AMENDED AND RESTATED LOAN AGREEMENT
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This AMENDED AND RESTATED LOAN AGREEMENT is made as of the 7th day of
August, 1996, by and among (a) OMNIPOINT COMMUNICATIONS INC. (the "Borrower"), a
Delaware corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (b) NORTHERN TELECOM INC., a
Delaware corporation having a principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as administrative agent for itself and the other
Lenders party hereto and (c) the Lenders. This Amended and Restated Loan
Agreement amends and restates the original Loan Agreement between Borrower and
Northern Telecom Inc. dated as of July 21, 1995 in its entirety.
(S)I. DEFINITIONS AND RULES OF INTERPRETATION.
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(S)A. DEFINITIONS.
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The following terms shall have the meanings set forth in this (S)1 or
elsewhere in the provisions of this Loan Agreement referred to below:
Accounts. As defined in the Borrower Security Agreement.
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Accounts Receivable. As defined in the Borrower Security Agreement.
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Additional Commitments. (1) Loan Commitments, (2) Equity Commitments, (3)
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Borrower's Working Capital; (4) the then undrawn amount of any loan from an AC
Lender pursuant to loan documentation that is finalized and in place; and (5)
the then undrawn amount of any equity line from an AC Equity Investor pursuant
to equity investment agreements that are finalized and in place. The aggregate
of items (1) through (5) (after eliminating any duplication among such items)
shall be in an amount that will be sufficient to cover (a) all operational cash
requirements of Borrower shown as "cash from operations before cap/ex financing"
on the Approved Full-Term Operating Business Plan, including, without limitation
all interest payable to the FCC with respect to the License for the New York PCS
Network for the period commencing on the measuring date in question (as
specified in (S)7.12 hereof) and continuing until Borrower's EBTDA is positive
(as shown on such Approved Full-Term Operating Business Plan), and (b) all
principal payments on the Indebtedness to the FCC for the purchase price for the
License for the New York PCS Network, provided that with respect to the
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principal due to the FCC on account of the purchase price for the New York PCS
Network License, the operational cash requirements shall only include all
principal due to the FCC on the New York PCS Network License for the twelve (12)
months succeeding such measuring date.
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Adjusted Borrower's Equity. For any period, the sum of (i) Borrower's
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Equity and (to the extent not otherwise included), (ii) Subordinated Debt and
(iii) $95,194,000 (representing the difference between the price paid for a so-
called "B Band" PCS License for the New York MTA ($442,712,00) and Borrower's
cost of the License for the New York MTA ($347,518,000), less the cumulative
amount of retained earnings (or deficit) of Borrower as determined in accordance
with GAAP.
Adjusted EBITDA. For any period the sum of (i) EBITDA and (ii) Contributed
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Capital infused into Borrower in the current calendar quarter.
Adjusted Indebtedness. For any period, Borrower's Indebtedness less
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Subordinated Debt owing to Parent or Grand Parent or any other Affiliate.
Adjusted Total Debt. Borrower's Indebtedness less Subordinated Debt.
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Adjusted Working Capital. The difference from year to year between
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Borrower's "current assets" and "current liabilities" as shown on the audited
balance sheet of Borrower (delivered pursuant to (S)7.18D); provided that in
calculating Adjusted Working Capital hereunder the following shall be excluded:
(i) all receivables outstanding more than 60 days past invoice date; (ii) all
inventories that otherwise would be included as current assets under such
balance sheet; and (iii) the current portion of long-term debt, in each case
consistently applied.
Administrative Agent. Northern Telecom Inc. and each successor
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Administrative Agent appointed pursuant to (S)13.9 hereof.
Administrative Agent's Office. The Administrative Agent's office set forth
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in the preamble hereof and upon the appointment of a successor Administrative
Agent pursuant to (S)13.9 hereof such address as shall be provided by such
successor Administrative Agent.
Administrative Agent's Special Counsel. ▇▇▇▇ and ▇▇▇▇.
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Affiliate. As to any Person, any other Person which, directly or
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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, (i) 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 (ii) to direct or cause direction of
the management and policies of such Person whether by contract or otherwise.
Applicable Commitment. Each Lender's commitment to make Tranche A Loans,
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Tranche B Loans and Tranche C Loans.
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Applicable Lending Period. For Tranche A Loans and Tranche B Loans, the
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period beginning with the Closing Date and ending on the Tranche A and B
Commitment Termination Date (inclusive), and for Tranche C Loans, the period
beginning with the Closing Date and ending on the Tranche C Final Repayment
Date.
Applicable Margin. For LIBOR Rate Tranche A Loans, * per annum; for
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LIBOR Rate Tranche B Loans and LIBOR Rate Tranche C Loans, * per annum.
Approved Annual Operating Business Plan. See (S)7.18B.
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Approved Full Term Operating Business Plan. See (S)7.18A.
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Assignment and Acceptance. See (S)17.1.
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Assignment and Acceptance Agreement. An assignment and acceptance
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agreement executed by an assignor and an assignee pursuant to which the
assignor, subject to and in accordance with the terms hereof, assigns to
assignee all or any portion of such assignor's Notes and Commitments,
substantially in the form of Exhibit D.
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BTA. The unit of division (of which there are 493) for the United States
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of America, devised by Rand ▇▇▇▇▇▇▇ based upon geography, population and other
factors, which units form the basis for the auction of PCS Licenses by the FCC.
Balance Sheet Date. December 31, 1995.
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Base LIBOR Rate. For any Interest Period, the rate which appears on Page
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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 (2) LIBOR Business
Days before the first day of such Interest Period provided, that, in the event
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no such rate is available, the rate shall be 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) as of such day in an amount
approximately equal to the amount of the requested Loan as of the first day of
the relevant Interest Period.
Base Rate. For Tranche A Loans for the applicable Interest Period, the per
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annum rate equal to the sum of (i) the Prime Rate in effect on the first
Business Day of the applicable Interest Period and (ii) * .
For Tranche B and C Loans for the applicable Interest Period, the per annum
rate equal to the sum of (i) the Prime Rate in effect on the first Business Day
of the applicable Interest Period and (ii) * %.
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* Confidential information has been omitted and filed separately
with the Commission.
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For all Base Rate Loans, the Base Rate, once determined, shall remain
unchanged during the applicable Interest Period.
Base Rate Loans. Loans bearing interest calculated by reference to the
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Base Rate.
Borrower. As defined in the preamble hereto.
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Borrower Security Agreement. That certain Amended and Restated Borrower
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Security Agreement in substantially the form of Exhibit E attached hereto, among
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Borrower, the Collateral Agent, the Nortel Administrative Agent and the Ericsson
Administrative Agent of even date, as may be amended, restated, modified or
supplemented and in effect from time to time.
Borrower's Equity. The amount of shareholder equity shown on Borrower's
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balance sheet prepared in accordance with GAAP.
Borrower's Obligations. All indebtedness, obligations and liabilities of
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Borrower to the Administrative Agent and the Lenders, arising or incurred under
this Loan Agreement or any of the other Loan Documents or in respect of any of
the Loans made or any of the Notes or other instruments at any time evidencing
any thereof, existing on the date of this Loan Agreement or arising thereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise.
Breakage Costs. Any loss, cost or expense (including loss of anticipated
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profit) that any Lender or the Administrative Agent may sustain or incur as a
consequence of (a) a default by Borrower in payment of the principal amount of
or any interest on any LIBOR Rate Loans as and when due and payable, including
any such loss or expense arising from interest or fees payable by such Lender or
the Administrative Agent to lenders of funds obtained by it in order to make its
LIBOR Rate Loans or (b) the making of any payment of a LIBOR Rate Loan on a day
that is not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by such Lender or the Administrative Agent to
lenders of funds obtained by it in order to maintain any such Loans.
Business Day. Any day other than a Saturday, a Sunday or a day on which
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commercial banks located in New York City are authorized or required by law or
other governmental action to close.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
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fixtures, machinery and equipment) and intangible
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(such as patents, copyrights, trademarks, franchises, Licenses and good will);
provided that Capital Assets shall not include any item customarily charged
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directly to expense or any item the entire useful life of which is depreciated
over a period of twelve (12) months or less in accordance with generally
accepted accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by Borrower in
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connection with the purchase or lease by Borrower of Capital Assets that would
be required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles.
Capitalized Leases. Leases under which Borrower is the lessee or obligor,
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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
generally accepted accounting principles.
Cash. For any period, the sum of (i) Borrower's cash, (ii) Borrower's
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Investments to the extent they are permitted by (S)8.4 (b) through (e) below,
(iii) Loan Commitments, the proceeds of which are available to be used for
general business purposes of Borrower including the payment of interest owed
with respect to Indebtedness permitted by Section 8.1., (iv) the portion of the
Tranche C Commitment then remaining undrawn, (v) Equity Commitments and (vi)
until June 30, 1998, the greater of (a) zero and (b)(1) the lesser of
$25,000,000 and the then remaining undrawn amount of the Tranche A Advance
Commitments (as defined in the Ericsson Loan Agreement) minus (2) the aggregate
amount of interest accrued on advances (whether or not paid) under the Ericsson
Loan Agreement.
Change in Control. The acquisition by any Person, or two or more Persons
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acting in concert (a "group"), of beneficial ownership (within the meaning of
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Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 50% or more of the outstanding shares of Voting Stock
of Borrower, provided, however, that if a change of ownership which would
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otherwise constitute a Change in Control results from a publicly underwritten
offering of Borrower's, securities and the proceeds of such public offering are
used to create a reserve sufficient in amount to pay all Indebtedness owing with
respect to Borrower's FCC Licenses and other Capital Expenditures (other than
Capital Expenditures financed by this Loan Agreement) for the amortization
period of the FCC Licenses, then such change of ownership shall not by itself
constitute a Change in Control.
Closing Date. The first date on which the conditions set forth in (S)9
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have been satisfied or waived through written acknowledgment of Administrative
Agent.
Collateral. All of the property, rights and interests of
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Borrower and Parent that are or are intended to be subject to the security
interests created by the Borrower Security Agreement and the Pledge Agreement.
Collateral Agent. Mellon Bank, N.A. or any successor thereto appointed
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pursuant to (S)6.5 of the Intercreditor Agreement.
Collateral Documents. The Borrower Security Agreement and the Pledge
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Agreement.
Commitment. The obligation of the Lenders to make Loans to Borrower,
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subject to the terms and conditions hereof, in an aggregate outstanding
principal amount not exceeding $382,500,000.
Commitment Percentage. The percentages in which the Lenders are bound to
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make Loans to the Borrower under the Commitment. Prior to the occurrence of an
Assignment and Acceptance of any portion of NTI's Commitment, NTI's Commitment
Percentage shall be 100%.
Communications Act. The Communications Act of 1934, as amended, and the
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rules and regulations issued thereunder, as from time to time in effect.
Compliance Certificate. As defined in (S)7.18E and in substantially the
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form set forth in Exhibit C attached hereto.
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Contingent Obligation. As to any Person, any obligation of such Person
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guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
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obligor") in any manner, whether directly or indirectly, including, without
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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, however, 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
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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.
Contributed Capital. The sum of (i) proceeds from the sale of Borrower's
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equity securities received during the applicable period, plus (ii) Subordinated
Debt incurred by Borrower during the applicable period and interest which has
accrued thereon and which remains unpaid.
Debt Service. For any period, the aggregate amount of interest and
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principal required to be paid by Borrower during such period on all Indebtedness
of Borrower outstanding during all or any part of such period (excluding (a) the
amount of any Net Funds Payment required to be paid during such period pursuant
to (S)3.2.B hereof, (b) the amount of any prepayment required to be paid during
such period pursuant to (S)3.C hereof or (S)3.02(a) or (b) of the Ericsson Loan
Agreement and (c) interest capitalized under loans where such loans provide for
the funding of interest costs), whether such interest and principal was or is
required to be reflected as an item of expense or capitalized, including
scheduled payments in respect of Capitalized Leases and including commitment
fees, agency fees, facility fees, origination fees, balance deficiency fees and
similar fees or expenses in connection with Indebtedness.
Default. Any of the events or circumstances specified in (S)11.1, whether
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or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
Distribution. The declaration or payment of any cash dividend, dividend in
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kind or cash equity distributions on or in respect of any shares of any class of
capital Stock of Borrower, other than dividends payable solely in shares of
common Stock of Borrower; the purchase, redemption, or other retirement of any
shares of any class of capital Stock of Borrower; the return of capital by
Borrower to its shareholders as such; or any other distribution on or in respect
of any shares of any class of capital Stock of Borrower.
Dollars or $. Dollars in lawful currency of the United States of America.
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Domestic Lending Office. In respect of any Lender, initially, the office
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or offices of such Lender in the United States designated as such on Schedule
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1.1; or thereafter, such other office, if any, of such Lender through which it
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shall be making or maintaining Base Rate Loans, as reported by such Lender in
the United States to the Administrative Agent and the Borrower.
Draw Request. See (S)2.8.
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Drawdown Date. The date on which any Loan is made or is
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7
to be made. Notwithstanding the foregoing, if the applicable Drawdown Date would
occur on a day which is not a Business Day, the Drawdown Date shall be the next
Business Day.
Drawdown Report and Certificate. A report signed by the Borrower's Chief
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Financial Officer or other authorized officer of the Borrower and submitted to
Administrative Agent with each Tranche B Draw Request certifying that the
proceeds of the prior month's Tranche B Loans were used to pay those Tranche B
Eligible Expenses for which such Tranche B Loans were requested (except to the
extent that Borrower disputes in good faith its obligation to pay a Tranche B
Eligible Expense), a list of all Tranche B Eligible Expense payments made,
showing the identity of the Person paid, the amount and the reasons for such
payment, a list of all Persons who were scheduled to be paid or who were paid
$100,000 or more during the prior month together with satisfactory evidence of
payment, and a list of all Tranche B Eligible Expenses which are in dispute;
provided that if Borrower asserts that it is barred from providing certain of
the supporting documentation required hereunder by reason of a confidentiality
agreement with any vendor, Borrower shall be required, as a condition of
receiving the payment therefor, to provide Administrative Agent with (a) a copy
of the confidentiality agreement in question (b) a description of the particular
items associated with such vendor, and (c) such other information as
Administrative Agent reasonably believes is necessary (consistent with the
confidentiality agreement) to substantiate the applicable Tranche B Eligible
Expenses.
EBITDA. For any period, Net Income (or loss) of the Borrower for such
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period plus, to the extent deducted or accrued 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) Total Interest
Expense.
EBTDA. For any period, Net Income (or loss) of the Borrower for such
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period plus, to the extent deducted or accrued 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) cash interest not
being paid as an express feature of the related debt instrument.
Eligible Assignee. See (S)17.1.
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Employee Benefit Plan. Any employee benefit plan within the meaning of
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(S)3(3) of ERISA maintained or contributed to by any of Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. Any federal, state or local law, statute, rule or
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regulation or the common law relating to the environment or occupational health
and safety, including without limitation any statute, regulation or order
pertaining to (i) treatment, storage, disposal, generation and transportation of
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industrial, toxic or hazardous substances or solid or hazardous waste; (ii) air,
water or noise pollution; (iii) groundwater and soil contamination; (iv) 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; (v) the protection of wildlife, marine sanctuaries
and wetlands, including without limitation all endangered and threatened
species; (vi) underground and other storage tanks or vessels, abandoned,
disposed or discarded barrels, containers and other closed receptacles; (vii)
health and safety of employees and other persons; and (viii) 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 or solid or hazardous waste,
including, without limitation, (a) the Comprehensive Environmental Response.
Compensation and Liability Act, as amended, 42 USCA (S)9601 et seq. ("CERCLA");
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(b) the Resource Conservation and Recovery Act of 1976, as amended, 42 USCA
(S)6901 et. seq. ("RCRA"); (c) the Toxic Substance Control Act, as amended, 15
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USCA (S)2601 et seq.; (d) the Water Pollution Control Act, as amended, 33 USCA
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(S)1251 et seq.; (e) the Clean Air Act, as amended 42 USCA (S)7401 et seq.; (f)
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the Hazardous Material Transportation Act, as amended, 49 USCA (S)1801 et seq.
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(g) the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), and (h)
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 (S)6.25(d).
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Equipment. As defined in the Borrower Security Agreement.
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Equity Commitment. Binding written commitment(s) (not in default) for the
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making of a cash equity investment in Borrower from a Person or entity (the "AC
Equity Investor") which (I) in the sole judgment of the Required Lenders has the
financial resources and capability of performing the commitment and making the
equity investment or (II) is from Parent or Grand Parent if and to the extent
such Person is holding cash, securities for which there is a readily available
market on established stock exchanges including over-the- counter exchanges or
other permitted Investments under (S)8.4(b) through (e) equal to or in excess of
the amount of the Equity Commitment in question (and which equity investment is
to be made in the form of Subordinated Debt or equity), which equity commitment
(w) is complete, with all schedules, (x) is in the form customarily utilized by
institutional venture capital firms for binding written commitments that have
passed all internal credit reviews, (y) has been fully executed by the AC Equity
investor and
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Borrower and (z) makes the AC Equity Investor's obligation to make the equity
investment subject only to (i) credit verification of the Borrower showing no
material adverse change in the financial condition of Borrower since the date of
the credit review (on which the equity commitment was predicated) and (ii)
completion and delivery of documentation and other documents, certificates and
opinions customarily required by institutional equity investors satisfactory to
AC Equity Investor's counsel.
Ericsson Loan Agreement. The Loan Agreement dated as of August 7, 1996
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among the Borrower, Ericsson, Inc., as Administrative Agent and the lenders
parties thereto, as the same may be amended from time to time in compliance with
the Intercreditor Agreement.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
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from time to time, and the rules and regulations issued thereunder as from time
to time in effect.
ERISA Affiliate. Any Person which is treated as a single employer with
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Borrower under (S)414 of the IRC.
ERISA Event. With respect to Borrower or any ERISA Affiliate, (a) a
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Reportable Event, (b) the withdrawal of Borrower 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 for a distress termination of the Plan under (S)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) 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 (S)11.1, provided,
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however, that any requirement for the giving of notice, or the lapse of time, or
both, or any other condition, event or act has been satisfied.
Excess Amount. See (S)7.6.
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Expense Allocation Agreement. That certain Expense Allocation Agreement
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among Borrower, Parent and Grand Parent dated as of July 21, 1995, which
provides for the allocation of expenses and overhead among Borrower, Parent,
Grand Parent and their Affiliates satisfactory to Administrative Agent and the
Required Lenders (as may be amended from time to time, but only if approved by
the Administrative Agent and the Required Lenders).
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FCC. The Federal Communications Commission or any Governmental Body
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succeeding to the functions thereof.
Full Term Operating Business Plan. See (S)7.18A.
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GAAP or generally accepted accounting principles. Whether directly or
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indirectly through reference to a capitalized term used therein, means (i)
principles that are consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, in effect for the
fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent
with such principles, the accounting practice of Borrower reflected in its
financial statements for the year ended on the Balance Sheet Date, provided that
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if such Board after the date hereof shall promulgate or adopt accounting
principles that materially differ over the term of this Loan Agreement from
those in effect on the Balance Sheet Date, Borrower and the Administrative Agent
will endeavor in good faith to amend (i) the definition of GAAP to include such
different principles and (ii) the covenants contained in (S)7.19 hereof in order
to reflect in substance the same limitations and restrictions as in effect prior
to such amendment to the definition of GAAP, it being understood that until the
Administrative Agent and Borrower shall reach agreements on such new covenants,
the covenants contained in (S)7.19 hereof continue to be effective, and (b) when
used in general, other than as provided above, means principles that are (i)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time,
and (ii) consistently applied with past financial statements of Borrower
adopting the same principles, provided that in each case referred to in this
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definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles are presented fairly in all material
respects in conformity with such principles applied on a consistent basis.
General Intangibles. As defined in the Borrower Security Agreement.
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Governmental Body. Any nation or government, any state or other political
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subdivision thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator.
Grand Parent. Omnipoint Corporation, a Delaware corporation.
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Grants of Security Interests. As defined in the Borrower Security
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Agreement.
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Guaranteed Pension Plan. Any employee pension benefit plan within the
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meaning of (S)3(3) of ERISA maintained or contributed to by any of Borrower or
any ERISA Affiliate 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.
Guaranty Agreement. That certain Limited Recourse Guaranty Agreement of
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even date, substantially in the form attached hereto as Exhibit F-1 executed by
Parent in favor of the Administrative Agent and Lenders as the same may be
amended, restated, modified or supplemented in accordance with the Loan
Documents and in effect from time to time.
Highest Lawful Rate. As to any Lender the maximum rate of interest, if
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any, that at any time or from time to time may be contracted for, taken, charged
or received by such Lender on the Notes held thereby, as the case may be, or
which may be owing to such Lender pursuant to this Loan Agreement and the other
Loan Documents under the laws applicable to such Lender and this transaction.
IRC. The Internal Revenue Code of 1986, as amended.
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Indebtedness. As to any Person, at a particular time, all items which
------------
constitute, without duplication, (i) indebtedness for borrowed money or the
deferred purchase price of Property (other than trade payables incurred in the
ordinary course of business), (ii) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (iii) obligations with respect to any
conditional sale or title retention agreement, (iv) indebtedness 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, (v) 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), (vi) obligations
under Capitalized Leases, (vii) amounts owed to the FCC on the FCC License for
the New York PCS Network, (viii) all Contingent Obligations and (ix) interest
that is accreted or otherwise accrued and unpaid on Subordinated Debt.
Indebtedness Cap. In the aggregate, at any one time outstanding, One
----------------
Billion Dollars ($1,000,000,000); provided, however, that such amount shall be
(a) decreased to the extent that Borrower sells, in compliance with applicable
law and with all Necessary Authorizations, any portion of the License for the
New York PCS Network and (b) increased if and to the extent Borrower acquires
additional Licenses for other PCS Networks, in each case
12
with the adjustment (upward or downward) to be calculated on the basis of $37.50
times the total number of persons in the United States population ("POP's") in
the FCC licensed area sold (or acquired) as the case may be and provided further
that no adjustment of the Indebtedness Cap shall be made for actual changes in
the POP's in the absence of any purchase or sale transaction.
Information. Collectively, the information which Borrower or Parent has
-----------
previously provided or caused to be provided to Administrative Agent relating to
Borrower's and Parent's business and operations and other information which is
available generally and of which Administrative Agent is aware relating to
Borrower's and Parent's business and operations.
Insolvent or Insolvency. With respect to any Person on a particular date,
--------- ----------
the condition that on such date, (i) the present fair salable value of the
assets of such Person is less than the amount that will be required to pay the
probable liabilities of such Person as and when they become due including,
without limitation, Contingent Obligations, of such Person, or (ii) such Person
is not generally paying its debts as and when they become due, or (iii) such
Person is engaged in business or a transaction, or is about to engage in
business or a transaction, for which such Person's Property would constitute an
unreasonably small amount of capital. With respect to determining in (i) the
fair salable value of an FCC License during the initial three year period in
which transfers are restricted by the FCC, the effect of such a transfer
restriction shall be ignored.
