FCC License, or
(B) is approved in writing by the Required Lenders, or
(b) any other agreement, arrangement or transaction with any of its
Affiliates (whether or not providing for the payment of any amounts to any
of its Affiliates), except in the ordinary course of business and on terms
that are fair and reasonable and no less favorable to the Borrower or such
Restricted Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
Section 7.12. Permitted Business. The Borrower shall not
(a) engage in any business other than the holding of Stock of
Operating Subsidiaries and License Subsidiaries and the purchasing and
reselling to Restricted Subsidiaries of equipment used in connection with
the build-out and operation of PCS Systems for which FCC Licenses for BTAs
other than Excluded BTAs are held by License Subsidiaries or hold any
assets other than such Stock,
(b) permit any License Subsidiary to engage in any business other than
the holding of FCC Licenses and the licensing thereof to other Persons to
the extent permitted hereunder or hold any assets other than FCC Licenses,
and
(c) permit any Operating Subsidiary to engage in any business other
than the development, construction and operation of PCS Systems and related
businesses.
Section 7.13. Charter Amendments. The Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, amend its certificate of
incorporation or bylaws.
97
Section 7.14. Accounting Changes. The Borrower shall not make or permit, or
permit any of its Restricted Subsidiaries to make or permit, any change in
accounting policies or reporting practices, except as required by GAAP, or
change its fiscal year.
Section 7.15. Prepayments, Etc., of Indebtedness. The Borrower shall not
and shall not permit any Restricted Subsidiary:
(a) to prepay, redeem, purchase, defease or otherwise satisfy prior to
the scheduled maturity thereof in any manner, or make any payment in
violation of any subordination terms of, any Indebtedness owing by the
Borrower or any of its Restricted Subsidiaries, other than the prepayment
of the Advances in accordance with the terms of this Agreement or as the
Required Lenders may otherwise agree, except for prepayments, redemptions,
purchases or other satisfactions by the Borrower as to which lenders under
the Intercreditor Agreement are not required to pay any amount to other
lenders party thereto or Indebtedness owing to the FCC, or
(b) to amend, modify or change in any manner any term or condition of
any Subordinated Debt or any other Indebtedness secured by Liens in favor
of the Collateral Agent, except for amendments, modifications and changes
that the lenders party to the Intercreditor Agreement are permitted to
enter into thereunder.
If on any date any amount shall be due and owing hereunder and under any other
Indebtedness of the Borrower or any of its Restricted Subsidiaries and the
Borrower or such Restricted Subsidiary shall not pay in full all such amounts as
are then due and owing, the Borrower shall not pay, or permit such Restricted
Subsidiary to pay, any such amounts except ratably, in accordance with the
respective amounts then due and owing thereunder. If the Borrower shall take any
action in violation of this Section 7.15, it irrevocably authorizes each lender
to it that is a party to the Intercreditor Agreement on its behalf to make any
payment required under the Intercreditor Agreement and acknowledges that any
amount so paid by any such lender shall be deemed not to have been paid by the
Borrower or such Restricted Subsidiary to such lender.
Section 7.16. Amendment, Etc., of Material Contracts. The Borrower shall
not, and shall not permit any Restricted Subsidiary to, cancel or terminate any
Material Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any consent,
waiver or approval thereunder, waive any default under or breach of any Material
Contract, agree in any manner to any other amendment, modification or change of
any term or condition of any Material Contract, or take any other action in
connection with any Material Contract, and shall not permit any of its
Restricted Subsidiaries to do any of the foregoing, that, in any such case,
could, at the time thereof, reasonably be expected to have a material adverse
effect on the ability of the Borrower or
98
any of its Restricted Subsidiaries to perform its obligations under this
Agreement or any other Loan Document.
Section 7.17. Restrictions on Restricted Subsidiaries. (a) The Borrower
shall not enter into or suffer to exist, or permit any of its Restricted
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien in favor of the Collateral
Agent upon any of its property or assets or limiting the ability of any
Restricted Subsidiary to declare and pay dividends and distributions or make
Investments in the Borrower.
(b) So long as any Advances are outstanding or any other amount is owing
under the Loan Documents, no Distribution shall be made by any Qualified Joint
Venture except in cash or to any Person other than the Borrower and its
Restricted Subsidiaries if such Person would receive more than [*] of the total
amount of such Distribution or if the total amount of all such Distributions
during any calendar year would exceed the Excess Cash Flow of such Qualified
Joint Venture for the immediately preceding calendar year;
Section 7.18. Partnerships. The Borrower shall not become, or permit any of
its Restricted Subsidiaries to become, a general partner in any general or
limited partnership other than any Restricted Subsidiary the sole asset of which
consists of its interest in such partnership.
Section 7.19. Default Under the Equipment Acquisition Agreement. The
Borrower shall not default in the performance or observance of any covenants or
conditions on its part to be performed or observed under the Equipment
Acquisition Agreement.
Section 7.20. Collections of Receivables. The Borrower shall not, and shall
not permit any of its Subsidiaries to, collect any receivables arising from
providing PCS or other services or sales of handsets or other assets, except
through the Operating Subsidiary.
ARTICLE VIII
CONDITIONS TO THE INITIAL ADVANCE
The obligations of the Lenders to make their initial Advances shall be
subject to the satisfaction of the following conditions precedent on or prior to
the date of such initial Advances (the "Closing Date"):
Section 8.01. Terms and Conditions of Transaction. (a) Each Lender shall
have received a Note, payable to the order of such Lender, duly executed and
delivered by the Borrower, as well as copies of each of the other Loan
Documents, which shall have been
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
99
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to the
Administrative Agent, each of the Lenders and their counsel.
(b) The Lenders shall be satisfied with the final terms and conditions of
the transactions contemplated hereby and by the other Loan Documents, including,
without limitation, all legal and tax aspects thereof.
(c) The Lenders shall be satisfied with the corporate and legal structure
and capitalization of the Borrower and its Subsidiaries, including, without
limitation, their respective charters and bylaws and each agreement or
instrument relating thereto.
Section 8.02. Due Diligence. The Lenders shall have completed a
due-diligence investigation of the Borrower and its Subsidiaries in scope, and
with results, satisfactory to the Lenders and shall have been given such access
to the management, records, books of account, contracts and properties of the
Borrower and shall have received such financial, business and other information
regarding the Borrower and its Subsidiaries as they shall have requested.
