EXHIBIT 10.21
CONSENT AND AGREEMENT
This Consent and Agreement (this "Consent and Agreement") is entered into
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as of June 23, 1999, between SPRINT SPECTRUM L.P., a Delaware limited
partnership ("Sprint Spectrum"), SPRINTCOM, INC., a Kansas corporation
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("SprintCom"), SPRINT COMMUNICATIONS COMPANY, L.P., a Delaware limited
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partnership ("Sprint Communications"), WIRELESSCO, L.P., a Delaware limited
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partnership ("WirelessCo" and together with Sprint Spectrum, SprintCom and
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Sprint Communications, the "Sprint Parties"), and COBANK, ACB, as administrative
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agent (together with any successors thereof in accordance with the Credit
Agreement hereinafter described, the "Administrative Agent") for the lenders
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under that certain Credit Agreement among LOUISIANA UNWIRED, L.L.C. (the
"Affiliate"), the Administrative Agent and the lenders from time to time party
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thereto (the "Lenders").
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Affiliate has entered into two Sprint PCS Management Agreements, one
Agreement dated and effective as of June 8, 1998, and one dated and effective as
of February 8, 1999 (such agreements, as they have been and may be amended,
modified, or supplemented from time to time, individually or together, the
"Management Agreement") with Sprint Spectrum and SprintCom providing for the
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design, construction and management of the Service Area Network (as therein
defined). Affiliate has also entered into the Sprint PCS Services Agreement (as
it may be amended, modified, or supplemented from time to time, the "Services
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Agreement") and the Sprint Trademark and Service ▇▇▇▇ License Agreement and the
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Sprint Spectrum Trademark and Service ▇▇▇▇ License Agreement (together, as they
may be amended, modified, or supplemented from time to time, the "License
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Agreements") (the Management Agreement, the Services Agreement and the License
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Agreements and all other agreements between Affiliate or its subsidiaries, on
the one hand and the Sprint Parties or any subsidiary of Sprint Corporation on
the other hand (whether entered into prior to, on, or after the date hereof)
that relate to the Service Area Network as they may be amended, modified, or
supplemented from time to time, collectively, the "Sprint Agreements").
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Affiliate has entered into or concurrently herewith is entering into that
certain Credit Agreement dated as of June 23, 1999 with the Administrative Agent
and the Lenders (such Credit Agreement, as it may be amended, supplemented,
restated, replaced or otherwise modified from time to time, the "Credit
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Agreement"), to provide financing for a portion of the costs of the design and
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construction of the Service Area Network and for certain other purposes. The
Credit Agreement and each note, security agreement, pledge agreement, guaranty
and any and all other agreements, documents or instruments entered into in
connection with any of the foregoing, as the same may from time to time be
amended, supplemented, restated, replaced or otherwise modified from time to
time, shall collectively be referred to as the "Loan Documents."
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As a condition to the availability of credit to Affiliate under the Credit
Agreement, the Administrative Agent and the Lenders have required the execution
and delivery of this Consent and Agreement by the Sprint Parties and have
required that Affiliate acknowledge, consent and
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agree to all terms and provisions of this Consent and Agreement.
Sprint Spectrum and SprintCom hold, directly or indirectly, certain of the
licenses for the service areas managed by Affiliate as contemplated in the
Management Agreement. As used in this Consent and Agreement, the term "Sprint
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PCS" shall refer in each particular instance or application to Sprint Spectrum
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and/or SprintCom, based on which of the two entities owns the License in that
portion of the Service Area to which the subject of the instance or application
applies.
All capitalized terms in this Consent and Agreement shall have the same
meanings ascribed to them in the Management Agreement unless otherwise provided
in this Consent and Agreement; provided, that the terms "Default", "Event of
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Default" and "Obligations" shall have the meanings ascribed to them in the
Credit Agreement.
Accordingly, each Sprint Party and the Administrative Agent, on behalf of
itself and for the Lenders, hereby agrees as follows:
Section 1. Consent to Security Interest. In connection with the
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transactions contemplated by the Credit Agreement and the other Loan Documents,
Affiliate has granted or will grant to the Administrative Agent, for the benefit
of the Lenders, a first priority security interest in and lien upon
substantially all of its assets and property, tangible and intangible, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof and accessions thereto, including without limitation the rights of
Affiliate in, to and under the Sprint Agreements, and the members of Affiliate
have granted or will grant to the Administrative Agents, for the benefit of the
Lenders, a first priority security interest in and pledge of all membership
interests or other equity interests in Affiliate (the "Pledged Equity"). The
foregoing security interests, liens and pledges are referred to collectively as
the "Security Interests" and the foregoing assets and property in which the
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Administrative Agent, for the benefit of the Lenders, has been or will be
granted a first priority security interest in and lien are referred to
collectively as the "Collateral". Each Sprint Party (i) acknowledges notice of
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the Credit Agreement, (ii) consents to the granting of the Security Interests in
the Collateral to the Administrative Agent, for the benefit of the Lenders, and
(iii) agrees that (a) neither it nor any subsidiary of Sprint Corporation will
challenge or contest that the Security Interests are valid, enforceable and duly
perfected first priority security interests and liens in and to the Collateral
and (b) neither it nor any subsidiary of Sprint Corporation will argue that any
such Security Interest is subject to avoidance, limitation or subordination
under any legal or equitable theory or cause of action.
Each Sprint Party acknowledges and agrees that (i) Sections 17.15.1 and
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17.15.2 of the Management Agreement do not apply to the assignment of
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Affiliate's rights under the Sprint Agreements to the Administrative Agent or
the Lenders under the Loan Documents or in connection with a transaction
permitted pursuant to this Consent and Agreement to any other Person pursuant to
the Loan Documents or to any other assignment in connection with any
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transaction permitted pursuant to this Consent and Agreement and (ii) Section
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17.15.3 of the Management Agreement shall not apply to any Change of Control of
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Affiliate in connection with the exercise by the Administrative Agent of any of
its rights or remedies under the Loan Documents, including without limitation in
connection with the sale of the membership interests of Affiliate to any Person
or to any other Change of Control of Affiliate; provided, however, Section
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17.15.3 of the Management Agreement shall apply to any such transaction if such
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transaction is not with the Administrative Agent or the Lenders or is not a
transaction permitted pursuant to this Consent and Agreement. It is understood
that any assignment described in this Section 1 to the Administrative Agent or
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the Lenders is hereby consented to by the Sprint Parties; provided, that any
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subsequent assignment by the Administrative Agent or the Lenders shall be in
accordance with the terms of this Consent and Agreement.
Section 2. Payments. Upon receipt of the Administrative Agent's
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written instructions, each Sprint Party agrees to make all payments (if any) to
be made by it under the Sprint Agreements, subject to its rights of setoff or
recoupment with respect to such payments as permitted under Section 10.6 of the
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Management Agreement, to Affiliate directly to the Administrative Agent, or
otherwise as the Administrative Agent shall direct; provided, that during the
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period that Sprint PCS is making such payments directly to the Administrative
Agent or its designee pursuant to this Section 2, Sprint PCS' setoff and
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recoupment rights under such Section 10.6 shall not be limited to undisputed
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amounts. Any payments made by any Sprint Party directly to, or at the
direction of, the Administrative Agent shall fully satisfy any obligation of
such Sprint Party to make payments to Affiliate under the Sprint Agreements to
the extent of such payments.
Section 3. Notice and Effect of Event of Default, Management Agreement
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Breach and Event of Termination. The Administrative Agent agrees to provide to
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Sprint PCS a copy of any written notice that Administrative Agent sends to
Affiliate, promptly after sending such notice, that a Default or an Event of
Default has occurred and is continuing, and Sprint PCS agrees to provide to the
Administrative Agent a copy of any written notice that Sprint PCS sends to
Affiliate, promptly after sending such notice, that an Event of Termination or
an event that if not cured, or if notice is provided, will constitute an Event
of Termination (each of an Event of Termination and an event that if not cured
would constitute an Event of Termination, a "Management Agreement Breach") has
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occurred. Sprint Spectrum and SprintCom acknowledge that the Administrative
Agent has informed them that an Event of Termination constitutes an Event of
Default under the Loan Documents, and Sprint Spectrum and SprintCom further
acknowledge that the Management Agreement does not prohibit Affiliate from
curing such an Event of Default.