Intellectual Property. All copyrights, Trademarks, service marks, Patents,
---------------------
trade names and service names, Licenses and the like.
Intercreditor Agreement. See (S)8.2.
-----------------------
Interest Payment Date. The last day of any Interest Period.
---------------------
Interest Period. With respect to each Loan, (a) initially, the period
---------------
commencing on the Drawdown Date of such Loan (inclusive) and ending on the last
day of the sooner of March, June, September or December (inclusive); and (b)
thereafter, each period commencing on the first day after the end of the
immediately preceding Interest Period (inclusive) and ending on the last day of
the sooner of March, June, September or December (inclusive). Interest shall be
due and payable with respect to any Loan as provided in (S)2.6 and other
applicable provisions hereof. Notwithstanding the foregoing:
(A) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest Period
shall end on the immediately preceding LIBOR Business Day (inclusive);
13
(B) if any Interest Period with respect to a Base Rate Loan would end on a
day that is not a Business Day, that Interest Period shall end on the
immediately preceding Business Day (inclusive); and
(C) with respect to Tranche A Loans or Tranche B Loans, any Interest Period
that would otherwise end after the Tranche A and B Maturity Date shall end on
the Tranche A and B Maturity Date (inclusive); and
(D) with respect to Tranche C Loans, any Interest Period that would
otherwise end after the Tranche C Final Repayment Date shall end on the Tranche
C Final Repayment Date (inclusive).
Interest Rate Election Notice. See (S)2.6A(b).
-----------------------------
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of 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 of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (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; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Key Barometers. For any quarterly period, the number of cell sites
--------------
constructed, the total number of customers, the number of new customers
acquired, the number of customers who terminated and the average monthly charges
billed to customers during the applicable quarter.
Lender. NTI and any other Person which becomes a Lender by reason of an
------
Assignment and Acceptance in accordance with the terms of this Loan Agreement
after the Closing Date.
Lenders' Tranche A Commitment. The obligation for the Lenders to make
-----------------------------
Tranche A loans to Borrower, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not exceeding * ; or if such
commitment is terminated pursuant to the provisions hereof, zero.
------------
* Confidential information has been omitted and filed separately
with the Commission.
14
Lenders' Tranche B Commitment. The obligations of the Lenders to make
-----------------------------
Tranche B Loans to Borrower, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not exceeding * or if such
commitment is terminated pursuant to the provisions hereof, zero.
Lenders' Tranche C Commitment. The obligation of the Lenders to make
-----------------------------
Tranche C Loans to Borrower, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not exceeding * ; or if such
commitment is terminated pursuant to the provisions hereof, zero.
LIBOR Business Day. Any day on which commercial banks are open for
------------------
international business (including dealings in Dollar deposits) in London.
LIBOR Lending Office. In respect of any Lender, initially, the office or
--------------------
branch of such Lender designated as such on Schedule 1.1 (or, if no such office
-------- ---
or branch is specified, its Domestic Lending Office); or thereafter, such other
office or branch, if any, of such Lender which shall be making or maintaining
LIBOR Rate Loans, as reported by such Lender to the Administrative Agent and the
Borrower.
LIBOR Rate. For the applicable Interest Period, a simple per annum
----------
interest rate (rounded upward, if necessary, to the nearest one-hundredth
(1/100th) of one percent) equal to the sum of (a) the quotient of (i) the Base
LIBOR Rate divided by (ii) one minus the LIBOR Reserve Rate, stated as a
decimal, plus (b) the Applicable Margin. The LIBOR Rate, once determined, shall
remain unchanged during the applicable Interest Period, except for changes to
reflect adjustments in the LIBOR Reserve Rate.
LIBOR Rate Loans. Loans bearing interest calculated by reference to the
----------------
LIBOR Rate.
LIBOR Reserve Rate. With respect to the Interest Period for any LIBOR Rate
------------------
Loan, the maximum rate (expressed as a decimal) applicable during such Interest
Period at which any Lender subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor or similar regulations relating to such reserve
requirements) against "Eurocurrency Liabilities" (as that term is used in
Regulation D), if such liabilities were outstanding and having a term equal to
such Interest Period in an amount comparable to the amount of such LIBOR Rate
Loan. The LIBOR Rate shall be adjusted automatically on and as of the effective
date of any change in the LIBOR Reserve Rate.
Licenses. Any mobile telephone, cellular telephone, microwave, paging or
--------
other license, authorization, certificate of compliance, franchise, approval or
permit, whether for the
------------
* Confidential information has been omitted and filed separately
with the Commission.
15
construction or the operation of any PCS System, granted or issued by the FCC
and any other federal Governmental Bodies and held by the Borrower. The initial
list of Licenses of Borrower as of the Closing Date are identified on Schedule
--------
1.2 attached hereto.
---
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, without limitation, any conditional sale or other title retention
agreement and any Capital Lease or other financing lease having substantially
the same economic effect as any of the foregoing.
Loan Agreement. That certain Loan Agreement dated as of July 21, 1995
--------------
among the Borrower, the Administrative Agent and the lenders party thereto, as
amended and restated in its entirety by this Amended and Restated Loan
Agreement, including the Schedules and Exhibits hereto, as the same may be
amended, restated, modified or supplemented and in effect from time to time.
Loan Commitment. Binding written commitment(s) (not in default) for the
---------------
making of a loan (in cash) to Borrower that is Subordinated Debt from a Person
or entity (the "AC Lender") which has, in the sole judgment of the Required
Lenders, the financial resources and capability of performing the commitment and
making the loan, which loan commitment (w) is complete with all schedule(s), (x)
is in the form customarily utilized by institutional lenders for binding written
loan commitments that have received all internal credit approvals, (y) has been
fully executed by the AC Lender and Borrower and (z) makes the AC Lender's
obligation to lend subject only to (i) credit verification of Borrower showing
no material adverse change in the financial condition of Borrower since the date
of the credit review (on which the loan commitment was predicated) and (ii)
completion and delivery of loan documentation and other documents, certificates,
and opinions customarily required by institutional lenders satisfactory to the
AC Lender's counsel.
Loan Documents. This Loan Agreement, the Notes, the Borrower Security
--------------
Agreement, the Pledge Agreement, the Guaranty Agreement, the Subordination
Agreement (Parent), the Subordination Agreement (Grand Parent), the Mortgage,
the Intercreditor Agreement, the Draw Requests, any mortgage or deed of trust
entered into pursuant to (S) 7.20, any option entered into pursuant to (S)
8.2(g)(II) and any other agreements or documents contemplated hereby or thereby
and all schedules, exhibits and annexes thereto.
Loans. Collectively, the Tranche A Loans, the Tranche B Loans and the
-----
Tranche C Loans.
MTA. Any "major trading area" as set forth on the Rand ▇▇▇▇▇▇▇ 1992
---
Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38-39 ("BTA/MTA
Map") and utilized by the FCC in dividing the
16
50 states, the District of Columbia and United States territories into 51 MTAs
for the purpose of licensing PCS Systems.
Material Adverse Effect. An effect resulting from any circumstance or
-----------------------
event of whatever nature (including, without limitation, any adverse
determination in any litigation) which does, or could reasonably be expected to,
materially and adversely (i) impair the validity or enforceability of any of the
Loan Documents, (ii) impair the ability of the Borrower to pay the Borrower's
Obligations in accordance with their terms, (iii) cause a Default, (iv) affect
the business, property, operations, or financial or other condition of Borrower
or Parent, or (v) 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.
Material Employment Agreements. The material employment and similar
------------------------------
contracts and agreements for the categories of officer and employment
responsibilities set forth on Schedule 1.3 as the same may be amended,
-------- ---
supplemented or otherwise modified from time to time, and any agreements entered
into with successor employees and officers relating to the same categories of
responsibilities.
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, or any other material
subject to regulation under any Environmental Laws.
Maturity Date. For Tranche A and Tranche B Loans, the Tranche A and B
-------------
Maturity Date; for Tranche C Loans, the Tranche C Final Repayment Date.
Mortgage. The Purchase Money Commercial Mortgage and Security Agreement
--------
dated as of November 1, 1995 in favor of Lender, as amended and assigned to the
Collateral Agent by Amendment and Assignment dated August 7, 1996, and as
further amended from time to time in compliance with the Loan Documents.
Multiemployer Plan. A "multiemployer plan" as defined in Sections
------------------
4001(a)(3) and 3(37)(A) of ERISA, and to which Borrower or any ERISA Affiliate
is making, or is obligated to make, contributions or has made, or been obligated
to make, contributions.
NTI. Northern Telecom Inc., a Delaware corporation.
---
17
Necessary Authorizations. All approvals and licenses from, and all filings
------------------------
and registrations with, any governmental or other regulatory authority,
including, without limitation, the Licenses and all grants, approvals, licenses,
filings and registrations under the Communications Act, necessary in order to
enable Borrower to own, construct, maintain and operate PCS Systems and to make
and hold investments in other Persons who own, construct, maintain and operate
PCS Systems.
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 Funds Amount. With respect to any date of determination, the sum
----------------
of (a) EBTDA for the most recent completed fiscal year of the Borrower preceding
such date of determination (the "Prior Fiscal Year"), plus (b) to the extent
deducted in calculating Net Income for the Prior Fiscal Year, the aggregate
amount of interest payments made by Borrower in respect of Subordinated Debt
owing to Parent or Grand Parent less (without duplication) the following: (i)
taxes actually paid during the Prior Fiscal Year, (ii) Capital Expenditures, net
of proceeds of new financing(s) for all or any portion of such Capital
Expenditures made during the Prior Fiscal Year, (iii) the aggregate amount of
scheduled principal payments required under this Loan Agreement or on
Indebtedness owed to an Other Lender as well as to holders of Indebtedness
allowed under Sections 8.1(c) and (g) during the Prior Fiscal Year, and during
the fiscal year of the Borrower in which such date of determination falls, (iv)
the aggregate amount of mandatory prepayments (other than mandatory prepayments
under (S)3.2C hereunder or (S)3.02(b) of the Ericsson Loan Agreement or an
equivalent mandatory prepayment on Indebtedness owed to an Other Lender) made
under this Loan Agreement, the Ericsson Loan Agreement or on Indebtedness owed
to an Other Lender for the Prior Fiscal Year, (v) Adjusted Working Capital
during the Prior Fiscal Year and (vi) scheduled principal payments actually made
by Borrower with respect to the FCC License for the New York PCS Network.
18
Net Funds Payment. See (S)3.2.C.
-----------------
Net Income. For any period, net income determined in accordance with
----------
GAAP.
New York PCS Network. A PCS Network in the New York MTA pursuant to
--------------------
an FCC License awarded to Borrower.
Note Record. A Record with respect to a Note.
-----------
Notes. The Tranche A Notes, the Tranche B Notes, and/or the Tranche C
-----
Notes, as the case may be.
Operating Cash Flow. EBITDA after eliminating any extraordinary gains
-------------------
and losses, including gains and losses from the sale of assets not in the
ordinary course of business.
Orbitel. Orbitel Mobile Communications, Ltd.
-------
Origination Fee. $7,500,000.
---------------
Other Lender. See (S)8.2.
------------
Outstanding Amount. With respect to the Loans, the aggregate unpaid
------------------
principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by (S)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 in
----------
a BTA or an MTA (or any successor territorial designation) pursuant to an FCC
License therefor.
Parent. Omnipoint PCS, Inc., a Delaware corporation.
------
Patents. As defined in the Security Agreement.
-------
Payment Date. See (S)3.1A.
------------
Permitted Liens. Liens, security interests and other encumbrances
---------------
permitted by (S)8.2.
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.
19
Plan. With respect to Borrower 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 is maintained for the
employees of Borrower or any ERISA Affiliate.
Pledge Agreement. That certain Amended and Restated Pledge Agreement
----------------
of even date in substantially the form attached hereto as Exhibit F executed
---------
among Parent, Collateral Agent, the Nortel Administrative Agent and the Ericsson
Administrative Agent, as may be amended, restated, modified or supplemented in
accordance with the Loan Documents and in effect from time to time.
Pledged Collateral. As defined in the Pledge Agreement.
------------------
Pledged Shares. As defined in the Pledge Agreement.
--------------
Prime Rate. The rate of interest quoted at such time by the Toronto-
----------
Dominion Bank, New York Branch as its "base rate" or "prime rate" provided,
--------
that, in the event no such rate is available, the rate shall be the rate of
interest quoted in The Wall Street Journal's "Money Rates" section as the prime
-----------------------
rate. The Prime Rate is not necessarily the lowest rate of interest charged to
borrowers at any applicable time.
Proceeds. As defined in the Borrower Security Agreement and Pledge
--------
Agreement, respectively.
Property. All types of real, personal, tangible, intangible or mixed
--------
property, including, without limitation, all FCC Licenses.
Purchaser. Omnipoint Communications Inc., a Delaware corporation, in
---------
its capacity as a purchaser under the Supply Agreement.
Rate Hedging Agreements. (i) 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 (ii) any and all cancellations, buy backs, reversals, terminations
or assignments of any of the foregoing.
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.
20
Record. The grid attached to a Note, or the continuation of such
------
grid, or any other similar record, including computer records, maintained by the
Lender with respect to any Loan referred to in such Note.
Register. See (S)17.3.
--------
Reportable Event. Any of the events set forth in Section 4043(b) of
----------------
ERISA or the regulations thereunder.
Required Lenders. (i) unless and until an Assignment and Acceptance
----------------
occurs in accordance with the terms of this Loan Agreement, NTI, and (ii) upon
the occurrence of an Assignment and Acceptance by NTI in accordance with the
terms of this Loan Agreement (a) at any time that there exists no Default
hereunder, Lenders the total of whose portion of the Commitment equals or
exceeds fifty-one percent (51%), or (b) at any time that there exists a Default
hereunder, Lenders the total of whose Loans outstanding equals or exceeds fifty-
one percent (51%) of the total Outstanding Amount of the Loans.
Revenue. For any period, the sum of (a) gross ▇▇▇▇▇▇▇▇ to
-------
subscribers, net of taxes and other direct pass-through charges, (b) net revenue
from the sale of equipment, (c) so-called roamer revenue, net of direct pass-
through charges and (d) other revenue of Borrower (in the case of resales net of
associated direct costs), in each case as determined in accordance with GAAP
(less all revenues from Affiliates (except where the Affiliate is acting as a
reseller of goods or services for the Borrower)).
Solvent. With respect to any Person on a particular date, the
-------
condition that on such date, (i) 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,
without limitation, Contingent Obligations, of such Person, (ii) 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, or (iii) 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. With respect to determining in (i), above, the fair
salable value of an FCC License during the initial three year period in which
transfers are restricted by the FCC, the effect of such a transfer restriction
shall be ignored.
Stock. Any and all shares, interests, participations, warrants or
-----
other equivalents (however designated) of corporate stock.
Subordinated Debt. Indebtedness of Borrower the payment of which is
-----------------
subordinated to the prior payment in full in cash of the Loans as to which the
holder thereof has executed a Subordination Agreement.
21
Subordination Agreement. With respect to any Person that certain
-----------------------
Subordination Agreement in substantially the form attached hereto as Exhibit J.
---------
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, directly or indirectly, either (i) in respect of
a corporation, owns or controls more than 50% of the outstanding 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 (ii) 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.
Supplier. Northern Telecom Inc., a Delaware Corporation, in its
--------
capacity as a supplier under the Supply Agreement.
Supply Agreement. That certain Personal Communications Systems Supply
----------------
Agreement dated September 22, 1994, as amended by Amendment No. 1 dated as of
July 21, 1995, between Borrower and the Supplier and as may be further amended,
restated, modified or supplemented and in effect from time to time.
Total Interest Expense. For any period, the aggregate amount of
----------------------
interest required to be accrued by Borrower during such period on all
Indebtedness of Borrower outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of
Capitalized Leases and including arrangement fees, commitment fees, agency fees,
facility fees, origination fees (provided that, if the origination fees are paid
-------- ----
from the proceeds of financing, such origination fees will be treated as
amortized evenly over the term of the financing and provided further that the
cash origination fees payable pursuant to Section 2.03(a) of the Ericsson Loan
Agreement shall be treated as incurred in the period when such fees are
payable), balance deficiency fees and similar fees or expenses in connection
with the borrowing of money, all as determined in accordance with generally
accepted accounting principles.
Total Lender Commitment. The sum of the Commitments of the Lenders,
-----------------------
as a whole, as in effect from time to time.
Total Loan Commitment. $382,500,000.
---------------------
Trademarks. As defined in the Borrower Security Agreement.
----------
22
Tranche. Any or all, as applicable, of Tranche A Loans, Tranche B
-------
Loans or Tranche C Loans.
Tranche A and B Commitment Termination Date. The earlier of (a)
-------------------------------------------
December 31, 1999, or (b) the termination of the Tranche A and B Commitments
pursuant to (S) 11.1.
Tranche A and B Maturity Date. The earlier of (a) December 31, 2004,
-----------------------------
and (b) the acceleration of the Loans pursuant to (S) 11.1.
Tranche A Commitment. An amount equal to US * or if such commitment
--------------------
is terminated pursuant to the provisions hereof, zero.
Tranche A Draw Date. See (S)2.8A.
-------------------
Tranche A Draw Request. See (S)2.8A.
----------------------
Tranche A Loans. Loans made under Tranche A.
---------------
Tranche A Notes. The promissory notes of Borrower substantially in
---------------
the form of Exhibit A-1 evidencing the Tranche A Loans.
-----------
Tranche B Advance Schedule. That certain schedule of Tranche B
--------------------------
Eligible Expenses attached hereto as Schedule 2.4 to be updated (with the
-------- ---
approval of the Administrative Agent in its sole and absolute discretion) and
delivered annually to Administrative Agent prior to December 1 of each calendar
year through calendar year 1998. Such schedule shall be made on both a
quarterly and cumulative basis and shall be in reasonable detail. The Tranche B
Advance Schedule may be updated, amended or modified, from time to time, with
the approval of the Administrative Agent in its sole and absolute discretion.
Tranche B Balance Requirement. Effective as of the Tranche C Final
-----------------------------
Repayment Date, the requirement that, as of each June 30 and December 31 through
the Tranche A and B Commitment Termination Date, the Outstanding Amount of
Tranche B Loans not exceed 50% of the sum of Outstanding Amount of Tranche A
Loans plus the amount of unfilled purchase orders under the Supply Agreement.
Tranche B Commitment. An amount equal to the difference between US
--------------------
* and the Outstanding Amount of Tranche C Loans as the same may be reduced from
time to time; or if such commitment is terminated pursuant to the provisions
hereof, zero.
Tranche B Draw Request. See (S)2.8B.
----------------------
Tranche B Eligible Expenses. Expenses incurred by Borrower to pay for
---------------------------
(i) costs incurred in connection with the construction, engineering, design and
site acquisition for the New
-------------------
* Confidentail information has been omitted and filed separately with the
Commission.
23
York PCS Network, (ii) the actual costs of physically relocating existing
microwave installations which are incompatible with the New York PCS Network,
(iii) costs incurred to vendors of equipment to build the New York PCS Network
from Persons other than the Supplier, and (iv) on the Tranche C Final Repayment
Date, the Outstanding Amount of Tranche C Loans, in each case with respect to
items (i), (ii) and (iii) above, to the extent and for the amounts provided for
in the Approved Annual Operating Business Plan or the Approved Full Term
Operating Business Plan, (whichever may apply for the applicable period).
Tranche B Loans. Loans made under Tranche B.
---------------
Tranche B Notes. The promissory notes of Borrower substantially in
---------------
the form of Exhibit A-2, evidencing the Tranche B Loans.
-----------
Tranche C Advance Schedule. That certain schedule of Tranche C
--------------------------
Eligible Expenses attached hereto as Schedule 2.5. Such schedule shall be made
-------- ---
on both a quarterly and cumulative basis and shall be in reasonable detail. The
Tranche C Advance Schedule may be amended or modified, from time to time, with
the approval of the Administrative Agent in its sole and absolute discretion.
Tranche C Commitment: An amount equal to US * .
--------------------
Tranche C Draw Request. See (S)2.8C.
----------------------
Tranche C Eligible Expenses. Expenses incurred by Borrower to pay for
---------------------------
(i) interest on the Loans, (ii) those certain pre-closing expenses set forth on
Schedule 1.4, (iii) operating and start-up expenses of Borrower consistent with
-------------
the Approved Annual Operating Business Plan and relating exclusively to the
operation of the New York PCS Network, (iv) intercompany expenses and overhead
charged to Borrower by Parent or Grand Parent pursuant to the Expense Allocation
Agreement, in each case with respect to items (iii) and (iv) above, to the
extent and for the amounts provided for in the Approved Annual Operating
Business Plan or the Approved Full Term Operating Business Plan, (whichever may
apply for the applicable period).
Tranche C Final Repayment Date. The earlier to occur of (a) June 30,
------------------------------
1997 and (b) the acceleration of the Loans pursuant to (S) 11.1.
Tranche C Loans. Loans made under Tranche C.
---------------
Tranche C Notes. The promissory notes of Borrower, substantially in
---------------
the form of Exhibit A-3, evidencing the Tranche C Loans.
-----------
Type. As to any Loan, its nature as a Base Rate Loan, or a LIBOR Rate
----
Loan.
------------
* Confidential information has been omitted and filed separately
with the Commission.
24
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.
Working Capital. The difference between Borrower's "current assets"
---------------
and "current liabilities" as certified at each measuring date by the Chief
Financial Officer of Borrower in accordance with GAAP, consistently applied.
(S)B. 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 Loan Agreement. In accordance
with the foregoing, the parties hereto agree that with respect to Exhibits ▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, C, and D, the forms of those Exhibits as attached to
the original Loan Agreement dated as of July 21, 1995 are incorporated herein by
reference and all references in (x) such Exhibits to the "Loan Agreement" and
(y) the originals of such instruments, shall be deemed to be references to the
Loan Agreement as defined in this Amended and Restated Loan 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 generally accepted accounting principles 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 generally
accepted accounting principles, 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 "(S)" refers to that section of this
Loan Agreement unless otherwise indicated.
25
i. The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Loan Agreement as a whole and not to any particular
section or subdivision of this Loan Agreement.
(S)II. THE LOANS.
---------
(S)A. COMMITMENT TO LEND.
------------------
Subject to the terms and conditions set forth in this Loan Agreement,
the Lender agrees to lend to Borrower from time to time during the Applicable
Lending Period under the terms and conditions set forth herein, such sums as are
requested by Borrower up to a maximum aggregate amount (after giving effect to
all amounts requested) at any one time equal to the Total Loan Commitment and
the Lender's Commitment applicable to each Tranche of Loans. Subject to (S)2.9,
all Loans shall be made pro rata in accordance with each Lender's Commitment
--------
Percentage. Notwithstanding any provision of this Loan Agreement to the
contrary, all Loans and any unpaid Borrower Obligations under or pursuant to the
Loan Documents shall constitute one obligation of Borrower to the Lenders.
(S)B. THE NOTES.