Section 8.03. Validity of Liens. The Borrower Security Agreement, the
Parent Pledge Agreement and each other Collateral Document required to be
entered into on the date hereof shall be effective to create in favor of the
Collateral Agent a legal, valid and enforceable first-priority security interest
(except for Permitted Liens that have priority under applicable law) in and Lien
upon the Collateral. All filings, recordings, deliveries of instruments and
other actions necessary or desirable in the opinion of the Collateral Agent to
protect and preserve such security interests shall have been duly effected, all
such documents shall have been duly executed by the applicable Loan Party and
all filing and recording fees and taxes relating to any of the foregoing shall
have been duly paid. The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.
Section 8.04. Search Reports and Related Documents. The Administrative
Agent shall have received
(a) such Uniform Commercial Code, tax, patent, trademark and judgment
lien search reports with respect to such applicable public offices where
Liens are filed, as shall be acceptable to the Administrative Agent,
disclosing that there are no Liens of record (other than Permitted Liens)
in such official's office covering any Collateral or showing any Loan Party
as a debtor thereunder;
100
(b) a certificate of each Loan Party signed by an authorized officer
of such Loan Party, dated the Closing Date, certifying that, as of the
Closing Date, there will exist no Liens on the Collateral other than
Permitted Liens; and
(c) acknowledgment copies or duly executed file-stamped copies of
UCC-1 and UCC-3 financing statements with respect to the Collateral (other
than the pledged Collateral), filed in each office in each jurisdiction
that the Administrative Agent may deem necessary or appropriate to perfect
and protect a first-priority Lien on the Collateral.
Section 8.05. Certificates of Insurance. The Administrative Agent shall
have received:
(a) a certificate of insurance from an independent insurance broker,
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Collateral Documents and
this Agreement, and
(b) copies of all policies evidencing such insurance, which shall
contain provisions naming the Collateral Agent as an additional insured and
loss payee on behalf of the Lenders as its interests may appear, and
providing for 30-days' prior written notice to Administrative Agent and the
Collateral Agent of cancellation or diminishment.
Section 8.06. Solvency Certificate. Each of the Lenders and the
Administrative Agent shall have received an officer's certificate of the
Borrower and the Parent, in form and substance satisfactory to the
Administrative Agent and the Lenders, dated as of the Closing Date as to the
Borrower and the Parent being Solvent after giving effect to the consummation of
the transactions contemplated herein and in the other Loan Documents.
Section 8.07. Opinions of Counsel to the Borrower and its Subsidiaries.
Each of the Lenders and the Administrative Agent shall have received favorable
legal opinions addressed to the Lenders and the Administrative Agent, each dated
as of the Closing Date, in form and substance satisfactory to the Lenders and
the Administrative Agent, from (i) Piper & Marbury, L.L.P., counsel to the
Borrower, (ii) Piper & Marbury, L.L.P., counsel to the Borrower's Subsidiaries,
and (iii) local counsel to the Borrower's Subsidiaries in such jurisdictions as
the Administrative Agent may reasonably request.
101
Section 8.08. Opinion of Counsel to the Grandparent and the Parent. Each of
the Lenders and the Administrative Agent shall have received a favorable legal
opinion addressed to the Lenders and the Administrative Agent, from Piper &
Marbury, L.L.P., counsel to the Grandparent and the Parent, dated as of the
Closing Date, in form and substance satisfactory to the Lenders and the
Administrative Agent.
Section 8.09. Opinion of FCC Counsel. Each of the Lenders and the
Administrative Agent shall have received a favorable legal opinion addressed to
the Lenders and Administrative Agent from Piper & Marbury, L.L.P., FCC counsel
to the Borrower, the Grandparent and the Parent, dated as of the Closing Date,
in form and substance satisfactory to the Lenders and the Administrative Agent.
Section 8.10. Opinion of Counsel to the Administrative Agent. Each of the
Lenders and the Administrative Agent shall have received a favorable legal
opinion addressed to the Lenders and Administrative Agent from Shearman &
Sterling, counsel to the Administrative Agent, dated as of the Closing Date, in
form and substance satisfactory to the Administrative Agent.
Section 8.11. Payment of Fees. The Borrower shall have paid all accrued
fees and expenses of the Administrative Agent, the Collateral Agent and the
Lenders, to the extent payable by the Borrower hereunder and under the other
Loan Documents.
Section 8.12. Approvals, Permits; FCC Licenses. (a) The Borrower and each
of its Subsidiaries shall have obtained all federal, state and local
governmental and regulatory consents, approvals, FCC Licenses and permits,
including any third-party consents, as required or necessary for the Borrower to
accept Loans and for the Borrower and its Subsidiaries to operate their
businesses pursuant to the Approved Full Term Operating Business Plan and shall
maintain in effect each of the foregoing; all applicable waiting periods shall
have expired without any action being taken by any competent authority; no law
or regulation shall be applicable in the judgment of the Lenders that restrains,
prevents or imposes materially adverse conditions upon the Loans or the
operation of the businesses of the Borrower and its Subsidiaries as currently
operated, and the Administrative Agent and each of the Lenders shall receive a
certificate of an authorized officer of the Borrower to that effect dated the
Closing Date.
(b) The Lenders shall have received evidence satisfactory to the Lenders
that each FCC License listed in Parts I and II of Schedule 5.07 has been won by
the Grandparent and its Subsidiaries in FCC PCS auctions, has been transferred
to a License Subsidiary, that each such FCC License is held by a Subsidiary of
the Grandparent and that no such FCC License is subject or likely to be subject
to any revocation action commenced or threatened by the FCC or to being
purchased by any Person other than a License Subsidiary.
102
Section 8.13. Delivery of Operating Business Plans. The Borrower shall have
delivered to the Administrative Agent and each Lender a full-term operating
business plan, each of which shall be in form and substance satisfactory to the
Administrative Agent and each Lender, together with (i) a certificate of the
chief or principal financial or accounting officer dated the Closing Date
certifying as to the reasonableness of the assumptions and expectations
contained therein and that there are presently no facts known to such Person
that would make either such plan misleading in any material respect and (ii)
such pro-forma financial statements and projections for the Borrower and its
Subsidiaries, in form and substance satisfactory to the Lenders, as shall be
reasonably requested by the Lenders.