Section 4. Event of Default without a Management Agreement Breach.
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(a) Affiliate Remains as Manager or Interim Manager Appointed.
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Upon and during the continuation of an Event of Default when no Management
Agreement Breach as to which Sprint PCS has given the Administrative Agent
notice exists on the original
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date of occurrence of such Event of Default, the Administrative Agent may,
by prior written notice to Sprint PCS, (i) allow Affiliate to continue to
act as the Manager under the Sprint Agreements, (ii) appoint Sprint
Spectrum to act as "Interim Manager" under the Sprint Agreements, or (iii)
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appoint a Person other than Sprint Spectrum to act as Interim Manager under
the Sprint Agreements. If the Administrative Agent initially allows
Affiliate to continue to act as the Manager under the Sprint Agreements,
the Administrative Agent may later, during a continuation of an Event of
Default; remove Affiliate as Manager and take the action described above in
clauses (ii) and (iii). The date on which a Person begins serving as
Interim Manager shall be the "Commencement Date."
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(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
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If the Administrative Agent appoints Sprint Spectrum as Interim Manager,
within 14 days after its appointment Sprint Spectrum shall accept the
position or designate another Person (a "Sprint Spectrum Designee") to act
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as Interim Manager under the Sprint Agreements. The Administrative Agent
shall accept Sprint Spectrum and any Sprint Spectrum Designee that is then
acting as an Other Manager (other than Affiliate) to act as Interim Manager
under the Sprint Agreements. Any Sprint Spectrum Designee that is not an
Other Manager must be acceptable to the Administrative Agent, which
acceptance will not be unreasonably withheld. If, within 30 days after the
Administrative Agent gives Sprint Spectrum notice of its appointment as
Interim Manager, Sprint Spectrum or a Sprint Spectrum Designee does not
agree to act as Interim Manager, then the Administrative Agent shall have
the right to appoint an Administrative Agent Designee as Interim Manager in
accordance with Section 4(c). At the discretion of the Administrative Agent
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Sprint Spectrum or the Sprint Spectrum Designee shall serve as Interim
Manager for up to six months from the Commencement Date.
Upon the expiration of its initial six-month period as Interim Manager
under the Sprint Agreements, Sprint Spectrum or the Sprint Spectrum
Designee will agree, at the written request of the Administrative Agent, to
serve as Interim Manager for up to six months from such expiration date
until the Administrative Agent gives Sprint Spectrum or the Sprint Spectrum
Designee at least 30 days' written notice of its desire to terminate the
relationship; provided, that the extended period will be for 12 months
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rather than six months (for a complete term of 18 months) in the event, as
of the date of the initial appointment, the aggregate number of pops that
Affiliate and all Other Managers have the right to serve under their
respective management agreements with the Sprint Parties is less than 40
million (such six or 12 month period, being the "Extension Period"). If
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Sprint Spectrum's or the Sprint Spectrum Designee's term as Interim Manager
is extended, then the Administrative Agent agrees that Sprint Spectrum or
the Sprint Spectrum Designee's right to be reimbursed by Affiliate promptly
for all amounts previously expended by Sprint Spectrum or the Sprint
Spectrum Designee under Section 11.6.3 of the Management Agreement (which
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expenditures were incurred in accordance with Section 9 of this Consent and
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Agreement) shall no longer be subordinated to the
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Obligations as provided in Section 9 in this Consent and Agreement, and
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Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
Affiliate for any expenses it incurs pursuant to its rights under Section
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11.6.3 of the Management Agreement as provided in the Management Agreement
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(which expenditures were incurred in accordance with Section 9 of this
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Consent and Agreement) shall not be subject to the subordination to the
Obligations as provided in Section 9 of this Consent and Agreement;
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provided, that Sprint Spectrum or the Sprint Spectrum Designee's right to
be reimbursed for amounts expended under Section 11.6.3 of the Management
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Agreement in an aggregate amount that exceed 5% of Affiliate's
shareholder's or member's equity or capital account plus Affiliate's
long-term debt (i.e., notes that on their face are scheduled to mature more
than one year from the date issued), as reflected on Affiliate's books (the
"Reimbursement Limit") shall remain subordinated to the Obligations as
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provided in Section 9 of this Consent and Agreement. Notwithstanding any
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other provision in this Section 4(b) to the contrary, Sprint Spectrum or
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the Sprint Spectrum Designee shall not be required to continue to serve as
Interim Manager during the Extension Period at any time after 30 days
following delivery by it to the Administrative Agent of written notice that
it needs to expend amounts under Section 11.6.3 of the Agreement that
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Sprint Spectrum or the Sprint Spectrum Designee reasonably believes will
not be reimbursed based on the projected Collected Revenues for the
remainder of the Extension Period. If it becomes necessary for Sprint
Spectrum or the Sprint Spectrum Designee to expend any amount that it
believes will not be reimbursed or that exceeds the Reimbursement Limit,
Sprint Spectrum or the Sprint Spectrum Designee is not required to incur
such expense.
Within 20 days after the end of each calendar month that Sprint
Spectrum or the Sprint Spectrum Designee serves as Interim Manager,
commencing with the fourth such month and continuing through the
termination of the Extension Period (whether by expiration, resignation or
otherwise), Sprint Spectrum or the Sprint Spectrum Designee, as applicable,
shall provide the Administrative Agent with a written report setting forth
(i) all capital expenditures and other expenses Sprint Spectrum or the
Sprint Spectrum Designee has incurred or that it believes needs to be
incurred under Section 11.6.3 of the Management Agreement, (ii) a summary
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of the costs and anticipated benefits of each such material capital
expenditure or material expense, and (iii) a statement of projected
Collected Revenues through the end of the Extension Period. Sprint Spectrum
or the Sprint Spectrum Designee, as applicable, shall indicate when any
amounts contained in a monthly report are estimated (not actual) amounts.
Upon the termination or expiration of the term of Sprint Spectrum or
the Sprint Spectrum Designee as Interim Manager, the Administrative Agent
shall have the right to appoint a successor Interim Manager in accordance
with Section 4(c).
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(c) Administrative Agent Designee as Interim Manager. If the
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Administrative Agent elects to appoint a Person other than Sprint Spectrum
to act as Interim Manager
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under the Sprint Agreements (an "Administrative Agent Designee") as
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permitted under Sections 4(a)(iii) and 4(b), such Administrative Agent
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Designee must (i) agree to serve as Interim Manager for six months unless
terminated earlier by Sprint PCS because of a material breach by the
Administrative Agent Designee of the terms of the Sprint Agreements or by
the Administrative Agent in its discretion, (ii) meet the applicable
"Successor Manager Requirements" set forth below in Section 13, and (iii)
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agree to comply with the terms of the Sprint Agreements but will not be
required to assume the existing liabilities of Affiliate. In the case of a
proposed Administrative Agent Designee, Sprint PCS shall provide to the
Administrative Agent, within 10 Business Days after the request therefor, a
detailed description of all information reasonably requested by Sprint PCS
to enable Sprint PCS to determine if a proposed Administrative Agent
Designee satisfies the Successor Manager Requirements. Sprint PCS agrees to
inform Administrative Agent within 20 days after it receives such
information respecting such proposed Administrative Agent Designee from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. A Person that satisfies the
Successor Manager Requirements (or is deemed to satisfy such requirements)
qualifies under the Management Agreement to become a Successor Manager,
unless the Administrative Agent Designee materially breaches the terms of a
Sprint Agreement while acting as Interim Manager or no longer meets the
Successor Manager Requirements. The Administrative Agent Designee may
continue to serve as Interim Manager after the initial six-month period at
the Administrative Agent's discretion, so long as the Administrative Agent
Designee continues to satisfy the Successor Manager Requirements and it
does not materially breach the terms of the Sprint Agreements. If the
Administrative Agent Designee materially breaches any Sprint Agreement
while acting as Interim Manager, then Sprint PCS and the Administrative
Agent have the rights set forth in Section 5; provided, that Sprint PCS may
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not allow Affiliate to act as the Manager of the Sprint Agreements without
the Administrative Agent's consent.