---------
The Loans shall be evidenced by the Notes in substantially the forms
of Exhibits A-1 through A-3 hereto dated as of the Closing Date and completed
------------ ---
with appropriate insertions. One Tranche A Note, Tranche B Note and Tranche C
Note shall be payable to the order of each Lender in a principal amount equal to
such Lender's Applicable Commitment or, if less, the amount of all Outstanding
Tranche A, B or C Loans made by such Lender, plus interest accrued thereon.
Borrower irrevocably authorizes each Lender to make or cause to be made, an
appropriate notation on such Lender's Note Record reflecting the making of Loans
or (as the case may be) the receipt of payments. The amount of the Loans set
forth on such Lender's outstanding Note Record 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 Lender's Note
Record shall not limit or otherwise affect the Borrower's Obligations hereunder
or under the Notes to make payments of principal of or interest on the Notes
when due.
(S)C. TRANCHE A LOAN AMOUNTS.
----------------------
Tranche A Loans shall be available solely for the purpose of paying
amounts due to Supplier under the Supply Agreement, including, without
limitation, sales taxes thereon to the extent applicable, and the Origination
Fee. The Outstanding Amount of Tranche A Loans at any one time may not exceed
the Tranche A Commitment. Borrower shall not be entitled to make a Tranche A
borrowing if it has terminated the Supply Agreement for any reason
26
whatsoever; provided that, Borrower may make a Tranche A borrowing in an amount
-------------
sufficient to cover those purchase orders that are outstanding at the time of
the termination of the Supply Agreement which, but for such termination,
Borrower would be entitled to borrow under this (S)2.3.
(S)D. TRANCHE B LOAN AMOUNTS.
----------------------
Tranche B Loans shall be available solely for the purpose of paying
Tranche B Eligible Expenses. The amount of Tranche B Loans shall not exceed the
Tranche B Commitment. The amount of Tranche B Loans available for borrowing
during any fiscal quarter may not exceed the sum of:
(i) the cumulative amount of Tranche B Eligible Expenses as shown on
the Tranche B Advance Schedule as of the applicable fiscal quarter less the
total amount of all Tranche B Loans previously made for Tranche B Eligible
Expenses; and
(ii) the amount of Tranche B Eligible Expenses budgeted for the next
succeeding fiscal quarter as shown on the Tranche B Advance Schedule.
No Tranche B Loan shall be available if on any June 30 or December 31
after the Tranche C Final Repayment Date, (after giving effect to the requested
Tranche B Loan), Borrower would not be in compliance with the Tranche B Balance
Requirement. The amount of available Tranche B Loans at any time shall be
reduced by an amount equal to Tranche B Eligible Expenses for which a Tranche B
Loan has been made and such an expense has not been paid by Borrower. Upon
payment of such amount to the appropriate Person for such an expense the amount
of Tranche B Loans available for borrowing shall be restored to the amount
otherwise available. Borrower shall not be entitled to make a Tranche B
borrowing if it has terminated the Supply Agreement for any reason whatsoever;
provided that, Borrower may make a Tranche B borrowing in an amount sufficient
-------- ----
to cover those Tranche B Eligible Expenses reflected in purchase orders that are
outstanding at the time of the termination of the Supply Agreement which, but
for such termination, Borrower would be entitled to borrow under this (S)2.4.
(S)E. TRANCHE C LOAN AMOUNTS.
----------------------
Tranche C Loans shall be available solely for the purpose of paying
Tranche C Eligible Expenses. The amount of Tranche C Loans shall not exceed the
Tranche C Commitment. The amount of Tranche C Loans available for borrowing
during any fiscal quarter may not exceed the sum of:
(a)(i) the cumulative amount of Tranche C Eligible Expenses as shown
on the Tranche C Advance Schedule as of the applicable fiscal quarter less the
total amount of all Tranche C Loans previously made (exclusive of interest on
the Loans) for Tranche C Eligible Expenses; and
27
(ii) the amount of Tranche C Eligible Expense budgeted for the next
succeeding fiscal quarter as shown on the Tranche C Advance Schedule; and
(b) the amount, if not otherwise paid by Borrower, required to make
interest payments when due under this Loan Agreement.
The amount of available Tranche C Loans at any time shall be reduced
by an amount equal to Tranche C Eligible Expenses for which a Tranche C Loan has
been made and which Tranche C Eligible Expenses have not been paid. Upon
payment of such amount to the appropriate Person for such an expense the
available amount of Tranche C Loans available for borrowing shall be restored to
the amount otherwise available. Borrower shall not be entitled to make a
Tranche C borrowing if it has terminated the Supply Agreement for any reason
whatsoever; provided that, Borrower may make a Tranche C borrowing in an amount
-------- ----
sufficient to cover Tranche C Eligible Expenses that are the subject of binding
commitments to non-affiliates and are outstanding at the time of the termination
of the Supply Agreement which, but for such termination, Borrower would be
entitled to borrow under this (S)2.5.
Notwithstanding the above, Borrower shall not be entitled to make a
Tranche C borrowing unless it has hired permanent employees to fill those job
functions listed on Schedule 7.17 within the time periods set forth thereon.
--------------
(S)F. INTEREST ON LOANS.
-----------------
Except as otherwise provided in (S)4.10, and provided that in no event
shall the interest rate payable in respect hereof exceed the Highest Lawful
Rate:
1. RATE.
-----
a. Initial Interest Period. For all Loans the Drawdown Dates for
-----------------------
which are on or before September 30, 1995, the interest rate for the initial
Interest Period on the Outstanding Amount of such Loans shall be a simple per
annum interest rate equal to the sum of (i) 5.875% per annum, plus (ii) the
Applicable Margin. Interest on all Loans shall be calculated on the basis of a
360-day year and the actual number of days elapsed.
b. Subsequent Interest Periods. For all Interest Periods beginning
---------------------------
after September 30, 1995, at Borrower's election, the interest rate on all
Outstanding Loans shall be the then applicable (i) Base Rate or (ii) LIBOR Rate.
Borrower shall give the Administrative Agent at least three (3) Business Days'
irrevocable notice (each, an "Interest Rate Election Notice") prior to each
Interest Payment Date stating which interest rate it shall elect for the next
Interest Period following such Interest Payment
28
Date. The type of interest rate elected shall apply to the Outstanding Amount of
all Loans for the term of the applicable Interest Period. For any Interest
Period prior to which Borrower fails to timely submit an Interest Rate Election
Notice to Administrative Agent, the LIBOR Rate in effect two (2) LIBOR Business
Days prior to the beginning of the next Interest Payment Date shall apply in the
next Interest Period. Interest on all Loans shall be calculated on the basis of
a 360-day year and the actual number of days elapsed. Each Base Rate Loan and
LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period (inclusive) with
respect thereto at the rate per annum equal to the Base Rate or LIBOR Rate, as
elected.
2. TIME FOR PAYMENT.
----------------
Interest on the unpaid principal balance of all Loans under all
Tranches shall be due and payable quarterly in arrears on each Interest Payment
Date.
3. MANNER OF PAYMENT.
-----------------
On each Interest Payment Date which occurs prior to the Tranche C
Final Repayment Date, unless otherwise paid by Borrower, the Lenders shall make
a Tranche C Loan for the amount owing for interest on the Outstanding Amount of
Loans, provided, that no Default or Event of Default has occurred and is
--------
continuing. Borrower irrevocably instructs the Administrative Agent to disburse
Tranche C borrowings to pay interest on the Outstanding Amount of Loans directly
to the Lenders. If interest is paid other than by a Tranche C Loan, the payment
shall be made when due in immediately available funds at the office of the
Administrative Agent for the ratable benefit of the Lenders.
4. STATEMENT FROM ADMINISTRATIVE AGENT.
-----------------------------------
Prior to the end of each Interest Period, Administrative Agent will
endeavor to provide a statement to Borrower listing the amount of interest
Administrative Agent estimates Borrower will owe on the Outstanding Amount of
Loans on the upcoming Interest Payment Date. The failure of Administrative
Agent to provide such a statement, or any error made by Administrative Agent on
the statement shall not limit or otherwise affect Borrower's Obligations
hereunder or under the Notes to make payments of interest in the correct amount
as and when due.
(S)G. BORROWINGS AND DRAWDOWN PERIOD.
------------------------------
Each Lender's Commitment to make Loans under the Loan Agreement shall
terminate at the end of the Applicable Lending Period and shall be suspended
during any time that an event or circumstance that constitutes a Default has
occurred and is continuing under the Loan Agreement.
29
Notwithstanding the foregoing, so long as the Required Lenders agree,
in writing, the Lenders may (a) make Tranche A Loans to pay for equipment, goods
and services under the Supply Agreement and (b) Tranche C Loans to pay accrued
but unpaid interest on the Outstanding Amount of Loans notwithstanding the
occurrence and continuance of an event or circumstance that constitutes a
Default.
If, prior to the end of the Applicable Lending Period, the Borrower
submits a Draw Request for which the applicable Drawdown Date (five Business
Days after the receipt of such request by Administrative Agent) would occur
after the termination of the Applicable Lending Period, the Lenders and the
Administrative Agent will use reasonable commercial efforts to fund the
requested amount prior to the termination of the Applicable Lending Period,
provided that, all other conditions to borrowing have been satisfied. In no
-------------
event will the Administrative Agent and the Lenders make a Loan or be obligated
to make a Loan after the termination of the Applicable Lending Period.
(S)H. REQUESTS FOR LOANS.
------------------
Promptly upon receipt of any request for a borrowing under any Tranche
in accordance with the terms below (each, a "Draw Request"), the Administrative
Agent shall notify each of the Lenders of the Draw Request and the date that the
Administrative Agent intends to make a Loan pursuant to such Draw Request. Each
Draw Request shall be irrevocable and binding on Borrower, and shall obligate
Borrower to accept the Loan requested from the Lenders on the Drawdown Date.
1. TRANCHE A DRAW REQUESTS.
-----------------------
Each request for borrowings under Tranche A (a "Tranche A Draw
Request") must be received by the Administrative Agent not less than five (5)
Business Days prior to the Drawdown Date requested in the Tranche A Draw
Request. Each Tranche A Draw Request must be signed by an authorized officer of
Borrower and be substantially in the form of Exhibit B-1. Borrowings under
-----------
Tranche A may be made no more frequently than two times per month (each, a
"Tranche A Draw Date"). The amount of each Tranche A borrowing shall equal the
amount then due under the Supply Agreement as of the Tranche A Draw Date.
Notwithstanding anything to the contrary contained herein, nothing
contained herein shall be deemed to alter or affect the rights and obligations
of the Purchaser and Supplier arising under or pursuant to the Supply Agreement.
2. TRANCHE B DRAW REQUESTS.
-----------------------
Each request for borrowings under Tranche B (the
30
"Tranche B Draw Request") must be received by the Administrative Agent not less
than five (5) Business Days prior to the Drawdown Date requested in the Tranche
B Draw Request. Each Tranche B Draw Request shall be signed by an authorized
officer of Borrower and be substantially in the form of Exhibit B-2. Tranche B
-----------
Draw Requests may not be submitted more frequently than two (2) times
per month. Lender may reject a Tranche B Draw Request if the amount requested is
more than the amount available for borrowing under (S)2.4 as of the proposed
Drawdown Date or if the Drawdown Report and Certificate submitted with the
Tranche B Draw Request is unsatisfactory to the Administrative Agent in any
material respect.
3. TRANCHE C DRAW REQUESTS.
-----------------------
Each request for borrowings under Tranche C, except for a Tranche C
Loan the proceeds of which will be used to pay interest on the Loans, must (i)
be accompanied by a properly completed Tranche C draw request (a "Tranche C Draw
Request") and (ii) be received by the Administrative Agent not less than five
(5) Business Days prior to the Drawdown Date requested in the Tranche C Draw
Request. Each Tranche C Draw Request must be signed by an authorized officer of
Borrower and be substantially in the form of Exhibit B-3. Tranche C Draw
-----------
Requests may not be submitted more frequently then two (2) times per quarter.
Tranche C Loans to pay interest on the Loans shall be made in the amounts and at
the times specified in (S)2.6 above.
(S)I. FUNDS FOR LOANS.
---------------
1. Unless and until an Assignment and Acceptance occurs in
accordance with the terms of this Loan Agreement, prior to 3:00 p.m. (New York
time) on the Drawdown Date, the Lender shall, subject to the satisfaction of the
conditions set forth in this Loan Agreement disburse the amount of such Loan by
(a) transferring the amount of such Loan to the Borrower by wire transfer
pursuant to the Borrower's instructions in the Draw Requests, or (b) if such
Loan is a Tranche A Loan to be used to pay the purchase price of equipment,
software or services and the applicable sales taxes thereon, if any, by the
Borrower under the Supply Agreement, crediting such payment of such purchase
price by wire transfer pursuant to the terms of the Tranche A Draw Request. The
Lender will endeavor to disburse the appropriate amount of a Loan to the
Borrower by 1:00 p.m. (New York time) rather than 3:00 p.m. (New York time) on
the Drawdown Date but is in no respect obligated to do so.
2. a. Following the occurrence of an Assignment and Acceptance in
accordance with the terms of this Loan Agreement, upon receipt of a Draw Request
from the Borrower, the Administrative Agent shall promptly notify each Lender by
telephone or telecopy of the Draw Request. Each Lender shall, not later than
11:00 a.m. (New York time) on the Drawdown Date make available to the
Administrative Agent at the Administrative Agent's Office or at
31
such other location as the Administrative Agent shall designate, the amount of
such Lender's ratable portion of such Loan in immediately available funds. Prior
to 3:00 p.m. (New York time) on the Drawdown Date, the Administrative Agent
shall, subject to the satisfaction of the conditions set forth in this Loan
Agreement, disburse the amounts made available to it by the Lenders in like
funds by (i) transferring the amounts so made available by wire transfer
pursuant to the Borrower's instructions, or (ii) if such Loan is a Tranche A
Loan to be used to pay the purchase price of equipment, software or services and
the applicable sales taxes thereof, if any by the Borrower under the Supply
Agreement, crediting such portion to payment of such purchase price by wire
transfer pursuant to the terms thereof. The Administrative Agent will endeavor
to disburse the appropriate amount of a Loan to the Borrower by 1:00 p.m. (New
York time) rather than 3:00 p.m. (New York time) on the Drawdown Date but is in
no respect obligated to do so.
b. If the Administrative Agent shall not have received from a
Lender prior to 2:00 p.m. (New York time) on any Drawdown Date such Lender's
ratable portion of such Loan, either (but not both) the Administrative Agent or
NTI (if NTI is not the Administrative Agent and has agreed with the
Administrative Agent to do so in the stead of the Administrative Agent), shall
make available to the Borrower on such date (in addition to its pro rata share
of the Loan made in its capacity as a Lender) the full amount of the portion of
the Loan not received by the Administrative Agent from such Lender. If and to
the extent the Administrative Agent or NTI so funds a portion of a Loan on
behalf of a Lender, such Lender shall repay to the Administrative Agent or NTI
(whichever one paid such Lender's portion) 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 or NTI, at the applicable interest rate.
c. If such Lender shall repay to the Administrative Agent or
NTI such corresponding amount, such amount so repaid shall thereafter constitute
such Lender's portion of the applicable Loan for purposes of this Loan
Agreement. The failure of any Lender to fund its ratable portion of any Loan
shall not relieve (i) either (but not both) the Administrative Agent or NTI (if
NTI is not the Administrative Agent and has agreed with Administrative Agent to
fund in the stead of the Administrative Agent), of its obligation to fund the
full amount of the Loan or (ii) any other Lender of its obligation hereunder to
fund its respective portion of the Loan on the date of such borrowing, but no
Lender (other than the Administrative Agent or NTI (if NTI is not the
Administrative Agent and has agreed with Administrative Agent to do so), but not
both) shall be responsible for any such failure of any other Lender.
d. In the event that, at any time when the
32
Borrower is not in Default and has satisfied all applicable conditions set forth
in (S)10, a Lender for any reason fails or refuses to fund its portion of an
Loan, then, until such time as such Lender has funded its portion of such Loan,
or all other Lenders have received payment in full (whether by repayment or
prepayment) of the principal and interest due in respect of such Loan, such non-
funding Lender shall not have the right (i) to vote or consent regarding any
issue on which voting or consenting is required or advisable under this Loan
Agreement or any other Loan Document and the amount of the Loan or Commitment
held by such Lender shall not be counted as outstanding for purposes of
determining "Required Lenders" hereunder, or (ii) to receive payments of
principal, interest or fees from the Borrower in respect of its unfunded portion
of Loans (but instead such payments shall be made to either the Administrative
Agent or NTI (whichever one paid such Lender's portion) in respect to the
portion of such Loans funded by it pursuant to this (S)2.9).
(S)III. REPAYMENT OF THE LOANS.
----------------------
(S)A. TERM/AMORTIZATION.
-----------------
1. TRANCHE A AND B.
---------------
The Outstanding Amount of Tranche A and Tranche B Loans shall be
repayable over five (5) years, in twenty consecutive quarterly payments
commencing March 31, 2000 and continuing on the last day of each June,
September, December and March thereafter to and including the Tranche A and B
Maturity Date (each, a "Payment Date"). On the Tranche A and B Maturity Date,
Borrower shall pay all of the Outstanding Amount of Tranche A Loans and Tranche
B Loans, together with any and all accrued and unpaid interest thereon. Prior
to the Tranche A and B Maturity Date, the Outstanding Amount of Tranche A and
Tranche B Loans as of the Tranche A and B Commitment Termination Date shall be
paid in accordance with the following schedule:
From March 31, 2000 to and
including December 31, 2001 3.75% of the Outstanding Amounts of
Tranche A and Tranche B Loans as of the
Tranche A and B Commitment Termination
Date per Payment Date
From March 31, 2002 to and
including December 31, 2002 5.0% of the Outstanding Amounts of
Tranche A and Tranche B Loans as of the
Tranche A and B Commitment Termination
Date per Payment Date
33
From March 31, 2003 to and
including December 31, 2004 6.25% of the Outstanding Amounts of
Tranche A and Tranche B Loans as of the
Tranche A and B Commitment Termination
Date per Payment Date
2. TRANCHE C.
---------
Principal under Tranche C shall be repayable on the Tranche C
Final Repayment Date.
(S)B. MANDATORY PREPAYMENTS OF LOANS.
------------------------------
1. EXCESS BORROWINGS.
-----------------
If at any time the Outstanding Loans for any Tranche exceeds the
maximum Commitment for such Tranche, then Borrower shall within three (3)
Business Days of the date the Administrative Agent so notifies the Borrower in
writing pay to the Administrative Agent the amount of such excess for the
respective accounts of the Lenders. Each repayment under this subparagraph
shall be allocated among the Lenders, in proportion, as nearly as practicable,
to the respective Outstanding Amounts under the appropriate Tranche in inverse
order of maturity, with adjustments to the extent practicable to equalize any
prior payments or repayments not exactly in proportion.
2. SALES OF ASSETS.
---------------
No later than three Business Days after its receipt of any Net Cash
Proceeds from the sale of any assets described below the Borrower will prepay
the interest and the Outstanding Amount of Tranche C Loans, and if there is no
Outstanding Amount of Tranche C Loans then to interest and Outstanding Amount of
Tranche B Loans, and if there is no Outstanding Amount of Tranche B Loans then
to interest and Outstanding Amount of Tranche A Loans in an amount equal to (i)
the Net Cash Proceeds from the direct or indirect sale of any assets of the
Borrower (other than the Borrower's inventory and other goods sold in the
ordinary course of the Borrower's business) 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 $5,000,000, multiplied
by (ii) a fraction, (A) the numerator of which is the aggregate principal amount
of the Outstanding Amount 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
the Ericsson Loan Agreement, plus the aggregate principal amount of equivalent
Loans owing to Other Lenders, with an equivalent mandatory prepayment provision,
outstanding at the time of such sale. All payments hereunder applicable to
principal
34
shall be applied in inverse order of maturity. Each repayment hereunder shall be
allocated among the Lenders, as nearly as practicable, to the respective
Outstanding Amounts under the applicable Tranche, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly on
proportion. All prepayments required in this (S)3.2B shall be accompanied by
such additional amounts as are sufficient to pay the Lenders' Breakage Costs
associated with such prepayments.
3. NET FUNDS PAYMENT.
-----------------
On or before the one-hundred-and-twentieth day of each year commencing
in the year 2001, and each year for so long as Tranche B Loans remain
outstanding, Borrower shall pay to Administrative Agent an amount equal to the
Net Funds Amount multiplied by a fraction (i) the numerator of which is the
aggregate principal amount of Tranche B Loans then outstanding at the time of
such date of determination and (ii) the denominator of which is such aggregate
principal amount plus the aggregate principal amount of the Tranche B Advances
(as defined in the Ericsson Loan Agreement) then outstanding under the Ericsson
Loan Agreement, plus the aggregate principal amount of equivalent loans owing to
Other Lenders with such an equivalent mandatory prepayment provision and then
outstanding if the loan agreement for such Other Lender provides for mandatory
prepayments from the Net Funds Amount and such mandatory prepayment is permitted
under the Intercreditor Agreement (the "Net Funds Payment"). The Net Funds
Payment shall be applied against interest and then Outstanding Amount of Tranche
B Loans in inverse order of maturity. Each repayment hereunder shall be
allocated among the Lenders, as nearly as practicable, to the respective
Outstanding Amount under the applicable Tranche, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion. The Borrower shall not be required to pay to the Administrative
Agent any Breakage Costs with respect to any Net Funds Payment.
4. DEFICIENCIES IN TRANCHE B BALANCE REQUIREMENT.
---------------------------------------------
Within 30 days after written notice from Administrative Agent,
Borrower shall make any prepayments which may be required to cure any deficiency
in the Tranche B Balance Requirement. The amount so paid will be applied
against the Outstanding Amount of Tranche B Loans in inverse order of maturity.
(S)C. OPTIONAL PREPAYMENTS OF LOANS.
-----------------------------
Borrower shall have the right, at its election, to prepay the
Outstanding Amount of Loans under any Tranche, as a whole or in part, at any
time without penalty or premium, provided that any full or partial prepayment of
--------
the Outstanding Amount of any LIBOR Rate Loans pursuant to this (S)3.3 may be
made only on the last day of the Interest Period relating thereto unless such
prepayments are
35
accompanied by such additional amounts as are sufficient to pay the Lender's
Breakage Costs associated with such prepayments. Borrower shall give the
Administrative Agent, no later than 10:00 a.m., New York time, at least three
(3) Business Days' prior written notice of any proposed prepayment pursuant to
this (S)3.3 of Base Rate Loans, and four (4) LIBOR Business Days' notice of any
proposed prepayment pursuant to this (S)3.3 of LIBOR Rate Loans, in each case
specifying the proposed date of prepayment of Loans, the principal amount to be
prepaid and which Tranche shall be prepaid. Each partial prepayment of the Loans
(i) shall be in a minimum amount of $1,000,000 and in integral multiples of
$100,000, (ii) shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of prepayment, (iii) shall be accompanied by the
payment of the appropriate Breakage Costs, if any, and (iv) shall be applied to
installment payments of principal in direct order of maturity on the applicable
Tranche. In the absence of instruction by Borrower, the prepayment shall be
first applied to interest and installment payments of principal outstanding
under Tranche C, then to interest and installment payments of principal
outstanding under Tranche B. Each partial prepayment shall be allocated among
the Lenders, in proportion, as nearly as practicable, to the respective
Outstanding Amount under the appropriate Tranche, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
Tranche A Loans which are prepaid may be reborrowed, provided such
reborrowing is made in accordance with all terms and conditions applicable to
borrowings under Tranche A.