Section 8.14. Security Agreements. The Borrower shall have delivered to the
Administrative Agent and each Lender copies of each of the following:
(a) a security agreement (as amended from time to time, the "Borrower
Security Agreement"), in substantially the form of Exhibit E-1, duly
executed by the Borrower, that, among other things, grants to the
Collateral Agent for the benefit of the Secured Parties a Lien on such
assets of the Borrower (including without limitation all issued and
outstanding Stock of each License Subsidiary and each Operating Subsidiary
owned by the Borrower) as the Lenders may request;
(b) a pledge agreement (as amended from time to time, the "Parent
Pledge Agreement"), in substantially the form of Exhibit E-2, duly executed
by the Parent, that, among other things, pledges to the Collateral Agent
for the benefit of the Secured Parties all issued and outstanding Stock of
the Borrower owned by the Parent;
(c) security agreements (together with each other security agreement
delivered pursuant to Section 6.18(b), in each case as amended from time to
time, a "Subsidiary Security Agreement" and, together with the Borrower
Security Agreement and the Parent Pledge Agreement, the "Security
Agreements"), substantially in the respective forms of Exhibit E-3 (for any
Operating Subsidiary) and E-4 (for any License Subsidiary) hereto, duly
executed by the Guarantors (other than the Parent), each of which, among
other things, grants to the Collateral Agent for the benefit of the Secured
Parties a Lien on such assets of such Guarantor (including, in the case of
any Operating Subsidiary, all issued and outstanding Stock of each of its
Restricted Subsidiaries that is a License Subsidiary or an Operating
Subsidiary, but in the case of any License Subsidiary, excluding any assets
for which the grant of such a Lien would violate applicable FCC
regulations) as the Lenders may request,
103
in each case together with:
(1) if applicable, certificates representing the any shares of
Stock pledged under such Security Agreement, accompanied by undated
stock powers executed in blank,
(2) duly executed financing statements, in proper form for filing
under the Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the first priority liens and security interests
created under such Security Agreement covering the Collateral
described in such Security Agreement,
(3) evidence of any insurance required by the terms of such
Security Agreement and
(4) evidence that all other action that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the
first priority liens and security interests created under such
Security Agreement has been taken.
Section 8.15. Guaranties. The Borrower shall have delivered to the
Administrative Agent and each Lender copies of each of the following:
(a) from the Parent, a limited recourse guaranty in substantially the
form of Exhibit H-1 hereto (as amended, supplemented or otherwise modified
from time to time in accordance with its terms, the "Limited Recourse
Parent Guaranty"), duly executed by the Parent, and
(b) from each Operating Subsidiary and each License Subsidiary, a
guaranty in substantially the form of Exhibit H-2 hereto (together with
each other such guaranty delivered pursuant to Section 6.18(a), in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms, a "Subsidiary Guaranty" and, together with the
Limited Recourse Parent Guaranty, the "Guaranties"), duly executed by each
Operating Subsidiary and each License Subsidiary.
Section 8.16. Mortgages, Etc. The Borrower shall have delivered to the
Administrative Agent and each Lender copies of deeds of trust, trust deeds,
mortgages, leasehold mortgages and leasehold deeds of trust in form and
substance satisfactory to the Administrative Agent and covering the properties
listed on Schedule 8.16 hereto (together with each other mortgage delivered
pursuant to Section 6.18(b), in each case as amended,
104
supplemented or otherwise modified from time to time in accordance with their
terms, the "Mortgages"), duly executed by each party thereto, in each case
together with:
(a) evidence that counterparts of the Mortgages have been duly
recorded on or before the day of the initial Advance (or, with respect to
any such Mortgage entered into after the date of the initial Advance in
accordance with this Agreement, on or before the date of execution and
delivery of such Mortgage) in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in order to create a
valid first and subsisting Lien (other than Permitted Liens) on the
property described therein in favor of the Secured Parties and that all
filing and recording taxes and fees have been paid;
(b) evidence of the insurance required by the terms of such Mortgage;
and
(c) evidence that all other action that the Administrative Agent or
Collateral Agent may deem necessary or desirable in order to create valid
first and subsisting Liens on the property described in such Mortgage has
been taken.
Section 8.17. Attornment and Recognition Agreements. The Borrower shall
have delivered to the Administrative Agent and each Lender copies of each
attornment and recognition agreement required by Section 6.11.
Section 8.18. Material Agreements. Subject to confidentiality restrictions,
the Administrative Agent and each of the Lenders shall have received a complete
and correct copy, in form and substance satisfactory to the Lenders, of (a) the
Expense Allocation Agreement and the servicing agreement and form of licensing
agreement referred to in Section 7.11(a)(i), in each case (if applicable) as
then in effect and duly executed by the parties thereto, and (b) each other
contract set forth on Schedule 5.27, as such other contract is then in effect
and as to which the Administrative Agent shall have requested a copy on or
before the Closing Date.
Section 8.19. Litigation. There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality affecting any of the Grandparent, the
Parent, the Borrower or any of their respective Subsidiaries that
(i) could have a Material Adverse Effect, or
(ii) purports to affect the legality, validity or enforceability of
this Agreement, any Note, any other Loan Document or the consummation of
the transactions contemplated hereby or thereby or challenges any of the
Lenders' rights under this Agreement, any Note or any other Loan Agreement.
105
Section 8.20. Insurance Certificates. The Administrative Agent shall have
received one or more insurance certificates to the effect set forth in
Section 6.05.
Section 8.21. No Default. No default shall have occurred and be continuing
under the Equipment Acquisition Agreement.
Section 8.22. No Material Adverse Change. There shall have occurred no
material adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower or any of its
Restricted Subsidiaries since the date of the most recent audited financial
statements provided to the Lenders, and all information provided by or on behalf
of the Borrower to the Lenders prior to the date of the initial Advance shall be
true and correct in all material aspects.
Section 8.23. Corporate Documents. The Administrative Agent shall have
received on or before the day of the initial Advance the following, each dated
such day (unless otherwise specified), in form and substance satisfactory to
each Lender (unless otherwise specified) and in sufficient copies for each
Lender:
(a) Certified copies of the resolutions of the Board of Directors of
the Borrower and each other Loan Party approving this Agreement, the Notes
and each other Loan Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and governmental and
other third party approvals and consents, if any, with respect to this
Agreement, the Notes and each other Loan Document.
(b) A copy of the charter of the Borrower, the Grandparent and each
other Loan Party and each amendment thereto, certified (as of a date
reasonably near the date of the initial Advance) by the Secretary of State
of the jurisdiction of its incorporation as being a true and correct copy
thereof.
(c) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of the Borrower, the Grandparent and each
other Loan Party, dated reasonably near the date of the initial Advance,
listing the charter of such Person and each amendment thereto on file in
his office and certifying that
(i) such amendments are the only amendments to such Person's
charter on file in his office,
(ii) such Person has paid all franchise taxes to the date of such
certificate, and
106
(iii) such Person is duly incorporated and in good standing under
the laws of the state of incorporation of such Person.
(d) A copy of a certificate of the Secretary of State or other
appropriate representative of each state in which each of the Borrower and
each other Loan Party is engaged in any business, dated reasonably near the
date of the initial Advance, stating that each of the Borrower and each
other Loan Party is duly qualified and in good standing as a foreign
corporation in such state and has filed all annual reports required to be
filed to the date of such certificate.