Section 5. Event of Default Created by a Management Agreement Breach.
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(a) Affiliate Remains as Manager or Interim Manager Appointed.
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Upon an Event of Default created by a Management Agreement Breach (so long
as at such time an Event of Default not created by a Management Agreement
Breach as to which Administrative Agent has given Sprint PCS notice is not
in existence), Sprint PCS may by prior written notice to Administrative
Agent (i) allow Affiliate to continue to act as the Manager under the
Sprint Agreements if approved by the Administrative Agent, (ii) act as
Interim Manager under the Sprint Agreements (in the case of Sprint
Spectrum) or appoint Sprint Spectrum as Interim Manager (in the case of
SprintCom), or (iii) appoint a Sprint Spectrum Designee to act as Interim
Manager under the Sprint Agreements as provided in paragraph (b) below. If
Sprint PCS initially allows Affiliate to continue to
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act as the Manager under the Sprint Agreements, Sprint PCS may later remove
Affiliate as Manager and take the action described above in clauses (ii)
and (iii). The Administrative Agent shall have no right to appoint an
Interim Manager when an Event of Default is caused by a Management
Agreement Breach (unless an Event of Default not created by a Management
Agreement Breach is in existence), unless Sprint PCS elects not to act as
Interim Manager or to appoint a Sprint Spectrum Designee.
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
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If Sprint Spectrum acts as Interim Manager or designates a Sprint Spectrum
Designee to act as Interim Manager under the Sprint Agreements, the Interim
Manager shall serve as Interim Manager for up to six months from the
Commencement Date, at the discretion of Sprint Spectrum. The Administrative
Agent shall accept Sprint Spectrum and any Sprint Spectrum Designee that is
then acting as an Other Manager (other than Affiliate) to act as Interim
Manager under the Sprint Agreements. Any Sprint Spectrum Designee that is
not then acting as an Other Manager must be acceptable to the
Administrative Agent, which acceptance will not be unreasonably withheld.
Upon the expiration of its initial six-month period as Interim Manager
under the Sprint Agreements, Sprint Spectrum or the Sprint Spectrum
Designee will agree to serve as Interim Manager for the Extension Period
until the Administrative Agent gives Sprint Spectrum or the Sprint Spectrum
Designee at least 30 days' written notice of its desire to terminate the
relationship. If Sprint Spectrum's or the Sprint Spectrum Designee's term
as Interim Manager is extended, then the Administrative Agent agrees that
Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
Affiliate promptly for all amounts previously expended by Sprint Spectrum
or the Sprint Spectrum Designee under Section 11.6.3 of the Management
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Agreement (which expenditures were incurred in accordance with Section 9 of
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this Consent and Agreement) shall no longer be subordinated to the
Obligations as provided in Section 9 of this Consent and Agreement, and
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Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
Affiliate for any expenses it incurs pursuant to its rights under Section
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11.6.3 of the Management Agreement as provided in the Management Agreement
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(which expenditures were incurred in accordance with Section 9 of this
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Consent and Agreement) shall not be subject to subordination to the
Obligations as provided in Section 9 of this Consent and Agreement;
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provided, that Sprint Spectrum or the Sprint Spectrum Designee's right to
be reimbursed for amounts expended under Section 11.6.3 of the Management
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Agreement in an aggregate amount that exceed the Reimbursement Limit shall
remain subordinated to the Obligations as provided in Section 9 of this
Consent and Agreement. Notwithstanding any other provision in this Section
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5(b) to the contrary, Sprint Spectrum or the Sprint Spectrum Designee shall
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not be required to continue to serve as Interim Manager during the
Extension Period at any time after 30 days following delivery by it to the
Administrative Agent of written notice that it needs to expend amounts
under Section 11.6.3 of the Management Agreement that Sprint Spectrum or
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the Sprint Spectrum Designee reasonably believes will not be reimbursed
based on the projected Collected
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Revenues for the remainder of the Extension Period. If it becomes necessary
for Sprint Spectrum or the Sprint Spectrum Designee to expend an amount
that it believes will not be reimbursed or that exceeds the Reimbursement
Limit, Sprint Spectrum or the Sprint Spectrum Designee is not required to
incur such expense.
Within 20 days after the end of each calendar month that Sprint
Spectrum or the Sprint Spectrum Designee serves as Interim Manager,
commencing with the fourth such month and continuing through the
termination of the Extension Period (whether by expiration, resignation or
otherwise), Sprint Spectrum or the Sprint Spectrum Designee, as applicable,
shall provide the Administrative Agent with a written report setting forth
(i) all capital expenditures and other expenses Sprint Spectrum or the
Sprint Spectrum Designee has incurred or that it believes needs to be
incurred under Section 11.6.3 of the Management Agreement, (ii) a summary
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the costs and anticipated benefits of each such material capital
expenditure or material expense, and (iii) a statement of projected
Collected Revenues through the end of the Extension Period. Sprint Spectrum
or the Sprint Spectrum Designee, as applicable, shall indicate when any
amounts contained in a monthly report are estimated (not actual) amounts.
Upon the termination or expiration of the term of Sprint Spectrum or
the Sprint Spectrum Designee as Interim Manager and with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed), Sprint Spectrum shall have the right to appoint a successor
Interim Manager in accordance with Section 5(a).
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(c) Administrative Agent Designee as Interim Manager. Notwithstanding
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anything in paragraph (a) above to the contrary, if, after Acceleration (as
defined in Section 6(a) of this Consent and Agreement) and within 30 days
after Sprint PCS gives the Administrative Agent notice of a Management
Agreement Breach, Sprint Spectrum does not agree to act as Interim Manager
or does not obtain the consent of a Sprint Spectrum Designee to act as
Interim Manager under the Sprint Agreements, or if Sprint Spectrum or the
Sprint Spectrum Designee gives the Administrative Agent notice of its
resignation as Interim Manager and Sprint Spectrum fails to appoint a
successor in accordance with Section 5(b) within 30 days after such
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resignation, the Administrative Agent may appoint an Administrative Agent
Designee to act as Interim Manager. Such Administrative Agent Designee must
(i) agree to serve as Interim Manager for six months unless terminated
earlier by Sprint PCS because of a material breach by the Administrative
Agent of the terms of the Sprint Agreements or by the Administrative Agent
in its discretion, (ii) meet the applicable Successor Manager Requirements,
and (iii) agree to comply with the terms of the Sprint Agreements. In the
case of a proposed Administrative Agent Designee, Sprint PCS shall provide
to the Administrative Agent, within 10 Business Days after the request
therefor, a detailed description of all information reasonably requested by
Sprint PCS to enable Sprint PCS to determine if a proposed Administrative
Agent Designee satisfies the Successor Manager Requirements. Sprint PCS
agrees to inform Administrative Agent within 20 days after it receives such
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information respecting such proposed Administrative Agent Designee from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. A Person that satisfies the
Successor Manager Requirements qualifies under the Management Agreement to
become a Successor Manager, unless the Administrative Agent Designee
materially breaches the terms of a Sprint Agreement while acting as Interim
Manager or no longer meets the Successor Manager Requirements. The
Administrative Agent Designee may continue to serve as Interim Manager
after the initial six-month period at the Administrative Agent's
discretion, so long as the Administrative Agent Designee continues to
satisfy the Successor Manager Requirements and it does not materially
breach the terms of the Sprint Agreements. If the Administrative Agent
Designee materially breaches any Sprint Agreement while acting as Interim
Manager, then Sprint PCS and the Administrative Agent have the rights set
forth in Section 5; provided, that Sprint PCS may not allow Affiliate to
act as the Manager of the Sprint Agreements without the Administrative
Agent's consent.