Amounts of Tranche B Loans which are prepaid may not be reborrowed.
Amounts of Tranche C Loans which are prepaid will be added to and made
available for one-time borrowing under Tranche B, provided that such Tranche B
borrowing is made in accordance with all terms and conditions applicable to
Tranche B borrowings.
(S)IV. CERTAIN GENERAL PROVISIONS.
--------------------------
(S)A. ORIGINATION FEE.
---------------
Borrower shall pay to the Administrative Agent on the Closing Date the
Origination Fee which shall be paid with the proceeds of a Tranche A Loan, as
provided above. (Administrative Agent acknowledges that this fee has been paid
prior to the date hereof).
(S)B. FUNDS FOR PAYMENTS.
------------------
1. All payments of principal (including the Origination Fee),
interest, expenses and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Administrative Agent, for the respective
accounts of the Lenders
36
and the Administrative Agent, at the Administrative Agent's Office or at such
other location as the Administrative Agent may from time to time designate, in
each case in immediately available funds.
2. All payments by Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless Borrower is
compelled by law to make such deduction or withholding within thirty (30) days
from the date the Administrative Agent makes written demand therefor. Subject
to the provisions of (S)4.6, if any such obligation is imposed upon Borrower
with respect to any amount payable by them hereunder or under any of the other
Loan Documents, Borrower shall pay to the Administrative Agent, for the account
of the Lenders or (as the case may be) the Administrative Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Lenders or the Administrative Agent to receive the same net amount which the
Lenders or the Administrative Agent would have received on such due date had no
such obligation been imposed upon Borrower. Borrower shall deliver promptly to
the Administrative Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by Borrower
hereunder or under such other Loan Document.
(S)C. COMPUTATIONS.
------------
All computations of interest on the Loans and of fees, or other
expenses shall, unless otherwise expressly provided herein, shall be based on a
360-day year and paid for the actual number of days elapsed. Except as
otherwise provided in the definition of the term "Interest Period" with respect
to LIBOR Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue at the then applicable interest rate during such extension. The
Outstanding Amount of the Loans as reflected on the Note Records from time to
time shall be prima facie evidence of the Outstanding Amount of the Loans,
-----------
unless within ten (10) Business Days after receipt of any notice by the
Administrative Agent or any of the Lenders of such Outstanding Amount, the
Administrative Agent or such Lender shall notify Borrower to the contrary.
(S)D. INABILITY TO DETERMINE LIBOR RATE OR PRIME RATE.
-----------------------------------------------
In the event, prior to the commencement of any Interest Period
relating to any LIBOR Rate Loan, the Administrative Agent
37
shall determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate that would otherwise determine the rate of interest
to be applicable to any LIBOR Rate Loan during any Interest Period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on Borrower and the Lenders) to Borrower and the
Lenders. In such event (a) any Draw Request with respect to LIBOR Rate Loans
shall be automatically withdrawn and shall be deemed a request for Base Rate
Loans, (b) each LIBOR Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and (c) the
obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the
Administrative Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Administrative Agent shall so notify
Borrower and the Lenders.
In the event prior to the commencement of any Interest Period relating
to any Base Rate Loan, the Administrative Agent shall determine that adequate
and reasonable methods do not exist for ascertaining the Prime Rate that would
otherwise determine the rate of interest to be applicable to any Base Rate Loan
during any Interest Period, the Administrative Agent shall forthwith give notice
of such determination (which shall be conclusive and binding on the Borrower and
the Lenders) to the Borrower and the Lenders. In such event (a) any Draw Request
with respect to Base Rate Loans shall be automatically withdrawn and shall be
deemed a request for LIBOR Rate Loans, (b) each Base Rate Loan will
automatically, on the last day of the then current Interest Period relating
thereto, become a LIBOR Rate Loan, and (c) the obligations of the Lenders to
make Base Rate Loans shall be suspended until the Administrative Agent
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Administrative Agent shall so notify the Borrower and the
Lenders.
(S)E. 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 Rate
Loans, such Lender shall forthwith give notice of such circumstances to
Borrower, the Administrative Agent and the other Lenders and thereupon (a) the
Commitment of such Lender to make LIBOR Rate 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 Outstanding Amount of such
Lender's LIBOR Rate Loans, if any, shall be converted automatically to Base Rate
Loans on the last day of each Interest Period applicable to such LIBOR Rate
Loans or within such earlier period as may be required by law. Borrower hereby
agrees to pay the
38
Administrative Agent for the account of such Lender, within ten (10) Business
Days of receipt by the Borrower of a statement from Lender, any additional
amounts necessary to compensate such Lender for any costs incurred by such
Lender in making any conversion in accordance with this (S)4.5, including any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder. Any such statement
shall disclose the amounts in reasonable detail. Before giving any notice
pursuant to this (S)4.5, the affected Lender shall use reasonable commercial
efforts to designate a new LIBOR Lending Office if such designation will avoid
the need for giving such notice or making such demand and will not, in the
judgment of such Lender, subject such Lender to additional costs or otherwise be
disadvantageous to such Lender.
(S)F. ADDITIONAL COSTS, ETC.
---------------------
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 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:
a. Subject any Lender or the Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Loan Agreement, the other Loan Documents, such Lender's
Commitment or the Loans (other than taxes based upon or measured by the income
or profits of such Lender or the Administrative Agent), or
b. Materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Lender of the principal of or
the interest on any Loans or any other amounts payable to any Lender or the
Administrative Agent under this Loan Agreement or any of the other Loan
Documents, or
c. Impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Loan 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
d. Impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Loan Agreement, the other Loan
Documents, such Lender's Commitment, or any class of loans, or commitments of
which any of the Loans or such Lender's Commitment forms a part, and the result
of any of the foregoing is
39
I. to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such Lender's
Commitment, or
II. to reduce the amount of principal, interest, or other
amount payable to such Lender or the Administrative Agent hereunder on account
of such Lender's Commitment, or any of the Loans, or
III. to require such Lender or the Administrative Agent to
make any payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received by such
Lender or the Administrative Agent from Borrower hereunder by an amount deemed
material by such Lender,
then, and in each such case, such Lender or the Administrative Agent may notify
Borrower of such fact. Borrower and such Lender or (as the case may be) the
Administrative Agent shall thereafter attempt to negotiate in good faith, within
fifteen (15) days of the day on which Borrower receive such notice, an
adjustment payable hereunder that will adequately compensate such Lender or the
Administrative Agent in light of these circumstances. Notice from such Lender
or Administrative Agent shall include a certificate or statement as to such
increased cost incurred as a result of any of the above mentioned events in
clauses (a), (b), (c), or (d) prepared in reasonable detail, which shall include
the method employed by such Lender or Administrative Agent in determining the
allocation of such costs to the Borrower. If Borrower and such Lender or the
Administrative Agent are unable to agree to such adjustment within fifteen (15)
days of the date on which Borrower receive such notice, then commencing on the
date of such notice (but not earlier than the effective date of any such
additional cost, reduction, payment or foregone interest or other sum), the fees
payable hereunder shall increase by an amount that will, in such Lender's or the
Administrative Agent's reasonable determination, provide adequate compensation
for the portion of the affected Lender's additional costs determined in
accordance with this (S)4.6. Each Lender and the Administrative Agent shall
allocate such cost increases in good faith and on an equitable basis.
Each Lender that is organized under the laws of any jurisdiction other
than the United States shall deliver to the Administrative Agent for
transmission to the Borrower, on or prior to the Closing Date (in the case of
each Lender listed on the signature pages hereof) or on the effective date of
the Assignment and Acceptance Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as may be necessary
in the determination of the Borrower or the
40
Administrative Agent (each in the reasonable exercise of its discretion
including, without limitation, if at any time such Lender shall change its then
current lending office or select an additional lending office), such
certificates, documents or other evidence, properly completed and duly executed
by such Lender (including, without limitation, Internal Revenue Service Form
1001 or Form 4224 or any other certificate or statement of exemption required by
Treasury Regulations Section 1.1441(a) or Section 1.1441-6(c) or any successor
thereto) to establish that such Lender is not subject to deduction or
withholding of United States federal income tax under Section 1441 or 1442 of
the Code or otherwise (or under any comparable provisions of any successor
statute) with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Loan Documents. Borrower shall
not be required to pay any additional amount to any such Lender under this
(S)4.6 if such Lender shall have failed to satisfy the requirements of the
immediately preceding sentence; provided that if such Lender shall have
satisfied such requirements on the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on the effective date of the Assignment
and Acceptance Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection shall relieve Borrower of its
obligation to pay any additional amounts pursuant to this (S)4.6 in the event
that, as a result of any change in applicable law, such Lender is no longer
properly entitled to deliver certificates, documents or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described in the immediately preceding sentence.
e. The agreements in this (S)4.6 shall survive the termination of the
Commitments and the payment of all amounts payable under the Loan Documents.
(S)G. CAPITAL ADEQUACY.
----------------
If any present or future 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 affects the amount of capital required or expected to be maintained
by any Lender or the Administrative Agent or any corporation controlling such
Lender or the Administrative Agent and such Lender or the Administrative Agent
determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of such Lender's or the Administrative
Agent's commitment with respect to any Loans, which has or would have the effect
of reducing the return on the Lender's or Administrative Agent's capital to a
level below that which the Lender or Administrative Agent could have achieved
(taking into consideration the Lender's or Administrative Agent's then existing
policies with respect to capital adequacy and assuming full utilization of the
Lender's or Administrative Agent's capital) but for such adoption, change or
41
compliance, by an amount deemed by the Lender to be material, then such Lender
or the Administrative Agent shall promptly notify Borrower of such fact. Such a
notice shall be accompanied by a certificate which will set forth in reasonable
detail the nature of the occurrence giving rise to such compensation and the
additional amount or amounts to be paid to it hereunder. To the extent that the
costs of such increased capital requirements are not reflected in the Base Rate
or LIBOR Rate, as the case may be, (if relating to Loans), Borrower and such
Lender or (as the case may be) the Administrative Agent shall thereafter attempt
to negotiate in good faith, within fifteen (15) days of the day on which
Borrower receives such notice, an adjustment payable hereunder that will
adequately compensate such Lender or the Administrative Agent in light of these
circumstances. If Borrower and such Lender or the Administrative Agent are
unable to agree to such adjustment within fifteen (15) days of the date on which
Borrower receive such notice, then commencing on the date of such notice (but
not earlier than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in such
Lender's or the Administrative Agent's reasonable determination, provide
adequate compensation. Each Lender and the Administrative Agent shall allocate
such cost increases in good faith and on an equitable basis.
(S)H. CERTIFICATE.
-----------
The Administrative Agent or any Lender will promptly notify Borrower
of the amounts it seeks to recover as indemnification from Borrower pursuant to
(S)4.9 hereof. Such a notice will set forth in reasonable detail the amount and
nature of the occurrence giving rise to indemnification thereof. The
aforementioned certificates setting forth any additional amounts payable
pursuant to this (S)4.8, (S)4.6 or (S)4.7, submitted by any Lender or the
Administrative Agent to Borrower, shall be conclusive, absent manifest error,
that such amounts are due and owing. Borrower shall pay to Administrative Agent
the amounts set forth in such certificates within fifteen (15) days of receiving
the same. By making such payments, Borrower is not waiving its right to
contest that the amounts set forth in the certificates are based on manifest
error.
(S)I. INDEMNITY.
---------
Borrower agrees to indemnify each Lender and the Administrative Agent
and to hold each Lender and the Administrative Agent harmless from and against
any loss, cost or expense (including loss of anticipated profits) that such
Lender or the Administrative Agent may sustain or incur as a consequence of (a)
a default by Borrower in making a borrowing after Borrower has given (or is
deemed to have given) a Draw Request relating thereto in accordance with
(S)(S)2.8A, B or C, or (b) the incurrence of Breakage Costs.
42
(S)J. INTEREST AFTER DEFAULT.
----------------------
Overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder or under
any of the other Loan Documents shall bear interest compounded monthly and
payable on demand at a rate per annum equal to four percent (4%) above the then
applicable Base Rate or LIBOR Rate, until such amount shall be paid in full
(after as well as before judgment), provided that, in no event shall the
-------- ----
interest payable in respect hereof exceed the Highest Lawful Rate.
(S)K. NO FORCE MAJEURE, DISPUTES.
--------------------------
Borrower's obligation to pay all amounts due under the Loans shall not
be affected by any circumstance whatsoever, including, without limitation: (i)
any set-off, counterclaim, recoupment, deduction, abatement, suspension,
diminution, reduction, defense or other right which Borrower may have against
Supplier for any reason whatsoever arising under or pursuant to the Supply
Agreement or otherwise relating to the purchase of goods and services from the
Supplier, (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 Supplier, (iii) any insolvency, bankruptcy, reorganization or
similar proceedings by or against Borrower or Parent, or affecting any of the
assets of any of the foregoing, (iv) any action of any governmental authority or
any damage to or destruction of or any taking of Borrower's property or any part
thereof, (v) any change, waiver, extension, indulgence or failure to perform or
comply with, or other action or omission herein or in the Loan Documents (except
for express written modifications to this Loan Agreement or other Loan Documents
as and in the manner permitted under this Loan Agreement or the other Loan
Documents), (vi) any dissolution of Borrower or Parent, (vii) any inability or
illegality with respect to the use or ownership of Borrower's property, (viii)
any failure to obtain, or expiration, suspension or other termination of, or
interruption to, any required licenses, permits, consents, authorizations,
approvals or other legal requirements, (ix) the invalidity or unenforceability
of the Loan Documents or any other infirmity therein or any lack of power or
authority of Lender or Borrower, or (x) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing and whether or not
Borrower shall have notice or knowledge of any of the foregoing, it being the
intention of the Lender and Borrower that the obligations of Borrower shall be
absolute and unconditional and shall be separate and independent covenants and
agreements and shall continue unaffected unless the requirements to pay or
perform the same shall have been terminated pursuant to an express provision
hereof or of the Loan Documents.
(S)V. COLLATERAL SECURITY.
-------------------
The Borrower's Obligations shall be secured pursuant to the Borrower
Security Agreement and the Pledge Agreement.
43
(S)VI. REPRESENTATIONS AND WARRANTIES.
------------------------------
Borrower represents and warrants to the Lenders and the Administrative
Agent as follows:
(S)A. CORPORATE AUTHORITY.
-------------------
1. INCORPORATION; GOOD STANDING.
----------------------------
Borrower (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.
2. AUTHORIZATION.
-------------
The execution, delivery and performance of this Loan Agreement and the
other Loan Documents to which Borrower is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the corporate
authority of Borrower, (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 Borrower is
subject or any judgment, order, writ, injunction, license or permit applicable
to Borrower 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, Borrower or its Property.
3. ENFORCEABILITY.
--------------
The execution and delivery of this Loan Agreement and the other Loan
Documents to which Borrower is or is to become a party will result in valid and
legally binding obligations of Borrower enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is 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.
(S)B. GOVERNMENTAL APPROVALS.
----------------------
The execution, delivery and performance by Borrower of this Loan
Agreement and the other Loan Documents to which Borrower
44
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 (other than UCC-1
financing statements required to be filed in the appropriate public records with
respect thereto), any governmental agency or authority other than those already
obtained.
(S)C. TITLE TO PROPERTIES; LEASES.
---------------------------
Except as indicated on Schedule 6.3 hereto, Borrower owns all of the
------------
assets reflected in the balance sheet of Borrower as at the Balance Sheet Date
or acquired since that 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 mortgages, leases, conditional sales agreements,
title retention agreements, liens or other encumbrances except Permitted Liens.
(S)D. FINANCIAL STATEMENTS.
--------------------
There has been furnished the Administrative Agent the audited balance
sheet of Borrower, as at the Balance Sheet Date, and the audited statement of
income and cash flow statement of Borrower for the fiscal year then ended, and
such balance sheet and statement of income and cash flow have been certified by
Borrower's independent certified public accountants and accompanied by an
unqualified opinion of such accountants. Such balance sheet and statement of
income and cash flow have been prepared in accordance with generally accepted
accounting principles and fairly present the financial condition of Borrower 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 Borrower as
of such date involving material amounts, known to the officers of Borrower,
which were not disclosed in such balance sheet and the notes related thereto.
(S)E. NO MATERIAL ADVERSE EFFECT, ETC.
-------------------------------
Since the Balance Sheet Date there has occurred no Material Adverse
Effect. Since the Balance Sheet Date, except as permitted hereunder Borrower
has not made any Distribution.
(S)F. FRANCHISES, PATENTS, COPYRIGHTS, ETC.
------------------------------------
Borrower possesses all franchises, patents, copyrights, trademarks,
trade names, and rights in respect of the foregoing shown on Schedule 6.6,
------------
adequate for the conduct of its business as now conducted or as presently
contemplated without known conflict with any rights of others.
(S)G. LICENSES, ETC.
--------------
Except as set forth on Schedule 6.7 attached hereto, Borrower has
------------
secured (a) with respect to the construction,
45
installation and development of facilities for the New York PCS Network, all
Licenses and 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 FCC License, and (b)
with respect to the operation of those portions of the New York PCS Network the
development of which has theretofore been completed, all Licenses and material
Necessary Authorizations sufficient to operate such completed portions. Neither
any License nor any material Necessary Authorization needed to comply with the
foregoing provisions of this (S)6.7 is the subject of any pending or, to the
best of Borrower's knowledge, threatened revocation.
(S)H. LITIGATION.
----------
Except as set forth in Schedule 6.8 hereto, there are no actions,
------------
suits, proceedings or investigations of any kind pending or, to the best of
Borrower's knowledge, threatened against Borrower 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 Borrower, to carry on business
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 Borrower, or which questions the
validity of this Loan Agreement or any of the other Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.
(S)I. NO MATERIALLY ADVERSE CONTRACTS, ETC.
------------------------------------
Borrower is not 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. Borrower is not a
party to any contract or agreement that has or is expected, in the judgment of
such Borrower's officers, to have any Material Adverse Effect.
(S)J. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.
---------------------------------------------
Borrower is not 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.
(S)K. TAX STATUS.
----------
Borrower (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
46
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, and the officers
of Borrower know of no basis for any such claim.
(S)L. NO EVENT OF DEFAULT.
-------------------
No event or circumstance which constitutes a Default or Event of
Default has occurred under the Loan Documents and is continuing.
(S)M. HOLDING COMPANY AND INVESTMENT COMPANY ACTS.
-------------------------------------------
Borrower is not 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; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
(S)N. 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 Borrower or
any rights relating thereto.
(S)O. FCC MATTERS.
-----------
Except for the filing of tariffs with the FCC, the Borrower 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, without limitation, 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.
(S)P. TARIFFS.
-------
No action to change, alter, rescind or otherwise terminate the tariffs
containing service regulations or any rates
47
and charges for commercial mobile radio services which, if adversely determined,
would have a Material Adverse Effect, is pending or known by Borrower to be
under consideration.
(S)Q. DISCLOSURE.
----------
This Loan Agreement and the statements and documents referred to
herein or delivered to the Administrative Agent and/or the Lenders by or on
behalf of 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.
(S)R. BURDENSOME OBLIGATIONS.
----------------------
Borrower is not 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 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 of the Borrower, or Operating Cash Flow,
or the ability of the Borrower to perform obligations under the Loan Documents.
Borrower does not presently anticipate that future expenditures by Borrower
needed to meet the provisions of federal or state statutes, orders, rules or
regulations will be so burdensome as to affect or impair, in a materially
adverse manner, the business or condition, financial or otherwise, of Borrower.
(S)S. SOLVENCY.
--------
Borrower is, and after giving effect to the incurrence of all
Indebtedness as and when contemplated by the Loan Documents will be, Solvent.
(S)T. SECURITY INTERESTS.
------------------
Subject to (i) the possession by the Collateral Agent of the Pledged
Collateral, (ii) the filing of UCC-1 financing statements with respect to Parent
and Borrower in the applicable filing offices, the payment of the fees in
respect thereof and the filing of continuation statements when required by
applicable law, (iii) the filing of the Grants of Security Interests in the
United States Patent and Trademark Office with respect to trademarks and
patents, and (iv) the execution and filing of an assignment of copyrights for
filing with the Copyright Office with respect to copyrights, the security
interests granted under the Collateral Documents will constitute valid, binding
and continuing duly perfected first priority Liens in and to the Collateral,
except for Permitted Liens, in favor of the Collateral Agent, for its benefit
and for the ratable benefit of the lenders and agents parties to the
Intercreditor Agreement.
48
(S)U. CERTAIN TRANSACTIONS.
--------------------
Except as set forth in Schedule 6.21 hereto, none of the officers,
-------------
directors, or employees of Borrower is presently a party to any transaction with
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 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. Borrower, Parent and Grand Parent have entered into an
Expense Allocation Agreement that has been previously delivered to
Administrative Agent on behalf of the Lenders. To the extent Intellectual
Property of Parent or Grand Parent is licensed to Borrower, the terms of such
license(s) and the fee charged to Borrower relating thereto shall be subject to
the Required Lenders' reasonable approval.
(S)V. BUSINESS PLANS.
--------------
The Approved Full-Term Operating Business Plan and each Approved
Annual Operating Business Plan have been prepared in all material respects in
accordance with GAAP concepts, consistently applied to projections.
(S)W. EMPLOYEE BENEFIT PLANS.
----------------------
1. IN GENERAL.
----------
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 but not limited to the
provisions thereunder respecting prohibited transactions. Borrower has made all
required contributions to each Employee Benefit Plan and each Multiemployer
Plan. To the extent applicable, 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
(S)103(d) of ERISA, with respect to each Guaranteed Pension Plan.
2. TERMINABILITY OF WELFARE PLANS.
------------------------------
Under each Employee Benefit Plan which is an employee welfare benefit
plan within the meaning of (S)3(1) or (S)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). A
Borrower or an ERISA Affiliate, as appropriate, 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 any of Borrower or such ERISA
Affiliate without liability to any Person.
49
3. GUARANTEED PENSION PLANS.
------------------------
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 (S)302(f) of ERISA, or otherwise,
has been timely made. No waiver of an accumulated funding deficiency or
extension of amortization periods has been 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 Borrower
or any ERISA Affiliate with respect to any Guaranteed Pension Plan and there has
not been any ERISA Reportable Event, or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by the
PBGC. Neither Borrower nor any ERISA Affiliate has instituted or intends to
institute proceedings to terminate a Guaranteed Pension Plan. No event requiring
notice to the PGBC 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 twelve months
of 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 (S)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.