(e) A certificate of the Borrower and each other Loan Party, signed on
behalf of the Borrower and such other Loan Party by its President or a Vice
President and its Secretary or any Assistant Secretary, dated the date of
the initial Advance (the statements made in which certificate shall be true
on and as of the date of the initial Advance), certifying as to
(A) the absence of any amendments to the charter of the Borrower,
or such other Loan Party since the date of the Secretary of State's
certificate referred to in Section 8.23(c),
(B) a true and correct copy of the bylaws of the Borrower and
such other Loan Party as in effect on the date of the initial Advance,
(C) the due incorporation and good standing of the Borrower and
such other Loan Party as a corporation organized under the laws of the
jurisdiction in which such Loan Party is incorporated, and the absence
of any proceeding for the dissolution or liquidation of the Borrower
or such other Loan Party,
(D) the truth of the representations and warranties of such
Person contained in the Loan Documents as though made on and as of the
date of the initial Advance, and
(E) the absence of any event occurring and continuing, or
resulting from the initial Advance, that constitutes a Default.
(f) A certificate of the Secretary or an Assistant Secretary of the
Borrower and each other Loan Party certifying as to the names and true
signatures of the officers of the Borrower and such other Loan Party
authorized to sign this Agreement, the Notes and each other Loan Document
to which they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
107
(g) All other documents, instruments, financial information and
opinions from the Borrower, the Grandparent, the Parent or any other Loan
Party (including opinions of counsel for the Borrower, the Grandparent, the
Parent or any other Loan Party) as the Administrative Agent and each Lender
may reasonably request, in form and substance satisfactory to the
Administrative Agent and each Lender and their counsel, and which shall be
in full force and effect on the date of the initial Advance.
Section 8.24. Intercreditor Agreement. The Borrower shall have delivered to
the Administrative Agent an intercreditor agreement substantially in the form of
Exhibit I, duly executed by the Collateral Agent (as the same may be amended
from time to time, the "Intercreditor Agreement").
Section 8.25. Support Agreement. The Borrower shall have delivered to the
Administrative Agent a Support Agreement substantially in the form of Exhibit J,
duly executed by the Grandparent and the Borrower (as the same may be amended
from time to time, the "Support Agreement").
Section 8.26. Amendment to Equipment Acquisition Agreement. The
Administrative Agent shall have received evidence satisfactory to it that the
Equipment Acquisition Agreement has been amended to allow [*]
Section 8.27. Acknowledgement of Assignment. The Administrative Agent shall
have received from Omnipoint Services a written statement to it in which
Omnipoint Services (a) consents to the assignment by the Operating Subsidiary
party to the Services Agreement of all of its right, title and interest in and
to the Services Agreement (including, without limitation, the right to receive
any monies due thereunder) to the Collateral Agent pursuant to the Collateral
Documents, (b) agrees not to cancel or terminate the Services Agreement except
upon at least [*] days written notice to the Administrative Agent and (c) agrees
that the Administrative Agent or the Collateral Agent shall be entitled to make
any payment or otherwise perform any obligation or cure any default of the
Borrower or any of its Restricted Subsidiaries under the Services Agreement.
Section 8.28. Other Information. The Lenders and the Administrative Agent
shall have received such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any Loan Party or any of its Restricted Subsidiaries as any Lender Party
(through the Administrative Agent) may from time to time reasonably request.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
108
ARTICLE IX
ADDITIONAL CONDITIONS TO ADVANCES
SECTION 9.01. Conditions Precedent to an Initial Advance Based on
Attributed Expenses with Respect to Any Operating Subsidiary or License
Subsidiary. The obligation of the Lenders to make an Advance on the basis of any
portion of the Borrowing Base relating to Attributed Expenses in respect of any
Permitted BTA relating to any Operating Subsidiary or License Subsidiary not in
existence on the date of the initial Advance, any FCC License not held by a
License Subsidiary as of the date of the initial Advance or any BTA in any
jurisdiction other than a jurisdiction as to which the Borrower shall have
received an opinion of counsel pursuant to Section 8.07, is subject to the
satisfaction of the following conditions precedent:
(a) the Lenders shall be satisfied with the corporate and legal
structure and capitalization of such Restricted Subsidiary, including the
terms and conditions of the charter, bylaws and each class of capital stock
of such Restricted Subsidiary and of each agreement or instrument relating
thereto, and
(b) such Restricted Subsidiary (or the Borrower on behalf of such
Restricted Subsidiary) shall have delivered each agreement, opinion of
counsel and other document required to be delivered by or on behalf of such
Restricted Subsidiary pursuant to Section 6.18.
Section 9.02. Conditions to All Advances. The obligation of each Lender to
make any Advance, including its initial Advance, shall also be subject to the
satisfaction of the following conditions precedent that on the date of such
Advance:
(a) The Administrative Agent shall have received a properly completed
Draw Request.
(b) Each of the representations and warranties of the Borrower and
each other Loan Party contained in this Agreement, the other Loan Documents
or in any document or instrument delivered pursuant to or in connection
with this Agreement or any other Loan Document is true and correct in all
material respects immediately prior to, and after giving effect to, the
making of such Advance and the application of the proceeds therefrom, as
though made on and as of such date (except to the extent of changes
resulting from transactions contemplated or permitted by this Agreement and
the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to
the extent that such representations and warranties relate expressly to an
earlier date). The
109
Administrative Agent shall have received a certificate of an authorized
officer of the Borrower to such effect.
(c) No event has occurred and is continuing, or would result from such
Advance or from the application of the proceeds therefrom, that constitutes
a Default or a default under any other Loan Document.
(d) No change shall have occurred in any law or regulations thereunder
or interpretations thereof that in the reasonable opinion of any Lender
would make it illegal for such Lender to make such Loan and no order of any
court or Governmental Body has been entered prohibiting the consummation of
the transactions contemplated by the Loan Documents.
(e) Each Lender shall have received such statements in substance and
form reasonably satisfactory to such Lender as such Lender shall require
for the purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
(f) The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.
(g) The Borrower shall have delivered to the Administrative Agent
invoices or other evidence reasonably satisfactory to the Administrative
Agent showing the aggregate amount of Ericsson Related Expenses that have
been incurred by the Borrower and its Restricted Subsidiaries through the
date of such Advance.