Section 6. Purchase and Sale of the Operating Assets. Upon the
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occurrence and during the continuation of an Event of Default, the following
provisions shall govern the purchase and sale of the Operating Assets:
(a) Acceleration of the Obligations Under the Loan Documents. In
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the Lenders accelerate the maturity of the Obligations under the Loan
Documents (an "Acceleration" and, the date thereof, an "Acceleration
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Date"), the Administrative Agent shall give written notice thereof to
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Sprint PCS. Upon receipt of notice of Acceleration, Sprint PCS shall have
the right, to which right Affiliate, by executing this Consent and
Agreement, expressly agrees, to purchase the Operating Assets from
Affiliate for an amount equal to the greater of (i) 72% of the Entire
Business Value (as defined in the Management Agreement) of Affiliate,
valued in accordance with the procedure set forth in Section 11.7 of the
Management Agreement (with the assumption that the deemed ownership of the
Disaggregated License under Section 11.7.3 of the Management Agreement
includes the transfer of the Sprint PCS customers as contemplated by
Section 11.4 of the Management Agreement), and (ii) the aggregate amount of
the Obligations. Sprint PCS shall, within 60 days of receipt of notice of
Acceleration, give Affiliate and the Administrative Agent notice of its
intent to exercise the purchase right. In the event Sprint PCS gives the
Administrative Agent written notice of its intent to purchase the Operating
Assets, the Administrative Agent agrees that it shall not enforce its
Security Interests in the Collateral until the earlier to occur of (i)
expiration of the period consisting of 120 days after the Acceleration Date
(or such later date that shall be provided for in the purchase agreement
and acceptable to the Administrative Agent in its discretion to close the
purchase of the Operating Assets) or (ii) receipt by Administrative Agent
and Affiliate from Sprint PCS of written notice that Sprint PCS has
determined not
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to proceed with the closing of the purchase of the Operating Assets for any
reason. If after the 120-day period after the Acceleration Date Affiliate
receives any purchase offer for the Operating Assets or the Pledged Equity
that is confirmed in writing by Affiliate to be acceptable to Affiliate,
Sprint PCS shall have the right subject to the consent of the
Administrative Agent, to purchase the Operating Assets or the Pledged
Equity of Affiliate, as the case may be, on terms and conditions at least
as favorable to Affiliate as the terms and conditions proposed in such
offer so long as within 14 Business Days after Sprint PCS's receipt of such
other offer Sprint PCS offers to purchase the Operating Assets or the
Pledged Equity and so long as the conditions of Sprint PCS's offer and the
amount of time it will take Sprint PCS to effect such purchase is
acceptable to Affiliate and Administrative Agent. Any such offer shall be
confirmed in writing by the third party offeror. In the event Sprint PCS
exercises its rights under this
Section 6(a), (i) Affiliate shall sell the Operating Assets or the Pledged
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Equity to Sprint PCS, (ii) the Administrative Agent and the Lenders shall
consent to such purchase and sale provided that the proceeds thereof shall
be sufficient to repay the aggregate amount of the Obligations, and (iii)
Sprint PCS shall make all payments to be made under this Section 6(a) to
Administrative Agent for its application against the Obligations. The
purchase right of the Sprint Parties under this Section 6(a) shall be in
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substitution of the purchase rights of the Sprint Parties under Section
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11.6.1 or any other provision of the Management Agreement. If Sprint PCS
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purchases the Operating Assets or the Pledged Equity of Affiliate as
permitted under this Section 6(a), the Administrative Agent will release
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the Security Interests in the Collateral upon payment in full of the
aggregate amount of the Obligations and the termination of all commitments
to advance credit under the Credit Agreement.
(b) Sale of Operating Assets to Third Parties. If the Sprint Parties
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do not purchase the Operating Assets from Affiliate after an Acceleration
as described above in Section 6(a), the Collateral may be sold as follows:
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(i) Sale to Successor Manager. The Collateral may be sold by the
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Administrative Agent (in its sole discretion) in the exercise of certain of
its rights and remedies as a secured party under the Loan Documents or by
Affiliate, at the discretion of the Administrative Agent, to a person that
satisfies the Successor Manager Requirements. Sprint PCS shall provide to
the Administrative Agent, with a copy to Affiliate, within 10 Business Days
after the request therefor, a detailed description of all information
reasonably requested by Sprint PCS to enable Sprint PCS to determine if a
proposed buyer satisfies the Successor Manager Requirements. Sprint PCS
agrees to inform the Administrative Agent and Affiliate within 20 days
after it receives such information respecting such proposed buyer from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. If the proposed buyer
satisfies
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the Successor Manager Requirements (or is deemed to satisfy such
requirements) and wishes to become a "Successor Manager", the buyer must
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agree to be bound by the Sprint Agreements; provided, that buyer shall have
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no responsibility or liability for any liability to any Person other than a
Sprint Party and Related Party of Sprint PCS arising out of Affiliate's
operations prior to the date buyer becomes bound by the Sprint Agreements.
In such case the Sprint Agreements shall remain in full force and effect
with the buyer as Successor Manager and this Consent and Agreement shall
remain in full force and effect for the benefit of the Successor Manager
and any Person providing senior secured debt financing to such Successor
Manager if required by such Person. Sprint PCS agrees, with respect to any
past failure of Affiliate to perform any obligation under the Sprint
Agreements, that the Successor Manager shall have the same amount of time
to perform such obligation that Affiliate had under the Sprint Agreements,
with the performance period commencing on the date on which the buyer
becomes a Successor Manager. Sprint PCS shall permit the performance period
set forth in the Management Agreement to be extended for such period of
time that Sprint PCS believes is reasonable to allow Successor Manager to
perform such unperformed obligations.
(ii) Sale to Other than Successor Manager. The Collateral may be
------------------------------------
sold pursuant to the exercise by the Administrative Agent or the Lenders of
their rights and remedies under the Loan Agreements or by Affiliate, at the
discretion of the Administrative Agent (subject to requirements of
applicable law) to a person that does not satisfy the Successor Manager
Requirements or to a person that does not wish to become a Successor
Manager, but only under the following conditions:
(A) the Sprint Parties may terminate the Sprint Agreements with such
buyer following the closing of such purchase (and the Administrative Agent
and the buyer shall have no rights thereto or thereunder with respect to
events occurring after the closing of such purchase);
(B) the buyer may purchase the Disaggregated License (with the amount
of Spectrum described below in Section 6(b)(iv) and with the Disaggregated
----------------
License having the characteristics described in the definition thereof) for
a price equal to the sum of (1) the original cost of the applicable License
to Sprint PCS pro rated on a pops and spectrum basis, plus (2) the
microwave relocation costs paid by Sprint PCS attributable to clearing the
Spectrum in the Disaggregated License, plus (3) the amount of carrying
costs to Sprint PCS attributable to such original cost and microwave
relocation costs from the date of this Consent and Agreement to and
including the date on which the Disaggregated License is transferred to the
buyer, based on a rate of 12 percent per annum; and
(C) the purchase agreement with the buyer contains the requirements
set forth in Section 6(c) of this Consent and Agreement.
------------
11
(iii) Confidentiality Agreement. Before any potential buyer is
-------------------------
provided Confidential Information respecting the potential purchase of any
of the Collateral (which buyer shall be entitled to receive), the potential
buyer shall execute a confidentiality agreement in the form attached as
Exhibit A with such changes thereto as may be reasonably requested by the
---------
parties to the agreement; provided, however, in the event the potential
--------
buyer does not satisfy the Successor Manager Requirements or has notified
Affiliate, Sprint PCS or the Administrative Agent that it does not intend
to be a Successor Manager, Confidential Information that constitutes or
relates to any technical, marketing, financial, strategic or other
information concerning any of the Sprint Parties and that does not pertain
to the business of Affiliate shall not be permitted to be provided to such
potential buyer.