4. MULTIEMPLOYER PLANS.
-------------------
Neither Borrower nor 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 (S)4201 of ERISA or as a result of a sale of assets
described in (S)4204 of ERISA. Neither Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of (S)4241 or (S)4245 of ERISA or that any
Multiemployer Plan intends to terminate or has been terminated under (S)4041A of
ERISA.
(S)X. 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" 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.
50
(S)Y. ENVIRONMENTAL COMPLIANCE.
------------------------
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 to its best knowledge:
a. Borrower has complied 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.
b. Except as set forth in Schedule 6.25 hereto, 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. 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 that could reasonably be expected
to have an impact on the Real Estate or facilities owned, operated or controlled
by the Borrower.
c. Set forth in Schedule 6.25 is a list of all environmental reports,
-------------
investigations and audits relating to premises currently or previously owned or
operated by the Borrower (whether conducted by or on behalf of the Borrower or a
third party, and whether done at the initiative of the Borrower or directed by a
governmental entity or other third party) which the Borrower has in its
possession or to which it has access, complete and accurate copies of each such
report, or the results of each such investigation or audit, have been provided
to the Administrative Agent on behalf of the Lenders.
d. Borrower has filed all reports and returns required to be filed by
the Borrower under any Environmental Laws. The business of the Borrower is being
conducted in compliance with all Environmental Laws applicable to the Borrower
or its business or Properties. The Borrower 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 which permits, or after notice or
lapse of time or both would permit, any modification or termination of any
Environmental Permit. Borrower (i) has not received any notice asserting the
absence of any Environmental Permit and (ii) has no knowledge of any
environmental law proposed or under consideration, which, if effective, could
have a Material Adverse Effect.
51
e. Neither Borrower 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.
(S)A. SUBSIDIARIES, ETC.
------------------
Borrower has no Subsidiaries. Except as set forth on Schedule 6.26
-------------
hereto, Borrower is not engaged in any joint venture or partnership with any
other Person.
(S)AA. MANAGERIAL PERSONNEL.
---------------------
Borrower has and shall maintain adequate managerial personnel to
implement and execute Borrower's business operations as set forth in the
Approved Full Term Operating Business Plan.
(S)VII. AFFIRMATIVE COVENANTS OF BORROWER.
---------------------------------
Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Lender has any obligation to make any Loans:
(S)A. PUNCTUAL PAYMENT.
----------------
Borrower shall duly and punctually pay or cause to be paid as and when
due the principal of and interest on the Loans, the Origination Fee and all
other amounts and expenses provided for in this Loan Agreement and the other
Loan Documents to which Borrower is a party, all in accordance with the terms of
this Loan Agreement and such other Loan Documents.
(S)B. MAINTENANCE OF OFFICE.
---------------------
Borrower shall maintain its chief executive office set forth in the
recitals of this Loan Agreement or at such other place in the United States of
America as Borrower shall designate upon written notice to (1) the
Administrative Agent, and (2) the Collateral Agent in accordance with the terms
of the Borrower Security Agreement, where notices, presentations and demands to
or upon Borrower in respect of the Loan Documents to which Borrower is a party
may be given or made.
52
(S)C. RECORDS AND ACCOUNTS.
--------------------
Borrower shall (a) keep true and accurate records and books of account
in which full, true and correct entries shall be made in accordance with
generally accepted accounting principles 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.
(S)D. CORPORATE EXISTENCE; MAINTENANCE OF LICENSES.
--------------------------------------------
Borrower shall do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence. Borrower shall
maintain in full force and effect, (a) with respect to the construction,
installation and development of facilities for the New York PCS Network, all
Licenses and 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 FCC License, and (b)
with respect to the operation of those portions of the New York PCS Network the
development of which has theretofore been completed, all material Licenses,
copyrights, patents, franchises, Necessary Authorizations and other rights as
are necessary and sufficient to operate such completed portions. Upon securing
each of the additional Licenses and Necessary Authorizations listed on Schedule
--------
6.7 attached hereto, Borrower shall maintain them in full force and effect,
----
where the failure to do so would have a Material Adverse Effect.
(S)E. MAINTENANCE OF PROPERTIES.
-------------------------
Borrower shall do or cause to be done all things necessary to preserve
and keep in full force and effect its franchises, employment contracts and
permits. The Borrower (a) shall 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) shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, (c) shall
continue to engage primarily in the businesses now conducted by it and in
related businesses, and (d) shall continue in full force and effect all
authorizations and approvals required to conduct its business as appropriate to
the then level of construction, development and operation of the New York PCS
Network; provided that nothing in this (S)7.5 shall prevent Borrower from
--------
discontinuing the operation and maintenance of any of its Properties (other than
its FCC Licenses and Licenses) if such discontinuance is, in the judgment of
Borrower, desirable in the conduct of its business and that does not have a
Material Adverse Effect.
53
(S)F. INSURANCE.
---------
Borrower shall maintain with financially sound and reputable insurers
insurance with respect to its Properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms customarily required by institutional lenders,
including, without limitation, naming Collateral Agent as an additional insured
and loss payee as its interests may appear, and providing for at least thirty
(30) days' written notice to Collateral Agent of cancellation or diminishment in
such forms and for such periods as may be reasonable and prudent and in
accordance with the terms of the Borrower Security Agreement.
(S)G. TAXES.
-----
Borrower shall duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it (including, without limitation, all
amounts due and owing to the FCC under Borrower's pioneer License) 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 any such tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if Borrower has set aside on its books adequate
reserves with respect thereto; and provided further that Borrower will 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.
(S)H. INSPECTION OF PROPERTIES AND BOOKS.
----------------------------------
a. Borrower shall permit the Lenders, through the Administrative
Agent or any of the Lenders' other designated representatives, to visit and
inspect any of the Properties of Borrower, to examine the books of account of
Borrower (and to make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of Borrower 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 Borrower's business.
b. Borrower authorizes the Administrative Agent and, if accompanied
by the Administrative Agent, the Lenders to communicate directly with such
Borrower's independent certified public accountants 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
54
including copies of any management letter with respect to the business,
financial condition and other affairs of Borrower. At the reasonable request of
the Administrative Agent, Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this (S)7.8(b).
The Administrative Agent agrees to use commercially reasonable efforts to
coordinate the communications and disclosures to and from the accountants and
the Lenders.
(S)I. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.
------------------------------------------------------
Borrower shall comply in all material respects with (a) the applicable
laws and regulations wherever its business is conducted, including, without
limitation, all Environmental Laws, all Environmental Permits, all ERISA laws,
the IRC, the Communications Act, and all FCC rules and regulations, (b) the
provisions of its charter documents and by-laws, (c) all material agreements and
instruments to which it is a party and by which it or any of its Properties may
be bound, including, without limitation all those agreements listed on Schedule
--------
1.3 hereto, (d) all obligations with respect to any Employee Benefit Plan or
---
Multiemployer Plan, and (e) all applicable decrees, orders, and judgments. 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 Borrower may fulfill any of its Obligations hereunder or any of the other
Loan Documents to which Borrower is a party, Borrower shall immediately take or
cause to be taken all reasonable steps within the power of Borrower to obtain
such authorization, consent, approval, permit or license and furnish the
Administrative Agent on behalf of the Lenders with evidence thereof.
(S)J. FURTHER ASSURANCES.
------------------
Borrower shall cooperate with the Lenders, the Collateral Agent and
the Administrative Agent and shall execute and pay for the filing of all such
further instruments and documents, including without limitation, UCC financing
statements and other security documents, as the Lenders, the Collateral Agent or
the Administrative Agent shall reasonably deem appropriate at such time in order
to effectuate the security interests to Collateral Agent and the Lenders and to
carry out to their satisfaction the transactions contemplated by the Loan
Documents.
(S)K. TRANCHE B BALANCE REQUIREMENT.
-----------------------------
Borrower shall satisfy the Tranche B Balance Requirement.
(S)L. ADDITIONAL COMMITMENTS.
----------------------
1. Borrower shall obtain and deliver to Administrative Agent original
counterparts (or copies thereof certified as true and correct by the Chief
Financial Officer of Borrower) of the Additional Commitments on the following
dates ("measuring dates"):
55
a. June 30, 1997; and
b. each December 31 and June 30 thereafter until (i) the payment
in full of all principal and interest due with respect to Indebtedness owing on
the purchase price for the New York PCS Network License and (ii) Borrower's
EBTDA exceeds zero.
2. Borrower shall provide to the Administrative Agent on or before
March 31, 1997 a statement, certified as true and correct by the Chief Financial
Officer of Borrower, as to the total amount of principal and interest due and
payable to the FCC on account of the Indebtedness owing on the purchase price
for the New York PCS Network License for the period December 14, 1994 through
June 30, 1998.
(S)M. AUTHORIZATION FROM LANDLORD/MORTGAGEE, ETC.
------------------------------------------
Borrower shall request that any landlord, mortgagee and easement
grantor of Borrower agree to give the Administrative Agent and Collateral Agent,
on a best efforts basis, notice of any default by Borrower under the terms or
conditions of any agreement between Borrower and any landlord, mortgagee of any
such landlord or easement grantor, and allow Collateral Agent to inspect or
remove after the occurrence and continuance thereof of an Event of Default
hereunder or under any of the Collateral Documents.
(S)N. ATTORNMENT AND RECOGNITION AGREEMENTS.
-------------------------------------
Borrower shall obtain all attornment and recognition agreements from
any landlord or landlord's mortgagee of Real Estate leased or owned by Borrower
upon which any Collateral (with a fair value in excess of $50,000) is stored or
located, in form and substance reasonably satisfactory to Collateral Agent.
Borrower shall use its best efforts to obtain all attornment and
recognition agreements from any landlord or landlord's mortgagee of Real Estate
leased or owned by Borrower upon which all other Collateral not covered by the
immediately preceding paragraph is stored or located, in form and substance
reasonably satisfactory to Collateral Agent.
(S)O. EXPENSE ALLOCATION AGREEMENT.
----------------------------
Borrower shall comply with the terms of the Expense Allocation
Agreement and not consent to any waiver, modification or amendment thereto.
(S)P. TRANCHE A DRAW REQUEST.
----------------------
Borrower shall submit Tranche A Draw Requests to the Administrative
Agent at such times and in such amounts so that payments to Supplier will timely
occur pursuant to the terms of the Supply Agreement.
56
(S)Q. RESERVED.
--------
(S)R. REPORTING REQUIREMENTS; NOTICES.
-------------------------------
Borrower shall deliver or cause to be delivered to the Administrative
Agent on behalf of the Lenders (and if specifically required below, to the
Collateral Agent) the following:
1. APPROVED FULL TERM OPERATING BUSINESS PLAN.
------------------------------------------
a. Prior to the Closing Date, Borrower shall submit to the
Administrative Agent on behalf of the Lenders for the Administrative Agent's
review and approval a proposed operating business plan for its business and
operations for the term of the Loan Agreement, such operating business plan (and
all line items thereof) (x) to be consistent with the financial covenants in
(S)7.19 hereof and (y) to be prepared on a month by month basis through calendar
year 1996, quarterly through calendar year 1999, and annually thereafter (the
"Full Term Operating Business Plan"). The Full Term Operating Business Plan
shall be based on assumptions and expectations which are reasonable and prudent
under the circumstances. (Administrative Agent acknowledges satisfaction of the
requirements of this clause (a) prior to the date hereof).
b. The Full Term Operating Business Plan shall contain (i)
internally prepared statements of income and expense of Borrower in reasonable
detail for the term of the Loan Agreement prepared in accordance with generally
accepted accounting principles (except for the absence of footnotes) (ii) a
schedule of all Capital Expenditures estimated to be made during the term of the
Loan Agreement, (iii) a statement of the amounts and times by which Borrower
needs to raise additional capital to meet its obligations when due during the
term of the Loan Agreement, (iv) a projected balance sheet of Borrower, (v) a
projected cash flow statement of Borrower, 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 GAAP applied on a consistent basis. Upon approval at the
Closing Date by Administrative Agent, the proposed Full Term Operating Business
Plan shall become the Approved Full Term Operating Business Plan of Borrower
(the "Approved Full Term Operating Business Plan"). Borrower may deliver, from
time to time, to Administrative Agent an updated proposed full term operating
business plan which the Administrative Agent, in its sole discretion, may or may
not approve. If Administrative Agent approves such proposed plan, the plan
shall thereafter constitute the "Approved Full Term Operating Business Plan."
57
c. If as and when the proposed plan required to be
delivered to the Administrative Agent pursuant to this (S)7.18A hereunder is
approved by Administrative Agent, said plan shall be deemed to be in compliance
with this (S)7.18A.
2. APPROVED ANNUAL OPERATING BUSINESS PLAN.
---------------------------------------
a. Prior to the Closing Date, Borrower shall also submit to the
Administrative Agent on behalf of the Lenders for the Administrative Agent's
approval a proposed operating business plan for the period from January 1, 1995,
through calendar year 1996, such operating business plan to be prepared on a
month by month basis and based on assumptions and expectations which are
reasonable and prudent under the circumstances. (Administrative Agent
acknowledges satisfaction of the requirements of this clause (a) prior to the
date hereof).
b. The proposed annual operating business plan shall contain (i)
internally prepared statements of income and expense of Borrower in reasonable
detail for the applicable period prepared in all material aspects in accordance
with generally accepted accounting principles (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 Borrower
needs to raise additional capital to meet its obligations when due during the
period, (iv) a projected balance sheet of Borrower, (v) a projected cash flow
statement of Borrower, 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 (x) in the
case of the proposed initial approved operating business plan, with GAAP (except
for the absence of footnotes) and (y) thereafter, with the Initial Approved
Annual Operating Business Plan, and on a consistent basis. Upon approval at the
Closing Date by the Administrative Agent, the proposed initial annual operating
business plan shall become the initial approved operating business plan of
Borrower (the "Initial Approved Annual Operating Business Plan" and, so long as
it is in effect, the "Approved Annual Operating Business Plan").
c. Commencing in 1996, prior to December 1 of each calendar year
until the later of (x) the Tranche A and B Commitment Termination Date, and (y)
the date on which Borrower's EBTDA is greater than zero for two successive
fiscal quarters, Borrower shall submit to the Administrative Agent on behalf of
the Lenders for Administrative Agent's review and approval a proposed annual
operating business plan containing the statements listed in (b)(i) through (vi)
and all exhibits required thereto as set forth in (S)7.18B(b) for the next
succeeding calendar year which the Administrative Agent, in its sole discretion,
may or may not approve. If the Administrative Agent approves the proposed new
annual operating business plan, the plan shall thereafter constitute the
"Approved Annual Operating Business Plan."
58
d. Commencing in 1996, on or prior to August 14 of each calendar
year, Borrower shall submit to Administrative Agent on behalf of the Lenders a
report certified as true and correct by the Chief Financial Officer of Borrower
which shows in reasonable detail, variances, if any, between the actual
operating performance of Borrower and what was estimated for the first six
months of the calendar year in the Approved Annual Operating Business Plan (or
the Approved Full Term Operating Business Plan if the Administrative Agent
refuses to approve a plan delivered pursuant to (S)7.18B(c) hereof) and explains
in reasonable detail in form satisfactory to Administrative Agent the reasons
for the discrepancies between the two, if any.
e. If as and when the proposed plan required to be delivered to
the Administrative Agent under this (S)7.18B hereunder is approved by
Administrative Agent, said plan shall be deemed to be in compliance with this
(S)7.18B.
3. QUARTERLY FINANCIAL STATEMENTS.
------------------------------
As soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the first three (3) fiscal quarters of each
fiscal year of Borrower, copies of the internally prepared unaudited balance
sheet of Borrower, as at the end of such quarter, and the related statement of
income and statement of cash flow for the portion of Borrower's fiscal year then
elapsed, all in reasonable detail and each setting forth in comparative form (x)
the figures for the prior year's corresponding fiscal quarter and (y) so long as
Borrower is required to deliver an Approved Annual Operating Business Plan
pursuant to (S)7.18B hereof, any variances from the Approved Annual Operating
Business Plan (or the Approved Full Term Operating Business Plan, if
applicable), if any, prepared in all material aspects in accordance with
generally accepted accounting principles, together with a certification by the
principal financial or accounting officer of Borrower that the information
contained in such financial statements fairly presents the financial position of
Borrower on the date thereof (subject to year-end adjustments).
4. ANNUAL FINANCIAL STATEMENTS.
---------------------------
As soon as practicable, but in any event no later than one hundred
twenty (120) days after the end of each fiscal year of Borrower, the audited
balance sheet of Borrower as at the end of such year, and the related audited
statement of income and audited statement of cash flow for such year prepared in
accordance with GAAP, and so long as Borrower is required to deliver an Approved
Annual Operating Business Plan pursuant to (S)7.18B hereof, a separate variance
analysis setting forth in comparative form the figures for the previous fiscal
year and any variances from the applicable period of the Approved Annual
Operating Business Plan in reasonable detail. Such balance sheet, statement of
income and statement of cash flow shall contain a certified audit report of a
nationally recognized independent certified public accounting firm
59
satisfactory to Administrative Agent, which report shall contain an unqualified
opinion of such accounting firm, and an "agreed upon procedures" report pursuant
to which the accountants (aa) review Borrower's statement that Borrower is in
compliance with the provisions of the Expense Allocation Agreement, (bb) perform
the agreed upon review procedures applicable thereto and (cc) confirm that in
examining the financial statements of Borrower they have not become aware of any
Default or Event of Default with respect to the Expense Allocation Agreement,
or, if such accountants shall have obtained knowledge of any then existing
Default or Event of Default they shall disclose in such report any such Default
or Event of Default; provided that such accountants shall not be liable to the
--------
Lenders for failure to obtain knowledge of any Default or Event of Default. The
annual financial statements shall also be accompanied by a management letter of
Borrower's accountants (only to the extent otherwise obtained by Borrower).
Notwithstanding the above, if NTI or an Affiliate of NTI has assigned all or a
part of its rights and obligations under the Loan Documents in accordance with
the terms hereof, then all annual financial statements, variance reports,
officer's certificates and accompanying documentation shall thereafter be due
within ninety (90) days from the end of each fiscal year;
5. COMPLIANCE CERTIFICATE.
----------------------
Simultaneously with the delivery of the financial statements referred
to in subsections (C) and (D) above, a statement certified by the principal
financial or accounting officer of Borrower (the "Compliance Certificate") in
substantially the form of Exhibit C hereto and setting forth in reasonable
---------
detail computations evidencing compliance with the financial covenants contained
in (S)7.19 and (if applicable) reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet Date;
6. QUARTERLY KEY BAROMETER REPORT.
------------------------------
Until such time as Borrower's EBTDA has exceeded zero for two
successive fiscal quarters, forty-five (45) days after each quarter, Borrower
shall deliver to Administrative Agent on behalf of the Lenders, a report of Key
Barometers dated as of the last day of the previous 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, along with an explanation of discrepancies between the actual numbers and
the estimated numbers.
7. SECURITIES AND EXCHANGE COMMISSION REPORTS.
------------------------------------------
Within three (3) Business Days after the filing or mailing
thereof, copies of all materials of a financial nature (x) filed with the
Securities and Exchange Commission by Borrower, Parent or Grand Parent, (y)
information sent to the stockholders of
60
Borrower or to banks and other lenders of Borrower (exclusive of proprietary
information) and (z) information and reports directly and materially related to
the Borrower or the New York PCS Network which Parent or Grand Parent would be
required to file with the Securities and Exchange Commission ("SEC") pursuant to
the Securities Exchange Act of 1934, if Parent or Grand Parent were public
companies subject to the reporting requirements of such Act; provided that, if
--------
the information or reports covered by this clause (z) contain proprietary
information, Borrower shall not be obligated to provide the proprietary
information hereunder unless (a) the Person (i.e., Parent or Grand Parent) 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 SEC.
8. ACCOUNTS RECEIVABLE AGING REPORT.
--------------------------------
Within forty-five (45) days after the end of each fiscal quarter
an Accounts Receivable aging report;
9. OTHER FINANCIAL INFORMATION.
---------------------------
From time to time such other financial data and information as
the Administrative Agent may reasonably request.
10. DEFAULTS.
--------
Written notice within three (3) Business Days thereof of the
occurrence and continuance of an event or circumstance that constitutes a
Default or the occurrence and continuance of an Event of Default under the Loan
Documents or of the Borrower first becoming aware of such occurrence, whichever
date is later. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of Default)
under this Loan Agreement or any other note, evidence of indebtedness, indenture
or other obligation to which or with respect to which Borrower 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, Borrower shall forthwith give written notice
thereof to the Administrative Agent, describing the notice or action and the
nature of the claimed default.
11. ENVIRONMENTAL EVENTS.
--------------------
As soon as possible, and in any event within ten (10) Business
Days, written notice to the Administrative Agent on behalf of the Lenders (i) of
any violation of any Environmental Law that 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
61
and (ii) upon becoming aware thereof, 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 Borrower or the security interests for the benefit
of the Lenders pursuant to the Borrower Security Agreement.
12. ERISA EVENTS.
------------
As soon as possible, and in any event within ten (10) days after
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, Borrower shall and shall cause such ERISA Affiliate to deliver to the
Administrative Agent a statement of the chief financial officer of 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 Borrower or such ERISA Affiliate proposes to take with
respect thereto.
13. EMPLOYEE BENEFIT PLANS.
----------------------
Borrower shall (i) promptly upon filing the same with the
Department of Labor or Internal Revenue Service, furnish to the Administrative
Agent (x) a copy of its initial actuarial statement required to be submitted
under (S)103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan, and (y) a notice of all
subsequent filings (with copies to be provided upon request of the
Administrative Agent), (ii) promptly upon receipt or dispatch, furnish to the
Administrative Agent any notice, report or demand sent or received in respect of
a Guaranteed Pension Plan under (S)(S)302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer Plan, under (S)(S)4041A,
4202, 4219, 4242, or 4245 of ERISA, and (iii) promptly upon becoming aware of
the occurrence thereof, furnish notice to the Administrative Agent of: (a) any
transaction which could result in the imposition of a penalty under Section
502(i) of ERISA or an excise tax under Section 4975 against Borrower or an ERISA
Affiliate; (b) any partial or complete withdrawal from a Multiemployer Plan by
any of Borrower or an ERISA Affiliate; (c) a failure by any of Borrower 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; and (e) any change in the actuarial assumptions 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.
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14. NOTIFICATION OF CLAIMS AGAINST COLLATERAL.
-----------------------------------------
Written notice to the Administrative Agent and the Collateral
Agent, within three (3) Business Days of becoming aware of any setoff, 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 and
Lenders' rights with respect to the Collateral, are subject.
15. NOTICE OF LITIGATION AND JUDGMENTS.
----------------------------------
Written notice within ten (10) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting Borrower or to which Borrower is or becomes a party that
could reasonably be expected to have a Material Adverse Effect and stating the
nature and status of the proceedings. Borrower shall give notice to the
Administrative Agent, in writing, in form and detail satisfactory to the
Administrative Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against Borrower in an amount in excess of
$1,000,000.
16. CALCULATION OF NET FUNDS PAYMENT.
--------------------------------
Annually, commencing in the year 2001, and for so long as
Tranche B Loans remain outstanding, a report of Borrower that includes true and
accurate calculations of Borrower's Net Funds Payment for that year, if any,
within one hundred twenty (120) days from the end of the fiscal year, certified
as true and correct by Borrower's Chief Financial Officer.
17. FCC NOTICES.
-----------
Within three (3) Business Days thereof, submit copies of all
material notices and correspondence received from or sent to the FCC relating to
the New York PCS Network License.
18. CHANGE IN CORPORATE NAME; LOCATION OF COLLATERAL.
------------------------------------------------
Not later than thirty (30) days prior thereto, written notice to
the Collateral Agent and the Administrative Agent of a change in (i) the
business or corporate name of Borrower or Parent, (ii) the location of the
Collateral of Borrower (subject to (S)6(a) of the Borrower Security Agreement)
or (iii) Borrower's chief executive office or other locations or the location
where Borrower's books and records are kept.
19. OTHER INFORMATION.
-----------------
Borrower shall provide the Administrative Agent on behalf of the
Lenders such other information concerning its business, operations or financial
condition as shall be reasonably requested. Upon the Administrative Agent's
receipt of any and all financial and other information furnished by the Borrower
pursuant to this (S)7.18 the Administrative Agent shall promptly deliver copies
thereof to each Lender.
63
(S)S. FINANCIAL COVENANTS OF BORROWER.
-------------------------------
Borrower covenants and agrees that, so long as any Loan, Note or other
of Borrower's Obligations are outstanding or any Lender has any obligation to
make any Loans, Borrower shall:
1. REVENUE COVENANT:
----------------
Have earned for each fiscal quarter during the periods set forth on
Schedule 7.19A, Revenue of not less than the applicable amount shown on Schedule
-------------- --------
7.19A.
-----
Notwithstanding the requirement set forth above, Borrower will not be
required to meet the Revenue Test in this Section 7.19A for any fiscal quarter
ending after the Borrower's EBTDA has exceeded zero for two successive fiscal
quarters.
2. MINIMUM CASH TEST:
-----------------
Maintain or cause to be maintained as of the last day of each fiscal
quarter, a ratio of Cash to EBTDA (for the quarter then ending) of not less than
1.25:1. For purposes of calculating the ratio in this (S)7.19B, negative EBTDA
shall be treated as if it were a positive number.
Notwithstanding the requirement set forth above, Borrower will not be
required to meet the Minimum Cash Test in this (S)7.19B (x) for any quarter in
which EBTDA is positive or (y) for any fiscal quarter ending after Borrower's
EBTDA has exceeded zero for two successive quarters.
3. INDEBTEDNESS TEST:
-----------------
Have as of the last day of each fiscal quarter during the term of this
Loan Agreement, Adjusted Indebtedness of not more than the Indebtedness Cap.
4. RATIO OF ADJUSTED TOTAL DEBT TO ADJUSTED BORROWER'S
---------------------------------------------------
EQUITY:
------
Beginning with the first quarter of calendar year 1996, maintain or
cause to be maintained as of the last day of each fiscal quarter through the
Tranche A and B Maturity Date, a ratio of Adjusted Total Debt to Adjusted
Borrower's Equity of not more than (a) beginning on the Closing Date through
December 31, 1996, 4:1, and (b) thereafter, 3:1.
5. ADJUSTED EBITDA TEST:
--------------------
Have for each fiscal quarter during the periods set forth on Schedule
7.19E, Adjusted EBITDA of not less than the amounts shown on such Schedule 7.19E
--------------
for the applicable period.
64
(S)T. MORTGAGE LIENS:
--------------
If the Borrower shall use the proceeds of any loan under any Permitted
Loan Agreement to acquire any Real Estate at the time of such acquisition it
will grant to the Collateral Agent a first-mortgage lien in form and substance
satisfactory to the Required Lenders on such Real Estate. Such Lien shall
provide that it shall be released upon the refinancing of any such loan.
(S)VIII. CERTAIN NEGATIVE COVENANTS OF BORROWER.
--------------------------------------
Borrower covenants and agrees that, so long as any Loan or Note or other
fees or expenses are outstanding or any Lender has any obligation to make any
Loans:
(S)A. RESTRICTIONS ON INDEBTEDNESS.
----------------------------
Borrower shall not create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:
a. Subject to the Indebtedness Cap, Indebtedness to the
Lenders and the Administrative Agent arising under any of the Loan Documents;
b. Subject to the Indebtedness Cap, Indebtedness to the
Parent or Grand Parent, provided that such Indebtedness is on terms which are no
-------------
better than those available on arm's length terms and, provided that, any such
-------------
Indebtedness shall be subordinated to the prior payment in full in cash of the
Outstanding Amount of Loans and all other Indebtedness permitted and owing to
any Person hereunder pursuant to a Subordination Agreement except that, so long
as no Default has occurred and is continuing under any of the Loan Documents,
Borrower is allowed (I) to pay interest only (but not principal) to Parent or
Grand Parent on such Indebtedness at market rates and (II) to pay an amount to
Parent or Grand Parent equal to that which Borrower would otherwise be permitted
to distribute to Parent in accordance with the terms of (S)8.5 hereof in lieu of
making such Distribution. Borrower shall also be allowed to pay Parent or Grand
Parent prior to paying the Borrower's Obligations hereunder for Indebtedness
which:
(i) (v) was incurred by Borrower to pay (and was in fact used to pay)
(I) expenses for which a Tranche A borrowing is permitted under this Loan
Agreement, or (II) a Tranche B Eligible Expense or (III) a Tranche C Eligible
Expense, or
(w) is to be paid out of the proceeds of Indebtedness to a non-
affiliated third party (other than the Lenders), and such non-affiliated third
party has executed a Subordination Agreement, or
65
(x) was incurred to pay for permitted Capital
Expenditures relating to the New York PCS Network and will be paid out of the
proceeds of Indebtedness to be borrowed from an Other Lender lending on a pari
passu basis in accordance with an Intercreditor Agreement, or
(y) was incurred to pay for costs for which Liens are
permitted under clauses (a), (b) and (c) of (S)8.2 below, and is to be paid to
Parent or Grand Parent out of the proceeds of such Indebtedness to an Other
Lender which has executed an Intercreditor Agreement permitted pursuant to
(S)8.1(e) below, or
(z) was incurred to pay for Borrower's cash flow/working
capital requirements pursuant to a revolving loan agreement which [as long as it
remains in place] allows Borrower to borrow and reborrow amounts from time to
time (up to, at any one time in the aggregate, $5,000,000), and is to be paid
out of the proceeds of Indebtedness to a non-affiliated third party (other than
the Lenders) which is permitted pursuant to (S)8.1(g) below; and
(ii) no Default has occurred and is continuing under any of
the Loan Documents.
c. Subject to the Indebtedness Cap, (i) purchase money
Indebtedness, (ii) Capital Lease obligations, and (iii) Indebtedness incurred in
the acquisition of Real Estate (w) in an amount not to exceed at any one time
outstanding in the aggregate Ten Million Dollars ($10,000,000), (x) in amounts
not to exceed the fair value of the property being acquired, and (y) in the case
of purchase money Indebtedness and Capital Lease obligations (considered
together) in an aggregate amount outstanding at any one time not to exceed Five
Million Dollars ($5,000,000) and in each case a refinancing of such Indebtedness
or Capital Lease Obligation in an amount not to exceed the amount to be
refinanced and such refinancing is provided by a nonaffiliated Lender and the
amount of such refinancing shall be counted in the $10,000,000 cap;
d. Subject to the Indebtedness Cap, additional unsecured
Indebtedness, provided that, any such Indebtedness shall be subordinated to the
-------------
prior payment in full in cash of the Outstanding Amount of Loans pursuant to a
Subordination Agreement;
e. Subject to the Indebtedness Cap, Indebtedness secured by
Liens permitted pursuant to clauses (a) and (c) of Section 8.2 below including
Indebtedness owing with respect to the Ericsson Loan Agreement;
f. Indebtedness the proceeds of which are used solely for
working-capital purposes, so long as, with respect to each of the two most
recent complete fiscal quarters of the Borrower, preceding the date on which
such Indebtedness is to be incurred
66
(i) the amount equal to
(A) the Borrower's EBTDA for such fiscal quarter minus
(B) the amount of interest that would have accrued on
such Indebtedness during such fiscal quarter if such
Indebtedness had been outstanding for all of such
fiscal quarter and such interest had accrued at the
rate per annum applicable at the time of incurrence,
shall have exceeded zero, and
(ii) the ratio of
(A) the aggregate principal amount of all Indebtedness
of the Borrower outstanding on such date, after giving
effect to such Indebtedness, to
(B) EBITDA for each such fiscal quarter,
shall not exceed 7.5:1;
g. Subject to the Indebtedness Cap, Indebtedness to a
nonaffiliated working capital lender for cash flow/working capital secured by
Accounts Receivable not to exceed in the aggregate, Five Million Dollars
($5,000,000.00);
h. Indebtedness owing to the FCC in an amount not greater than
the purchase price payable for the FCC License for the New York PCS Network;
i. Indebtedness owing under the Ericsson Loan Agreement.
j. Subject to the Indebtedness Cap, Purchase Money Indebtedness
(in addition to any purchase money Indebtedness described in (S)8.1(c) above)
incurred in order to acquire inventory (other than in respect of handsets and
accessories thereto manufactured or supplied by Ericsson or Orbitel or their
respective Affiliates).
Indebtedness of Borrower to the Parent or Grand Parent shall only be
permitted hereunder pursuant to (S)8.1(b), above.
(S)B. RESTRICTIONS ON LIENS.
---------------------
Borrower shall not (A) create or incur or suffer to be
67
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 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 thirty (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; provided that Borrower may create or
--------
incur or suffer to be created or incurred or to exist (collectively "Permitted
Liens"):
a. Liens securing any and all other vendor financing for the
supply and installation of equipment to be used in the New York PCS Network to
be supplied by third party nonaffiliated suppliers for amounts not in excess of
the fair value of the property being acquired and related services associated
with the equipment (and the refinancing and refunding of such Indebtedness, so
long as such refinancing and refunding is done through nonaffiliated third
parties) provided that, with respect to any nonaffiliated Person who has not
-------------
signed an Intercreditor Agreement prior to obtaining such Lien, the amount
secured by such Liens by all such nonaffiliated Persons pursuant to (S)(S)8.2(a)
and (b) hereof shall not exceed in the aggregate at any one time $5,000,000;
b. Liens securing purchase money Indebtedness permitted under
(S)8.1(c) above, provided that such Liens cover only the property so acquired
-------------
and for amounts not in excess of the fair value of the property being acquired
(and the refinancing and refunding of such Indebtedness, so long as such
refinancing and refunding is done through nonaffiliated third parties) provided
--------
that, with respect to any nonaffiliated Person who has not signed an
----
Intercreditor Agreement prior to obtaining such Lien, the amount secured by such
Liens by all such nonaffiliated Persons pursuant to (S)(S)8.2(a) and (b) hereof
shall not exceed in the aggregate at any one time $5,000,000;
c. Liens securing Indebtedness incurred, and the proceeds of
which are used to pay (i) Tranche C Loans, in whole or in part, (ii) up to
$15,000,000 of Tranche C Loans due under the Ericsson Loan Agreement and (iii)
the portion of Tranche A Loans drawn under the Ericsson Loan Agreement, the
proceeds of which were used to pay interest due under the Ericsson Loan
Agreement provided
--------
68
that, the maturity date of any such Indebtedness shall not occur earlier
-----
than the Tranche A and B Commitment Termination Date (and the refinancing and
refunding of such Indebtedness, so long as such refinancing and refunding is
done through nonaffiliated third parties);
d. 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;
e. deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance;
f. 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;
g. 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 Borrower is a party, and
other minor liens or encumbrances none of which in the opinion of Borrower
interferes materially with the use of the property affected in the ordinary
conduct of the business of Borrower, which defects do not individually or in the
aggregate have a Material Adverse Effect on the business of Borrower; and
(II) mortgage (or deed of trust) liens (collectively "Mortgage
Liens") to secure the payment of borrowed money to acquire Real Estate, provided
(i) the amount secured by any Mortgage Lien shall not exceed the sum of (w) the
acquisition cost of the Real Estate acquired by Borrower and (x) the cost of any
improvements constructed thereon; and (ii) Borrower shall simultaneously with
the acquisition of the Real Estate in question either (A) if the amount of the
Mortgage Lien has been advanced from funds of Borrower or under one or more
Permitted Loan Agreements, grant to the Collateral Agent a first mortgage or
deed of trust or (B) otherwise (y) 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 owing to lenders that are parties to the Intercreditor Agreement or
(z) 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 K attached hereto; provided that if
------- -
Borrower proceeds under Clause (ii)(A) of this Section 8.2(g)(II), Borrower
shall have the right to refinance the Mortgage Lien with a different lender in
which event Borrower
69
shall deliver to the Collateral Agent, simultaneously with
such financing, the documentation required under clause (B) hereof;
h. Liens existing on the date hereof and listed on Schedule 8.2
------------
hereto;
i. 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;
j. Liens to secure Indebtedness permitted under (S)8.1(f),
above;
k. Liens on Accounts Receivable to secure Indebtedness
permitted under (S)8.1(g), above;
l. Deposits to secure the performance of bids, trade contracts
(other than for Guaranteed 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; and
m. liens on inventory other than handsets and accessories
thereto manufactured by Ericsson, Inc., Orbitel and their respective Affiliates.
The Lenders will consent to and permit a pari passu sharing of
----------
collateral with one or more lenders who (i) have Indebtedness secured by liens
permitted by (a), (b), (c) and (f) and (i) of this (S)8.2, (ii) are eligible to
join in the Intercreditor Agreement (the "Intercreditor Agreement")dated August
7, 1996, by and among the Collateral Agent, the Ericsson Administrative Agent
and the Nortel Administrative Agent , and (iii) are not Affiliates of Borrower
(the "Other Lender"). The collateral pool that will be shared pari passu
----------
between Lender and the Other Lender shall consist of the collateral pledged to
(i) the Lender and (ii) the Other Lender.
All expenses of the Collateral Agent and all expenses, including legal
fees, incurred in connection with the preparation and negotiation of appropriate
collateral agent documentation shall be paid by the Borrower.
(S)C. NO CONTINGENT OBLIGATIONS.
-------------------------
Borrower shall not create, incur, assume, guarantee or remain liable
on any Contingent Obligations other than (i) guarantees in favor of the Lenders
or their Affiliates and assigns, and (ii) those Contingent Obligations existing
on the date hereof and noted on Schedule 8.3 hereto.
------------
70
(S)D. RESTRICTIONS ON INVESTMENTS.
---------------------------
Borrower shall not 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 not to exceed 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 ninety (90) days
or less from the date of issuance which, at the time of acquisition by Borrower,
is accorded a rating of A1 or better by Standard & Poor's Corporation, 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 the United States
of America or any agency or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case, maturing in
twelve 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) and issued by a bank or trust company meeting the requirements of
paragraph (d) of this 8.4;
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 are, at the time of acquisition thereof
by Borrower, rated AA or better by Standard & Poor's Corporation or Aa or better
by ▇▇▇▇▇'▇ Investors Service, Inc., (ii) issued by any Lender, and (iii) issued
by a bank or trust company organized under law other than those of the United
States or any state thereof, having capital, surplus and undivided profits
aggregating at least $500,000,000 and having a credit rating of B/C or better
and a "legal rating" of 3 or better by IBCA Lendering Analysis Ltd.
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; and
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
Borrower;
71
(S)E. DISTRIBUTIONS.
-------------
Except as permitted by the Expense Allocation Agreement, Borrower
shall not make any Distributions (other than a dividend or other distribution of
any shares of capital stock of Borrower subject to the Parent's pledge to the
Lenders pursuant to the Pledge Agreement) without the prior written consent of
the Administrative Agent and the Required Lenders or make any payment on account
of allocated corporate charges or overhead which is not a Tranche C Eligible
Expense unless at the time of and after giving effect to such Distribution:
(i) no Default shall have occurred and be continuing;
(ii) the Borrower shall have had EBTDA in excess of zero for each of
its four 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 of the Borrower as of the last day of
the Preceding Fiscal Quarter, minus
(B) the aggregate amount of Debt Service payable by the
Borrower during the 12 calendar months next-following the
Preceding Fiscal Quarter, minus
(C) while any Tranche B Advance is outstanding, (1) 50%,
multiplied by (2) 25%, multiplied by (3) the number of Borrower's
fiscal quarters that have begun on or before the date of such
Distribution during the Borrower's then-current fiscal year,
multiplied by (4) the Net Funds Amount in respect of the
Borrower's immediately preceding complete fiscal year, minus
(D) the aggregate amount of any prepayment of Indebtedness
required to be made pursuant to (S)3.02(b) of the Ericsson Loan
Agreement and pursuant to (S)3.2C hereunder during the Borrower's
then-current fiscal year and that has not theretofore been made.
(S)F. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
-----------------------------------------------
a. Borrower shall not become a party to any merger or consolidation,
shall not create any Subsidiaries or agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary course
of business consistent with sound and prudent practices) and shall not make any
other fundamental changes in its business, operations or corporate
72
structure, including, but not limited to, changing its name or any trade name
used in its business, making non-ordinary course asset disposals or transfers,
including transactions with Affiliates, restructurings, issuing additional
capital stock, or changing the allocation of intercompany expenses among
Borrower and its corporate Affiliates from that set forth in the Expense
Allocation Agreement.
b. Borrower shall not 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 business, consistent with
sound and prudent practices, and (iii) the disposition of asset not covered by
either of the foregoing exceptions in an amount not to exceed $10,000,000 in the
aggregate during the term of this Agreement.
(S)G. SALE AND LEASEBACK.
------------------
Borrower shall not enter into any arrangement, directly or indirectly,
whereby Borrower shall sell or transfer any Property owned by it in order then
or thereafter to lease such Property or lease other property that Borrower
intends to use for substantially the same purpose as the Property being sold or
transferred.
(S)H. COMPLIANCE WITH ENVIRONMENTAL LAWS.
----------------------------------
Borrower shall not (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, (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.
(S)I. EMPLOYEE BENEFIT PLANS.
----------------------
Neither Borrower nor any ERISA Affiliate shall
a. engage in any "prohibited transaction" within the meaning of
(S)406 of ERISA or (S)4975 of the Code which could result in a material
liability for Borrower; or
73
b. permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in (S)302 of ERISA, whether or not
such deficiency is or may be waived; or
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 Borrower
pursuant to (S)302(f) or (S)4068 of ERISA; or
d. permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of (S)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;
f. withdraw (completely or partially) from any Multiemployer
Plan where such withdrawal is likely to result in a material liability to
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 to any of 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 Borrower or an ERISA Affiliate.
(S)J. KEY MANAGEMENT PERSONNEL COMPENSATION.
-------------------------------------
Until such time as Borrower's EBTDA has exceeded zero for two
successive fiscal quarters, Borrower's compensation program for the categories
its key management personnel listed on Schedule 8.10 attached hereto shall not
-------------
provide for incentive-based cash compensation which is in excess of three (3)
times the applicable base salary.
(S)K. RESERVED.
--------
(S)L. TRANSACTIONS WITH AFFILIATES.
----------------------------
The Borrower shall not enter into
74
a. any agreement or arrangement providing for the payment of any
amounts to any of its Affiliates, other than
I. (x) the Expense Allocation Agreement, and (y) only if the
Administrative Agent issues a formal approval in writing subsequent to
the date hereof, the Servicing Agreement dated as of the date hereof
between the Borrower and the Grand Parent,
II. a tax-sharing agreement or arrangement pursuant to which
the Borrower 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
would have paid if the Borrower had always filed income-tax returns as
a separate entity and
III. a management, consulting or other agreement, but only if
such agreement either
(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 than it would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate;
(2) does not provide for payments by the Borrower under
such agreement; and
(3) does not provide for the performance of services or
purchase or delivery of property by the Borrower 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 to
build-out or operate the New York MTA, 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 than it would obtain
in a comparable arm's-length transaction with a Person not an Affiliate.
75
(S)M. CHANGE IN NATURE OF BUSINESS.
----------------------------
The Borrower shall not make any fundamental change in its business as
carried on and as proposed to be carried on at the date hereof.
(S)N. CHARTER AMENDMENTS.
------------------
The Borrower shall not amend its certificate of incorporation or
bylaws.
(S)O. ACCOUNTING CHANGES.
------------------
The Borrower shall not make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as required by GAAP, or change its fiscal year.
(S)P. PREPAYMENTS, ETC., OF INDEBTEDNESS.
----------------------------------
The Borrower
a. shall not, and shall not permit any Affiliate 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, other than
the prepayment of the Loan 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 Section 5.02 of the Intercreditor Agreement are not required
to pay any amount to other lenders party thereto or Indebtedness owing to
the FCC, and
b. shall not 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 and the Borrower shall not pay in full all such
amounts as are then due and owing, the Borrower shall not 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
8.16, it irrevocably authorizes each lender to it that is a party to the
Intercreditor Agreement on its behalf to make any payment required under Section
5.02 or 5.03 of 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 to
such lender.
76
(S)Q. AMENDMENT, ETC., OF MATERIAL CONTRACTS.
--------------------------------------
The Borrower shall not 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 that, in any such case, could, at the time thereof, reasonably be
expected to have a material adverse effect on the Borrower's ability to perform
its obligations under this Agreement or any other Loan Document.
(S)R. NEGATIVE PLEDGE.
---------------
The Borrower shall not enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien in favor of the Lenders or
the Collateral Agent upon any of its property or assets.
(S)S. PARTNERSHIPS.
------------
The Borrower shall not become a general partner in any general or
limited partnership.
(S)IX. CLOSING CONDITIONS.
------------------
The obligations of the Lenders to make Loans shall be subject to the
satisfaction of the following conditions precedent on or prior to the Closing
Date:
(S)A. LOAN DOCUMENTS.
--------------
Each of the Loan Documents shall have been 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 Administrative Agent, each of the
Lenders and their counsel. Each Lender and the Administrative Agent shall have
received a fully executed copy of each such document.
(S)B. SECRETARY'S CERTIFICATE; EVIDENCE OF ACTION.
-------------------------------------------
Each of the Lenders and the Administrative Agent shall have received
from each of Borrower and Parent a Secretary's Certificate, dated as of the
Closing Date, signed by the Secretary or Assistant Secretary of Borrower and
Parent, (i) giving the name and bearing a specimen signature of each individual
officer who
77
shall be authorized: (a) to sign, in the name and on behalf of Borrower or
Parent, each of the Loan Documents to which Borrower or Parent is or is to
become a party; (b) to make Tranche A, B or C Drawdown Requests (with respect to
Borrower only); and (c) to give notices and to take other action on its behalf
under the Loan Documents; (ii) attaching (a) its charter or other incorporation
documents (and all amendments thereto) as in effect on the Closing Date, (b) its
by-laws (and all amendments thereto) as in effect on the Closing Date, certified
by the Secretary or Assistant Secretary of Borrower and Parent as being true and
complete on the Closing Date, and (c) a certificate of good standing from the
Secretary of State of the jurisdiction of its incorporation and of each other
jurisdiction in which it is qualified to do business, and (iii) attaching a copy
of all corporate action necessary for the valid execution, delivery and
performance by Borrower and Parent of each of the Loan Documents to which it is
or is to become a party, certified as true and correct and in full force and
effect as of the Closing Date by the Secretary or Assistant Secretary of each of
Borrower and Parent, respectively.
(S)C. VALIDITY OF LIENS.
-----------------
The Borrower Security Agreement and the Pledge Agreement shall each be
effective to create in favor of the Collateral Agent for the benefit of the
Collateral Agent and the lenders and agents parties to the Intercreditor
Agreement a legal, valid and enforceable first (except for Permitted Liens
entitled to priority under applicable law) priority security interest 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
and all such documents shall have been duly executed by Borrower and Parent.
The Collateral Agent shall have received evidence thereof in form and substance
satisfactory to the Collateral Agent.
(S)D. SEARCH REPORTS AND RELATED DOCUMENTS.
------------------------------------
The Administrative Agent shall have received (i) such UCC, 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 in such
official's office covering any Collateral or showing Borrower or Parent as a
debtor thereunder other than those Liens listed on Schedule 8.2, (ii) a
-------- ---
certificate of the Borrower and Parent signed by an authorized officer of each
thereof, dated the Closing Date, certifying that, as of the Closing Date, there
will exist no Liens on the Collateral other than Permitted Liens, and (iii) duly
executed UCC-1 financing statements with respect to the Collateral (other than
Pledged Collateral), to be filed in each office as determined by the
Administrative Agent.
78
(S)E. CERTIFICATES OF INSURANCE.
-------------------------
The Collateral Agent shall have received on the Closing Date (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 Borrower Security Agreement and (S)7.6 of this Loan
Agreement and (b) copies of all policies evidencing such insurance (with copies
certified by the applicable insurer(s) to be delivered to Collateral Agent
within thirty (30) days after the Closing Date) which shall contain provisions
naming the Collateral Agent as an additional insured and loss payee on behalf of
the lenders and agents parties to the Intercreditor Agreement as their
respective interests may appear, and providing for 30 days' prior written notice
to Administrative Agent of cancellation or diminishment.
(S)F. SOLVENCY CERTIFICATE.
--------------------
Each of the Lenders and the Administrative Agent shall have received
an officer's certificate of Borrower and Parent dated as of the Closing Date as
to the Solvency of Borrower and Parent following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Administrative Agent and Lenders.
(S)G. OPINIONS OF COUNSEL TO BORROWER.
-------------------------------
Each of the Lenders and the Administrative Agent shall have received a
favorable legal opinion of Borrower's counsel addressed to the Lenders and the
Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent and substantially in
the form of Exhibit G hereto, addressing such matters as, without limitation,
---------
corporate good standing, authority and capacity to enter into the Loan Documents
to which Borrower is or will become a party thereto, perfection of security
interests and pledges, and the validity, binding nature and enforceability of
the Loan Documents to which Borrower is or will become a party.
(S)H. OPINIONS OF COUNSEL TO PARENT.
-----------------------------
Each of the Lenders and the Administrative Agent shall have received a
favorable legal opinion of Parent's counsel addressed to the Lenders and
Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and Administrative Agent and substantially in the
form of Exhibit H hereto, addressing such matters as, without limitation,
---------
corporate good standing, authority and capacity to enter into the Loan Documents
to which Parent is or will become a party thereto, perfection of security
interests and pledges, and the validity, binding nature and enforceability of
the Loan Documents to which Parent is or will become a party.
79
(S)I. 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
FCC counsel to the Borrower and Parent, dated as of the Closing Date, in form
and substance satisfactory to the Lenders and the Administrative Agent, and
substantially in the form of Exhibit I hereto, addressing such matters as,
---------
without limitation, Necessary Authorizations and Licenses being in full force
and effect and being adequate at such time in order to meet Borrower's then
current objectives as set forth in the Approved Full Term Operating Business
Plan to allow Borrower to proceed with the construction, development and
operation of the New York PCS Network, and opining that execution and delivery
of the Loan Documents, including the Collateral Documents, will not violate the
Communications Act.
(S)J. PAYMENT OF FEES.
---------------
Borrower shall have paid all fees and expenses, including, without
limitation, the reasonable attorneys' fees of Administrative Agent's Special
Counsel on the Closing Date (which amounts shall be borrowed from the proceeds
of Tranche C).
(S)K. PAYMENT OF ORIGINATION FEE.
--------------------------
Borrower shall have paid the Origination Fee on the Closing Date
(which amount shall be borrowed from the proceeds of Tranche A as provided
above). (Administrative Agent acknowledges receipt of such payment prior to the
date hereof)
(S)L. GOVERNMENTAL APPROVALS, PERMITS.
-------------------------------
The Borrower shall have obtained all federal, state and local
governmental and regulatory consents, approvals, Licenses and permits as
required or necessary for Borrower to commence with the construction and
development of the New York PCS Network as contemplated for the current stage of
construction and development on the Closing Date and operate its business
pursuant to the Approved Full Term Operating Business Plan and the
Administrative Agent and each of the Lenders shall receive a certificate of an
authorized officer of Borrower to that effect dated the Closing Date.
Notwithstanding the above, if Borrower is unable to obtain all such consents,
approvals, Licenses and permits prior to the Closing Date, it shall deliver a
list disclosing those material consents, approvals, Licenses and permits it was
unable to obtain which Administrative Agent and the Required Lenders in their
discretion may or may not approve.
(S)M. PAID IN CAPITAL.
---------------
The Borrower shall have paid in capital of at least Twenty Million
Dollars ($20,000,000) as of the Closing Date.
80
(S)N. NO MATERIAL ADVERSE EFFECT.
--------------------------
No Material Adverse Effect shall have occurred, or could be reasonably
anticipated to occur with respect to Borrower and Parent since (a) the Balance
Sheet Date and (b) from that described in the Information, and the
Administrative Agent and each of the Lenders shall receive a certificate of the
Chief Financial Officer of Borrower and Parent dated the Closing Date to that
effect.
(S)O. DELIVERY OF APPROVED OPERATING BUSINESS PLANS.
---------------------------------------------
Borrower shall have delivered to Administrative Agent and each Lender
each of its (i) Initial Approved Annual Operating Business Plan and its (ii)
Approved Full Term Operating Business Plan, along with a certificate of its
Chief Financial Officer dated the Closing Date certifying as to the
reasonableness of the assumptions and expectations contained in each of (i) and
(ii) when made, and as of the Closing Date, and certifying that there are
presently no known facts which would make (i) and (ii) misleading in any
material respect, and attaching a copy of resolutions of the Board of Directors
of Borrower approving each of (i) and (ii), certified as true and correct and in
full force and effect as of the Closing Date by the Secretary of Borrower.
(Administrative Agent acknowledges satisfaction of the requirements of this
(S)9.15 prior to the date hereof)
(S)P. REPRESENTATIONS AND WARRANTIES.
------------------------------
All representations and warranties shall be true and correct as of the
Closing Date in all material respects and Administrative Agent and each Lender
shall have received a certificate of the Chief Financial Officer of Borrower
dated the Closing Date to that effect.
(S)Q. NO CONFLICTS.
------------
The Administrative Agent and each of the Lenders shall have received a
certificate of an authorized officer of Borrower and Parent to the effect that
the execution, delivery or carrying out of the terms of the Loan Documents to
which they are a party or the Supply Agreement or any other agreement between
the parties will not constitute a Default under, conflict with, require any
consent under (other than consents which have been obtained) or result in the
creation or imposition of, or obligation to create, any Lien upon the Collateral
of the Borrower or the Parent pursuant to the terms of any mortgage, indenture,
contract, agreement, judgment, decree or order, which defaults, conflicts and
consents, if not obtained, separately or taken as a whole, could reasonably be
expected to have a Material Adverse Effect.
(S)R. DELIVERY OF PLEDGED SHARES.
--------------------------
The Parent shall have delivered to the Collateral Agent under the
Intercreditor Agreement all pledged stock certificates representing all of the
issued and outstanding Stock of
81
the Borrower owned by Parent, which shall not be less than 95.6% of all of
Borrower's issued and outstanding shares, together with stock powers executed in
blank.
(S)S. MATERIAL AGREEMENTS.
-------------------
The Administrative Agent and each of the Lenders shall have received a
copy of each agreement set forth on Schedule 9.19 attached hereto, and all other
-------------
Material Employment Agreements set forth on Schedule 1.3 attached hereto, and
------------
similar contracts and agreements, including, without limitation, those with the
key management personnel and categories of key officers or employees to be hired
listed on Schedule 8.10, hereto, including all amendments thereto.
-------------
(S)T. NO CHANGE IN CONTROL.
--------------------
No Change in Control shall have occurred from the Closing Date.
(S)U. SUPPLY AGREEMENT.
----------------
All representations and warranties contained in the Supply Agreement
shall be true and correct in all material respects and no Event of Default,
Default or breach shall have occurred or be continuing thereunder, and the
Administrative Agent and each Lender shall have received a certificate of the
Borrower's Chief Financial Officer to that effect dated the Closing Date.
(S)V. ASSIGNMENT OF INTELLECTUAL PROPERTY.
-----------------------------------
Borrower shall provide Collateral Agent with evidence reasonably
satisfactory to Collateral Agent that all material Intellectual Property
required for Borrower to operate its business is assignable to Collateral Agent
on behalf of the lenders and agents party to the Intercreditor Agreement
(subject to customary fees and charges);
(S)W. OTHER DOCUMENTS.
---------------
The Administrative Agent, Collateral Agent and each Lender shall
receive all other documents, instruments and opinions from Borrower and Parent
(including opinions of counsel for Borrower and Parent) as Administrative Agent,
Collateral Agent and each Lender may reasonably request, in form and substance
satisfactory to Administrative Agent, Collateral Agent and each Lender and their
counsel, and which shall be in full force and effect on the date of the initial
disbursement under this Loan Agreement.
(S)X. CONDITIONS TO ALL BORROWINGS.
----------------------------
The obligations of the Lenders to make any Loan, including the initial
Loan, whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
82
(S)A. DRAW REQUEST.
------------
The Administrative Agent shall have received a properly completed Draw
Request.
(S)B. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.
-----------------------------------------
Each of the representations and warranties of Borrower contained in
this Loan Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Loan Agreement shall be true as
of the date as of which they were made and shall also be true at and as of the
time of the making of such Loan with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Loan 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) and no
Default or Event of Default shall have occurred and be continuing. The
Administrative Agent shall have received a certificate of an authorized officer
of Borrower to such effect.
(S)C. NO LEGAL IMPEDIMENT.
-------------------
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.
(S)D. GOVERNMENTAL REGULATION.
-----------------------
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.
(S)E. PROCEEDINGS AND DOCUMENTS.
-------------------------
All proceedings in connection with the transactions contemplated by
this Loan Agreement, the other Loan Documents and all other documents incident
thereto shall be satisfactory in substance and in form to the Lenders, the
Collateral Agent, the Administrative Agent and the Administrative Agent's
Special Counsel, and the Lenders, the Collateral Agent, the Administrative Agent
and such counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Administrative
Agent or the Collateral Agent may reasonably request.
83
(S)XI. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
(S)A. EVENTS OF DEFAULT AND ACCELERATION.
----------------------------------
Upon the occurrence and during the continuance of any of the following
events after any applicable cure period, if any:
a. Borrower shall fail to pay (i) any principal of the Loans or
the Origination Fee when the same shall become due and payable, (ii) any
interest on the Loans or other sums hereunder or under any of the other Loan
Documents to which it is a party as and when due, or (iii) any mandatory
prepayment of the principal required under (S)3.2 hereof as and when due,
whether at the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment if such failure continues for three (3)
consecutive days;
b. Borrower shall fail to comply with any of the covenants
contained in (S)(S)7.6, 7.15, 7.16, 7.18J, 7.18K, 7.18L, 7.18M, 7.18O, 7.19,
7.20 and (S)(S)8.1-8.10 of the Loan Agreement;
c. Borrower 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 (S)11.1) and such failure shall continue for a
period of thirty (30) days;
d. any representation or warranty under the Loan Agreement or
any of the other Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Loan Agreement or any Loan Document shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated;
e. Borrower shall commit a breach or Default under the Supply
Agreement which would entitle the Supplier thereunder to exercise its remedies
under Section 12 thereunder and which is not cured within ten (10) Business Days
thereunder;
f. Borrower shall (i) make an assignment for the benefit of
creditors, or (ii) 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
Borrower or of any substantial part of the assets of Borrower or (iv) shall
commence any case or other proceeding relating to Borrower 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 if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against Borrower and the Borrower shall indicate
84
its approval thereof, consent thereto or acquiescence therein or shall not be
able to have such proceeding dismissed within thirty (30) days thereof;
g. a default or an event or circumstance which with notice or
lapse of time or both would become a default shall have occurred or an event or
circumstance which with notice of lapse of time or both would become a default
shall have occurred under any other obligation of Borrower for borrowed money
permitted hereunder for an amount in excess of $5 million, the result of which
is that the holder or holders to whom such Indebtedness is owed has the right
under the governing documents to accelerate such Indebtedness;
h. there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) consecutive days, any judgment against
Borrower that, exceeds $1,000,000 net of insurance proceeds, if any, or any such
judgment shall not have been bonded pending appeal within thirty (30) days of
the entry thereof;
i. 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 the
Borrower or any of its stockholders, or any court or any other governmental or
regulatory authority or 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;
j. 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 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;
k. the Borrower 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 thirty (30) consecutive days or any such attachment
shall not have been bonded over within thirty (30) days of the entry thereof;
85
l. the Insolvency of Borrower or Parent;
m. the FCC or any other Governmental Body cancels, revokes or
suspends any of Borrower's material Licenses for the New York PCS Network or
fails to renew any such License or Licenses;
n. the FCC or any other Governmental Body commences any
proceeding to cancel, revoke or suspend any of Borrower's material Licenses for
the New York PCS Network which proceeding for the cancellation, revocation or
suspension (i) could reasonably be expected to have a Material Adverse Effect
and (ii) has not been stayed or enjoined by Borrower within five (5) business
days of the commencement of any such proceeding;
o. Borrower shall fail to pay when due amounts owing the FCC
unless (i) Borrower's failure to pay can reasonably be expected, in the sole
judgment of Administrative Agent, not to result in any cancellation, revocation
or suspension of Borrower's License for the New York PCS Network or (ii)
Borrower has obtained a stay or injunction against any action by the FCC to
cancel, revoke or suspend such License notwithstanding Borrower's failure to
pay;
p. an Event of Default shall have occurred under the Notes, the
Security Agreement, the Pledge Agreement or any other Loan Document;
q. a Change in Control has occurred;
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 in writing to Borrower (i) declare the obligation of each Lender to make
Loans to be terminated, whereupon the same shall forthwith terminate and/or (ii)
declare all amounts owing with respect to this Loan Agreement, the Notes and the
other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by Borrower; provided that
--------
in the event of any Event of Default specified in (S)11.1(f) all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Administrative Agent or any Lender.
(S)B. REMEDIES.
--------
Upon the occurrence of an Event of Default under the Loan Documents,
the Collateral Agent, subject to the provisions of the Intercreditor Agreement
shall have the right to exercise its remedies under the Borrower Security
Agreement, the Pledge Agreement and the Guaranty Agreement, and/or as allowed
under applicable law.
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In case any one or more of the Events of Default shall have occurred
and be continuing, and whether or not the Required Lenders shall have
accelerated the maturity of the Loans pursuant to (S)11.1, each Lender, if owed
any amount with respect to the Loans may, with the consent of the Required
Lenders but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Loan Agreement and
the other Loan Documents or any instrument pursuant to which the Borrower's
Obligations to such Lender are evidenced, including as permitted by applicable
law the obtaining of the ex parte appointment of a receiver, and, if such amount
--------
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of such Lender. No remedy
herein conferred upon any Lender or the Administrative Agent or the Collateral
Agent or the holder of any Note is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
(S)C. DISTRIBUTION OF COLLATERAL PROCEEDS.
-----------------------------------
In the event that, following the occurrence or during the continuance
of any Default or Event of Default and subject to the provisions of any
applicable Intercreditor Agreement, the Administrative Agent or any Lender, as
the case may be, receives any monies in connection with the enforcement of the
Borrower Security Agreement, the Pledge Agreement and the Guaranty Agreement or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:
a. First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Administrative Agent in connection with the collection of such
monies by the Administrative Agent, for the exercise, protection or enforcement
by the Administrative Agent of all or any of the rights, remedies, powers and
privileges of the Administrative Agent under this Loan Agreement or any of the
other Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Administrative Agent against any taxes or
liens which by law shall have, or may have, priority over the rights of the
Administrative Agent to such monies;
b. Second, to all other Borrower Obligations in such order or
preference as the Required Lenders may determine; provided, however, that
-------- -------
distributions in respect of such Borrower Obligations to the Lenders with
respect to each type of Borrower Obligation such as interest, principal, fees
and expenses, shall be
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made among the Lenders pro rata; and provided, further, that the Administrative
-------- -------- -------
Agent may in its discretion make proper allowance to take into account any
Borrower Obligations not then due and payable;
c. Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the
Administrative Agent of all of the Borrower Obligations, to the payment of any
obligations required to be paid pursuant to (S)9-504(1)(c) of the Uniform
Commercial Code of the State of New York; and
d. Fourth, the excess, if any, shall be returned to Borrower or
to such other Persons as are entitled thereto.
(S)XII. SETOFF.
------
Regardless of the adequacy of any Collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Lenders to Borrower and any securities or other property of Borrower in the
possession of such Lender may be applied to or set off by such Lender against
the payment of Borrower's Obligations and any and all other liabilities, direct,
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of such Borrower to such Lender. Each of the Lenders agrees
with each other Lender that (a) if an amount to be set off is to be applied to
Indebtedness of Borrower to such Lender, other than Indebtedness evidenced by
the Notes held by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Lender, and (b) if such Lender shall receive from Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Lender by
proceedings against Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and shall retain and apply to the payment of the Note or Notes
held by such Lender any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the Notes held by such Lender
will make such disposition and arrangements with the other Lenders with respect
to such excess, either by way of distribution, pro tanto assignment of claims,
---------
subrogation or otherwise as shall result in each Lender receiving in respect of
the Notes held by it, its proportionate payment as contemplated by this Loan
Agreement; provided that if all or any part of such excess payment is thereafter
--------
recovered from such Lender, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.
88
(S)XIII. THE ADMINISTRATIVE AGENT.
------------------------
(S)A. AUTHORIZATION.
-------------
The Administrative Agent is authorized to take such action on behalf
of each of the Lenders and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Administrative Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
--------
herein or therein shall be implied to have been assumed by the Administrative
Agent and provided further that wherever the determination, consent or approval
-------- -------
(and the like) of the Administrative Agent is required by any of the Loan
Documents, the Administrative Agent may agree with the Lenders (which agreement
shall not modify the terms of this Loan Agreement or the other Loan Documents)
that Administrative Agent will make determinations or grant or deny such
consents or approvals as directed by the Required Lenders. The relationship
between the Administrative Agent and the Lenders is and shall be that of agent
and principal only, and nothing contained in this Loan Agreement or any of the
other Loan Documents shall be construed to constitute the Administrative Agent
as a trustee for any Lender.
(S)B. EMPLOYEES AND ADMINISTRATIVE AGENTS.
-----------------------------------
The Administrative Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its rights and
duties under this Loan Agreement and the other Loan Documents. The
Administrative Agent may utilize the services of such Persons as the
Administrative Agent in its sole discretion may reasonably determine and all
reasonable fees and expenses of any such Persons shall be paid by Borrower.
(S)C. NO LIABILITY.
------------
Neither the Administrative Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Administrative Agent
or such other Person, as the case may be, may be liable for losses due to its
willful misconduct or gross negligence.
(S)D. NO REPRESENTATIONS.
------------------
The Administrative Agent shall not be responsible for the execution or
validity or enforceability of this Loan Agreement, the Notes, any of the other
Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or
89
for the validity, enforceability or collectability of any such amounts owing
with respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of Borrower
or be bound to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements herein or in any instrument at
any time constituting, or intended to constitute, collateral security for the
Notes or to inspect any of the properties, books or records of Borrower. The
Administrative Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by Borrower or any holder of any of
the Notes shall have been duly authorized or is true, accurate and complete. The
Administrative Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the Lenders,
with respect to the creditworthiness or financial conditions of Borrower. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Loan Agreement.
(S)E. PAYMENTS.
--------
a. A payment by Borrower to the Administrative Agent hereunder
or any of the other Loan Documents for the account of any Lender shall
constitute a payment to such Lender. The Administrative Agent agrees promptly
to distribute to each Lender such Lender's pro rata share of payments received
--------
by the Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.
b. If in the reasonable opinion of the Administrative Agent the
distribution of any amount received by it in such capacity hereunder, under the
Notes or under any of the other Loan Documents might involve it in liability, it
may refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction, or until the
Administrative Agent in its sole opinion determines that it is not subject to
liability. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Administrative Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either repay to
the Administrative Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court. The Administrative Agent shall pay to the Lenders
interest at the rate calculated in accordance with (S)2.6 on such amounts that
were withheld promptly after the Administrative Agent receives payment in full
of such amounts.
90
c. Notwithstanding anything to the contrary contained in this Loan
Agreement or any of the other Loan Documents, any Lender that fails (i) to make
available to the Administrative Agent its pro rata share of any Loan or (ii) to
--------
comply with the provisions of (S)12 with respect to making dispositions and
arrangements with the other Lenders, where such Lender's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
--------
such payments due and payable to all of the Lenders, in each case as, when and
to the full extent required by the provisions of this Loan Agreement, shall be
deemed delinquent (a "Delinquent Lender") and shall be deemed a Delinquent
Lender until such time as such delinquency is satisfied. A Delinquent Lender
shall be deemed to have assigned any and all payments due to it from Borrower,
whether on account of outstanding Loans, interest, fees or otherwise, to the
remaining nondelinquent Lenders for application to, and reduction of, their
respective pro rata shares of all outstanding Loans. The Delinquent Lender
--------
hereby authorizes the Administrative Agent to distribute such payments to the
nondelinquent Lenders in proportion to their respective pro rata shares of all
--------
outstanding Loans. A Delinquent Lender shall be deemed to have satisfied in full
a delinquency when and if, as a result of application of the assigned payments
to all outstanding Loans of the nondelinquent Lenders, the Lenders' respective
pro rata shares of all outstanding Loans have returned to those in effect
--------
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
(S)F. HOLDERS OF NOTES.
----------------
The Administrative Agent may deem and treat the payee of any Note as
the absolute owner or purchaser thereof for all purposes hereof until it shall
have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
(S)G. INDEMNITY.
---------
The Lenders ratably agree hereby to indemnify and hold harmless the
Administrative Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Administrative Agent has not been reimbursed by
Borrower as required by (S)14), and liabilities of every nature and character
arising out of or related to this Loan Agreement, the Notes, or any of the other
Loan Documents or the transactions contemplated or evidenced hereby or thereby,
or the Administrative Agent's actions taken hereunder or thereunder, except to
the extent that any of the same shall be directly caused by the Administrative
Agent's willful misconduct or gross negligence.
(S)H. ADMINISTRATIVE AGENT AS LENDER.
------------------------------
In its individual capacity, NTI shall have the same
91
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes, as
it would have were it not also the Administrative Agent.
(S)I. RESIGNATION OR REMOVAL.
----------------------
The Administrative Agent may resign at any time by giving sixty (60)
days' prior written notice thereof to the Lenders and Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Administrative Agent shall be reasonably
acceptable to Borrower. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
financial institution having a rating of not less than A-1 or its equivalent by
Standard & Poor's Corporation or P-1 ▇▇▇▇▇'▇ Investors Services, Inc. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation, the provisions of this Loan
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent. The Administrative Agent may be removed by the
Required Lenders for cause if the Administrative Agent shall fail in a material
way to perform its duties hereunder and the provisions of this (S)13.9 shall
apply to the appointment of a successor Administrative Agent.
(S)J. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT.
----------------------------------------------
Each Lender hereby agrees that, upon learning of the existence of a
Default or an Event of Default, it shall promptly notify the Administrative
Agent and the Collateral Agent thereof. The Administrative Agent hereby agrees
that upon receipt of any notice under this (S)13.10 it shall promptly notify the
other Lenders and the Collateral Agent of the existence of such Default or Event
of Default.
(S)K. DUTIES IN THE CASE OF ENFORCEMENT.
---------------------------------
Except to the extent otherwise provided for in the Intercreditor
Agreement, in case one of more Events of Default have occurred and shall be
continuing, and whether or not acceleration of the Borrower's Obligations shall
have occurred, the
92
Administrative Agent shall, subject to the provisions of the Intercreditor
Agreement, the Borrower Security Agreement, the Pledge Agreement and the
Guaranty Agreement if (a) so requested by the Required Lenders and (b) the
Lenders have provided to the Administrative Agent such additional indemnities
and assurances against expenses and liabilities as the Administrative Agent may
reasonably request, proceed to enforce the provisions of the Borrower Security
Agreement, the Pledge Agreement or the Guaranty Agreement authorizing the sale
or other disposition of all or any part of the Collateral and exercise all or
any such other legal and equitable and other rights or remedies as it may have
in respect of such Collateral. Subject to the Intercreditor Agreement, the
Required Lenders may direct the Administrative Agent in writing as to the method
and the extent of any such sale or other disposition, the Lenders hereby
agreeing to indemnify and hold the Administrative Agent harmless from all
liabilities incurred in respect of all actions taken or omitted in accordance
with such directions, provided that the Administrative Agent need not comply
--------
with any such direction to the extent that the Administrative Agent reasonably
believes the Administrative Agent's compliance with such direction to be
unlawful or commercially unreasonable in any applicable jurisdiction.
(S)XIV. EXPENSES.
--------
Borrower agrees to pay (a) the costs of producing and reproducing this Loan
Agreement, the other Loan Documents and the other agreements and instruments
mentioned herein, (b) any taxes (including any interest and penalties in respect
thereto) payable by the Administrative Agent or any of the Lenders (other than
taxes based upon the Administrative Agent's or any Lender's net income) on or
with respect to the transactions contemplated by this Loan Agreement (Borrower
hereby agreeing to indemnify the Administrative Agent and each Lender with
respect thereto), (c) the reasonable fees, expenses and disbursements of the
Administrative Agent's Special Counsel or any counsel to the Administrative
Agent incurred in connection with the structuring, negotiation, drafting,
preparation, execution, delivery, administration and/or interpretation of the
Loan Documents and other instruments mentioned herein, each closing hereunder,
and all amendments, modifications, approvals, consents, waivers and other post-
closing matters or in the enforcement or protection of rights hereto or
hereunder, (d) the fees, expenses and disbursements of the Administrative Agent
incurred in connection with the structuring, negotiation, drafting, preparation,
execution, delivery, administration or interpretation of the Loan Documents and
other instruments mentioned herein, and all amendments, modifications,
approvals, consents, waivers and other post-closing matters, or in the
enforcement or protection of its rights, (e) all out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Lender or the Administrative Agent (provided
--------
that, such fees are reasonably comparable to fees customarily charged by outside
----
counsel) and
93
reasonable consulting, accounting, appraisal, investment banking
and similar professional fees and charges) incurred by any Lender or the
Administrative Agent in connection with (i) the enforcement of or preservation
of rights under any of the Loan Documents against Borrower or the administration
thereof after the occurrence of a Default or Event of Default (including
engineering, appraiser and investment banking charges) and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Lender's or the Administrative Agent's relationship with Borrower,
provided, however, that the Borrower will not be obligated to reimburse Lender
-------- -------
or the Administrative Agent under this subparagraph (e)(ii) to this (S)14, if
and only if, a court of competent jurisdiction enters a final nonappealable
judgment determining that the litigation, proceeding or dispute commenced by the
Lender or the Administrative Agent was not warranted by existing law or by a
nonfrivolous argument for the extension, modification or reversal of existing
law or the establishment of new law and that the factual allegations of the
Lender or the Administrative Agent did not and were not likely to have
evidentiary support after reasonable opportunity for further investigation or
discovery, and (f) all closing or signing costs, including stamp or registration
costs and related taxes and charges, and all fees, expenses and disbursements of
any Lender or the Administrative Agent incurred in connection with UCC and other
lien searches and UCC filings. The covenants of this (S)14 shall survive
payment or satisfaction of payment of amounts owing with respect to the Notes.
Borrower shall also pay all reasonable out-of-pocket costs and
expenses (including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent incurred by Administrative Agent and/or
each Lender in connection with (i) verification of the Information, and (ii) due
diligence with respect to Borrower and its Parent.
(S)XV. INDEMNIFICATION.
---------------
Borrower agrees to indemnify and hold harmless the Collateral Agent, the
Administrative Agent and the Lenders, the respective Affiliates of the
Collateral Agent, Administrative Agent and the Lenders, and the respective
officers, directors, employees, agents (including, without limitation each of
their counsel and with respect to the Collateral Agent, reasonable allocated
costs and expenses of in-house counsel and legal staff), and controlling persons
of the Collateral Agent, Administrative Agent and each Lender and each such
Affiliate (each, an "Indemnified Party") from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and costs and expenses (including, without
limitation, the reasonable fees and disbursements of counsel) of every nature
and character arising out of or in connection with any actual or threatened
claim, litigation, investigation or proceeding relating to this Loan Agreement
or any of the other Loan Documents or the transactions contemplated hereby
excluding, however, any such actions or expenses resulting from the gross
negligence or willful misconduct of the Collateral Agent, the Administrative
Agent or the Lenders, but including, without limitation, (a) any actual or
proposed use by Borrower of the proceeds of any of the Loans, (b) any actual or
alleged infringement of any patent, copyright, trademark, service ▇▇▇▇ or
similar right of Borrower comprised in the Collateral, (c) Borrower entering
into or performing this Loan Agreement or any
94
of the other Loan Documents or (d) with respect to Borrower and its properties
and assets, the violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release or threatened
release of any Materials of Environmental Concern or any action, suit,
proceeding or investigation brought or threatened with respect to any Materials
of Environmental Concern (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding whether or not such Indemnified
Party is a party thereto, and Borrower agrees to reimburse each Indemnified
Party, upon demand, for all out-of-pocket costs and expenses (including, without
limitation, the reasonable fees and disbursements of counsel) incurred in
connection with any of the foregoing. In litigation, or the preparation
therefor, the Collateral Agent, the Lenders and the Administrative Agent shall
be entitled to select their own counsel and, in addition to the foregoing
indemnity, Borrower agrees to pay promptly the reasonable fees and expenses of
such counsel. If, and to the extent that the obligations of Borrower under this
(S)15 are unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
Borrower shall not make any claim against any Indemnified Party for
any special, indirect or consequential damages in respect of any breach or
wrongful conduct (whether the claim therefor is based in contract, tort or duty
imposed by law) in connection with, arising out of or in any way related to the
transactions contemplated by, and the relationship established by, the Loan
Documents, or any act, omission or event occurring in connection therewith, and
Borrower and Parent hereby waive, release and agree not to ▇▇▇ upon any such
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in Borrower's or Parent's favor.
The covenants contained in this (S)15 shall survive payment or
satisfaction in full of all other of the Borrower's Obligations.
(S)XVI. SURVIVAL OF COVENANTS, ETC.
--------------------------
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any
95
documents or other papers delivered by or on behalf of Borrower or Parent
pursuant hereto shall be deemed to have been relied upon by the Lenders and the
Administrative Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Lenders of any of the
Loans, as herein contemplated, and shall continue in full force and effect so
long as any amount due under this Loan Agreement or the Notes or any of the
other Loan Documents remains outstanding or any Lender has any obligation to
make any Loans and for such further time as may be otherwise expressly specified
in this Loan Agreement. All statements contained in any certificate or other
paper delivered to any Lender or the Administrative Agent at any time by or on
behalf of Borrower or pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by Borrower
or Parent hereunder.
(S)XVII. ASSIGNMENT AND PARTICIPATION.
----------------------------
(S)A. CONDITIONS TO ASSIGNMENT BY LENDERS.
-----------------------------------
Except as provided herein, each Lender may assign to one or more
assignees (each, an "Eligible Assignee") all or a portion of its interests,
rights and obligations under this Loan Agreement (including all or a portion of
its Commitment Percentage and its Lender's Commitment and the same portion of
the Loans at the time owing to it and the Notes held by it); provided that: (a)
--------
each such assignment shall be of a constant, and not a varying, percentage of
all the assigning Lender's rights and obligations under this Loan Agreement, (b)
the parties to such assignment shall execute and deliver to the Administrative
Agent, for recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit D hereto (an "Assignment and
---------
Acceptance"), together with any Notes subject to such assignment. At no time
shall Administrative Agent or any Lender assign any of their respective rights
to a competitor of the Borrower. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Administrative Agent
of the registration fee referred to in (S)17.3, be released from its obligations
under this Loan Agreement and under the Intercreditor Agreement accruing after
the date of such assignment.
(S)B. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
--------------------------------------------------------------
By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each
96
other and the other parties hereto as follows: (a) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, the 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
Loan Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Loan Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto; (b) the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or any other
Person primarily or secondarily liable in respect of any of the Borrower's
Obligations, or the performance or observance by Borrower or any other Person
primarily or secondarily liable in respect of any of the Borrower's Obligations
or any of their obligations under this Loan Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; (c) such assignee confirms that it has received a copy of this Loan
Agreement and the Intercreditor Agreement, together with copies of the most
recent financial statements referred to in (S)6.4 and (S)7.18 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; (d) such
assignee will, independently and without reliance upon the assigning Lender, 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 Loan Agreement; (e)
such assignee represents and warrants that it is an Eligible Assignee; (f) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Loan Agreement and
the other Loan Documents as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto; (g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Loan Agreement and the
Intercreditor Agreement are required to be performed by it as a Lender; and (h)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance.
(S)C. REGISTER.
--------
The Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
Percentage of, and principal amount of the Loans owing to the Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and 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 Loan
97
Agreement. The Register shall be available for inspection by Borrower and the
Lenders at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Lender agrees to pay to the
Administrative Agent a registration fee in the sum of $1,000.
(S)D. NEW NOTES.
---------
Upon its receipt of an Assignment and Acceptance executed by the
parties to such assignment, together with each Note subject to such assignment,
the Administrative Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to Borrower and the Lenders
(other than the assigning Lender). Within five (5) Business Days after receipt
of such notice, Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Note, shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Note, shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Notes. Within five (5) days of issuance
of any new Notes pursuant to this (S)17.4 Borrower shall deliver an opinion of
counsel, addressed to the Lenders and the Administrative Agent, relating to the
due authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to the
Lenders. The surrendered Notes shall be cancelled and returned to Borrower.
(S)E. PARTICIPATIONS.
--------------
Each Lender may sell participations to one or more banks or other
entities in all or a portion of such Lender's rights and obligations under this
Loan Agreement and the other Loan Documents; provided that (a) each such
---------
participation shall be in an amount of not less than $3,500,000, (b) any such
sale or participation shall not affect the rights and duties of the selling
Lender hereunder to Borrower, and (c) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Lender as it relates to such participant or extend any regularly scheduled
payment date for principal or interest.
98
(S)F. DISCLOSURE.
----------
Borrower agrees that in addition to disclosures made in accordance
with standard and customary banking practices any Lender may disclose
information obtained by such Lender pursuant to this Loan Agreement to assignees
or participants and potential assignees or participants hereunder; provided that
--------
such assignees or participants or potential assignees or participants shall
agree (a) to treat in confidence such information, (b) not to disclose such
information to a third party, and (c) not to make use of such information for
purposes of transactions unrelated to such contemplated assignment or
participation.
(S)G. ASSIGNEE OR PARTICIPANT AFFILIATED WITH ANY OF BORROWER.
-------------------------------------------------------
If any assignee Lender is an Affiliate of Borrower, then any such
assignee Lender shall have no right to vote as a Lender hereunder or under any
of the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Administrative Agent
pursuant to (S)11.1 or (S)11.2, and the determination of the Required Lenders
shall for all purposes of this Agreement and the other Loan Documents be made
without regard to such assignee Lender's interest in any of the Loans. If any
Lender sells a participating interest in any of the Loans to a participant, and
such participant is a Borrower or an Affiliate of a Borrower, then such
transferor Lender shall promptly notify the Administrative Agent of the sale of
such participation. A transferor Lender shall have no right to vote as a Lender
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the
Administrative Agent pursuant to (S)11.1 or (S)11.2 to the extent that such
participation is beneficially owned by such Borrower or any Affiliate of such
Borrower, and the determination of the Required Lenders shall for all purposes
of this Agreement and the other Loan Documents be made without regard to the
interest of such transferor Lender in the Loans to the extent of such
participation.
(S)H. MISCELLANEOUS ASSIGNMENT PROVISIONS.
-----------------------------------
If any assignee Lender is not incorporated under the laws of the
United States of America or any state thereof, it shall, prior to the date on
which any interest or fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to Borrower and the Administrative Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. Anything contained in this (S)17 to the contrary
notwithstanding, any Lender may at any time pledge all or any portion of its
interest and rights under this Loan Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Lenders organized under (S)4 of
the Federal Reserve Act, 12 U.S.C. (S)341. No such pledge or the enforcement
thereof shall release the pledgor Lender from its obligations hereunder or under
any of the other Loan Documents.
99
(S)I. NO ASSIGNMENT BY BORROWER.
-------------------------
Borrower shall not assign or transfer any of its rights or obligations
under any of the Loan Documents.
(S)XVIII. LENDER'S AND ADMINISTRATIVE AGENT'S RELATIONSHIP TO BORROWER.
------------------------------------------------------------
Borrower (and not the Administrative Agent or any Lender) has the sole
responsibility for the operation, control and management of the business of the
Borrower, and the Administrative Agent's and each Lender's rights under the Loan
Documents are only those of Administrative Agent to the Lenders and a secured
creditor, respectively. The relationship created between each Lender, on the
one hand, and Borrower, on the other, is that of creditor and debtor, and each
Lender is not, nor shall it be deemed to be or treated as, a partner, joint-
venturer or co-venturer, with Borrower.
(S)XIX. NOTICES, ETC.
------------
Except as otherwise expressly provided in this Loan Agreement, all notices
and other communications made or required to be given pursuant to this Loan
Agreement or the Notes shall be in writing and shall be delivered in hand,
mailed by United States or Canadian registered or certified first class mail,
postage prepaid, sent by overnight courier, or sent by telegraph, telecopy,
facsimile or telex and confirmed by delivery via courier or postal service,
addressed as follows:
Borrower:
--------
Omnipoint Communications Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
with a copy to:
Piper & Marbury, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
Administrative Agent:
--------------------
Northern Telecom Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
and
Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇); and
Attn: ▇▇▇▇ ▇▇▇
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
with a copy to:
▇▇▇▇ and ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
Collateral Agent:
----------------
Mellon Bank, N.A.
as Collateral Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Parent Guarantor:
----------------
Omnipoint Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
with a copy to:
Piper & Marbury, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
If a notice should be sent to any other Lender, it shall be sent to
such address for notice as such Lender shall have last furnished in writing to
the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of
101
the party to which it is directed, at the time of the receipt thereof by such
officer or the sending of such facsimile and (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third Business Day following
the mailing thereof. The parties hereby deem all notices sent by telecopy or
facsimile original documents and all signatures on such notices, originals.
(S)XX. PROCESS AGENT.
-------------
Borrower hereby appoints Piper & Marbury, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., as its legally authorized
process agent to accept service on behalf of Borrower.
(S)XXI. GOVERNING LAW.
-------------
THIS LOAN AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN,
EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SAID STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF STATE LAW). BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS LOAN
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON SUCH BORROWER BY MAIL TO PIPER & MARBURY AT THE ADDRESS
SPECIFIED IN (S)20. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
(S)XXII. CERTIFICATES OF OFFICERS OF BORROWER.
------------------------------------
With respect to all certificates of officers of Borrower which Borrower is
obligated to deliver to Administrative Agent under the Loan Documents, the
officers signing such certificates will have no personal liability therefor
except with respect to fraud, gross negligence and intentional misconduct.
(S)XXIII. CONFIDENTIALITY.
---------------
Prior to disclosure to any Eligible Assignee, the Administrative Agent will
obtain a written confidentiality agreement from such Eligible Assignee with
respect to the following items: (i) the Approved Full Term Operating Business
Plan, (ii) the Approved Annual Operating Business Plan, (iii) the terms of the
Material Employment Agreements, and (iv) detailed pricing information and
variance analyses previously provided to the Administrative Agent. The
confidentiality agreement will contain terms providing for the protection to the
Borrower having terms substantially as set forth in the following paragraph and
shall survive the execution by an Eligible Assignee of an Assignment and
Acceptance Agreement. Notwithstanding anything to the contrary herein, the
Administrative Agent shall be permitted to summarize generally basic business
102
information relating to the Borrower and its Affiliates to nonaffiliated third
parties and Eligible Assignees, such as information that is or would be of
public knowledge by reason of a public offering or otherwise.
The Administrative Agent and each Lender agree to keep the type of
information listed in (i) through (iv), above furnished by Borrower confidential
except for disclosure (i) to legal counsel, accountants, and other professional
advisors to Administrative Agent and each Lender, (ii) to bank and financial
institution regulatory officials with regulatory control over Lender, (iii) as
requested pursuant to or as required by law, regulation, or legal process, (iv)
in connection with any legal proceeding to which that Administrative Agent or
any Lender is a party, or (v) in connection with any court order.
(S)XXIV. CHANGES IN FCC PAYMENT SCHEDULES.
--------------------------------
In the event the FCC modifies Borrower's payment requirements relating to
the Borrower's FCC License so that such payment requirements materially differ
from that which were in effect as set forth in the Approved Full Term Operating
Business Plan, Borrower and the Administrative Agent will endeavor in good faith
to renegotiate the covenants contained in (S)7.19 hereof in order to reflect
such change, it being understood that until the Administrative Agent and
Borrower shall reach agreements on such new covenants, the covenants contained
in (S)7.19 hereof continue to be effective.
(S)XXV. HEADINGS.
--------
The captions in this Loan Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
(S)XXVI. COUNTERPARTS.
------------
This Loan Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Loan Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
(S)XXVII. ENTIRE AGREEMENT, ETC.
---------------------
The Loan Documents and any other documents executed in connection herewith
express the entire understanding of the parties with respect to the transactions
contemplated hereby. Neither this Loan Agreement nor any term hereof may be
changed, waived, discharged or terminated, except as provided in (S)29.
103
(S)XXVIII. WAIVER OF JURY TRIAL.
--------------------
BORROWER HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION
OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS LOAN AGREEMENT, THE
NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS
PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE,
ADMINISTRATIVE AGENT OR ATTORNEY OF ANY LENDER OR THE ADMINISTRATIVE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE ADMINISTRATIVE
AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (B) ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS HAVE
BEEN INDUCED TO ENTER INTO THIS LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS TO
WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.
(S)XXIX. CONSENTS, AMENDMENTS, WAIVERS, ETC.
-----------------------------------
Any consent or approval required or permitted by this Loan Agreement to be
given by the Lenders may be given, and any term of this Loan Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by Borrower of any terms of
this Loan Agreement, the other Loan Documents or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of Borrower and the written consent of the
Administrative Agent and the Required Lenders. Notwithstanding the foregoing,
the rate of interest on the Notes, the term of the Notes, the amount of the
Commitments of the Lenders, and the amount of the Origination Fee may not be
changed without the written consent of Borrower and the written consent of each
Lender affected thereby; the definition of Required Lenders may not be amended
without the written consent of all of the Lenders; and the amount of the
Administrative Agent's Fee payable for the Administrative Agent's account and
(S)13 may not be amended without the written consent of the Administrative
Agent. No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Administrative Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon Borrower shall entitle Borrower to other or further
notice or demand in similar or other circumstances.
The Lenders will consider in good faith amendments proposed by the Borrower
that are intended to reconcile any apparent conflicts between the provisions of
(S)(S)3.2B, 3.2C, 7.19 and 8.1 through 8.5 of this Agreement and the related
provisions of the Ericsson Loan Agreement, provided that nothing herein shall
obligate the Lenders to agree to any such amendments.
104
(S)XXX. IMMUNITIES.
----------
The Borrower hereby waives any and all rights against immunity from
jurisdiction, attachment (both before and after judgment) and execution to which
it might be entitled.
(S)XXXI. 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 (with respect to the Collateral Agent,
including reasonable allocated costs and 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 and/or
any other Loan Document at any time, including without limitation the reasonable
fees and expenses of counsel (with respect to the Collateral Agent, 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.
(S)XXXII. AMENDMENTS, ETC. TO INTERCREDITOR AGREEMENT.
--------------------------------------------
Neither the Administrative Agent nor the Lenders shall consent to any
amendment or modification of, supplement to or 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.
(S)XXXIII. SEVERABILITY.
------------
The provisions of this Loan Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Loan Agreement in any jurisdiction.
105
[Intentionally Left Blank]
106
IN WITNESS WHEREOF, the undersigned have duly executed this Loan Agreement
as a sealed instrument as of the date first set forth above.
BORROWER:
--------
OMNIPOINT COMMUNICATIONS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President, Finance
ADMINISTRATIVE AGENT:
---------------------
NORTHERN TELECOM INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President, Sales and
Marketing
THE LENDERS:
------------
NORTHERN TELECOM INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President, Sales and
Marketing
107