ARTICLE X
EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 10.01. Events of Default and Acceleration. Upon the occurrence and
during the continuance of any of the following events,
(a) the Borrower shall fail to pay any principal of the Loans, any
fee, any interest on the Loans or any other sum hereunder or under any of
the other Loan Documents to which it is a party, in any such case within
three days after the date on which the same shall become due and payable;
or
(b) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Article VII or Section 6.14(i) or 6.15; provided
that the Borrower
110
shall have the right to comply with the covenants contained in
Sections 6.15(a), (b) and (c) by providing, prior to the delivery of the
financial statement or other report to the Administrative Agent disclosing
the existence of such default, additional cash equity to the extent that if
such equity were included in Revenue or Operating Cash Flow, the Borrower
would be in compliance with Sections 6.15(a), (b) and (c), as the case may
be; or
(c) any Loan Party shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other
than those specified elsewhere in this Section 10.01) and such failure
shall continue for a period of 30 days; or
(d) any representation or warranty made by any Loan Party or any of
its Restricted Subsidiaries (or any of its officers) under this Agreement
or any of the other Loan Documents or in any certificate, statement,
document or instrument delivered pursuant to or in connection with this
Agreement or any Loan Document shall not be correct in any material respect
upon the date when made or confirmed or deemed to have been made, confirmed
or repeated; or
(e) any Loan Party or any shareholder of the Borrower shall:
(i) make an assignment for the benefit of creditors, or
(ii) generally not pay its debts as such debts become due or
admit in writing its inability to generally pay or generally fail to
pay its debts as they mature or become due, or
(iii) petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of any Loan Party or any such
shareholder or of any substantial part of the assets of any Loan Party
or any such shareholder, or
(iv) shall commence any case or other proceeding relating to any
Loan Party or any such shareholder under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction
providing for the relief of debtors, now or hereafter in effect, or
(v) shall take any action to authorize or in furtherance of any
of the foregoing,
or any such petition or application shall be filed or any such case or
other proceeding shall be commenced against any Loan Party or any such
shareholder and such Loan
111
Party or shareholder shall indicate its approval thereof, consent thereto
or acquiescence therein or shall not be able to have such proceeding
dismissed within 30 days thereof or any of the actions sought in such
proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or any substantial part of its property) shall occur; or any Loan
Party or any such shareholder shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) the Borrower or any of its Restricted Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount payable in
respect of any Indebtedness that is outstanding in an aggregate principal
amount of at least $5,000,000 (but excluding Indebtedness outstanding
hereunder or owing by any License Subsidiary to the FCC), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Indebtedness, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such
Indebtedness or otherwise to cause, or to permit the holder thereof to
cause, such Indebtedness to mature; or any such Indebtedness shall be
declared to be due and payable or required to be prepaid or redeemed (other
than by a regularly scheduled required prepayment or redemption), purchased
or defeased, or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof; or
(g) any judgment or order for the payment of money in excess of
$1,000,000 (excluding any portion thereof that an insurance company of
recognized standing and creditworthiness has agreed to pay), or any
material non-monetary judgment or order, shall be rendered against the
Borrower and either
(i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order, or
(ii) there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) any of the Loan Documents shall be cancelled, terminated, revoked
or rescinded otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Lenders, or
any action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of any Loan Party or any of its or their stockholders, or any court
or any other governmental or regulatory authority or
112
agency of competent jurisdiction shall make a determination that, or issue
a judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents, is illegal, invalid or unenforceable in accordance with
the terms thereof; or
(i) with respect to any Guaranteed Pension Plan, an ERISA Event shall
have occurred and the Required Lenders shall have determined in their
reasonable discretion that such event reasonably could be expected to
result in liability of the Borrower to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $250,000 and such event in the
circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan; or
the PBGC shall have instituted proceedings to terminate such Guaranteed
Pension Plan; or appointed a trustee to administer or liquidate any plan;
or
(j) the Borrower or any of its Restricted Subsidiaries shall be the
subject of writs of attachment or garnishment and the like that might have
a Material Adverse Effect and that are unstayed for a period of 30
consecutive days or any such attachment shall not have been bonded over
within 30 days of the entry thereof; or
(k) the FCC or any other Governmental Body shall cancel, revoke,
suspend or fail to renew any FCC License held by any License Subsidiary
relating to (i) any right held by any Restricted Subsidiary to provide PCS
services to any POPs included in any Core BTA, Dependent BTA or other
Permitted BTA, in either case for which the cancellation, revocation,
suspension or failure to renew the FCC License relating to which could
reasonably be expected to have a Material Adverse Effect, or (ii) any
Permitted BTA for which Ericsson Related Expenses in excess of $1,000,000
have been incurred, in either case except for any C-Block General License
Revocation Event or Proposed C-Block General License Revocation Event
occurring at any time when no License Subsidiary shall hold a C-Block
License for the Philadelphia BTA; or
(l) the FCC or any other Governmental Body shall commence any
proceeding to cancel, revoke or suspend any of the any FCC License held by
any License Subsidiary relating to BTAs described in clause (k) above,
which proceeding (i) could reasonably be expected to have a Material
Adverse Effect, and (ii) has not been stayed or enjoined within five
Business Days after the commencement of any such proceeding, in either case
except for any C-Block General License Revocation Event or Proposed C-Block
General License Revocation Event occurring at any time when no License
Subsidiary shall hold a C-Block License for the Philadelphia BTA; or
113
(m) any License Subsidiary shall fail to pay when due amounts owing to
the FCC relating to BTAs described in clause (k) above unless (i) such
failure to pay can reasonably be expected, in the reasonable judgment of
the Required Lenders, not to result in any cancellation, revocation or
suspension of such FCC License or (ii) the Borrower has obtained a stay or
injunction against any action by the FCC to cancel, revoke or suspend such
FCC License notwithstanding such failure to pay and such injunction or stay
shall then be in effect; or
(n) the Collateral Agent shall cease to have a valid and perfected
first-priority Lien on any Collateral securing any Loan Party's obligations
under any Loan Document, or any Loan Party shall so assert (subject,
however, to Permitted Liens entitled to priority in accordance with the
terms of the Loan Documents); or
(p) at any time any of the following shall occur:
(i) the Ownership Fraction shall be less than [*];
(ii) any issuance by the Borrower or disposition by the Parent of
Stock of the Borrower shall occur, other than a Permitted Stock
Transfer, or any Person (other than Ericsson and its Affiliates)
engaged in, or having an Affiliate engaged in, the business of
manufacturing, selling or distributing telecommunications equipment
shall own, directly or indirectly, legal or beneficially, more than
[*] of the Voting Stock of the Borrower then outstanding; or
(iii) all of each series and class of issued and outstanding
shares of Stock of the Borrower and each of its Subsidiaries shall
cease to be pledged as security for the obligations of the Borrower,
the other Loan Parties and their respective Subsidiaries hereunder and
under the other Loan Documents; or
(p) there shall occur in the judgment of the Required Lenders any
change in the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party that could
reasonably be expected to have a material adverse effect on the ability of
such Loan Party to perform its obligations under the Loan Documents to
which it is a party; or
(q) the Borrower or any Restricted Subsidiary shall default, after any
applicable grace period, under any equipment-acquisition agreement (other