(iv) Amount of Spectrum Sold. Sprint PCS will sell Spectrum as
-----------------------
follows when required under Section 6(b)(ii)(B):
-------------------
(A) If the buyer, an entity with respect to which such buyer
directly or indirectly through one or more persons owns the total voting
power or at least 50% of the total voting power or at least 50% of the
total equity (a) "controlled entity"), an entity that directly or
-----------------
indirectly through one or more persons has a parent entity that owns at
least 50% of the voting power or at least 50% of the total equity of both
the buyer and the common controlled entity (a "common controlled entity"),
------------------------
owns a license to provide wireless service to at least 50% of the pops in a
BTA with respect to which such buyer proposes to purchase Spectrum (each a
"Restricted Party" with respect to such BTA), the buyer may buy only 5 MHz
----------------
of Spectrum for such BTA.
(B) If the buyer is not a Restricted Party for a BTA with
respect to which such buyer proposes to purchase Spectrum, and either does
not satisfy the Successor Manager Requirements (other than those set forth
in Section 13(b) of this Consent and Agreement) or does not wish to be a
------------
Successor Manager, then the buyer may buy 5 MHz, 7.5 MHz or 10 MHz as the
buyer determines in its sole discretion.
(c) No Direct Solicitation of Customers. Upon the sale of the Collateral
-----------------------------------
or the Disaggregated License in accordance with this Consent and Agreement
pursuant to Section 6(b)(ii), then the Sprint Parties agree to transfer to the
----------------
buyer thereof the customers with a MIN assigned to the Service Area covered by
the Disaggregated License, but Sprint PCS shall retain the customers of a
national account and any resellers who are then party to a resale agreement with
Sprint PCS. Each Sprint Party agrees to take all actions reasonably requested by
the buyer of the Collateral to fully transfer to such purchaser such customers.
Each Sprint Party agrees that neither it nor any of its Related Parties will
directly or indirectly solicit, for six months after the date of transfer, the
customers with a MIN assigned to the Service Area covered by the Disaggregated
License; provided, that Sprint PCS retains the customers of a national account
--------
and any resellers that have entered into a resale agreement with Sprint PCS,
Sprint PCS may advertise nationally, regionally and locally, and engage direct
marketing firms to solicit
12
customers generally. If the buyer continues to operate the purchased assets as a
wireless network in the same geographic area on a network that is
technologically compatible with Sprint PCS's network, the buyer and Sprint PCS
shall each agree to provide roaming services to the other (in the case of Sprint
PCS, the roaming services shall be provided to those customers of buyer in the
geographic area serviced by the Disaggregated License roaming nationally and, in
the case of buyer, the roaming services shall be provided to those customers of
Sprint PCS roaming in the geographic area covered by the Disaggregated License)
pursuant to a roaming agreement to be entered into between buyer and Sprint PCS
and to be mutually agreed upon so long as such agreement is based on Sprint
PCS's then standard roaming agreement used by Sprint PCS in the industry and the
price that each party shall pay the other party for roaming services provided to
the first party shall be a price equal to the lesser of: (1) MFN Pricing
provided by buyer to third parties roaming in the geographic area serviced by
the Disaggregated License; and (2) the national average paid by Sprint PCS to
third parties for Sprint PCS's customers to roam in such third parties'
geographic areas (including Other Managers). Such obligations with respect to
roaming shall continue until such roaming agreement is terminated pursuant to
its terms. The buyer shall agree in writing that if it continues to operate the
purchased assets as a wireless network in the same geographic area on a network
that is technologically compatible with Sprint PCS's network, the buyer shall,
to the extent required by law, provide resale to Sprint PCS in the geographic
area covered by the Disaggregated License at the MFN Pricing that buyer charges
third parties who purchase resale from buyer; provided, however, if buyer is not
--------
offering resale to any other customers then pricing of resale provided to Sprint
PCS shall be as mutually agreed; and provided, further, however, whether or not
-------- -------
buyer is required by law to offer such resale, buyer shall offer such resale (on
the terms described in this sentence) to national customers of Sprint PCS.
Section 7. No Limits on Remedies. Nothing contained in this Consent
---------------------
and Agreement shall limit any rights of the Administrative Agent or Lenders to
Accelerate. Except as expressly provided herein, nothing contained in this
Consent and Agreement shall limit any rights or remedies that the Administrative
Agent or the Lenders may have under the Loan Documents or applicable law. The
Administrative Agent may not sell, lease, assign, convey or otherwise dispose of
the Collateral other than as permitted under this Consent and Agreement.
Section 8. Rights and Obligations of Interim Manager. The Interim
-----------------------------------------
Manager may collect a reasonable management fee for its services; provided, that
--------
if Sprint Spectrum or a Related Party of Sprint PCS acts as Interim Manager,
such management fee shall not exceed the direct expenses relating to Sprint
Spectrum or such Related Party employees for the actual time spent by such
employees when performing the function of Interim Manager and Sprint Spectrum's
or such Related Party's out-of-pocket expenses. Such direct expenses shall
include such employees' salaries and benefits, and the out-of-pocket and accrued
expenses allocated to such employees. If Sprint Spectrum is the Interim
Manager, the management fee will be paid out of the 92% Management Fee that
Sprint PCS pays under the Management Agreement, and will be in addition to the
fees it receives under the Services Agreement. Sprint PCS shall collect such
management fee by setoff against the fees and any other amounts payable to
Affiliate under the
13
Sprint Agreements. The Interim Manager will be required to operate the Service
Area Network in accordance with the terms of the Sprint Agreements and will be
subject to all of the requirements and obligations of such agreements, but will
not be required to assume the existing liabilities of Affiliate.
SECTION 9. Rights to Cure. Neither the provisions of this Consent and
--------------
Agreement nor any action of either Administrative Agent or Sprint PCS shall
require either Administrative Agent, any Lender or Sprint PCS to cure any
default of Affiliate under the Sprint Agreements or to perform under the Sprint
Agreements, but shall only give it the option to do so except to the extent
otherwise required by this Consent and Agreement. Sprint PCS may exercise its
rights under Section 11.6.3 of the Management Agreement upon an Event of
--------------
Termination, whether such situation arises while Affiliate, Sprint Spectrum, an
Administrative Agent Designee or a Sprint Spectrum Designee is acting as Interim
Manager and notwithstanding any other provision of this Consent and Agreement;
provided, that the right to reimbursement for any expenses incurred in
--------
connection with such cure shall be unsecured and until such time as the
Obligations have been paid in full in cash and all commitments to advance credit
under the Credit Agreement have terminated or expired, the Person or Persons
entitled thereto shall not receive such reimbursement, except as specifically
provided in Section 4(b) or Section 5(b) of this Consent and Agreement. Sprint
------------- ------------
PCS shall not be permitted to deduct or setoff from its payments to Affiliate
any such amounts it is not entitled to receive under this Section and shall not
take any action of any type to attempt to collect such reimbursement and the
failure to be so reimbursed shall not constitute a Management Agreement Breach.
In the event that Sprint PCS receives any payments or distributions that it is
not entitled to receive under this Section, such payments shall be held in trust
for, and promptly turned over to, the parties entitled thereto. If Sprint PCS
has designated a third party to take action under Section 11.6.3 of the
--------------
Management Agreement, before taking any such action such third party shall enter
into an agreement with Administrative Agent providing that such third party
agrees to the provisions of this Section 9 as if it were a party hereto. Until
---------
such time as the Obligations have been paid in full in cash and all commitments
to advance credit under the Credit Agreement have terminated or expired, Sprint
PCS shall not be entitled to exercise any other remedies under the Sprint
Agreements, including, without limitation, the remedy of terminating the Sprint
Agreements (except to the extent permitted under Section 6(b)(ii)(A) of this
-------------------
Consent and Agreement) or the remedy of withholding any payment set forth in
Section 10 of the Management Agreement (subject to Sprint PCS's rights of setoff
----------
or recoupment with respect to such payments as permitted under Sections 2, 4(b)
----------------
and 5(b) of this Consent and Agreement). Until such time as the Obligations
--------
have been paid in full in cash and all commitments to advance credit under the
Credit Agreement have terminated or expired, notwithstanding anything to the
contrary contained in Section 2.3 of the Management Agreement, in no event shall
-----------
any Person other than Affiliate or a Successor Manager be a manager or operator
for Sprint PCS with respect to the Service Area and neither Sprint PCS nor any
of its Related Parties shall own, operate, build or manage another wireless
mobility communications network in the Service Area, except to the extent
provided in Sections 2.3(a), (b), (c) or (d) of the Management Agreement and
--------------- --- --- ---
except to the extent that the Sprint Agreements are terminated in accordance
with Section 6(b)(ii)(A) of this Consent and
--------------------
14
Agreement. The Administrative Agent acknowledges and agrees that Sprint PCS
shall also have the right to cure an Event of Default or to assist Affiliate in
curing an Event of Default but only to the extent Affiliate has the right to so
cure under the Loan Documents, as applicable (it being understood that the act
of Sprint PCS curing an Event of Default shall not constitute an independent
Event of Default unless the act itself would otherwise constitute a Default
(e.g. a sale of assets not otherwise permitted by the Loan Documents)),
including but not limited to Sprint PCS's providing Affiliate the funds
necessary to operate or meet certain financial covenants in the Loan Documents.