than the Equipment Acquisition Agreement) providing for the purchase of
more than $10,000,000 in aggregate purchase price of equipment or other
goods, from any Person, or such Person shall so allege in writing; or
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
114
(r) the transferee of any FCC License disposed of in a Permitted
Transfer pursuant to Section 7.06(b)(iii)(E)(2) shall default in any of its
obligations under clause (c)(i)(C) of the definition of "Permitted
Transfer";
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice to the Borrower, (i) declare the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith terminate, and/or
(ii) declare the Notes, all interest thereon and all other amounts payable under
this Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that upon the occurrence of an Event of Default under subsection (e)
above, (A) the obligation of each Lender to make Advances shall automatically be
terminated and (B) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01. Authorization and Action. Each Lender appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including enforcement or collection of the Notes), the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lenders; provided that
the Administrative Agent shall not be required to take any action that exposes
the Administrative Agent to personal liability or that is contrary to this
Agreement or applicable law. The Administrative Agent will give to each Lender
prompt notice of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
Section 11.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents,
115
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Administrative Agent:
(a) may treat the Lender that made any Advance as the holder of the
Indebtedness resulting therefrom until the Administrative Agent receives
and accepts an Assignment and Acceptance entered into by such Lender, as
assignor, and an assignee, as provided in Section 12.07;
(b) may consult with legal counsel (including counsel for any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts;
(c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents;
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
any Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party;
(e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of,
or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or
any other instrument or document furnished pursuant thereto;
(f) shall incur no liability under or in respect of any Loan Document
by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, telecopy, cable or telex) believed by it
to be genuine and signed or sent by the proper party or parties; and
(g) shall incur no liability as a result of any determination whether
the transactions contemplated by the Loan Documents constitute a "highly
leveraged transaction" within the meaning of the interpretations issued by
the Comptroller of the Currency, the Federal Deposit Insurance Corporation
and the Board of Governors of the Federal Reserve System.
Section 11.03. Ericsson and Affiliates. With respect to its Commitments,
the Advances made by it and the Note issued to it, Ericsson and any other
Administrative Agent in its individual capacity shall have the same rights and
powers under the Loan Documents as
116
any other Lender and may exercise the same as though it were not the
Administrative Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Ericsson in its individual capacity or any other
Administrative Agent in its individual capacity. Ericsson or any other
Administrative Agent in its individual capacity and its affiliates may a
generally engage in any kind of business with, the Borrower and any of its
Affiliates and any Person who may do business with or own securities of any
Borrower or any of its Affiliates, all as if Ericsson or any other
Administrative Agent in its individual capacity were not the Administrative
Agent and without any duty to account therefor to the Lenders.
Section 11.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
Section 11.05. Indemnification. Each Lender severally will indemnify the
Administrative Agent (to the extent not promptly reimbursed by the Borrower)
from and against such Lender's ratable share of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Administrative Agent under the Loan Documents; provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender will reimburse the
Administrative Agent promptly upon demand for its ratable share of any costs and
expenses payable by the Borrower under Section 12.04, to the extent that the
Administrative Agent is not promptly reimbursed for such costs and expenses by
the Borrower. For purposes of this Section 11.05, the Lenders' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (a) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lenders and (b) the aggregate unused portions
of their respective Commitments. The failure of any Lender to reimburse the
Administrative Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lenders to the Administrative Agent as provided
herein shall not relieve any other Lender of its obligation hereunder to
reimburse the Administrative Agent for its ratable share of such amount, but no
Lender shall be responsible for the failure of any other Lender to reimburse the
Administrative Agent for such other Lender's ratable share of such amount.
Without prejudice to the survival of any other agreement of any
117
Lender hereunder, the agreements and obligations of each Lender contained in
this Section 11.05 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.
Section 11.06. Successor Administrative Agents. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent,
which shall be a commercial bank organized under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article XI shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. A successor
Administrative Agent will notify the Borrower of its appointment promptly after
its appointment.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that
(a) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following at any time:
118
(i) waive any of the conditions specified in Article IX or, in
the case of the initial Advance, Article VIII;
(ii) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Lenders, that
shall be required for the Lenders or any of them to take any action
hereunder;
(iii) release any Collateral, other than as contemplated by the
Loan Documents;
(iv) permit the creation, incurrence, assumption or existence of
any Lien on any item of Collateral to secure any obligations other
than obligations owing to the Lenders, the Collateral Agent and the
Administrative Agent under the Loan Documents and other than
Indebtedness owing to any other Person;
(v) amend this Section 12.01;
(vi) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations;
(vii) reduce the principal of, or interest on, the Notes or any
fees or other amounts payable hereunder; or
(viii) postpone any date fixed for any payment of principal of,
or interest on, the Notes or any fees or other amounts payable
hereunder;
(b) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and
(c) no amendment, waiver or consent shall, unless in writing and
signed by the Collateral Agent in addition to the Lenders required above to
take such action, adversely affect the rights or duties of the Collateral
Agent under this Agreement or any other Loan Document.
Section 12.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy, telex or
cable communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered,
(a) if to the Borrower, at:
119
OPCS Philadelphia Holdings, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[*]
with copies to:
OPCS Philadelphia Holdings, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[*]
and
Piper & Marbury, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
[*]
(b) if to any Lender, at its Domestic Lending Office; and
(c) if to the Administrative Agent, at:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President-Finance
[*]
with a copy, at the same address to the
attention of the Vice President-General Counsel
[*]
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed, telegraphed, telecopied, telexed or cabled, be effective
when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the cable company,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III or XI shall not be effective until received by the
Administrative Agent.
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
120
Section 12.03. No Waiver; Remedies. No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note or any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 12.04. Costs, Expenses. (a) (i) Except as specified in clause (ii)
or (iii) below, Ericsson will pay its own legal and other out-of-pocket costs in
connection with the drafting, negotiation and closing of this Agreement and the
other Loan Documents.
(ii) The Borrower will pay on demand all fees and reasonable expenses
that are incurred in connection with any necessary or desirable filings or
recordations by the Administrative Agent, the Collateral Agent or Ericsson
in connection with this Agreement, the other Loan Documents and the
transactions contemplated hereby and thereby, whether or not any such
transactions are consummated.
(iii) The Borrower will also pay on demand:
(A) all ongoing costs, including, without limitation, all
reasonable legal fees and charges, recording costs and related taxes
or charges, filing fees, costs and expenses of the Administrative
Agent (if other than Ericsson) and (except with respect to legal fees)
the Lenders related to (1) the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency
or other similar proceeding affecting creditors' rights generally or
otherwise, (2) the perfection, protection or preservation of any of
their respective rights or interests under the Loan Documents or to or
in the Collateral, (3) the administration of this Agreement or any
other Loan Document and (4) any amendments, waivers or supplements
related to this Agreement and the other Loan Documents;
(B) to the extent not paid pursuant to clause (a)(ii) above, all
out-of-pocket costs and expenses of the Collateral Agent (including
allocated costs and reasonable expenses of in-house counsel and legal
staff) in connection with the preparation, execution, delivery,
performance, administration, enforcement, modification and amendment
of this Agreement, the Intercreditor Agreement, the Collateral
Documents, the Guaranties and/or any other Loan Document at any time,
including without limitation the reasonable fees and expenses of
counsel (including reasonable allocated costs and expenses of in-house
counsel and legal staff) and the costs and expenses incurred by the
Collateral Agent in the course of performing its duties and
obligations as Collateral Agent, whether or not the transactions
contemplated hereby are contemplated;
121
(C) all reasonable legal fees and expenses relating to the
matters described in clause (A) above incurred by Ericsson as
Administrative Agent or a Lender if a Default shall have occurred and
be continuing under this Agreement; and
(D) all reasonable legal fees and expenses relating to the
matters described in clause (A) above incurred by any Lender other
than Ericsson or an Affiliate thereof or for which such Lender would
have an indemnification obligation (whether or not contingent on
non-payment thereof by the Borrower) under this Agreement.
(b) If, at any time while the Second LIBOR Method is applicable, any
payment of principal of, or Conversion of, any LIBOR Advance is made by the
Borrower to or for the account of a Lender other than on the last day of
the Interest Period for such Advance, as a result of any repayment,
prepayment (other than pursuant to Section 3.02(c)) or Conversion thereof,
acceleration of the maturity of the Notes pursuant to Section 10.01 or for
any other reason, the Borrower shall, upon demand by such Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender any loss, cost or expense (including
loss of anticipated profit) that any Lender may sustain or incur as a
consequence of the making of any payment of a LIBOR Loan on a day that is
not the last day of the applicable Interest Period with respect thereto.
(c) If the Borrower fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including fees and expenses
of counsel and indemnities, such amount may be paid on behalf of the
Borrower by the Administrative Agent or any Lender, in its sole discretion.
(d) The Borrower will indemnify each Lender, the Collateral Agent, the
Administrative Agent and their respective affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party")
and hold each Indemnified Party harmless from and against from and against
any and all claims, damages, losses, liabilities and expenses (including
reasonable fees and expenses of counsel and, with respect to the Collateral
Agent, reasonable allocated costs and expenses of in-house counsel and
legal staff) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with
(i) the Notes, this Agreement and other Loan Documents, any of
the transactions contemplated herein or therein or the actual or
proposed use of the proceeds of the Advances, or
(ii) the actual or alleged presence of Materials of Environmental
Concern on any property of the Borrower or any environmental
proceeding relating in any way to the Borrower,
122
except to the extent such claim, damage, loss, liability or expense is
found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of any investigation,
litigation or other proceeding to which the indemnity in this
Section 12.04(d) applies, the indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by the Borrower,
its directors, shareholders or creditors or an Indemnified Party or any
other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower also shall not to assert any claim against the Administrative
Agent, the Collateral Agent, any Lender, any of their Affiliates, or any of
their respective directors, officers, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use
of the proceeds of the Advances.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 12.04 shall survive the payment in full of
principal and interest hereunder and under the Notes.
Section 12.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request specified
by Section 10.01 to authorize the Administrative Agent to declare, or the
Administrative Agent's declaration of, the Notes to be due and payable pursuant
to the provisions of Section 10.01, each Lender and each of its Affiliates is
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and otherwise apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or such Affiliate to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and the Note or Notes held by
such Lender, irrespective of whether such Lender shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application; provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its Affiliates under this Section 12.05 are in addition to other rights and
remedies (including other rights of set-off) that such Lender and its Affiliates
may have.
Section 12.06. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Lender that such
Lender has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent, each Lender, the Collateral
Agent and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders. Sections 12.04(a) and
123
(d), insofar as they relate to the Collateral Agent, and Section 7.15 also shall
inure to the benefit of each lender to the Borrower that at any time is a party
to the Intercreditor Agreement.
Section 12.07. Assignments and Participations. (a) Each Lender may assign
to one or more banks or other entities (including any trust or other Person in
connection with a securitization or monetization of the Advances or other
indirect raising of capital) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment or
Commitments, the Advances owing to it and/or the Note or Notes held by it);
provided that
(i) each such assignment of any Commitments shall be of a uniform, and
not a varying, percentage of all rights and obligations under and in
respect of all Commitments;
(ii) except in the case of an assignment to a Person that, immediately
prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment and/or Advances of the assigning Lender being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 and shall be an integral multiple of $1,000,000;
(iii) the parties to each such assignment shall
(A) execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such assignment
and a processing and recordation fee of $2,500, and
(B) deliver a copy of such Assignment and Acceptance to the
Borrower at the time it delivers a copy to the Administrative Agent;
(iv) unless the Borrower shall have consented thereto, no such
assignment of undrawn commitments shall be made:
(A) except to a Person that shall have represented that it has a
combined capital and surplus in excess of $50,000,000, and
(B) except to a Person, other than a commercial bank or other
financial institution, that shall have represented that such Person is
not engaged in, and does not have an Affiliate that is engaged in, the
business of providing PCS telecommunications services to the public;
and
124
(v) in the case of any proposed assignment by Ericsson (in its
capacity as a Lender) of any portion of its rights and obligations
hereunder to a Person other than a Person at least [*] of the voting stock
of which is owned by Telefonaktiebolaget LM Ericsson and/or its
Subsidiaries, Ericsson shall give the Borrower at least two-month's written
notice of such proposed assignment.
A Lender may assign outstanding Advances without assigning undrawn Commitments,
and may assign undrawn Commitments without assigning outstanding Advances. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder and under the Intercreditor Agreement
have been assigned to it pursuant to such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder and thereunder, and
(y) the Lender assignor thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the Intercreditor Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
Ericsson shall consider in good faith any assignment of all or a portion of its
Commitments, the outstanding Advances owing to it and the Note or Notes held by
it to any Person that the Borrower may propose from time to time; provided that
Ericsson shall have no obligation to enter into any such assignment.