The Administrative Agent shall have the right to cure any Management Agreement
Breach.
SECTION 10. Sprint PCS's Right to Purchase Obligations, Operating Assets
------------------------------------------------------------
or Pledged Equity. (a) Following the Acceleration Date and until the 60-day
-----------------
anniversary of the filing of a bankruptcy petition by or with respect to
Affiliate, Sprint PCS shall have the right to purchase the Obligations under,
and as defined in, the Credit Agreement, by repaying the Obligations in full in
cash. In the event that Sprint PCS purchases the Obligations within 60 days
immediately following the earlier of (i) the Acceleration Date and (ii) the date
of the filing of a bankruptcy petition by or with respect to Affiliate, Sprint
PCS may in lieu of purchasing the total amount of the Obligations, purchase all
Obligations other than the accrued interest with respect thereto for a purchase
price equal to the amount of the Obligations other than such accrued interest
and any fees and expenses that are unreasonable, in which case, such accrued
interest and unreasonable fees and expenses shall remain due and owing by
Affiliate to the Lenders.
(b) In the event that the Administrative Agent acquires the Operating
Assets or the Pledged Equity, Sprint PCS shall have the right to purchase the
Operating Assets or the Pledged Equity from the Administrative Agent during the
limited period of time provided in and otherwise in accordance with this Section
-------
10(b) by paying to the Administrative Agent in cash an amount equal to the sum
-----
of the aggregate amount paid (by credit against the Obligations or otherwise) by
the Administrative Agent or the Lenders for the Operating Assets or Pledged
Equity, as the case may be, plus the aggregate amount of any remaining unpaid
Obligations. Administrative Agent shall give Sprint PCS notice of any
acquisition of the Operating Assets or the Pledged Equity by the Administrative
Agent promptly following the date of final consummation of such acquisition (the
"Acquisition Notice"). Sprint PCS shall, within 60 days of receipt of a valid
-------------------
Acquisition Notice, give the Administrative Agent (and Affiliate, in the case of
a purchase of the Pledged Equity) notice of its intent to exercise its purchase
right under this Section 10(b). In the event Sprint PCS gives the Administrative
-------------
Agent written notice of its intent to purchase the Operating Assets or the
Pledged Equity, the Administrative Agent agrees that it shall provide Sprint PCS
the right to purchase the Operating Assets or Pledged Equity, as the case may
be, until the earlier to occur of (i) expiration of the period consisting of 120
days after Sprint PCS' receipt of a valid Acquisition Notice (or such later date
that shall be provided for in the purchase agreement and acceptable to the
Administrative Agent in its sole discretion to close the purchase of the
Operating Assets or Pledged Equity) or (ii) receipt by Administrative Agent
from Sprint PCS of written notice that Sprint PCS has determined not to proceed
with the closing of the purchase of the Operating Assets or the Pledged Equity.
If Sprint PCS at any time
15
purchases the Operating Assets or the Pledged Equity as permitted under this
Section 10, the Administrative Agent will release the Security Interests in the
----------
Collateral upon payment in full of the aggregate amount of the Obligations.
Notwithstanding the foregoing, in the event that a bankruptcy petition is filed
by or with respect to Affiliate, Sprint PCS shall again have the right to
purchase the Operating Assets or the Pledged Equity from the Administrative
Agent by repaying the Obligations in full in cash, by giving the Administrative
Agent notice of its intent to exercise such purchase right no later than 60 days
following the date of filing of such bankruptcy petition.
(c) If at any time during the period described in Section 10(a) or
-------------
10(b) above or thereafter the Administrative Agent receives any purchase offer
-----
for the Operating Assets, the Pledged Equity or the Obligations, as applicable,
that is acceptable to the Administrative Agent, the Administrative Agent shall
exercise reasonable efforts to obtain the consent of the offeror to deliver a
copy of such offer to Sprint PCS and Sprint PCS shall have the right to purchase
the Operating Assets, the Pledged Equity or the Obligations, as applicable, on
terms and conditions at least as favorable to the Administrative Agent as the
terms and conditions proposed in such offer so long as within 14 Business Days
after Sprint PCS's receipt of such other offer Sprint PCS offers to purchase the
Operating Assets, the Pledged Equity or the Obligations, as applicable, and so
long as the conditions of Sprint PCS's offer and the amount of time it will take
Sprint PCS to effect such purchase is acceptable to the Administrative Agent and
the Lenders.
(d) If Sprint PCS at any time purchases the entirety of the
Obligations as provided in this Section 10, the Administrative Agent shall
assign and transfer or cause the Lenders to assign and transfer to Sprint PCS
all rights and interests in, to and under all of the Loan Documents, including
but not limited to all security interests, liens, financing statements,
guaranties and other credit enhancements related to such Loan Documents, and all
rights and claims thereunder (collectively referred to as the "Loan Document
--------------
Rights"). If Sprint PCS purchases less than all the Obligations (as permitted
------
in the second sentence of Section 10(a) above), then the Administrative Agent
-------------
shall assign and transfer or cause the Lenders to assign and transfer to Sprint
PCS all Loan Document Rights, except that the Administrative Agent shall retain
the unsecured right to collect the amount of the Obligations not purchased by
Sprint PCS.
SECTION 11. Foreclosure. Upon the Administrative Agent or any Lender or
-----------
any other Person that meets the Successor Manager Requirements acquiring the
Operating Assets and the Sprint Agreements, then such Person shall be entitled
to exercise any and all rights of Affiliate under the Sprint Agreements in
accordance with the terms of the Sprint Agreements and each Sprint Party will
thereupon comply in all respects with such exercise by such Person and perform
its obligations under the Sprint Agreements and this Consent and Agreement for
the benefit of such Person. Each Sprint Party agrees that the Administrative
Agent or any Lender may (but shall not be obligated to), subject to and in
accordance with the terms of this Consent and Agreement, assign its rights and
interests acquired in the Operating Assets and the Sprint Agreements to any
buyer or transferee thereof and, in the event the buyer wishes to become a party
to the Sprint Agreements and such buyer satisfies the Successor Manager
Requirements,
16
such buyer shall be bound by the Sprint Agreements; provided, that buyer shall
--------
have no responsibility or liability to any Person other than a Sprint Party and
a Related Party of a Sprint Party arising out of Affiliate's operations prior to
the date buyer becomes bound by the Sprint Agreements. In such case the Sprint
Agreements shall remain in full force and effect with the buyer as Successor
Manager and this Consent and Agreement shall remain in full force and effect for
the benefit of the Successor Manager and any Person providing senior secured
debt financing to such Successor Manager if required by such Person. Sprint PCS
agrees, with respect to any past failure of Affiliate to perform any obligation
under the Sprint Agreements, that the Successor Manager shall have the same
amount of time to perform such obligation that Affiliate had under the Sprint
Agreements, with the performance period commencing on the date on which the
buyer becomes a Successor Manager. Sprint PCS shall permit the performance
period set forth in the Management Agreement to be extended for such period of
time that Sprint PCS believes is reasonable to allow Successor Manager to
perform such unperformed obligations.
SECTION 12. Trademarks and Service Marks. In the event the
----------------------------
Administrative Agent forecloses on its security interest in the License
Agreements and transfers the License Agreements to a Person who does not meet
the Successor Manager Requirements, then Sprint PCS shall have the right to
terminate the License Agreements and cause the Administrative Agent to release
its security interest in the License Agreements immediately prior to such
transfer.
SECTION 13. Interim Manager and Successor Manager Requirements. To
--------------------------------------------------
qualify as an Interim Manager or a Successor Manager, the Person must satisfy
each of the following "Successor Manager Requirements," as applicable:
-------------------------------
(a) The Person must not during the three-year period immediately
preceding the date of determination have materially breached any material
agreement with Sprint Spectrum or its Related Parties that resulted in the
exercise of a termination right or in the initiation of judicial or
arbitration proceedings;
(b) The Person must not be one of the Persons identified on Schedule
--------
13 (a "Schedule 13 Person"); provided, that no Other Manager under any
-- ------------------
Sprint PCS Management Agreement may be identified on Schedule 13;
(c) In the case of a Successor Manager, the Person must meet a
reasonable Person's credit criteria (taking into consideration the
circumstances), it being understood that such criteria is satisfied if the
financial projections contained in the business plan such Person submits to
Sprint PCS shows the ability to service its indebtedness and meet the
build-out requirements contained in the Build-out Plan; and
(d) The Person must agree to be bound by the terms of the Sprint
Agreements as if an original party thereto; provided, in the case of an
--------
Interim Manager the Person
17
must also execute a separate confidentiality agreement in the form attached
as Exhibit A with such changes thereto as may be reasonably requested by
---------
the parties to the agreement, but the Person is not required to assume the
existing liabilities of Affiliate.
Except as provided in Schedule 13, the Administrative Agent, each Lender
-----------
and each of their wholly-owned subsidiaries or entities who wholly-own such
entities shall be deemed to satisfy Sections 13(a), (b) and (c) of the preceding
--------------- --- ---
"Successor Management Requirements".
---------------------------------
SECTION 14. Management Agreement. Sprint PCS agrees that it will not
--------------------
exercise its right under the Management Agreement to purchase the Operating
Assets or to sell the Disaggregated License to Affiliate if before, or after
giving effect to such exercise, there would exist a Default or Event of Default
under the Credit Agreement, unless Sprint PCS pays the aggregate amount of the
Obligations as a condition of the exercise of such right and the Credit
Agreement shall have been terminated in connection with such payment. Sprint
PCS agrees that until the Obligations have been paid in full in cash and all
commitments to advance credit under the Credit Agreement have terminated or
expired, a failure to pay any amount by any Related Party of Affiliate under any
agreement with Sprint PCS or any of its Related Parties shall not constitute a
Management Agreement Breach for any purpose. Subject to regulatory approval in
connection with any such sale, Sprint PCS agrees that it shall always maintain
the ability to sell the Disaggregated License in accordance with this Consent
and Agreement. Sprint PCS shall own at least 10 MHz of Spectrum in the Service
Area until the first to occur of the following events: (i) the Obligations have
been paid in full in cash and all commitments to advance credit under the Credit
Agreement have terminated or expired, (ii) the sale by Sprint PCS of the
Spectrum pursuant to this Consent and Agreement shall be effected, and (iii) the
sale of the Operating Assets pursuant to this Consent and Agreement. Sprint PCS
acknowledges that the financing provided pursuant to the Loan Documents complies
with Section 1.7 of the Management Agreement dated as of June 8, 1998 and
------------
Section 11.3.6 of such Management Agreement shall no longer be applicable with
--------------
respect to such financing, but such financing does not satisfy the financing
requirements under the Management Agreement dated as of February 8, 1999.
Notwithstanding anything to the contrary contained in Section 12.2 of the
------------
Management Agreement, the Administrative Agent, the Lenders, and any Successor
Manager or buyer of the Operating Assets or Disaggregated License shall be
permitted to disclose Confidential Information (as defined in the Management
Agreement) (i) to the extent required by law, rule or regulation, (ii) to any
regulator or any regulatory body regulating such entity, (iii) to any rating
agency in connection with requirements applicable to such Person and (iv) to the
lawyers and accountants for any such Persons.
SECTION 15. Administrative Agent and Eligible Assignees.
-------------------------------------------
(a) The Administrative Agent and each Lender must be an Eligible
Assignee. "Eligible Assignee" shall mean and include a commercial bank,
-----------------
financial institution, other "accredited investor" (as defined in
Regulation D of the Securities Act) other than individuals, or a "qualified
---------
institutional buyer" as defined in rule 144A of the Securities
-------------------
18
Act; provided, that prior to the 61st day after the filing of a bankruptcy
--------
petition by or with respect to Affiliate in no event may any Person that is
engaged in or that controls, is controlled by or is under common control
with any Person engaged in, the telecommunications service business in the
United States (other than Sprint Corporation and its subsidiaries), be an
Eligible Assignee, it being understood that no small business investment
corporation that is ultimately owned by an Eligible Assignee that is
subject to Regulation Y shall be deemed to be controlled by or under common
control with such Eligible Assignee; and provided further, that after the
----------------
filing of such bankruptcy petition in no event may a Schedule 13 Person be
an Eligible Assignee.
(b) If (i) the Administrative Agent or any Lender becomes a Schedule
13 Person and (ii) a new Administrative Agent or Lender (as applicable)
commits to purchase all interests of such Administrative Agent or Lender in
the Obligations and the Loan Documents and assume all commitments and
obligations of such Administrative Agent or Lender under the Loan
Documents, in each case within such three months as described in clause (A)
below, for the aggregate amount of the unpaid Obligations of such
Administrative Agent or Lender, then such Administrative Agent or Lender
shall (A) assuming such purchaser does not breach its commitment to so
purchase, divest itself of all interests in the Obligations and the Loan
Documents within three (3) months after such Administrative Agent or Lender
becomes a Schedule 13 Person by selling such interests in consideration of
the payment of such aggregate amount and the assumption of such commitments
and obligations, and (B) promptly upon the consummation of such sale, no
longer be given or be entitled to receive any Confidential Information. In
no event shall the Administrative Agent or any Lender be obligated or
responsible to find or obtain a purchaser to purchase any Obligations or
Loan Documents or to assume any commitments or obligations.
SECTION 16. Sprint Party Representations. Each Sprint Party represents
----------------------------
and warrants to the Administrative Agent, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate and partnership action, and does not and
will not require any further consents or approvals that have not been obtained,
or violate any provision of any law, regulation, order, judgment, injunction or
similar matters or materially breach any agreement presently in effect with
respect to or binding on it; provided, that the transfer of Spectrum as
--------
contemplated under this Consent and Agreement will require regulatory approval
(which each Sprint Party agrees to use its commercially reasonable efforts to
obtain); (b) this Consent and Agreement is a legal, valid and binding obligation
of such Person enforceable against it in accordance with its terms, except that
(i) such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be limited by
equitable defenses and by the discretion of the court before which any
proceeding may be brought; (c) the Sprint Agreements are in full force and
effect and have not been amended, supplemented or modified; (d) as of the date
of execution hereof, to the knowledge of the Sprint
19
Parties, no Event of Termination has occurred and is continuing (without regard
to any requirement of the delivery of written notice necessary to the occurrence
of an Event of Termination under Section 11.3 of the Management Agreement);
------------
provided, that Sprint PCS has delivered to Affiliate and the Administrative
--------
Agent a document titled "Louisiana Unwired, L.L.C. Management Agreement Non-
Compliance Summary," which describes events that, if not cured, will become
Events of Termination; (e) on the date the Management Agreement was executed
Sprint PCS owned, and on the date hereof Sprint PCS owns, 10 MHz or more of
Spectrum in the Service Area; and (f) the only existing agreements or
arrangements between Affiliate, on the one hand, and Sprint Corporation or any
of its subsidiaries, on the other hand, are the Management Agreement, the
Services Agreement and the License Agreements.
SECTION 17. Administrative Agent Representations. The Administrative
------------------------------------
Agent represents and warrants to Sprint PCS, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate action, and does not and will not require
any further consents or approvals that have not been obtained, or violate any
provision of any law, regulation, order, judgment, injunction or similar matters
or materially breach any agreement presently in effect with respect to or
binding on it; (b) this Consent and Agreement is a legal, valid and binding
obligation of the Administrative Agent enforceable against it in accordance with
its terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be limited by equitable defenses and by the discretion of the court
before which any proceeding may be brought; (c) at the time of the execution
hereof, the only Lenders are CoBank, ACB, The Bank of New York, First Union
National Bank, PNC Bank, The CIT Group/Equipment Financing, Inc., and Coast
Business Credit, a division of Southern Pacific Bank; and (d) as of the date of
execution hereof, to the knowledge of the Administrative Agent, no Event of
Default has occurred and is continuing.
SECTION 18. Successors and Assigns. This Consent and Agreement shall be
----------------------
binding upon the successors and assigns of the parties hereto and shall inure,
together with the rights and remedies of the parties hereunder, to the benefit
of their respective successors and assigns. In the event the Sprint PCS Network
is sold in accordance with the Management Agreement, the buyer thereof will
assume the obligations of the Sprint Parties hereunder and under all the other
Sprint Agreements other than the Sprint Trademark and Service ▇▇▇▇ License
Agreement; provided, however, the buyer of the Sprint PCS Network shall enter
--------
into an agreement with Affiliate on substantially the same terms as the Sprint
Trademark and Service ▇▇▇▇ License Agreement with respect to such buyers'
trademarks, service marks, brands, etc. In the event a Successor Manager
becomes a party to the Sprint Agreements as provided in this Agreement, this
Consent and Agreement shall remain in full force and effect for the benefit of
the Successor Manager and any Person providing senior secured debt financing to
such Successor Manager if required by such Person.
20
SECTION 19. Amendment. Neither this Consent and Agreement nor any
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provision herein may be waived except pursuant to an agreement or agreements in
writing entered into by Sprint PCS, the Administrative Agent and Affiliate, and
neither this Consent and Agreement nor any provision herein may be amended or
modified except pursuant to an agreement or agreements in writing entered into
by Sprint PCS, the Administrative Agent and Affiliate. The Administrative Agent
and each Lender (and its successors and assigns) shall be bound by any
modification or amendment authorized by this Section 19. No amendment or waiver
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or effective amendment or waiver entered into in violation of this Section 19
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shall be valid; provided, however, that no consent of Affiliate shall be
necessary for any amendment or modification to this Consent and Agreement made
pursuant to and in accordance with Section 24 hereof.
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SECTION 20. APPLICABLE LAW. THIS CONSENT AND AGREEMENT SHALL BE
--------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO.
SECTION 21. Notices. Notices and other communications provided for in
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this Consent and Agreement shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) if to Sprint PCS, to it at:
Sprint Spectrum L.P.
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
(b) if to the Administrative Agent, to it at:
CoBank, ACB, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Rural Utility Banking Group
21
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to Affiliate, to it at:
Louisiana Unwired, L.L.C.
c/o US Unwired, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Finance Department
with a copy to:
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
All notices and other communications given to any party hereto in accordance
with the provisions of this Consent and Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy, or on the date five (5) business days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 21 or in
----------
accordance with the latest unrevoked direction from such party given in
accordance with this Section 21.
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SECTION 22. Counterparts. This Consent and Agreement may be executed in
------------
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
SECTION 23. Severability. Any provision of this Consent and Agreement
------------
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties
shall endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provision with valid provisions the economic effect of which is as
close as possible to that of the invalid, illegal or unenforceable provision.
SECTION 24. Amendments to Form Consent and Agreement. If Sprint PCS
----------------------------------------
modifies or amends the form of Consent and Agreement it enters into with another
lender, then Sprint PCS agrees to give the Administrative Agent written notice
of such modifications and amendments and, at the request of Administrative
Agent, to amend this Consent and Agreement in the same
22
manner; provided, that: (a) Sprint PCS will not modify this Consent and
--------
Agreement to incorporate changes made for the benefit of a lender because of
circumstances related to a particular Other Manager, subject to the limitations
set forth below; (b) the Administrative Agent must agree to make all (or none)
of the changes made for the other lender and the Other Manager, unless Sprint
PCS agrees to allow the Administrative Agent to make only some of the changes;
and (c) Sprint PCS is only required to make changes to this Consent and
Agreement based on changes made to the form of Consent and Agreement executed in
connection with loans to Other Managers that are syndicated or intended to be
syndicated (i.e., loans sold or participated, or intended to be sold or
participated, in whole or in part to at least three financial institutions or
investment funds) (a"Syndication Consent") until the later to occur of: (i)
-------------------
five Syndication Consents are executed, and (ii) loans to Other Managers are
syndicated where the pops in the Service Areas of such Other Managers, in the
aggregate, exceed 10 million; provided, however, that in the event any
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Syndicated Consent executed after such later date relates to a transaction where
the pops in the Service Area of the Other Manager exceed 5 million, Sprint PCS
agrees to give the Administrative Agent the right to so amend this Consent and
Agreement, subject to the provisions of clauses (a) and (b) above.
For purposes of subsection (a) in the preceding paragraph, Sprint PCS will
not deem the following changes to be made because of circumstances related to a
particular Other Manager: (i) any form of recourse to Sprint PCS or other
similar form of credit enhancement; (ii) any change in Sprint PCS's right to
purchase Operating Assets, the Pledged Equity or Obligations; (iii) any change
in Affiliate's, Administrative Agent's or Lenders' right to sell the Collateral
or purchase the Disaggregated License (including, without limitation, any rights
of first refusal and the purchase price of the Disaggregated License); (iv) any
change in the ownership status, terms of usage or amount of Disaggregated
License utilized by Affiliate; (v) any material change in the flow of revenues
between Sprint Spectrum and Affiliate excluding changes related to the pricing
of direct or indirect fees, but including any subordination of direct or
indirect fees or other amounts or costs due under the Sprint Agreements or
hereunder to Sprint PCS; (vi) any change to obligations required to be assumed
by, or qualifications for, any Interim or Successor Manager, including changes
in the time period or terms under which Sprint PCS agrees to remain as Interim
Manager; (vii) any changes in confidentiality, non-compete or Eligible Assignee
language, including changes to Schedule 13; (viii) any clarifications of FCC
compliance issues; (ix) the issuance of legal opinions; (x) any change in the
circumstances under, or procedures by which, an Interim Manager or Successor
Manager is appointed; or (xi) any change to this Section 24.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Agreement to be executed by their respective authorized officers as of the date
and year first above written.
SPRINT SPECTRUM L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Business Development Officer
SPRINTCOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
WIRELESSCO, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President,
Consumer Market Strategy and Communication
COBANK, ACB,
for itself and as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
----------------------------------
24
Acknowledgment, Consent and Agreement of Affiliate
--------------------------------------------------
The undersigned Affiliate (i) has reviewed this Consent and Agreement, (ii)
acknowledges, consents and agrees to the terms and provisions of this Consent
and Agreement, and (iii) agrees to be bound by the terms and provisions of this
Consent and Agreement, including, without limitation, such terms and provisions
that affect Affiliate, its assets or its rights under the Management Agreement.
Without limiting the generality of the foregoing: (i) Affiliate acknowledges
and agrees that the right to appoint an Interim Manager is intended to allow the
right and ability to preserve and/or protect the Collateral or its value and the
Service Area Network or its value and (ii) Affiliate acknowledges and agrees
that in the event of the sale of the Collateral by the Administrative Agent, the
value of the Collateral may be dependent on the right of the Person purchasing
the Collateral to assume or be a party to the Sprint Agreements and acknowledges
that any sale of the Collateral in accordance with Sections 6 and 10 hereof, the
-----------------
other provisions of this Consent and Agreement and, to the extent not
inconsistent with this Consent and Agreement, the Loan Documents is agreed to be
a commercially reasonable disposition of the Collateral by Administrative Agent.
LOUISIANA UNWIRED, L.L.P.
By: ______________________
Name: ______________________
Title: ______________________
25