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished
pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
125
the performance or observance by the Borrower of any of its obligations
under this Agreement or any other instrument or document furnished pursuant
hereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, the Intercreditor Agreement and each other Loan Document,
together with copies of the financial statements referred to in
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(v) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Administrative
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto;
(vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement and
the Intercreditor Agreement are required to be performed by it as a Lender;
(vii) such assignee makes the representations set forth in subsection
(a)(iv) above; and
(viii) such assignee confirms that it is bound by the confidentiality
provisions set forth in Section 12.10.
(c) The Administrative Agent shall maintain at its address referred to in
Section 12.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitments of, and principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the
126
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is substantially in the form of Exhibit C,
(i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register, and
(iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at its
own expense, shall execute and deliver to the Administrative Agent in exchange
for the surrendered Note or Notes a new Note to the order of such assignee in an
amount equal to the Advances and/or Commitments assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained Advances or
Commitments hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Advances and/or Commitments retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be
substantially in the form of Exhibit C.
(e) Each Lender may sell participations in or to all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitments, the Advances owing to it and the Note or Notes held by it);
provided that
(i) such Lender's obligations under this Agreement (including its
Commitments) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, and
(iv) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement.
(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 12.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such
127
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including the Advances owing to it and the Note or
Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
Section 12.08. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Section 12.09. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
Section 12.10. Confidentiality. Neither the Administrative Agent nor any
Lender shall disclose any Confidential Information to any Person without the
consent of the Borrower, other than
(a) to the Administrative Agent's or such Lender's Affiliates and
their officers, directors, employees, agents and advisors and to actual or
prospective assignees and participants, and then only on a confidential
basis,
(b) as required by any law, rule or regulation or judicial process,
and
(c) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking.
The Administrative Agent and the Lenders shall not, and the Borrower shall
not, and shall cause its Subsidiaries and Affiliates not to, disclose the terms
of this Agreement, the other Loan Documents or the transactions contemplated
hereby to any Person without the consent of the other party hereto, except
(i) to any other lender that is a party to a Permitted Loan Agreement
(as defined in the Intercreditor Agreement) and that shall have agreed to
be bound by the provisions of this paragraph,
128
(ii) to the extent that such terms or transactions become generally
available to the public,
(iii) to their respective Affiliates and their officers, directors,
employees, agents, advisors and (in the case of the Lenders) to actual or
prospective assignees and participants, in each case to the extent that the
Administrative Agent, any Lender or the Borrower deems necessary or
appropriate,
(iv) as required by any law, rule or regulation or judicial process,
and
(v) as requested by any state, federal or foreign regulatory
authority.
A reasonable period of time prior to making any disclosure with respect to such
terms and transactions that is permitted under clause (iv) or (v) of the
preceding sentence, the party proposing, or whose Affiliate is proposing, to
make such disclosure will consult with the other party concerning the need for
and scope of any such disclosure.
Section 12.11. Consent to Jurisdiction. The Borrower irrevocably
(a) submits to the jurisdiction of any New York state or federal court
sitting in New York City and any appellate court from any thereof in any
action or proceeding arising out of or relating to any Loan Document;
(b) agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York state or in such federal court;
(c) waives, to the fullest extent that it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding;
(d) consents to the service of any and all process in any such action
or proceeding by the mailing of copies of such process to such Borrower at
its address specified in Section 12.02; and
(e) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
Nothing in this Section 12.11 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by law or
affect the right of the Administrative Agent or any Lender to bring any action
or proceeding against any Borrower or its property in the courts of other
jurisdictions.
129
Section 12.12. Matters Relating to the Collateral Agent. The Borrower will
pay the Collateral Agent a fee in an amount, computed as provided and payable at
the times separately agreed to by the Collateral Agent and the Borrower. In
addition, the Borrower will pay on demand all costs and expenses of the
Collateral Agent (including allocated costs and reasonable expenses of in-house
counsel and legal staff) in connection with the preparation, execution,
delivery, performance, administration, enforcement, modification and amendment
of this Intercreditor Agreement, the Borrower Security Agreement, the Parent
Pledge Agreement, the Mortgages and/or any other Loan Document at any time,
including without limitation the reasonable fees and expenses of counsel
(including reasonable allocated costs and expenses of in-house counsel and legal
staff) and the costs and expenses incurred by the Collateral Agent in the course
of performing its duties and obligations as Collateral Agent.
Section 12.13. Amendments, Etc., to Intercreditor Agreement. Neither the
Administrative Agent nor the Lenders shall consent to any amendment or
modification of, supplement to, replacement of or substitution for the
Intercreditor Agreement unless either
(a) the Borrower shall have consented thereto in writing, or
(b) at the time at which such amendment, modification or waiver is
entered into a Default, or any event that, with the passage of time or
giving of notice or both, would constitute an event of default under any
other Permitted Loan Agreement, shall have occurred and be continuing.
Section 12.14. Certain FCC Actions. If the FCC shall issue a decision in
FCC Docket WT No. 97-82 or in any subsequent or related FCC proceeding that
alters the terms and conditions or structure of the deferred purchase price on
C-Block FCC Licenses (including without limitation debt restructuring, debt
reduction, license amnesty, prepayment of debt or any other repayment options
not currently available under the FCC's current rules), the Lenders will
consider and negotiate in good faith any proposal of the Borrower with respect
to its participation in such program. The Lenders shall have no obligation to
accept any such proposal unless such proposal is acceptable to the Lenders in
their sole discretion. Neither the Administrative Agent nor any Lender shall
have any obligation to forbear from the exercise of their rights and remedies
hereunder and under the other Loan Documents while any such proposal is being
prepared by the Borrower, considered by the Lenders or negotiated by the
Borrowers and the Lenders. Nothing contained in this Section 12.14 shall
derogate from the rights of the Administrative Agent and the Lenders in their
discretion at any time and from time to time to exercise such rights and
remedies as may be available to them under this Agreement and the other Loan
Documents.
Section 12.15. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lenders irrevocably waives all right to trial by
jury in any action, proceeding
130
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of the
Administrative Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
131
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
OPCS PHILADELPHIA HOLDINGS,
INC.
By ________________________________
Title:
Commitment: ERICSSON INC., as Administrative
$120,000,000 Agent and a Lender
By ________________________________
Title:
Domestic Lending Office and
LIBOR Lending Office:
[*]
A copy of any notice delivered pursuant to
Section 12.02 should be delivered to the
address set forth above to the attention
of the
[*]
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
Schedule 6.15(a)
REVENUE
FISCAL QUARTER ENDING REVENUE
--------------------- -------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC
Schedule 6.15(c)
LEVERAGE RATIO
FISCAL QUARTER ENDING LEVERAGE RATIO
--------------------- --------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
---------------------------------------------------------------------------
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC