UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
333-06609-01
Commission file number 333-06609-02
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SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 48-1165245
DELAWARE 43-1746537
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Nos.)
4900 Main Street, Kansas City, Missouri 64112
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 559-1000
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was re-
quired to file such reports), and (2) has been subject to such filing require-
ments for the past 90 days. Yes X No
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Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of March 14, 1997 the Sprint Spectrum Finance Corporation had Common Stock
outstanding of 100 shares.
Documents Incorporated by Reference: None
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SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
1996 FORM 10-K/A ANNUAL REPORT
Table of Contents
Page
PART I
Item 1. Business................................................... 3
Item 2. Properties................................................. 16
Item 3. Legal Proceedings.......................................... 16
Item 4. Submission of Matters to a Vote of Security Holders........ 16
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters...................................... 16
Item 6. Selected Financial Data.................................... 17
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................ 17
Item 8. Financial Statements and Supplementary Data................ 17
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures................................ 17
PART III
Item 10. Directors and Executive Officers of the Registrants........ 18
Item 11. Executive Compensation..................................... 22
Item 12. Security Ownership of Certain Beneficial Owners and
Management............................................... 26
Item 13. Certain Relationships and Related Transactions............. 27
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on
Form 8-K................................................. 29
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Sprint Spectrum L.P.
Sprint Spectrum Finance Corporation
Securities and Exchange Commission
Annual Report on Form 10-K/A
Part I
Item 1. Business
Business of Sprint Spectrum L.P.
Sprint Spectrum L.P. is a Delaware limited partnership that was formed
on March 28, 1995. The terms "Sprint Spectrum" and the "Company" refer to
Sprint Spectrum L.P. and its direct and indirect subsidiaries, including Wire-
lessCo, L.P., Sprint Spectrum Equipment Company, L.P., Sprint Spectrum Realty
Company, L.P. and Sprint Spectrum Finance Corporation.
The general partner of Sprint Spectrum is Sprint Spectrum Holding
Company, L.P. ("Holdings"), and the limited partner is MinorCo, L.P.
("MinorCo"). Each of Holdings and MinorCo is a limited partnership formed by
Sprint Enterprises, L.P., which has a 40% partnership interest, TCI Spectrum
Holdings, Inc. (formerly known as TCI Telephony Services, Inc., a successor to
TCI Network Services), which has a 30% partnership interest, and Comcast
Telephony Services and Cox Telephony Partnership, each of which has a 15%
partnership interest. Sprint Enterprises, L.P., TCI Spectrum Holdings, Inc.,
Comcast Telephony Services and Cox Telephony Partnership are collectively
referred to as the "Partners". Each Partner is both a general partner and a
limited partner of both Holdings and MinorCo, holding 99% of its interest as a
general partner and 1% of its interest as a limited partner. Holdings has a
greater than 99% general partnership interest in the Company. The Partners are
subsidiaries of, respectively, Sprint Corporation ("Sprint"),
Tele-Communications, Inc. ("TCI"), Comcast Corporation ("Comcast") and Cox
Communications, Inc. ("Cox", and together with Sprint, TCI and Comcast, the
"Parents"). TCI, Comcast and Cox are collectively referred to as the "Cable
Parents".
Business of Sprint Spectrum Finance Corporation
Sprint Spectrum Finance Corporation ("FinCo"), a Delaware corporation,
was formed on May 21, 1996 and is a wholly-owned subsidiary of Sprint Spectrum
L.P. FinCo has nominal assets, does not conduct any operations and was formed to
be a co-obligor of the securities issued by the Company. Certain institutional
investors who might otherwise be limited in their ability to invest in
securities issued by partnerships by reasons of the legal investment laws in
their states of organization or their charter documents, may be able to invest
in the Company's securities because FinCo is a co-obligor. Accordingly, a
discussion of the results of operations, liquidity and capital resources of
FinCo are not presented. See FinCo's notes to financial statements for a
discussion of the securities with respect to which FinCo is serving as
co-obligor.
General
Sprint Spectrum intends to become a leading provider of wireless
communications products and services in the United States. The Company is the
largest broadband wireless personal communications services ("PCS" company in
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the United States in terms of total license coverage of population equivalents.
The term population equivalents ("Pops") means the Donnelley Marketing Ser-
vice estimate of the December 31, 1995, population of geographic areas
in the United States. The Company was the successful bidder for 29 PCS li-
censes in the Federal Communication Commission's ("FCC") A Block and B Block
PCS auction which concluded in March 1995. The Company's 29 wholly-owned
markets cover 150.3 million Pops and include, among others, the New York,
San Francisco, Detroit, Dallas/Fort Worth and Boston/Providence Major
Trading Areas ("MTAs"). Additionally, on February 6, 1997, Cox contributed
to the Company a PCS license for the Omaha MTA that Cox purchased in the broad-
band PCS auction in March 1995. The Company, together with other PCS licensees
that have affiliated, or are expected to affiliate with the Company, will have
licenses to provide service to the entire United States population (exclud-
ing certain United States territories).
The Company is in the development stage and has minimal revenues from
operations. Sprint Spectrum commenced initial commercial PCS operations late in
the fourth quarter of 1996. As of March 14, 1997, the Company has launched
service in Fresno, California; Spokane, Washington; Portland, Oregon; Milwaukee,
Wisconsin; Albany and Syracuse, New York; Pittsburgh, Pennsylvania; Salt Lake
City, Utah; Oklahoma City and Tulsa, Oklahoma; Little Rock, Arkansas; Des
Moines, Iowa City and Cedar Rapids, Iowa; the Rio Grande Valley in Texas
(including Brownsville, Harlingen and McAllen); Louisville, Kentucky; and
Wichita, Kansas.
Affiliations
To increase its network Pop coverage, the Company has affiliated, and
expects to continue to affiliate with, other PCS providers, including those in
which Holdings or affiliates of its Parents have an interest. Pursuant to
affiliation agreements, each affiliated PCS service provider will be included in
the Company's national network and will use the Sprint(R) (a registered
trademark of Sprint Communications Company, L.P.) brand name. In return for this
right, the affiliated PCS provider agrees to offer certain products designated
by Sprint Spectrum, to adhere to certain technical standards for the affiliated
PCS provider's network and to share in certain costs, such as advertising, that
benefit both the affiliated PCS provider and Sprint Spectrum. The affiliated PCS
provider pays a fee for the services and reimburses Sprint Spectrum for certain
direct costs attributable to the affiliate. The affiliation agreements between
Sprint Spectrum and other PCS providers are not presently subject to regulation
by the FCC.
Holdings owns a 49% limited partnership interest in American PCS, L.P.
("APC"), a limited partnership that owns a PCS license for, and operates a
broadband PCS system in, the Washington D.C./Baltimore MTA. APC has affiliated
with Sprint Spectrum and is marketing its products and services under the Sprint
brand name. APC launched its PCS service in November 1995 and was the nation's
first commercially operational PCS system. On December 31, 1996, Holdings
acquired a 49% limited partnership interest in Cox Communications PCS, L.P.
("Cox PCS"), a partnership that was formed to hold a PCS license for the Los
Angeles/San Diego MTA covering 21.5 million Pops. Cox which currently owns this
license, will contribute the license to Cox PCS (pending FCC approval) and will
manage and control Cox PCS. The Company signed an affiliation agreement with Cox
PCS concurrently with the execution of the Cox PCS partnership agreement. Cox
PCS launched service in San Diego, California on December 27, 1996.
The Company also expects to affiliate with and provide various services
to PhillieCo, L.P. ("PhillieCo"), a limited partnership organized by and among
subsidiaries of Sprint, TCI and Cox that owns a PCS license for the Philadelphia
MTA covering 9.1 million Pops. The Company also expects to affiliate with
SprintCom, Inc. ("SprintCom"), an affiliate of Sprint, which participated in the
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FCC's D and E Block auction which ended January 14, 1997, and was awarded
licenses for 139 of 493 Basic Trading Areas ("BTAs") covering 70 million Pops,
all of which are geographic areas not covered by the Company's owned PCS
licenses or licenses owned by PhillieCo, APC or Cox PCS. The Company is in the
process of negotiating an agreement with SprintCom to build out the network
infrastructure in certain BTA markets where SprintCom was awarded PCS licenses.
In accordance with an agreement among the Partners and the Amended and Restated
Agreement of Limited Partnership of MajorCo, L.P. (renamed Sprint Spectrum
Holding Company , L.P.) dated January 31, 1996 (the "Partnership Agreement"),
SprintCom is required to offer to enter into an affiliation agreement with
Holdings with respect to such BTA licenses pursuant to which SprintCom's systems
in such areas would be included in the Company's national PCS network, although
no assurance can be given that SprintCom and Holdings will enter into any such
affiliation agreement.
Network Buildout
The buildout of the Company's network involves systems design,
acquisition of cell sites, equipment procurement, relocation of existing
microwave users, interconnection with other communications providers,
construction of cell sites, installation of switches, and implementation of
advanced management information and billing systems. A team comprised of
engineering and operations employees and independent contractors and
consultants, is designing and constructing the Sprint Spectrum network based on
the regional marketing and product requirements to meet the Company's targets
for consistency, uniformity and reliability.
Rollout methodology. The Company's principal objective is to maximize
population coverage levels within targeted demographic segments and geographic
areas. Sprint PCS began offering commercial service late in the fourth quarter
of 1996 in portions of 8 of 31 MTAs, with service expected in certain areas of
most markets during the summer of 1997. Thereafter, the Company will evaluate
further coverage expansion on a market-by-market basis. In developing its PCS
network requirements, Sprint Spectrum will consider, among other things,
population and traffic density, FCC coverage requirements and the ability to
cluster groups of markets.
RF design. The RF design for coverage of 57% of the Pops in the
Company-owned license areas in the aggregate has been approved. This process
includes cell site design, frequency planning and network optimization for each
of Sprint Spectrum's markets. RF engineering also allocates voice channels and
assigns frequencies to cell sites taking into consideration both PCS and
microwave interference issues.
Property acquisition. The Company employs Engineering and Operations
directors to manage the buildout process and subsequently to have responsibility
for operating the network. Property acquisition managers are located within each
MTA and are responsible for identifying and obtaining the required property for
buildout of the PCS network.
The Company has hired property acquisition firms for each MTA to assist
with acquisition, zoning, permitting and appropriate surveying. The Company is
attempting to minimize property acquisition activity through utilization of the
Parents' assets and cable infrastructure, where possible. The cell site
selection process requires the lease or acquisition of approximately 5,300 sites
in 31 MTAs prior to completion of the initial phase of the buildout, many of
which have required the Company to obtain zoning variances or other local
governmental or third-party approvals or permits. As of March 14, 1997, the
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Company had signed leases or options for 4,702 sites, of which 519 were pending
zoning. There are currently 2,084 sites either under construction or completed.
Microwave relocation. Sprint Spectrum must relocate existing 2GHz
commercial microwave service users within its MTAs in order to clear its
spectrum. The Company has contracted with national vendors to assist in the
microwave relocation process. Recently, the FCC adopted a microwave relocation
cost-sharing plan that limits permissible relocation costs and outlines new
procedures for the sharing of relocation costs where the relocation of private
microwave facilities benefits multiple broadband PCS licenses.
Approximately 1,400 co-channel and adjacent-channel microwave paths
which may affect Sprint Spectrum's rollout need to be relocated by the Company,
of which approximately 500 were required for service launch. As of March 14,
1997, 919 relocation agreements were under negotiation, 1,067 agreements had
been reached and 590 paths had been relocated. The Company has entered into
various cost-sharing arrangements that provide for sharing among affected PCS
license holders of expenses associated with microwave relocation.
Interconnection. Sprint Spectrum's network is connected to the Public
Switched Telephone Network. Such interconnection is required to facilitate
originating and terminating traffic between the Company's facilities and both
the incumbent local exchange and long distance carriers. The Company uses Sprint
as its interexchange carrier and the agreement for such service is covered under
the Holdings Partnership Agreement.
Roaming. Subject to entering into arrangements with analog cellular
providers, wireless service providers are able to offer service to subscribers
from other systems who are traveling in or through their service area. Customers
typically pay higher rates while "roaming" outside of their home market. Roaming
is made possible in today's analog cellular environment by virtue of common
frequency and signaling technology. PCS and analog cellular systems operate on
different frequencies and with different signaling technologies.
Within its own network, the Company plans to offer "traveling" plans for
subscribers who use the Company's network outside of their home markets.
Features and services will operate identically across all of the Company's
markets. As a result, travelers will be encouraged to access the network anytime
and anywhere.
In areas where CDMA-based PCS service is not available, the Company may
offer a roaming option on the traditional analog cellular system via dual-mode,
dual-band handsets capable of transmitting over cellular frequencies. The
Company may also offer a roaming option over other CDMA-based PCS systems.
Access to cellular coverage is dependent on availability of dual-mode, dual-band
handsets which the Company believes will become available late in the first half
of 1997. The Company has not entered into any such agreements with any cellular
providers nor can there be any assurance that the Company will enter into any
agreements.
Regulation
The FCC regulates the licensing, construction, operation, acquisition
and interconnection arrangements of wireless telecommunications systems in the
United States under the Communications Act of 1934, as amended by the
Telecommunications Act of 1996 (the "Communications Act").
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Pursuant to the Communications Act, the FCC has promulgated, and is in
the process of promulgating, a series of rules, regulations and policies to (i)
grant or deny licenses for PCS frequencies, (ii) grant or deny PCS license
renewals, (iii) rule on assignments and/or transfers of control of PCS licenses,
(iv) govern the interconnection of PCS networks with other wireless and wireline
carriers, (v) establish access and universal service funding provisions, (vi)
impose fines and forfeitures for violations of any of the FCC's rules, and (vii)
regulate the technical standards of PCS networks.
Recent events: The Telecommunications Act of 1996. On February 8, 1996,
Congress enacted the Telecommunications Act of 1996 (the "1996 Act"). The 1996
Act is supposed to create a procompetitive, deregulatory national policy to
accelerate competitive development of telecommunications offerings, expand the
availability of telecommunications services to all segments of the public and
streamline regulation of the telecommunications industry by removing regulatory
burdens. The FCC, state public utility commissions ("PUCs") and a federal-state
joint board are charged with implementing the 1996 Act. On February 12, 1996,
the FCC released its tentative schedule for implementation of the 1996 Act's
mandates, many of which will be implemented within six to 18 months. Some
specific provisions of the 1996 Act are expected to affect PCS service
providers.
PCS licensing. The FCC established service areas for PCS throughout the
United States and its possessions and territories based upon the Rand McNally
market definition of 51 MTAs and 493 smaller BTAs. At least two BTAs are
contained within each MTA.
The FCC has allocated 120 MHz of radio spectrum in the 1850 to 1990 MHz
band, divided into six separate spectrum blocks, for licensed broadband PCS
services. The A and B Blocks are 30 MHz each and are allocated to the 51 MTAs.
The FCC sponsored auctions for the A and B Blocks that ended in March 1995, and
the FCC granted the A and B Block licenses in June 1995. Aggregate bids in the A
and B Block auctions totaled $7.72 billion representing an average price of
$15.29 per Pop. The remaining blocks, C (30 MHz), D (10MHz), E (10MHz) and F
(10MHz), are allocated to the 493 BTAs. The C Block auction ended on May 6,
1996, and the D, E and F Block auctions ended January 14, 1997. Neither the
Company, nor Holdings participated in the C, D, E or F Block auctions. However,
as stated above, SprintCom was awarded PCS licenses for 139 of 493 BTAs in the D
and E Block auctions.
A PCS license has been awarded for each block in every MTA or BTA for a
total of more than 2,000 licenses. The licenses in each block collectively cover
the United States and its territories. Therefore, any one location may have up
to six PCS service providers who own a license to serve that location, in
addition to the two incumbent cellular license holders. It is expected that some
or all of the PCS license holders who offer services, as well as the incumbent
cellular license holders, will be in competition with the Company.
The FCC revised its rules regarding spectrum aggregation limits that may
affect PCS licensees. The FCC now prohibits a single entity from having a
combined attributable interest (20% or greater interest in any license) in
broadband PCS, cellular and SMR licenses totaling more than 45 MHz in any
geographic area.
Pioneer's preference program. Holdings has a non-controlling equity
interest in APC, one of three recipients of an FCC broadband PCS Pioneer's
Preference license ("Pioneer's Preference") which effectively reduces the cost
of a license by awarding it outside of the auction process. Holdings also has a
non-controlling interest in Cox PCS, which holds a broadband PCS Pioneer's
Preference license awarded to Cox. Following several parties' unsuccessful legal
challenges in the United States Court of Appeals for the District of Columbia
Circuit to the FCC's awards of Pioneer's Preferences, the FCC in
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March 1996 ruled that the Pioneer's Preference licensees must begin
making installment payments on their licenses. Cox and APC must pay,
respectively, approximately $252 million, plus interest, for the Los Angeles-San
Diego MTA and approximately $102 million, plus interest, for the
Washington-Baltimore MTA over a five-year period. The Company is not directly
obligated to make any payments to the FCC with respect to the Pioneer's
Preference licenses held by APC or Cox PCS.
The District of Columbia Circuit Court of Appeals recently vacated an
FCC order denying a Pioneer's Preference license for Qualcomm, Inc. and
instructed the FCC to further consider its decision. Qualcomm had sought a
Pioneer's Preference license for southern Florida, specifically a region that
included Miami and surrounding communities. WirelessCo, L.P., a subsidiary of
the Company, holds the A Block Miami-Ft. Lauderdale MTA license. It is highly
improbable that the FCC would revisit its award of PCS licenses for the
Miami-Ft. Lauderdale MTA, but such a result cannot be guaranteed.
Transfers and assignments of PCS licenses. Pursuant to the
Communications Act, the FCC must give prior approval to the assignment or
transfer of control of a PCS license. In addition, the FCC has established
transfer disclosure requirements that require licensees that assign or transfer
control of a PCS license within the first three years to file associated
contracts for sale, option agreements, management agreements or other documents
disclosing the total consideration that the applicant would receive in return
for the transfer or assignment of the license. Non-controlling interests in an
entity that holds a PCS license or PCS networks generally may be bought or sold
without prior FCC approval.
Foreign ownership restrictions. The Communications Act restricts foreign
investment in and ownership of certain FCC radio licenses, including PCS
licensees. Non-United States citizens or their representatives, foreign
governments or their representatives, or corporations organized under the laws
of a foreign country may not own more than 20% of a common carrier PCS licensee
directly or more than 25% of the parent of a common carrier PCS licensee. If it
would serve the public interest, the FCC has the authority to permit the parent
of the licensee to exceed the 25% limit. However, the FCC lacks the authority to
permit a licensee itself to exceed the 20% limit on foreign ownership. If an
entity fails to comply with the foreign ownership requirements, the FCC may
order the entity to divest alien ownership to bring the entity into compliance
with the Communications Act. Other potential sanctions include fines, a denial
of renewal or revocation of the license. The Communications Act eliminates the
existing restrictions on the number of alien officers and directors of FCC
licensee companies and companies controlling FCC licensees.
Conditions on PCS licenses. All PCS licenses are granted for 10-year
terms conditioned upon timely compliance with the FCC's buildout requirements.
Pursuant to the FCC's buildout requirements, all 30 MHz broadband PCS licensees
must construct facilities that offer coverage to one-third of the population of
their service area(s) within five years of their initial license grant(s) and to
two-thirds of the population within 10 years. Licensees that fail to meet the
buildout requirements may be subject to license forfeiture. The FCC intends to
conduct random audits to ensure that licensees are in compliance with the FCC's
holding period and attribution rules. Rule violations could result in license
revocations, forfeitures or fines.
PCS license renewal. PCS licensees can renew their licenses for an
additional 10 years. PCS renewal applications are not subject to auctions.
However, under the FCC's rules, third parties may oppose renewal applications
and/or file competing applications. If one or more competing applications are
filed, a renewal application will be subject to a comparative renewal hearing.
The FCC's rules afford PCS renewal applicants involved in comparative renewal
hearings with a "renewal expectancy." The renewal expectancy is the most
important comparative factor in a comparative renewal hearing and is applicable
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if the PCS renewal applicant has: (i) provided "substantial" service during
its license term; and (ii) substantially complied with all applicable FCC rules
and policies as well as the Communications Act. The FCC's rules define
"substantial" service as service that is sound, favorable and substantially
above the level of mediocre service that might minimally warrant renewal.
FCC relocation requirements. The spectrum allocated by the FCC for PCS
services is now occupied by existing microwave facilities. PCS licensees must
relocate such incumbent microwave facilities operating on the same frequencies
to avoid interference problems. The FCC's rules require the PCS licensee to
provide the microwave licensee with comparable facilities at the PCS licensee's
own expense and to ensure the facilities are "equal to or superior to existing
facilities." In order to encourage parties to negotiate relocation agreements,
the FCC's rules require, for existing A and B Block licensees other than public
safety agencies, a two-year voluntary negotiation period followed by a one-year
mandatory negotiation period if voluntary negotiations fail. The FCC recently
reduced the voluntary negotiation period to one year for C, D, E and F Block
licensees. Separate negotiation periods are applicable to public safety
agencies, which are entities dedicating a majority of their communications
systems for police, fire or emergency medical services operations involving
safety of life and property. The FCC's rules require public safety agencies to
undertake a three-year voluntary negotiation period followed by a two-year
mandatory negotiation period, if necessary. If an agreement is not reached, the
incumbent microwave licensee may be involuntarily relocated provided that the
PCS licensee pays for comparable facilities. The FCC recently revised its
microwave relocation rules to clarify permissible relocation costs that must be
assumed by PCS licensees during the mandatory period and to implement new
procedures for the sharing of relocation costs where the relocation of private
microwave facilities benefits multiple broadband PCS licensees. Incumbent
microwave carriers that voluntarily relocate their own facilities may
participate in the cost-sharing plan.
Interconnection. Under the 1996 Act both the FCC and statePUCs regulate
the terms of interconnection between broadband PCS networks and the networks of
local exchange carriers. On August 8, 1996, the FCC issued interconnection rules
that generally required symmetrical reciprocal rates for the transport and
termination of local telecommunications traffic between a PCS network and a
local exchange carrier's network, i.e. the PCS provider and local exchange
carrier pay each other the same rate for transporting and terminating local
traffic that originates on the other's network (the "FCC Interconnection
Rules"). Implementation of the pricing and various other provisions of the FCC
Interconnection Rules was stayed by the Eighth Circuit Court of Appeals on
October 15, 1996, with part of the stay lifted for wireless carriers on November
1, 1996. Interconnection agreements negotiated between PCS providers and local
exchange carriers under the provisions of the 1996 Act and the FCC
Interconnection Rules are subject to state PUC approval. The FCC Interconnection
Rules were challenged by several local exchange carriers as contrary to the 1996
Act, and those challenges were consolidated in a proceeding before the Eighth
Circuit Court of Appeals.
Pending resolution of the current FCC and related court proceedings
concerning interconnection, the Company is, in any case, negotiating
interconnection agreements within its service areas. It is expected that those
agreements will contain more favorable terms and conditions including price than
has historically been available to wireless carriers, but this result cannot be
guaranteed. The exact scope of this benefit cannot be known at this time.
Expanded interconnection obligations. Under the 1996 Act, all
telecommunications carriers, likely including broadband PCS providers, must
interconnect with other carriers. The 1996 Act also imposes a detailed list of
"interconnect" obligations upon LECs including resale, number portability,
dialing parity, access to rights-of-way and reciprocal compensation.
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Other FCC requirements. In June 1996, the FCC adopted rules that
prohibit broadband PCS providers from unreasonably restricting or disallowing
resale of their services or unreasonably discriminating against resellers.
Resale obligations will automatically expire five years after the FCC has
concluded its initial round of licensing of currently allocated broadband PCS
spectrum. The FCC concluded its initial licensing round in January 1997. The FCC
is also considering whether wireless providers should be required to offer
unbundled communications capacity to resellers who intend to operate their own
switching facilities.
The FCC recently extended an existing rule to require broadband PCS and
other Commercial Mobile Radio Service ("CMRS") providers to provide "manual"
roaming service that allows customers of one wireless provider to obtain service
while roaming in another wireless provider's service area. Such customers must
first establish a service relationship with the host system, by, for example,
supplying a valid credit card number to the host system. In addition, the FCC is
considering whether broadband PCS and other CMRS providers should be required
also to offer "automatic" roaming agreements on a nondiscriminatory basis that
would allow customers to roam by simply turning on their handsets in a host
market.
The FCC recently adopted rules permitting broadband PCS networks and
other CMRS providers to provide wireless local loop and other fixed services
that would directly compete with the wireline services of LECs. In June 1996,
the FCC adopted rules requiring broadband PCS and other CMRS providers to
implement enhanced emergency 911 capabilities within 18 months after the
effective date of the FCC's rules.
The Company may use common carrier point-to-point microwave and
traditional landline facilities to connect cell sites and to link them to their
respective main switching offices. The FCC will license these microwave
facilities separately and regulate the technical parameters and service
requirements of these facilities.
Other federal regulations. Wireless systems must comply with certain FCC
and FAA regulations regarding the siting, lighting and construction of
transmitter towers and antennaes. In addition, certain FCC environmental
regulations may cause certain cell site locations to become subject to
regulation under the National Environmental Policy Act.
Review of universal service requirements. Although the 1996 Act
contemplates that wireless providers will "make an equitable and
non-discriminatory contribution" to support the cost of providing universal
service, the FCC is authorized to exempt carriers if their contribution would be
de minimis.
Public utility "telecommunications" services. The 1996 Act modifies the
Public Utilities Holding Company Act of 1935 to permit public utilities subject
to that Act to engage in the provision of telecommunications and information
services.
BOC entry into in-region interLATA services. Before engaging in
in-region interLATA services, the 1996 Act requires Bell Operating Companies
("BOCs") to provide access and interconnection to one or more unaffiliated
competing providers of telephone exchange service. BOCs must offer the following
interconnection services on a non-discriminatory basis: interconnection and
unbundled access; access to poles, ducts, conduits and rights-of-way owned or
controlled by BOCs; unbundled local loops; unbundled local transport; unbundled
local switching; access to emergency 911, directory assistance, operator call
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completion and white pages; access to telephone numbers, databases and
signaling for call routing and completion; number portability; local dialing
parity; reciprocal compensation; and resale.
The 1996 Act permits BOCs immediately to provide "incidental" interLATA
services including the provision of CMRS. The FCC has concluded that existing
accounting safeguards will apply to BOC provision of long distance services over
their CMRS (including PCS) networks.
BOC commercial mobile joint marketing. Under the 1996 Act, BOCs and any
other company may jointly market and sell commercial mobile services, including
cellular and PCS, together with telephone exchange service, exchange access,
intraLATA telecommunications service, interLATA telecommunications service and
information services. A BOC, however, may not jointly market telephone exchange
service and any long distance service until certain conditions have been met.
Partitioning. The FCC recently modified its rules to allow broadband PCS
licensees to partition their market areas and/or to disaggregate their assigned
spectrum and to transfer partial market areas or spectrum assignments to
eligible third parties. The Rural Telecommunications Group has sought a judicial
stay and review of the decision, arguing that only rural telephone companies
should be eligible to partition PCS licenses.
Wireless facilities siting. Under the 1996 Act, states and localities
cannot regulate the placement of wireless facilities so as to "prohibit" the
provision of wireless services or to "discriminate" among providers of such
services. In addition, so long as a wireless system complies with the FCC's
rules, the 1996 Act prohibits states and localities from using environmental
effects as a basis to regulate the placement, construction or operation of
wireless facilities. The FCC is considering numerous requests for preemption of
local actions affecting wireless facilities siting.
Equal access. Under the 1996 Act, wireless providers are not required to
provide equal access to common carriers for toll services. However, the FCC is
authorized to require unblocked access to toll carriers subject to certain
conditions.
Deregulation. The 1996 Act requires the FCC to forebear from applying
any statutory or regulatory provision if it is not necessary to keep
telecommunications rates and terms reasonable or to protect customers.
Correspondingly, a state may not apply a statutory or regulatory provision that
the FCC decides not to apply. In addition, the FCC must review its
telecommunications regulations every two years to determine if any can be
eliminated or modified as no longer in the public interest as a result of
increased competition.
Marketing and Distribution
The Company's current marketing strategy is to differentiate itself
through its state-of-the-art network, use of the established and respected
Sprint brand name, customer-care systems, diverse distribution channels and
sales and packaging arrangements with the Parents. The Company will build on
Sprint's strong national identity, using regional and local marketing to tailor
programs to the demands of individual markets. The Company has formed
segmentation and distribution strategies targeted at both consumer and business
markets.
The Company uses multiple methods of distribution in each of its
markets; and will continue to review and implement new distribution channels in
the future as it determines the most effective combination of options. Current-
11
<PAGE>
ly the Company uses third-party national and regional retail distribution
channels, Company-owned retail stores, direct sales force and telemarketing. The
Company also intends to cross-market the Company's wireless services with the
long distance, local telephone and cable-based entertainment services of the
Parents in order to increase customer acquisition and retention. By using the
Cable Parents' regular contacts with their customers, including bill inserts and
customer service contacts, the Company intends to build market share of its
wireless services efficiently. The Company also expects to be able to build on
Sprint's distribution capabilities, through Sprint's long distance and local
telephone divisions.
Trademarks
The Company does not currently own any trademarks or patents, though it
has applied for various trademarks and patents. Sprint(R) is a registered
trademark of Sprint Communications Company, L.P. ("Sprint Communications") and
Sprint(R) and Sprint PCS(R) are licensed to the Company on a royalty-free basis
pursuant to a trademark license agreement between Sprint Communications and the
Company. Sprint Communications may terminate this agreement (i) upon the
dissolution and winding up of the Company, (ii) upon the bankruptcy of the
Company, (iii) upon the failure of the Company to perform in accordance with the
material terms of the agreement or for a breach of its representations and
warranties or (iv) if the Company challenges Sprint's rights to the Sprint
trademark and the associated logo. The Company may terminate the agreement (i)
if Sprint Communications abandons or fails to support its trademark and
associated logo, (ii) upon the bankruptcy of Sprint Communications, (iii) if
Sprint Communications takes action that conflicts with the Company's rights to
use the trademark and associated logo or (iv) if Sprint Communications breaches
its covenant to license the trademark and associated logo to additional
licensees in accordance with the terms of the agreement. Subject to certain
conditions, each of the Company and Sprint Communications may terminate the
agreement if a controlled affiliate of Sprint ceases to own any equity interest
in Holdings. Within thirty days of termination, or in certain circumstances on a
specified termination date, the Company's rights to use the trademark and
associated logo will cease.
Pursuant to certain of its third party supplier contracts, Sprint
Spectrum has certain rights to use third party supplier trademarks in connection
with the buildout, marketing, and operation of its network.
Products and Services
With its all-digital national wireless network, the Company plans to
introduce a wide array of services and features that are designed to enhance
utility, provide consumers greater capabilities in call management and increase
usage for both outgoing and incoming calls.
Outgoing Calls. Features that encourage customers to make outgoing
calls include: improved call quality, advanced handsets, national consistency
and customer-driven local calling areas.
Incoming Calls. Features that encourage customers to receive calls in-
clude: caller ID, message management, including voicemail and integrated pag-
ing, and improved battery technology.
The Company believes that the market for wireless communications will
shift over time from today's traditional voice mobility applications which
supplement customers' wireline service to an environment in which wireless
begins to expand into the wireline market, both as a primary communications de-
12
<PAGE>
vice and as a means of providing advanced functionality. The Company
intends to develop products, services and features which will serve to increase
network utilization above historical cellular usage while simultaneously
containing costs.
Technology
Wireless digital signal transmission is accomplished through the use of
various frequency management technologies, or "protocols." The FCC has not
mandated a universal digital protocol for PCS systems. Currently, various
vendors have proposed three principle competing, incompatible protocols for use
in PCS systems: CDMA, GSM and TDMA (IS-136).
The GSM protocol is an updated, up-banded version of the TDMA-based
protocol now in use in Europe. TDMA (IS-136) is an up-banded version of the
TDMA-based digital cellular protocol now used by cellular operators in the
United States. CDMA is a first-generation technology that is just beginning to
be commercially deployed in the United States. The Company believes that the
CDMA protocol will be the most widely adopted PCS protocol in the United States.
The Company has selected CDMA technology rather than the other
technologies because it believes it will have increased subscriber capacity,
higher quality of transmission and lower infrastructure and ongoing support
costs. The Company believes that CDMA provides the following benefits:
performance, cost effectiveness, functionality, security and capacity.
Equipment Vendors
Sprint Spectrum has selected Lucent Technologies Inc. ("Lucent") and
Northern Telecom Inc. ("Nortel"), two of the leading telecommunications
equipment manufacturers, to construct the wireless network because of their
extensive experience in wireless technology and their willingness to guarantee
delivery in accordance with specifications developed by the Company. In
addition, the Company has obtained from Nortel and Lucent financing to fund the
purchase of their respective equipment and the construction of their assigned
portions of the network. To mitigate against a substantial portion of the risks
of completion delay and performance of the network and to ensure the Company has
received competitive terms and conditions, the procurement agreements with each
of Lucent and Nortel include, among other things, deferred payment schedules,
liquidated damages provisions, extended warranty periods and "most favored
customer" status.
Sprint Spectrum has entered into two agreements for the purchase of
handsets. The first agreement is a three-year purchase and supply agreement for
CDMA handsets with Qualcomm Personal Electronics, which is a partnership formed
by QUALCOMM Incorporated ("Qualcomm") and Sony Electronics Inc. Pursuant to the
agreement, Qualcomm will manufacture CDMA handsets for the Company. In addition,
Qualcomm will provide training for the Company's sales personnel and will work
with the Company to develop new products for the Company's PCS network. In
addition, the Company entered into an agreement with Samsung Electronics Co.,
Ltd. ("Samsung") for an initial term of three years. Under this agreement,
Samsung will manufacture CDMA handsets for the Company. Additionally, Samsung
will provide training for the Company's sales personnel. The Company also
expects to source handsets from other vendors in mid-1997 and is currently
negotiating purchase and supply agreements on a preliminary basis with such
other vendors.
13
<PAGE>
Competition
General. The wireless telecommunications industry is experiencing
significant technological changes, as evidenced by the increasing pace of
improvements in the capacity and quality of digital technology, shorter cycles
for new products and enhancements and changes in consumer preferences and
expectations. Accordingly, the Company expects competition in the wireless
telecommunications business to be dynamic and intense as a result of the
entrance of new competitors and the development of new technologies, products
and services.
Each of the markets in which the company competes will be served by
other two-way wireless service providers, including cellular and PCS operators
and resellers. Many of these competitors have been operating for a number of
years, currently serve a substantial subscriber base and have significantly
greater financial and technical resources than those available to the Company.
Certain of the Company's competitors are operating, or planning to operate,
through joint ventures and affiliation arrangements, wireless telecommunications
systems that encompass most of the United States.
The Company will also face competition from other current or
developing technologies, such as paging, Enhanced Specialized Mobile Radio
("ESMR") and satellite networks. In addition, as a result of advances in digital
technology, ESMR operators have begun to design and deploy digital mobile
networks that increase the channel capacity of ESMR systems to a level that may
be competitive with that of cellular systems. A limited number of ESMR operators
have recently begun offering short messaging, data services and interconnected
voice telephony services on a limited basis. Several ESMR licensees have
recently merged into one company and plan to build and operate digital mobile
networks in most major United States markets.
Several entities have received, and several others are seeking, FCC
authorization to construct and operate global satellite networks to provide
domestic and international mobile communications services from geostationary and
low earth orbit ("LEO") satellites. While geostationary orbiting satellites are
subject to transmission delays inherent in high earth orbit satellite
communications, a mobile satellite system could reduce transmission delays with
LEO satellites and could augment or replace communications with segments of
land-based wireless systems. Based on current technologies, however, satellite
transmission services are not expected to be competitively priced relative to
the Company's product offering in its markets. Sprint has an interest in a
satellite-based mobile telecommunications business entity.
Continuing technological advances in telecommunications and FCC
policies that encourage the development of new spectrum-based technologies make
it impossible to predict the extent of future competition. The FCC has adopted
rules that provide preferences, including discounted licenses, to companies that
develop new spectrum-based communications technologies without bidding in
FCC-sanctioned auctions. Such a preference may encourage the development of new
technologies that compete with cellular and PCS service. In addition, the
Omnibus Budget Reconciliation Act of 1993 (the "Budget Act") requires, among
other things, the allocation to commercial use of a portion of 200 MHz of the
spectrum currently reserved for government use. It is possible that some portion
of the spectrum that is reallocated will be used to create new land-mobile
services or to expand existing land-mobile services.
The Company expects to compete with other communications technologies
that now exist, such as conventional mobile telephone service, ESMR systems and
paging services and with cellular and PCS resellers. In the future, cellular
service and PCS will also compete more directly with traditional communications
14
<PAGE>
services over their cable systems. In addition, the Company may face compe-
tition from technologies that may be introduced in the future.
The Company anticipates that market prices for two-way wireless
services generally will decline in the future based upon increased competition.
The Company competes to attract and retain customers principally on the bases of
services and features, its customer service, the size and location of its
service areas and pricing. The Company's ability to compete successfully also
depends, in part, on its ability to anticipate and respond to various
competitive factors affecting the industry, including new services that may be
introduced, changes in consumer preferences, demographic trends, economic
conditions and discount pricing strategies by competitors, which could adversely
affect the Company's operating margins.
The Company's PCS business will directly compete with several other
PCS providers in each of its PCS markets, including AT&T Wireless Services,
Inc., BellSouth Telecommunications, Inc., Omnipoint Corporation, Pacific Bell
Mobile Services, Inc., PCS PrimeCo L.P. and Western Wireless Corporation. The
Company also expects that existing analog wireless service providers in the PCS
markets, some of which have been operational for a number of years and have
significantly greater financial and technical resources than those available to
the Company, will upgrade their systems to provide comparable services in
competition with its PCS system. These cellular competitors include AirTouch,
AT&T Wireless Services, Inc., BellSouth Mobility, Inc., Ameritech Mobile
Communications, Inc., Bell Atlantic NYNEX Mobile, Southwestern Bell Mobile
Systems, GTE Mobilnet, Inc. and U.S. Cellular Corp.
Handsets used for CDMA-based PCS systems will not be automatically
compatible with cellular systems, and vice versa. The Company expects dual-mode,
dual-band telephones to be commercially available late in the first half of 1997
(although sufficient quantities may not be commercially available until the
first quarter of 1998). Once such handsets are available, if the Company decides
to offer roaming services and is able to secure contracts with cellular
providers, subscribers may be able to roam by using the existing cellular
wireless system in other markets. Until then, this lack of interoperability may
impede the company's ability to attract current cellular subscribers or
potential new wireless communication subscribers that desire the ability to
access different service providers in the same market.
Initially, the cost to the Company of PCS handsets may not be
competitive with the cost to analog operators of analog cellular handsets. While
the Company believes that its PCS handsets will be competitively priced as
compared to digital cellular handsets of comparable size, weight and features,
cellular operators may subsidize the sale of digital handset units at prices
below those with which the Company can compete through the Company's handset
subsidies.
Employee Relations
At March 14, 1997, the Company employed approximately 4,500 personnel.
None of the Company's employees are represented by a labor union. Management
believes that the Company's employee relations are good. The Company is engaging
independent contractors to perform a variety of functions, including
construction and maintenance of the Company's network, information technology,
advertising, accounting and data processing.
15
<PAGE>
Item 2. Properties
As of December 31, 1996, the Company occupied approximately 360,000
square feet of leased headquarters space in metropolitan Kansas City, Missouri.
The Company plans to increase its leased headquarters space to approximately
500,000 square feet by the end of the third quarter of 1997. The Company
occupies 73,000 square feet, consisting of both owned and leased space, in
Lenexa, Kansas for use by network monitoring personnel.
The Company leases a 150,000 square foot facility in Ft. Worth, Texas
for its customer care center. The Company has also leased 61 retail stores
(approximately 198,000 square feet) and expects to lease additional retail
space.
As of December 31, 1996, the Company currently has leased 32 Field
Operations offices (approximately 367,000 square feet in the aggregate) and 35
MTA offices (approximately 500,000 square feet). The Company expects to lease
additional facilities for Field Operations and MTA sites. The Company is also
leasing space for base station towers and switch sites as it constructs its
nationwide network. The Company has leased or purchased 39 switch sites and has
entered into leases or options to lease a total of 4,481 cell sites.
Item 3. Legal Proceedings
The Company is involved in various legal proceedings incidental to the
conduct of its business. Since the enactment of the 1996 Act, the Company has
been involved in various legal proceedings in various states concerning the
imposition of moratoria on the processing or approval of permits for wireless
telecommunication towers, the denial of applications for permits and other
issues arising in connection with tower siting. There can be no assurance that
such litigation, and similar actions taken by others seeking to block actions
necessary for the construction of the Company's network in other locations, will
not, in the aggregate, have a material effect on the Company. While it is not
possible to determine the ultimate disposition of each of these proceedings, the
Company believes that the outcome of such proceedings, individually and in the
aggregate, will not have a material adverse effect on the Company's financial
condition or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
At December 31, 1996, the Company did not have common equity.
16
<PAGE>
Item 6. Selected Financial Data
For information required by Item 6, refer to the "Selected Financial
Data" section of the Financial Statements and Financial Statement Schedule filed
as part of this report.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For information required by Item 7, refer to the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
section of the Financial Statements and Financial Statement Schedule filed as
part of this report.
Item 8. Financial Statements and Supplementary Data
For information required by Item 8, refer to the Company's "Consolidated
Financial Statements" and the "Quarterly Financial Data" section of the
Financial Statements and FinCo's "Financial Statements" filed as part of this
report.
Item 9. Changes in and Disagreements With Accountants on Accounting and Finan-
cial Disclosure
None.
17
<PAGE>
Item 10. Directors and Executive Officers of the Registrants
The executive officers of the registrants and their respective positions
with Sprint Spectrum and FinCo are set forth below. In addition, the
representatives of the Partnership Board of Holdings are set forth below. Sprint
Spectrum does not have a partnership board but is managed by Holdings in its
capacity as general partner. The Board of Directors of FinCo is comprised of
Andrew Sukawaty, Robert M. Neumeister, Jr. and Joseph M. Gensheimer. The ages of
the individuals set forth below are as of December 31, 1996.
Name Age Positions
Andrew Sukawaty............ 41 Chief Executive Officer and President of
Sprint Spectrum; President of FinCo (1)
Arthur A. Kurtze........... 52 Chief Operating Officer of Sprint Spectrum
Bernard A. Bianchino....... 48 Chief Business Development Officer of Sprint
Spectrum
Robert M. Neumeister, Jr... 47 Chief Financial Officer of Sprint Spectrum;
Vice President and Treasurer of FinCo
F. Edward Mattix........... 43 Chief Public Relations Officer of Sprint
Spectrum
Charles E. Levine.......... 43 Chief Marketing Officer of Sprint Spectrum
Joseph M. Gensheimer....... 45 General Counsel and Secretary of Sprint
Spectrum; Secretary of FinCo
Ronald T. LeMay............ 51 Representative on, and Chairman of, the
Holdings Partnership Board (2)
William T. Esrey........... 56 Holdings Partnership Board Representative
Gerald W. Gaines........... 40 Holdings Partnership Board Representative
Arthur B. Krause........... 55 Holdings Partnership Board Representative
James O. Robbins........... 53 Holdings Partnership Board Representative
Lawrence S. Smith.......... 49 Holdings Partnership Board Representative
- -------------------
(1) Mr. Sukawaty began serving as Chief Executive Officer and President of the
Company and President of FinCo effective September 2, 1996.
(2) Mr. LeMay served as Chief Executive Officer and President of Sprint Spec-
trum and President of FinCo until September, 1996 at which time he was
succeeded by Mr. Sukawaty.
Andrew Sukawaty, Chief Executive Officer and President
Andrew Sukawaty was appointed Chief Executive Officer and President of
Sprint Spectrum and President of FinCo effective September 2, 1996. Prior to
joining the Company, Mr. Sukawaty was Chief Executive Officer of NTL, the
British diversified broadcast transmission and communications company, since
1994. From 1989 to 1994, he was Chief Operating Officer of Mercury One-2-One,
the British company which started the world's first PCS service in the U.K. in
1993. Prior to joining Mercury One-2-One, Mr. Sukawaty held numerous positions
for US WEST, Inc., including: Chief Operating Officer of US WEST Paging,
President of Coastel, a cellular communications company, and Vice President and
branch manager for US WEST.
18
<PAGE>
Arthur A. Kurtze, Chief Operating Officer
Arthur A. Kurtze was appointed Chief Operating Officer of the Company in
June 1995. Prior to joining the Company, Mr. Kurtze was Senior Vice
President--Operations for Sprint's Local Telecommunications Division. Prior to
joining Sprint in March 1993, Mr. Kurtze was Executive Vice President in charge
of strategic planning and corporate development for Centel Corp. Mr. Kurtze
joined Centel in 1972 and served in various positions there, including Vice
President of Centel Communications Co., Vice President--Staff of Centel Business
Systems, Vice President--Market Planning for Centel Corp., Group Vice President
of Centel Cable Television Co. and Senior Vice President--Planning and
Technology.
Bernard A. Bianchino, Chief Business Development Officer
Bernard A. Bianchino was appointed Chief Business Development Officer of
the Company in September 1995. Most recently, Mr. Bianchino was Executive Vice
President, General Counsel and External Affairs for Qwest Communications
Corporation. He served as Vice President--Law, General Business for Sprint from
1992 to 1994 and as General Attorney; Vice President and Associate General
Counsel for US Sprint Communications Company from 1986 to 1992. From 1978 to
1986, Mr. Bianchino was counsel to a number of affiliates of Exxon Corporation
in its Enterprises Group, including Reliance Comm/Tec (now RELTEC) and Exxon
Office Systems. Prior to joining Exxon, he was an attorney with the United
States Department of Energy.
Robert M. Neumeister, Jr., Chief Financial Officer
Robert M. Neumeister, Jr. was named Chief Financial Officer of the
Company in September 1995 and Treasurer of FinCo in May 1996. Prior to joining
the Company, Mr. Neumeister served in various capacities at Northern Telecom
Ltd., which he joined in 1978. In June 1991, Mr. Neumeister was named Vice
President of Finance and Information Services for Northern Telecom--Canada. He
continued with Northern Telecom as Senior Vice President and Chief Financial
Officer of Motorola Nortel Communications Co., Vice President of
Finance--Americas, Vice President--Broadband Networks, Customer Network
Solutions and Vice President of Finance.
F. Edward Mattix, Chief Public Relations Officer
F. Edward Mattix was named Chief Public Relations Officer of the Company
in April 1996. Prior to joining the Company, he was Vice President--Public Rel-
ations for US WEST Communications, Inc. Mr. Mattix served in various management
level positions relating to public relations or governmental affairs since
joining US WEST, Inc. in 1976.
Charles E. Levine, Chief Marketing Officer
Charles E. Levine was appointed Chief Marketing Officer of Sprint
Spectrum effective January 27, 1997. Prior to joining the Company, Mr. Levine
was President of Octel Link and Senior Vice President of Octel Services from
1994 to 1996. From 1993 to 1994, he was President and Chief Executive Officer of
CAD Forms Technology. Prior to joining CAD Forms Technology, Mr., Levine held
numerous positions with the AT&T Corporation from 1986 to 1993, including: Team
Leader, Project Peabody, Small Business Market Team; Vice President, General
Business Systems, Products and New Services; Vice President, Consumer Products,
Product Management; Director, Consumer Products, Product Management. Mr. Levine
19
<PAGE>
has also served in management positions for the General Electric Corporation and
the Procter & Gamble Company.
Joseph M. Gensheimer, General Counsel and Secretary
Joseph M. Gensheimer was named General Counsel of the Company in October
1995 and Secretary of FinCo in May 1996. Mr. Gensheimer is responsible for all
legal and regulatory functions. Prior to joining the Company, he was Senior
Counsel for IBM's mainframe and supercomputer divisions. Prior to joining IBM in
1988, he was General Counsel and Secretary of RealCom Communications
Corporation, a telecommunications services provider. From 1982 and 1984, Mr.
Gensheimer was Senior Attorney and Assistant Secretary for GTE Corporation.
Prior to joining GTE, he was an associate at Morgan, Lewis & Bockius and an
attorney for the United States Department of Justice.
Ronald T. LeMay, Representative
Ronald T. LeMay was appointed as a representative to the Partnership
Board in September 1996 and is President and Chief Operating Officer of Sprint.
He began his telephony career with Southwestern Bell Telephone Company in 1972.
In 1983, Mr. LeMay was appointed Regional Vice President of External Affairs for
AT&T Communications in Kansas City and in February 1985, he was named Vice
President and Comptroller for AT&T Communications where he served until July
1985 when he joined United Telephone System, Inc. (a Sprint company) as Vice
President and General Counsel. In 1986 Mr. LeMay became Senior Vice President of
Operations for United Telephone System. He became Executive Vice President of
Corporate Affairs for Sprint in 1987 and Executive Vice President of Staff for
the Long Distance Division in November 1988. In October 1989, Mr. LeMay was
appointed President and Chief Operating Officer for the Long Distance Division,
a position he held until assuming responsibility for the Company in March 1995.
Mr. LeMay served as President and Chief Executive Officer of Sprint Spectrum
until September 1996. Mr. LeMay is the Vice Chairman of the Board of Directors
of Sprint and a director of the Mercantile Bank of Kansas City and Yellow
Corporation.
William T. Esrey, Representative
William T. Esrey was appointed as a representative of the Partnership
Board in March 1995. He has been the Chairman of Sprint since 1990 and its
Chief Executive Officer since 1985. Mr. Esrey is also a director of Sprint,
Equitable Life Assurance Society of America, General Mills, Inc., PanEnergy Cor-
poration and Everen Capital Corporation. Mr. Esrey currently serves on the com-
pensation committee of each of PanEnergy Corporation and Everen Capital Corpora-
tion.
Gerald W. Gaines, Representative
Gerald W. Gaines was appointed as a representative of the Partnership
Board in March 1995. He has been the President of TCI Spectrum Holdings, Inc.
and Senior Vice President of TCI Communications, Inc. since 1994. Prior to
joining TCI Communications, Mr. Gaines founded GCG, Inc., a management services
firm advising the telecommunications industry. From 1986 to 1991, Mr. Gaines
served as a senior-level executive of US WEST, Inc. as President and Chief Exe-
cutive Officer for US WEST service link. Mr. Gaines is a director of Teleport
Communications Group Inc.
20
<PAGE>
Arthur B. Krause, Representative
Arthur B. Krause was appointed as a representative of the Partnership
Board in March 1995. He is the Executive Vice President and Chief Financial
Officer of Sprint, positions which he has held since 1988. Prior to such
appointment, Mr. Krause served in other management capacities at Sprint,
including President of United Telephone-Eastern Group.
James O. Robbins, Representative
James O. Robbins was appointed as a representative of the Partnership
Board in March 1995. He has served as President of Cox since September 1985,
and as Chief Executive Officer since May 1994. Mr. Robbins joined Cox in Sep-
tember 1983 and has served as Vice President, Cox Cable New York City and as Se-
nior Vice President, Operations of Cox. Prior to joining Cox, Mr. Robbins held
management and executive positions with Viacom Communications, Inc. and Conti-
nental Cablevision. Mr. Robbins is a director of Telewest Plc, Teleport Commun-
ications Group Inc. and Cox.
Lawrence S. Smith, Representative
Lawrence S. Smith was appointed as a representative of the Partnership
Board in March 1995. He has been Executive Vice President of Comcast since De-
cember 1995. Prior to that time, Mr. Smith served as Senior Vice President of
Comcast for more than five years. Mr. Smith is the Principal Accounting Officer
of Comcast. Mr. Smith is a Director of Comcast UK Cable Partners Limited.
Committees of the Partnership Board; Compensation; Committee Interlocks
Except for the Audit Committee, there are no standing committees of the
Partnership Board. Messrs. Krause and Smith have been appointed by Sprint and
Comcast, respectively, to serve on the Audit Committee. TCI and Cox have not yet
named their representatives on the Audit Committee. Representatives receive no
compensation for serving on the Partnership Board or any committee thereof.
There are no compensation committee interlocks between Holdings and any
affiliated entity.
21
<PAGE>
Item 11. Executive Compensation
Summary Compensation of Executive Officers. The following table reflects the
cash and non-cash compensation paid by the Company for services in all
capacities for the years ended December 31, 1995 and December 31, 1996 by those
persons who served as the Chief Executive Officer during the fiscal year ended
December 31, 1996, and the other four most highly compensated executive officers
of the Company, determined as of the end of the fiscal year ended December 31,
1996 (the "Named Executives"). The amounts set forth below are only for that
portion of the respective years that the Named Executives were employed by the
Company.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
---------------------------------- ------------------------------
Securities
Name and Principal Underlying LTIP
Position Year Salary Bonus (3) Other Options/SARs Payouts($)(4)
- ---------------------------- ---- -------- ----------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Andrew Sukawaty (1)....... 1996 $ 146,552 $ 325,000 $ 63,620(5) - $ -
Chief Executive
Officer
Ronald T. LeMay(2) ....... 1996 525,002 287,000 11,500 - 315,615
Chief Executive 1995 408,333 313,250 - 132,017 398,676
Officer
Arthur A. Kurtze.......... 1996 295,692 204,294 - - -
Chief Operating 1995 171,320 107,500 - 11,000 69,890
Officer
Joseph M. Gensheimer...... 1996 302,990 107,875 172,459(6) - -
General Counsel 1995 78,161 31,150 233,381(7) - -
Robert M. Neumeister, Jr.. 1996 277,529 141,000 13,439(5) - -
Chief Financial 1995 79,023 35,950 34,822(8) - -
Officer
Bernard Bianchino......... 1996 214,081 92,725 47,416(5) - -
Chief Business 1995 58,741 68,300 17,718(9) - -
Development
Officer
</TABLE>
- ------------------
(1) Mr. Sukawaty began serving as Chief Executive Officer and President of the
Company and President of FinCo effective September 2, 1996.
(2) Mr. LeMay served as Chief Executive Officer and President and President of
FinCo until September 1996.
(3) Includes an estimate of the short-term incentive compensation target
established for each officer.
(4) Messrs. LeMay and Kurtze were employed by Sprint immediately prior to
their employment by the Company , and as former employees, they partici-
pated in certain long-term incentive plans at Sprint not available to the
other executives listed in this table. The Company reimbursed Sprint
for a portion of the amounts shown.
(5) Represents relocation expenses paid on behalf of Messrs. Sukawaty, Neumei-
ster and Bianchino.
(6) Includes relocation expenses of $22,459 paid on behalf of Mr. Gensheimer
and $150,000 represents foregone incentive compensation from his former em-
ployer.
(7) Of the $233,381 shown as other compensation, $83,287 represents relocation
expenses paid on behalf of Mr. Gensheimer and $150,000 represents foregone
incentive compensation from his former employer
(8) Of the $34,822 shown as other compensation, $31,818 represents relocation
expenses paid on behalf of Mr. Neumeister.
(9) Of the $17,178 shown as other compensation, $16,684 represents relocation
expenses paid on behalf of Mr. Bianchino.
Long-Term Incentive Plan Summary
The Partnership Board has adopted a Long-Term Incentive Compensation
Plan (the "Long-Term Plan"). The Long-Term Plan is administered by the
Partnership Board, which is authorized to interpret Long-Term Plan provisions,
determine membership, approve incentive targets and payouts and otherwise manage
22
<PAGE>
the Long-Term Plan. The Long-Term Plan has no specified termination date and may
be amended or terminated without constraint.
Employees meeting certain eligibility requirements are considered to be
participants in the Long-Term Plan. Participants will receive 100% of the
pre-established targets for the period from July 1, 1995 to June 30, 1996 (the
"Introductory Term"). Participants may elect a payout of the amount due or
convert 50% or 100% of the award to appreciation units. Unless converted to
appreciation units, payment for the Introductory Term will be made in the third
quarter of 1998. Appreciation units vest 25% per year commencing on the second
anniversary of the date of grant. Participants had until March 15, 1997 to make
payout or conversion elections.
Short-Term Incentive Plan Summary
The Partnership Board has adopted a Short-Term Incentive Compensation
Plan (the "Short-Term Plan"). The Short-Term Plan is administered by the
Partnership Board, which is authorized to interpret Short-Term Plan provisions,
determine membership, approve incentive targets and payouts and otherwise manage
the Short-Term Plan. The Short-Term Plan has no specified termination date and
may be amended or terminated without constraint.
The Partnership Board selects eligible employees to participate in the
Short-Term Plan. Eligibility is limited to employees within exempt salary bands.
Participation in the Short-Term Plan precludes participation in any other
short-term compensation plans.
Payouts are granted based on pre-set targeted opportunities. Performance
periods are one year long and incentive targets ("Incentive Targets") are
approved by the Partnership Board for each performance period. An Incentive
Target is established for each position based on the Company's overall
compensation strategy. Incentive Targets contain Company and personal objective
components, which are approved by the Chief Executive Officer and the
Partnership Board. Maximum earnings for the Company objectives are determined by
the Board for each performance period. Participants may earn a maximum of 120%
of the incentive opportunity allocated to the personal objective component.
However, a minimum level of performance may be required to generate payout for
the personal objective component.
Payouts for employees selected to participate in the Short-Term Plan
after the start of a performance period are prorated as are certain payouts for
Short-Term Plan participants whose employment with the Company terminates prior
to the end of a performance period. Payouts for Short-Term Plan participants who
change positions during a performance period will be prorated according to the
opportunities applicable to the positions which were held. Notwithstanding the
above, employees may not begin participation in the Short-Term Plan within two
calendar months prior to the completion of a performance period.
The 1996 Incentive Targets were based on, among other things, the
following factors (i) markets launched by November 1, 1996, (ii) markets that
were launched or were positioned to launch during the period from November 1,
1996 through February 15, 1997, (iii) population coverage by the markets
launched and (iv) expense control.
Participation in the Short-Term Plan is terminated upon the transfer to
a nonparticipating position in the Company, employment by a Partner, death,
disability or separation from the Company for lack of work. Terminated
participants are eligible for a prorated payment based upon the time served
under the Plan. If a participant is terminated for any but the aforementioned
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reasons, that participant's Short-Term Plan payment is deemed forfeited.
Participants who complete a performance period will be eligible to receive a
Short-Term Plan payment regardless of the reason for termination.
Savings Plan
The Company maintains a savings program (the "Savings Plan") for certain
of its employees, which is intended to qualify under Section 401(k) of the
Internal Revenue Code of 1986, as amended (the "Code"). Most permanent
full-time, and certain part-time, employees are eligible to become participants
in the plan. Participants make contributions to a basic before tax account and a
supplemental before tax account. The maximum contribution for any participant
for any year is 16% of such participant's compensation subject to maximum
amounts set by federal taxation law and certain additional limitations for
Highly Compensated Individuals (as defined in the Savings Plan). For each
eligible employee who elects to participate in the Savings Plan and makes a
contribution to the basic before tax account, the Company makes a matching
contribution equal to 50% of the amount of the basic before tax contribution of
each participant up to 6% of such employee's contribution. Contributions to the
Savings Plan are invested, at the participant's direction, in several designated
investment funds. Distributions from the Savings Plan generally will be made
only upon retirement or other termination of employment, unless deferred by the
participants.
Profit Sharing Plan (Retirement Component)
Employees become eligible to participate in the Profit Sharing Plan
after completing 12 consecutive months of service. The Company's profit sharing
contribution will be based on eligible compensation (as defined by the plan). A
combination of age and years of service will determine the amount contributed,
which will range from two to ten percent of eligible compensation. It will be
deposited into individual accounts of the Company-sponsored 401(k) plan. Such
accounts will be established for employees who do not participate in the 401(k)
plan. For employees that do participate in the 401(k) plan, the contribution
will be subject to the applicable 401(k) investment percentage criteria. The
contribution vests after completion of five years of service; once vested the
plan is considered portable.
Employment Agreements
Holdings has entered into employment agreements with Messrs. Sukawaty,
Gensheimer and Levine. The agreements provide for an annual base salaries, as
well as short-term and long-term incentive opportunities.
The agreements provide that Sprint Spectrum may terminate the named
officers' employment for any reason at any time, provided, however, that if
termination is other than for cause, total disability or the voluntary
resignation of such officers, Sprint Spectrum will be required to pay special
compensation which includes, among other things, (i) bi-weekly compensation for
a period of 18 months (the "Severance Period"), (ii) subject to certain
conditions, a bonus under any short-term compensation plan maintained during the
Severance Period, (iii) a prorated award under any long-term incentive plan in
which the officer participate, (iv), life, medical and retirement benefits
throughout the Severance Period and (v) outplacement counseling.
Pursuant to the terms of these employment agreements, each of these
officers have agreed that, for 18 months following termination of employment for
any reason, he will not accept any position where, within any 90-day period, he
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dedicates his time and efforts principally to a wireless business anywhere in
the United States.
In addition, Mr. Gensheimer's employment agreement includes provisions
for additional payments. He received a payment of $150,000 in 1995 and an
additional $150,000 in 1996 on the first anniversary of his employment with the
Company for foregone stock options and 1995 incentive compensation related to
his previous employer.
Sprint Spectrum expects to enter into employment agreements, on terms
substantially similar to those contained in the employment agreements, with
Messrs. Kurtze, Bianchino and Neumeister.
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Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of March 14, 1997, the ownership of Holdings,
MinorCo, L.P., Sprint Spectrum L.P. and FinCo. For a more detailed discussion of
certain ownership interests, see "Business" and "Certain Relationships and
Related Transactions."
Percentage
Name and Address of Beneficial Owner Type of Interest Interest
Sprint Spectrum Holding Company, L.P.
Sprint Enterprises, L.P(1)................. Partnership(2) 40%
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
TCI Spectrum Holdings, Inc.(3)............. Partnership(2) 30%
5619 DTC Parkway
Englewood, Colorado 80111
Comcast Telephony Services(4).............. Partnership(2) 15%
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
Cox Telephony Partnership(5)............... Partnership(2) 15%
1400 Lake Hearn Drive
Atlanta, Georgia 30319-1464
Sprint Spectrum L.P.
Sprint Spectrum Holding Company, L.P(6).... General Partnership 99%
4900 Main Street-Twelfth Floor
Kansas City, Missouri 64112
MinorCo, L.P.(6)........................... Limited Partnership 1%
4900 Main Street-Twelfth Floor
Kansas City, Missouri 64112 MinorCo, L.P.
Sprint Enterprises, L.P.(1)................ Partnership(2) 40%
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
TCI Spectrum Holdings, Inc.(3)............. Partnership(2) 30%
5619 DTC Parkway
Englewood, Colorado 80111
Comcast Telephony Services(4).............. Partnership(2) 15%
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
Cox Telephony Services(5)................... Partnership(2) 15%
1400 Lake Hearn Drive
Atlanta, Georgia 30319-1464
Sprint Spectrum Finance Corporation
Sprint Spectrum L.P......................... Common Stock 100%
4900 Main Street- Twelfth Floor
Kansas City, Missouri 64112
- -----------
(1) An indirect wholly-owned subsidiary of Sprint Corporation. The general
partner of Sprint Enterprises, L.P. is US Telecom, Inc., a subsidiary of
Sprint Corporation. The limited partners of Sprint Enterprises, L.P. are
UCOM, Inc., UST PhoneCo, Inc.and UC PhoneCo, Inc., each a subsidiary of
Sprint Corporation
(2) Each Partner is both a general partner and a limited partner and holds a
99% of its partnership interest as a general partner and 1% as a limited
partner.
(3) A subsidiary of Tele-Communications, Inc. Interest was originally held by
TCI Network Services and subsequently transferred to TCI Telephony Ser-
vices, Inc. which changed its name to TCI Spectrum Holdings, Inc.
(4) Comcast Telephony Services is a general partnership. The general partners
are COM Telephony Services, Inc. and Comcast Telephony Services, Inc.
(5) Cox Telephony Partnership is a general partnership. The general partners
are Cox Communications Wireless, Inc. and Cox Telephony Partners, Inc.
(6) As of December 31, 1996, Holdings, the sole general partner of Sprint
Spectrum, owned a greater than 99.0% partnership interest in Sprint Spec-
trum, and MinorCo, the sole limited partner, owned a partnership interest
equal to less than 1.0%. The interests held by each of Holdings and Minor-
co fluctuate based on the amount of equity contributions by Holdings to
Sprint Spectrum because MinorCo's limited partnership interest is equal to
the ratio of $5.0 million (its investment in Sprint Spectrum) to the total
contributed equity in Sprint Spectrum.
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Item 13. Certain Relationships and Related Transactions
The general partner of the Company is Holdings, which holds a greater
than 99% general partnership interest. There are four general partners of
Holdings, Sprint Enterprises, L.P., which has a 40% partnership interest, TCI
Spectrum Holdings, Inc. which has a 30% partnership interest, and Comcast
Telephony Services and Cox Telephony Partnership, each of which has a 15%
partnership interest. Each of the Partners is a subsidiary of Sprint, TCI,
Comcast and Cox, respectively. Sprint is a leading provider of domestic and
international long distance and local exchange telecommunications services. TCI
is one of the largest cable television operators in the United States in terms
of numbers of basic subscribers served. Comcast is engaged in the development,
management and operation of cable and cellular telephone communications systems
and the production and distribution of cable programming. Comcast also provides
cellular telephone communications services in markets with an aggregate
population of over 7.9 million, including the Comcast Service Area. Cox is a
fully integrated, diversified media and broadband communications company with
operations and investments in U.S. cable televisions systems, international
cable television systems, programming and telecommunications and technology.
The Company and Holdings expect to have extensive relationships with the
Partners and their affiliates, including the Parents, but the nature and terms
of such relationships have not yet been determined. The Holdings Partnership
Agreement sets forth guidelines for business dealings between the Company and/or
Holdings and the Partners and their affiliates, including the Parents. The
Holdings Partnership Agreement permits Holdings and its subsidiaries, including
the Company, to enter into transactions with the Partners and their affiliates
in the normal course of their respective businesses; provided, however, that (i)
any contract, agreement, relationship or transaction between Holdings or any of
its subsidiaries and any person in which any of the Partners or their affiliates
has a direct or indirect material interest must be approved (after full
disclosure by the interested Partner(s) of all material facts relating to such
matter) by the Partnership Board, with the Partnership Board representatives of
the interested Partner(s) abstaining from deliberations and voting and (ii) the
Partnership Board has determined that the price and terms of such transaction
are fair to Holdings and its subsidiaries, including the Company, and that the
price and terms of such transaction are no less favorable than comparable
transactions involving non-affiliates. Subject to certain conditions, including,
without limitation, unanimous approval of appropriate procedures, the
Partnership Board may elect from time to time to provide rights of first
opportunity to various Partners or their affiliates. In addition, the Holdings
Partnership Agreement contains other provisions relating to transactions between
Holdings and its subsidiaries, including the Company, on the one hand, and the
Partners and their affiliates, on the other hand. No procedures have been
adopted by the Company to determine the fairness of related party transactions
and no determination has been made by the Company as to whether such procedures
will be adopted. The Company believes that it will be able to determine the
fairness of related party transactions on a case-by-case basis through
consultation with its independent advisors, market surveys and other third party
means of verification.
The Company entered into an agreement with Sprint to sell the Company's
paging services. Sprint serves as the Company's agent for selling traditional
paging services and markets these services through direct mail, direct sales,
employee programs, advertising and promotions. The foregoing agreement does not
affect the Company's ability to offer paging services as part of its integrated
wireless service package.
Sprint entered into a three year agreement to become an official sponsor
to the NFL through 1998. The Company elected to participate in the agreement,
and is allocated $5 million per year of the total contract cost.
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The Company has entered into a five year contract with Sprint whereby
Sprint will provide invoicing services, including printing customer invoices,
placing the invoices and any other informational or promotional inserts into
envelopes, and mailing the invoices to the Company's customers. The Company
agreed to pay for the initial development of the systems and an ongoing charge
per invoice handled. The per-invoice charge decreases as volumes increase.
Additional fees may be required if a specified minimum number of invoices
handled is not achieved by April 1997.
Sprint was selected as the Company's operator services vendor and was
awarded a three year contract. Services will include "0" call processing, busy
line verification, and initial set-up of software control tables for
confirmation of local calling areas. The Company is charged on a per call record
basis for services provided. Additional charges may be required if specified
monthly call volumes are not realized.
The Company has also entered into a three year agreement with Sprint
whereby Sprint will provide asynchronous transfer mode (ATM) switching equipment
to enable "soft" hand-offs, resulting in fewer dropped calls. When cell sites
are connected to different switches, ATM switching provides for a "soft" handoff
when the mobile customer's handset establishes a connection with a new cell
before disconnecting with the current cell. Monthly charges are usage based and
will not increase during the term of the agreement; however, such fees may be
reduced to any lower rate provided to any other customer for such services
during the term of the agreement.
The Company is negotiating a miscellaneous services agreement with
Sprint/United Management Company ("Sprint/United"), an affiliate of Sprint, for
Sprint/United to provide various administrative services (e.g., payroll, travel,
etc.) for the Company and Holdings is in the process of negotiating an agreement
with SprintCom, an affiliate of Sprint, for the Company to build out the network
infrastructure in certain BTA markets where SprintCom was awarded PCS licenses
in the FCC's D and E Block auctions. At this time, the Company reimburses Sprint
for certain accounting and data processing services, for participation in
certain advertising contracts, for certain cash payments made by Sprint
Corporation on behalf of the Company and other management and administrative
services. The costs of such services are allocated based on direct usage. The
aggregate amount of such expenses was approximately $11,900,000 and $2,646,000
for 1996 and 1995, respectively. No reimbursement was made through December 31,
1994.
On June 21, 1996, the Company entered into an agreement with Cox PCS
pursuant to which the Company is obligated to sell to Cox PCS a fixed percentage
of the CDMA PCS subscriber equipment purchased by the Company from QUALCOMM
Personal Electronics. Although Cox PCS is not a party to the Purchase and Supply
Agreement among the Company, QUALCOMM Personal Electronics and the various other
parties thereto, the Company has agreed to sell the CDMA PCS subscriber
equipment to Cox PCS at cost.
Subject to certain exceptions, the Holdings Partnership Agreement
restricts any Partner and its controlled affiliates from bidding on, acquiring
or, directly or indirectly, owning, managing, operating, joining, controlling or
financing, or participating in the management, operation, control or financing
of, or being connected as a principal, agent, representative, consultant,
beneficial owner of an interest in any person, or entity, or otherwise with, or
use or permit its name to be used in connection with, any business that engages
in the bidding for or acquisition of any wireless business license or engages in
any Wireless Business or provides, offers, promotes or brands services that are
within Holdings' core business. Unless approved by a unanimous vote of the
Partners and subject to certain provisions, (i) as a result of Comcast's
ownership of a PCS license for the Philadelphia MTA, Holdings and its
subsidiaries (including the Company) are prohibited from engaging in any of the
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activities listed in the preceding sentence, including bidding for or acquiring
any PCS license, in Philadelphia and (ii) no Partner or controlling affiliate
may bid in a PCS auction for any wireless business license, and at no time may
any Partner bid for or acquire a wireless business if such bid or acquisition
would violate or cause the Partnership or other Partners to violate any rules of
the FCC.
The Holdings Partnership Agreement provides that the marketing channels
of the Company will include each of the Partners and certain of their
affiliates. Each of the Partners will be non-exclusive sales agents for the
Company's services, and the Company will be a non-exclusive sales agent for
those services Sprint and the Cable Parents make available to the Company. No
agency agreements formalizing the specific terms of these arrangements between
the Company and the Partners have been signed. Any commissions payable as a
result of the sales agency relationships between and among, the Company and the
Partners are required to be no less favorable to the agent than those for
comparable agency arrangements with third parties irrespective of volume.
Subject to certain exceptions, the Company's services will be offered, promoted
and packaged solely under the Sprint trademark and the logo used in connection
therewith. Nothing in the Holdings Partnership Agreement, however, precludes or
prohibits the Partners and their affiliates from marketing, selling or
distributing their own products and services.
The Holdings Partnership Agreement provides that each Partner and its
controlled affiliates and Holdings, as a whole will cause their respective
agents to keep secret and maintain in confidence all confidential and
proprietary information and data of Holdings, the Partners and such affiliates.
Subject to such confidentiality restrictions, Holdings, and its subsidiaries
will grant each Partner and its controlled affiliates access to technical
information of Holdings and its subsidiaries.
Pursuant to the Holdings Partnership Agreement, each Partner has agreed
to provide certain services to the Company in connection with the operation of
the network, including antenna sites and/or strand mounting of RF and
transmission equipment, transmission facilities between cell sites and
designated switching locations and provision of primary power, standby power and
maintenance. The provisions of any such services by Comcast within a specified
service area is not required.
Part IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
(a) 1. See "Index to Financial Statements" set forth on page F-1.
2. See "Index to Financial Statements" set forth on page F-1.
3. The following Exhibits are part of this report:
EXHIBITS
3.1 Certificate of Limited Partnership of Sprint Spectrum L.P. (in-
corporated by reference to Registrant's Form S-1 Registration
Statement, Registration No. 333-00609, filed June 21, 1996).
3.2 Agreement of Limited Partnership of MajorCoSub, L.P. (renamed
Sprint Spectrum L.P.) dated as of March 28, 1995, among MajorCo,
L.P. and MinorCo, L.P. (incorporated by reference to Regi-
29
<PAGE>
strant's Form S-1 Registration Statement, Registration No.
333-00609, filed June 21, 1996).
3.3 Amended and Restated Agreement of Limited Partnership of Major-
Co, L.P. (renamed Sprint Spectrum Holding Company, L.P.) dated
January 31, 1996, among Sprint Spectrum, L.P. (renamed Sprint
Enterprises, L.P.), TCI Network Services, Comcast Telephony Ser-
vices and Cox Telephony Partnership (incorporated by reference
to Registrant's Form S-1 Registration Statement, Registration
No. 333-06609, filed on June 21, 1996).
4.1 Senior Note Indenture, dated August 23, 1996, between Sprint
Spectrum L. P., Sprint Spectrum Finance Corporation, and The
Bank of New York, as Trustee (incorporated by reference to
Registrant's Form 10-Q filed November 12, 1996).
4.2 Form of Senior Note (included in Exhibit 4.1).
4.3 Senior Discount Note Indenture dated August 23, 1996, between
Sprint Spectrum L.P., Sprint Spectrum Finance Corporation, and
The Bank of New York, as Trustee (incorporated by reference to
Registrant's Form 10-Q filed November 12, 1996).
4.4 Form of Senior Discount Note (included in Exhibit 4.3).
10.1 Procurement and Services Contract, dated as of January 31, 1996,
between MajorCo, L.P. and Northern Telecom Inc. (incorporated by
reference to Form S-1 Registration Statement, Registration No.
333-06609, filed on July 30, 1996).
10.2 Assignment, Assumption and Amendment No. 1, dated as of June 26,
1996, to Procurement and Services Contract, dated as of January
31, 1996, between MajorCo, L.P. and Northern Telecom, Inc. (in-
corporated by reference to Form S-1 Registration Statement, Reg-
istration No. 333-06609, filed on July 30, 1996).
10.3 Procurement and Services Contract, dated as of January 31, 1996,
between MajorCo, L.P. and AT&T Corp. (incorporated by reference
to Form S-1 Registration Statement, Registration No. 333-06609,
filed on July 30, 1996).
10.4 Assignment, Assumption and Amendment No. 1, dated as of June 21,
1996, to Procurement and Services Agreement, dated as of January
31, 1996, between MajorCo, L.P. and AT&T Corp. (incorporated by
reference to Form S-1 Registration Statement, Registration No.
333-06609, filed on July 30, 1996).
10.5 Amendment No. 2 to the Lucent Technologies/Sprint Spectrum Pro-
curement and Services Contract, dated as of July 15, 1996 be-
tween Sprint Spectrum Equipment Company, L.P. and Lucent Tech-
nologies, Inc. (incorporated by reference to Registrant's Form
10-Q filed November 12, 1996).
10.6 Amended and Restated Procurement and Services Contract, dated as
of October 9, 1996 between Sprint Spectrum Equipment Company,
L.P. and Lucent Technologies Inc. The omitted portions indicated
by brackets have been separately filed with the Securities and
Exchange Commission pursuant to a request for confidential
treatment under Rule 24-b of the Securities Exchange Act of
1934, as amended.
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<PAGE>
10.7 Amended and Restated Sprint Trademark License Agreement, dated
as of January 31, 1996, between Sprint Communications Company,
L.P. and MajorCo, L.P. (incorporated by reference to Regi-
strant's Form S-1 Registration Statement, Registration No.
333-06609, filed on July 30, 1996).
10.8 First Amendment to Amended and Restated Trademark License Agree-
ment, dated as of September 26, 1996, between Sprint Communica-
tions Company, L.P. and Sprint Spectrum Holding Company, L.P.
(incorporated by reference to Registrant's Form 10-Q filed Nov-
ember 12, 1996).
10.9 Assignment and Acceptance Agreement (regarding the Amended and
Restated Trademark License Agreement, as amended) dated as of
September 30, 1996 between Sprint Spectrum Holding Company, L.P.
and Sprint Spectrum L.P. (incorporated by reference to
Registrant's Form 10-Q filed November 12, 1996).
10.10 Amended and Restated Assignment and Assumption Agreement
(Leases), dated as of July 1, 1996, between Sprint Spectrum
Holding Company, L.P., Sprint Spectrum L.P. and Sprint Spectrum
Realty Company, L.P. (incorporated by reference to Registrant's
Form 10-Q filed November 12, 1996).
10.11 Property Use Agreement, dated as of July 1, 1996, between Sprint
Spectrum Realty Company, L.P. and Sprint Spectrum L.P. (in-
corporated by reference to Registrant's Form S-1 Registration
Statement, Registration No. 333-06609, filed on July 30, 1996).
10.12 Assignment and Assumption, dated as of July 1, 1996, between
Sprint Spectrum Holding Company, L.P., Sprint Spectrum L.P. and
Sprint Spectrum Equipment Company, L.P. (incorporated by refer-
ence to Registrant's Form S-1 Registration Statement, Registra-
tion No. 333-06609, filed on July 30, 1996).
10.13 Equipment Lease Agreement, dated as of July 1, 1996, between
Sprint Spectrum Equipment Company, L.P. and Sprint Spectrum L.P.
(incorporated by reference to Registrant's Form S-1 Registration
Statement, Registration No. 333-06609, filed on July 30, 1996).
10.14 Employment Agreement, dated as of July 29, 1996, between Sprint
Spectrum Holding Company, L.P. and Andrew Sukawaty (incorpor-
ated by reference to Registrant's Form S-1 Registration State-
ment, Registration No. 333-06609, filed on August 12, 1996).
10.15 Employment Agreement, dated as of September 29, 1995, between
MajorCo, L.P. and Joseph M. Gensheimer (incorporated by refer-
ence to Registrant's Form S-1 Registration Statement, Registra-
tion No. 333-06609, filed on July 30, 1996).
10.16 Registration Rights Agreement, dated as of August 23, 1996 among
Sprint Spectrum L.P., Sprint Spectrum Finance Corporation and
Sprint Corporation (incorporated by reference to Registrant's
Form 10-Q filed November 12, 1996).
10.17 Amended and Restated Capital Contribution Agreement dated as of
October 2, 1996, among Sprint Corporation, Tele-Communications,
Inc., Comcast Corporation, Cox Communications, Inc. and Sprint
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Spectrum L.P. (incorporated by reference to Registrant's Form
10-Q filed November 12, 1996).
10.18 Paging Sales Agency Agreement, dated as if January 17, 1996, be-
tween MajorCo, L.P. and Sprint Communications Company, L.P. (in-
corporated by reference to Registrant's Form S-1 Registration
Statement, Registration No. 333-06609, filed on July 30, 1996).
10.19 Second Amended and Restated Limited Partnership Agreement dated
as of January 9, 1995 among American Personal Communications,
Inc., WirelessCo, L.P. and The Washington Post Company (in-
corporated by reference to Registrant's Form S-1 Registration
Statement, Registration No. 333-06609, filed on July 30, 1996).
10.20 WirelessCo Affiliation Agreement, dated as of January 9, 1995
between American PCS, L.P., and WirelessCo, L.P. (incorporated
by reference to Registrant's Form S-1 Registration Statement,
Registration No. 333-06609, filed on July 30, 1996).
10.21 Letter Agreement, dated as of August 31, 1996, between American
PCS, L.P., American Personal Communications Inc., WirelessCo,
L.P., Sprint Spectrum L.P. and Sprint Spectrum Holding Company,
L.P. (incorporated by reference to Registrant's Form 10-Q, filed
on September 26, 1996).
10.22 Purchase and Supply Agreement dated as of June 21, 1996, between
Sprint Spectrum L.P., QUALCOMM Personal Electronics, QUALCOMM
Incorporated and Sony Electronics Inc. (incorporated by
reference to Registrant's Form S-1 Registration Statement,
Registration No. 333-06609, filed on August 12, 1996).
10.23 Amendment No. 1, dated as of October 24, 1996, to the Purchase
and Supply Agreement dated as of June 21, 1996, between Sprint
Spectrum L.P., QUALCOMM Personal Electronics, QUALCOMM
Incorporated and Sony Electronics Inc. The omitted portions
indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for
confidential treatment under Rule 24-b of the Securities
Exchange Act of 1934, as amended.
10.24 Customer Account and Billing System Agreement, dated as of
February 26, 1996, between Sprint Spectrum L.P. and Cincinnati
Bell Information Systems Inc. (incorporated by reference to Reg-
istrant's Form S-1 Registration Statement, Registration No.
333-06609, filed on July 30, 1996).
10.25 Subscriber Unit Equipment Purchase and Supply Agreement, dated
as of September 17, 1996, between Sprint Spectrum L.P. and Sam-
sung Electronics Co., Ltd. (incorporated by reference to Regi-
strant's Form 10-Q filed November 12, 1996).
10.26 Letter agreement dated as of September 17, 1996 from Sprint
Spectrum L.P. to Samsung Electronics Co., Ltd. and Samsung Elec-
tronics Co., Ltd./Samsung Telecommunications America, Inc. (in-
corporated by reference to Registrant's Form 10-Q filed November
12, 1996).
10.27 Master Agreement, dated as of September 1996, between Sprint
Communications Company, L.P., Sprint Spectrum L.P., Sprint Uni-
ted Management Company and Tandy Corporation, a Delaware corp-
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oration acting by and through its RadioShack division
(incorporated by reference to Registrant's Form 10-Q filed
November 12, 1996).
10.28 Credit Agreement, dated as of October 2, 1996, between Sprint
Spectrum L.P. and Northern Telecom Inc. The omitted portions
indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for
confidential treatment under Rule 24-b of the Securities
Exchange Act of 1934, as amended.
10.29 Credit Agreement, dated as of October 2, 1996, between Sprint
Spectrum L.P. and Lucent Technologies Inc. The omitted portions
indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for
confidential treatment under Rule 24-b of the Securities
Exchange Act of 1934, as amended.
10.30 Credit Agreement, dated as of October 2, 1996, among Sprint
Spectrum L.P., the several banks and other financial
institutions and entities from time to time parties to the
Credit Agreement and The Chase Manhattan Bank, as administrative
agent for the lenders. The omitted portions indicated by
brackets have been separately filed with the Securities and
Exchange Commission pursuant to a request for confidential
treatment under Rule 24-b of the Securities Exchange Act of
1934, as amended.
10.31 Trust Agreement, dated as of October 2, 1996 among Sprint Spec-
trum L.P., First Union National Bank and Kenneth D. Benton.
10.32 Pledge Agreement, dated as of October 2,1996, made by Sprint
Spectrum L.P. and MinorCo, L.P. in favor
of the Trustees under the Trust Agreement.
10.33 Borrower Security Agreement, dated as of October 2. 1996, made
by Sprint Spectrum L.P. and MinorCo, L.P. in favor of the
Trustees under the Trust Agreement.
10.34 Subsidiary Security Agreement, dated as of October 2, 1996, made
by Sprint Spectrum L.P. and MinorCo, L.P. in favor of the
Trustees under the Trust Agreement.
10.35 Guarantee, dated as of October 2, 1996, by WirelessCo, L.P. in
favor of the Trustees under the Trust Agreement.
10.36 Guarantee, dated as of October 2, 1996, by Sprint Spectrum
Equipment Company, L.P. in favor of the Trustees under the Trust
Agreement.
10.37 Guarantee, dated as of October 2, 1996, by Sprint Spectrum Real-
ty Company, L.P. in favor of the Trustees under the Trust Agree-
ment.
12 Statements re: computation of ratios
21 Subsidiaries of Registrant
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the fiscal year ended December 31,
1996.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SPRINT SPECTRUM L.P.
(Registrant)
By /s/ Andrew Sukawaty
Andrew Sukawaty
President and Chief Executive
Officer
Date: January 30, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 30th day of January, 1998.
/s/ Andrew Sukawaty
Andrew Sukawaty
President and Chief Executive
Officer
/s/ Robert M. Neumeister, Jr.
Robert M. Neumeister, Jr.
Chief Financial Officer
/s/ John W. Meyer
John W. Meyer
Vice President and Controller
Principal Accounting Officer
/s/ Ronald T. LeMay
Ronald T. LeMay
Sprint Spectrum Holding Company
Partnership Board Representative
/s/ James O. Robbins
James O. Robbins
Sprint Spectrum Holding Company
Partnership Board Representative
34
<PAGE>
/s/ Lawrence S. Smith
Lawrence S. Smith
Sprint Spectrum Holding Company
Partnership Board Representative
/s/ Gerald W. Gaines
Gerald W. Gaines
Sprint Spectrum Holding Company
Board Representative
35
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SPRINT SPECTRUM
FINANCE CORPORATION
(Registrant)
/s/ Andrew Sukawaty
Andrew Sukawaty
President
Date: January 30, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on the 30th day of January, 1998.
/s/ Andrew Sukawaty
Andrew Sukawaty
President and Director
/s/ Robert M. Neumeister, Jr.
Robert M. Neumeister, Jr.
Vice President, Treasurer and Director
36
<PAGE>
SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Page
Reference
-----------
Sprint Spectrum L.P.
Selected Financial Data.................................................... F-2
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................ F-3
Consolidated Financial Statements
Report of Independent Auditors' - Deloitte & Touche LLP................ F-8
Report of Independent Auditors' - Price Waterhouse LLP................. F-9
Consolidated Balance Sheets........................................... F-10
Consolidated Statements of Operations................................. F-11
Consolidated Statements of Changes in Partners' Capital............... F-12
Consolidated Statements of Cash Flows................................. F-13
Notes to Consolidated Financial Statements............................ F-14
Financial Statement Schedule:
Certain financial statement schedules are omitted because the required
information is not present, or because the information required is included
in the consolidated financial statements and notes thereto.
Sprint Spectrum Finance Corporation
Financial Statements
Report of Independent Auditors' - Deloitte & Touche LLP............... F-26
Balance Sheets........................................................ F-27
Statement of Operations............................................... F-28
Statements of Changes in Stockholder's Equity......................... F-29
Statement of Cash Flows............................................... F-30
Notes to Financial Statements......................................... F-31
F-1
<PAGE>
SPRINT SPECTRUM L.P.
SELECTED FINANCIAL DATA
For the
Period from
October 24,
1994 (date of
For the Years Ended inception) to
December 31, December 31,
-----------------------------------------------
1996 1995 1994
------------- -------------- ------------------
(In Thousands)
Results of Operations
Net operating revenues........ $ 4,175 $ - $ -
Operating loss (1)............ 355,873 64,520 3,332
Financial Position
Total assets.................. 3,898,766 2,244,343 123,875
Long-term compensation
obligation.................. 11,356 - -
Long-term debt................ 691,241 - -
Construction obligations...... 714,934 - -
(1) Effective August 31, 1996, the Company transferred its investment in
APC to Holdings . Sprint Spectrum's operating loss for the year ended
December 31, 1996 includes approximately $92 million of equity in
losses of APC through August 31, 1996. The operating loss for the year
ended December 31, 1995 includes approximately $46 million of equity in
losses of APC.
F-2
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
Sprint Spectrum L.P.'s consolidated financial statements and notes thereto. The
term "Company" refers to Sprint Spectrum L.P. and its subsidiaries, including
Sprint Spectrum Finance Corporation ("FinCo"), WirelessCo, L.P. ("WirelessCo"),
Sprint Spectrum Realty Company, L.P. ("RealtyCo") and Sprint Spectrum Equipment
Company, L.P. ("EquipmentCo"). As of July 1, 1996, Holdings transferred
substantially all operating assets and liabilities to the Company. The Sprint
Spectrum financial information as presented includes the pooled operations of
Holdings through June 30, 1996.
The Company includes certain estimates, projections and other
forward-looking statements in its reports as well as in presentations to
analysts and others and in other material disseminated to the public. There can
be no assurances of future performance and actual results may differ materially
from those in the forward-looking statements. Factors which could cause actual
results to differ materially from estimates or projections contained in
forward-looking statements include:
- the effects of vigorous competition in the markets in which the
Company will operate;
- the cost of entering new markets necessary to provide services;
- the impact of any unusual items resulting from ongoing evaluations
of the Company's business strategies;
- the effects of unanticipated delays or problems with the development
of technologies and systems used by the Company;
- requirements imposed on the Company and its competitors by the Federal
Communications Commission ("FCC") and state regulatory commissions
under the Telecommunications Act of 1996;
- the possibility of one or more of the markets in which the Company
will compete being impacted by variations in political, economic or
other factors over which the Company has no control; and
- unexpected results in litigation.
General
The Company is a development stage enterprise formed for the purpose of
establishing a nationwide personal communications service ("PCS") wireless
telecommunications network. The Company acquired PCS licenses in the FCC's A
Block and B Block PCS auction, which concluded in March 1995, to provide service
to 29 major trading areas ("MTAs") covering 150.3 million Pops. Additionally,
Cox contributed to the Company, effective February 6, 1997, a PCS license for
the Omaha MTA. The Company has also affiliated and expects to continue to
affiliate with other PCS providers. Pursuant to affiliation agreements, each
affiliated PCS service provider will use the Sprint(R) (a registered trademark
of Sprint Communications Company, L.P.) brand name. Holdings owns a 49% limited
partnership interest in American PCS, L.P. ("APC"), which owns a PCS license
for, and operates a broadband GSM PCS system in the Washington D.C./Baltimore
MTA. APC has affiliated with the Company and is marketing its products and
services under the Sprint(R) brand name. Holdings also owns a 49% limited
partnership interest in Cox Communication PCS, L.P. ("Cox PCS"), a partnership
that owns a PCS license for the Los Angeles-San Diego MTA covering 21.5 million
Pops. Cox, which currently owns this license, has agreed to contribute the
license to Cox PCS and will manage and control Cox PCS. The Company signed an
affiliation agreement with Cox PCS on December 31, 1996.
F-3
<PAGE>
The Company also expects to provide various services to PhillieCo, a
limited partnership organized by and among subsidiaries of Sprint, TCI and Cox
that owns a PCS license for the Philadelphia MTA covering 9.1 million Pops. In
addition, SprintCom participated in the FCC's D and E Block auction which ended
on January 14, 1997, and was awarded licenses for 139 of 493 BTAs, all of which
are areas not covered by the Company's owned PCS licenses or licenses owned by
APC, Cox PCS and PhillieCo. In accordance with an agreement among the Partners
and the Partnership Agreement, SprintCom is required to offer to enter into an
affiliation agreement with Holdings with respect to such BTA licenses pursuant
to which SprintCom's systems in such areas would be included in the Company's
national PCS network, although no assurance can be given that SprintCom and
Holdings will enter into any such affiliation agreement. Holdings is in the
process of negotiating an agreement with SprintCom to build out the network
infrastructure in certain BTA markets where SprintCom was awarded PCS licenses.
To date, the Company has incurred expenditures in conjunction with PCS
license acquisitions, initial design and construction of the PCS network,
engineering, marketing, administrative and other start up related expenses. The
Company commenced initial commercial operations for its PCS services late in the
fourth quarter of 1996 and, as a result, has generated minimal operating
revenues. The Company intends to initiate service in portions of most MTAs
during the summer of 1997. Pop coverage at the end of the initial launch period
(approximately the end of the second quarter of 1997) is expected to reach
approximately 57% of the Pops in all of the Company's license areas with
coverage in the individual license areas ranging from 19% to 90%. The timing of
launch in individual markets will be determined by various factors, principally
zoning and microwave relocation factors, equipment delivery schedules and local
market and competitive considerations. The Company intends to continue to expand
its coverage in its PCS markets in its existing license areas based on actual
market experience, customer demand, and reductions in the cost of technology.
The extent to which the Company is able to generate operating revenue and
earnings is dependent on a number of business factors, including maintaining
existing financing to complete network construction and fund initial operations
and operating losses, successfully deploying the PCS network and attaining
profitable levels of market demand for the Company's products and services.
Liquidity and Capital Resources
The buildout of the Company's PCS network and the marketing and
distribution of the Company's PCS products and services will require substantial
capital. The Company currently estimates that its capital requirements (capital
expenditures, the cost of its existing licenses, working capital, debt service
requirements and anticipated operating losses) for the period from inception
through the end of 1998 (based on the Company's current plans for its network
buildout in its current license areas) will total approximately $8.9 billion (of
which approximately $3.4 billion had been expended as of December 31, 1996).
After 1998, the Company will also require additional capital for coverage
expansion, volume-driven network capacity and other capital expenditures for
existing license areas, working capital, debt service requirements and
anticipated further operating losses. Costs associated with the network buildout
include switches, base stations, towers, antennae, radio frequency engineering,
cell site construction and microwave relocation. Management estimates that
capital expenditures associated with the buildout will total approximately $3.8
billion through 1997, including $1.6 billion expended through 1996. Estimated
capital expenditures have increased due to changes in the nature of certain
network elements, actual construction experience to date and additional network
capacity requirements. Actual amounts of the funds required may vary materially
from these estimates and additional funds would be required in the event of
significant departures from the current business plan, operating losses that
exceed current estimates, unforeseen delays, cost overruns, unanticipated
expenses, regulatory changes, engineering design changes and other technological
risks.
F-4
<PAGE>
The Company currently has minimal sources of revenue to meet its capital
requirements and has relied upon capital contributions and advances from
Holdings and third party debt and public debt. Holdings also requires capital
for its affiliate investments and other partnership purposes. The Holdings
partnership agreement provides for a planned capital amount to be contributed by
the Partners ("Total Mandatory Contributions"), which represents the sum of $4.2
billion, which includes agreed upon values attributable to the contributions of
certain additional PCS licenses by a Partner. The Total Mandatory Contributions
amount is required to be contributed in accordance with capital contribution
schedule to be set forth in approved annual budgets if requested by the Holdings
partnership board (or by the Chief Executive Officer of Holdings pursuant to
authority to be granted in each annual budget or such other authority as may be
delegated to the Chief Executive Officer by the Holdings partnership board). The
partnership board of Holdings may request capital contributions to be made in
the absence of an approved budget or more quickly than provided for in an
approved budget, but always subject to the Total Mandatory Contributions limit.
The proposed budget for 1997 has not yet been approved by the partnership board.
The Amended and Restated Capital Contribution Agreement (the "Amended
Agreement") was executed effective October 2, 1996. The Amended Agreement
recognizes that through December 31, 1995, approximately $2.2 billion of the
Total Mandatory Contributions had been contributed to Sprint Spectrum L.P., and
designates that $1.0 billion of the balance of the Total Mandatory Contributions
shall be contributed to Sprint Spectrum L.P. As of December 31, 1996, $2.6
billion had been contributed to Sprint Spectrum. The Company's business plan and
the financial covenants and other terms of the Secured Financing (defined below)
will require such additional equity financing prior to the end of 1998, absent a
new financing source. The $1.0 billion portion of the $4.2 billion not required
to be invested in the Company may be used by Holdings to fund its other
affiliate commitments and make other wireless investments. Amounts budgeted by
the Partners in future years will determine the extent to which the commitments
will actually be utilized.
In October 1996, the Company entered into a credit agreement with The
Chase Manhattan Bank, as administrative agent for a group of lenders, and
various lenders for a $2.0 billion senior secured credit facility (the "Bank
Facility"). The proceeds of the Bank Facility are to be used to finance working
capital needs, subscriber acquisition costs, capital expenditures and other
general purposes of the Company. The Bank Facility consists of a $300 million
term loan commitment and a revolving credit commitment of $1.7 billion. Of the
$300 million term facility, $150 million was drawn down subsequent to closing,
and the remaining $150 million was drawn down in January, 1997. As of December
31, 1996, $450 million was available under the revolving facility, and there
were no borrowings under such facility. Availability under the Bank Facility
will increase subject to the Company meeting certain performance criteria.
Also in October 1996, the Company entered into credit agreements for up
to an aggregate of $3.1 billion of senior secured multiple drawdown term loan
facilities from two of its network infrastructure equipment vendors. Nortel has
agreed to provide up to $1.3 billion in senior secured loans, and Lucent has
agreed to provide up to $1.8 billion in senior secured loans (together the
"Vendor Financing" and together with the Bank Facility, the "Secured
Financing"). Both Nortel and Lucent have staged commitments regarding when
financing must be made available. The Company will use the proceeds from the
Vendor Financing to fund the purchase of the equipment and software manufactured
by the vendors as well as substantially all of the construction and ancillary
equipment (e.g., towers, antennae, cable) required to construct the Company's
PCS network. These facilities will serve as the primary financing mechanism for
the buildout of the network.
Borrowings under the Secured Financing are secured by the Company's
interest in WirelessCo, RealtyCo and EquipmentCo and certain other personal and
real property (the "Shared Lien"). The Shared Lien equally and ratably secures
the Bank Facility and the Vendor Financing. The credit facility is jointly
F-5
<PAGE>
and severally guaranteed by WirelessCo, RealtyCo and EquipmentCo and is
non-recourse to the Partners and the Parents.
In August 1996, the Company and FinCo issued $250 million aggregate
principal amount of the 11% Senior Notes and $500 million aggregate principal
amount at maturity of 12 1/2% Senior Discount Notes (together, the "Notes"). The
Senior Discount Notes were issued at a discount to their aggregate principal
amount at maturity and generated proceeds of approximately $273 million. Cash
interest on the Senior Notes will accrue at a rate of 11% per annum and is
payable semi-annually in arrears on each February 15 and August 15, commencing
February 15, 1997. Cash interest will not accrue or be payable on the Senior
Discount Notes prior to August 15, 2001. Thereafter, cash interest on the Senior
Discount Notes will accrue at a rate of 12 1/2% per annum and will be payable
semi-annually in arrears on each February 15 and August 15, commencing February
15, 2002. FinCo was formed solely to be a co-obligor of the Notes. FinCo has
only nominal assets and no operations or revenues, and Sprint Spectrum will be
responsible for payment of the Notes. On August 15, 2001, the Company will be
required to redeem an amount equal to $384.772 per $1,000 principal amount at
maturity of each Senior Discount Note then outstanding ($192 million in
aggregate principal amount at maturity, assuming all of the Senior Discount
Notes remain outstanding at such date). The proceeds of approximately $509
million from the issuance of the Notes (net of approximately $14 million of
underwriting discounts, commissions, and offering expenses) will be used to fund
capital expenditures, including the buildout of the nationwide PCS network, to
fund working capital as required, to fund operating losses and for other
partnership purposes. Sprint purchased, and continues to hold, approximately
$183 million principal amount at maturity of the Senior Discount Notes.
Sources of funding for the Company's further financing requirements may
include additional vendor financing, public offerings or private placements of
equity and/or debt securities, commercial bank loans and/or capital
contributions from Holdings or the Partners. There can be no assurance that any
additional financing can be obtained on a timely basis and on terms acceptable
to the Company and within limitations contained in the Notes, the agreements
governing the Secured Financing and any new financing arrangements. Failure to
obtain any such financing could result in the delay or abandonment of the
Company's development and expansion plans and expenditures or the failure to
meet regulatory requirements. It also could impair the Company's ability to meet
its debt service requirements and could have a material adverse effect on its
business.
For the year period ended December 31, 1996, Sprint Spectrum used cash
of $211 million in operating activities, which consisted of the operating loss
of $439 million and the increase in inventory of $72 million. The uses were
offset, in part, by the equity in the loss of APC through August 31, 1996 and
increased payables and other accruals. Cash used in investing activities totaled
$979 million, consisting of capital expenditures and microwave relocation costs
of $807 million and advances to APC of $172 million.
Results of Operations
For the Year Ended December 31, 1996
Sprint Spectrum incurred a loss of $439 million for the year ended
December 31, 1996, which includes equity in the loss of APC of $92 million
through August 31, 1996.
The Company commenced initial commercial operations for its PCS services
late in the fourth quarter of 1996 and, as a result, has generated minimal
operating revenues. The negative gross profit from equipment sales results from
the Company's subsidy of handsets. Cost of services consists principally of
F-6
<PAGE>
switch and cell site expenses, including site rental, utilities and access
charges. Such costs are incurred prior to service launch during the network
buildout and testing phases.
Selling expenses increased from $0.1 million for the year December 31,
1995 to $38.3 million for the year ended December 31, 1996 due to costs incurred
in preparation of and during the initial commercial service launch. Such costs
include participation with Sprint in the NFL sponsorship, development and
production expenses associated with advertisements in various media (i.e.,
television, radio, print), and the development of printed brochures to promote
the Company's products and services.
General and administrative expenses increased from $64.2 million for the
year ended December 31, 1995 to $274.4 million for the year ended December 31,
1996 (314%) due principally to increases in salary and related benefits,
computer equipment and related expenses and professional and consulting fees.
Salaries and benefits and computer equipment and related expenses increased due
to an increase in employee headcount. Professional and consulting fees increased
due to the use of consultants and other experts to assist with the development
of the Company's sophisticated information systems (including systems to handle
customer care, billing, network management and financial and administrative
services), development and rollout of training programs for the Company's sales
force, and various other projects associated with the development of the
corporate infrastructure.
Depreciation and amortization expense increased from $0.2 million for
the year ended December 31, 1995 to $11.3 million for the year ended December
31, 1996 as certain network equipment has been placed in service and
amortization of PCS licenses and microwave relocation costs in the launched
markets commenced .
Effective August 31, 1996, the Company's interest in APC, the
existing loans to APC, and obligations to provide additional funding to APC were
transferred to Holdings pursuant to an amendment to the APC partnership
agreement. The Company retained the rights and obligations under an affiliation
agreement with APC. The consolidated financial statements for the year ended
December 31, 1996, reflect the losses allocated to the Company until the
transfer to Holdings.
For the Year Ended December 31, 1995
Sprint Spectrum incurred a loss of $110 million for the year ended
December 31, 1995, which included equity in APC loss of $46 million. There was
no amortization of licenses during the period as PCS service had not been
launched commercially.
From the Date of Inception to December 31, 1994
Sprint Spectrum incurred a loss of $3.3 million for the period from
October 24, 1994 (date of inception) through December 31, 1994, which consisted
largely of general and administrative expenses. There was no amortization of
licenses during the period as PCS service had not been launched commercially.
F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
Partners of Sprint Spectrum L.P.
Kansas City, Missouri
We have audited the accompanying consolidated balance sheets of Sprint Spectrum
L.P. and subsidiaries (the "Partnership"), development stage enterprises, as of
December 31, 1996 and 1995, and the related consolidated statements of
operations, changes in partners' capital and cash flows for each of the two
years in the period ended December 31, 1996, for the period from October 24,
1994 (date of inception) to December 31, 1994 and for the cumulative period from
October 24, 1994 (date of inception) to December 31, 1996. Our audits also
included the financial statement schedules listed in the Index at Item 14(a)(2).
These consolidated financial statements and financial statement schedules are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedules based on our audits. We did not audit the 1996 financial
statements of American PCS, L.P. ("APC") an investment of the Partnership's
which was accounted for by use of the equity method. The Partnership's share of
APC's net loss was $92,284,000 (See note 4 to the consolidated financial
statements) which is included in the accompanying consolidated financial
statements. The financial statements of APC were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for APC, is based solely on the report of such other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, such
consolidated financial statements present fairly, in all material respects, the
consolidated financial position of Sprint Spectrum L.P. and subsidiaries at
December 31, 1996 and 1995, and the results of their operations and their cash
flows for the years then ended and for the period from October 24, 1994 (date of
inception) to December 31, 1994 and for the cumulative period from October 24,
1994 (date of inception) to December 31, 1996, in conformity with generally
accepted accounting principles. Also, in our opinion, such financial statement
schedules, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
As discussed in Note 1 to the consolidated financial statements, Sprint Spectrum
L.P. and its subsidiaries are in the development stage as of December 31, 1996.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
March 14, 1997
F-8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
In our opinion, the balance sheet and the related statements of loss, of changes
in partners' capital and cash flows (not presented separately herein) present
fairly, in all material respects, the financial position of American PCS, L.P.
at December 31, 1996, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Partnership's management; our responsibility is to express an opinion on these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit include examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Washington, D.C.
March 7, 1997
F-9
<PAGE>
<TABLE>
<CAPTION>
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
(In Thousands)
December 31, December 31,
1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................................... $ 49,988 $ 1,123
Accounts receivable, net.......................................... 3,310 -
Receivable from affiliates........................................ 14,021 340
Inventory......................................................... 72,414 -
Prepaid expenses and other assets................................. 14,260 188
Note receivable--unconsolidated partnership........................ - 655
------------- -------------
Total current assets............................................ 153,993 1,651
INVESTMENT IN PCS LICENSES, net...................................... 2,122,908 2,124,594
INVESTMENT IN UNCONSOLIDATED PARTNERSHIP............................. - 85,546
PROPERTY, PLANT AND EQUIPMENT, net................................... 1,408,680 31,897
MICROWAVE RELOCATION COSTS, net...................................... 135,802 -
OTHER ASSETS, net.................................................... 77,383 -
------------- -------------
TOTAL ASSETS......................................................... $ 3,898,766 $ 2,244,343
============= =============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable.................................................. $ 196,146 $ 39,905
Payable to affiliates............................................. 5,626 7,598
Accrued advertising............................................... 13,936 -
Accrued expenses.................................................. 45,264 1,914
Current maturities of long-term debt.............................. 5,049 -
------------- -------------
Total current liabilities....................................... 266,021 49,417
LONG-TERM COMPENSATION OBLIGATION.................................... 11,356 1,856
CONSTRUCTION OBLIGATIONS............................................. 714,934 -
NOTE PAYABLE--AFFILIATE............................................... - 5,000
LONG-TERM DEBT....................................................... 686,192 -
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNER INTEREST IN CONSOLIDATED
SUBSIDIARY........................................................ 5,000 5,000
PARTNERS' CAPITAL AND ACCUMULATED DEFICIT:
Partners' capital................................................. 2,767,564 2,296,806
Deficit accumulated during the development stage.................. (552,301) (113,736)
------------- -------------
Total partners' capital......................................... 2,215,263 2,183,070
------------- -------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL.............................. $ 3,898,766 $ 2,244,343
============= =============
See notes to consolidated financial statements
F-10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
Cumulative
Period from Period from
October 24, October 24,
1994(date of 1994(date of
Year Ended Year Ended inception) inception)
December 31, December 31, to December 31, to December 31,
1996 1995 1994 1996
------------ ------------- ----------------- ----------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Service............................. $ 33 $ - $ - $ 33
Equipment............................ 4,142 - - 4,142
------------ ------------- ----------------- ----------------
Total operating revenues........... 4,175 - - 4,175
OPERATING EXPENSES:
Cost of service..................... 21,928 - - 21,928
Cost of equipment................... 14,148 - - 14,148
Selling............................. 38,345 145 - 38,490
General and administrative.......... 274,352 64,164 3,294 341,810
Depreciation and amortization....... 11,275 211 38 11,524
------------ ------------ ----------------- ----------------
Total operating expenses........... 360,048 64,520 3,332 427,900
------------ ------------ ----------------- ----------------
LOSS FROM OPERATIONS................... (355,873) (64,520) (3,332) (423,725)
OTHER INCOME (EXPENSE):
Interest income..................... 8,337 260 24 8,621
Interest expense.................... (549) - - (549)
Other income........................ 1,804 38 - 1,842
Equity in loss of unconsolidated
partnership....................... (92,284) (46,206) - (138,490)
------------ ------------ ----------------- -----------------
Total other income (expense)...... (82,692) (45,908) 24 (128,576)
------------ ------------ ----------------- ----------------
NET LOSS............................... $ (438,565) $ (110,428) $ (3,308) $ (552,301)
============ ============ ================= ================
See notes to consolidated financial statements
F-11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(In Thousands)
Partners' Accumulated
Capital Deficit Total
------------- ------------- ------------
<S> <C> <C> <C>
BALANCE, October 24, 1994...................... $ - $ - $ -
Contributions of capital....................... 123,438 - 123,438
Net loss....................................... - (3,308) (3,308)
------------- ------------- ------------
BALANCE, December 31, 1994..................... 123,438 (3,308) 120,130
Contributions of capital....................... 2,173,368 - 2,173,368
Net loss....................................... - (110,428) (110,428)
------------- ------------- -------------
BALANCE, December 31, 1995..................... 2,296,806 (113,736) 2,183,070
Contributions of capital....................... 669,509 - 669,509
Net loss....................................... - (438,565) (438,565)
Transfer of investment in unconsolidated
partnership to Holdings...................... (165,917) - (165,917)
Dividend to Holdings........................... (32,834) - (32,834)
------------- --------------- ------------
BALANCE, December 31, 1996...................... $ 2,767,564 $ (552 ,301) $ 2,215,263
============= =============== ============
See notes to consolidated financial statements
F-12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Cumulative
Period Period
from October 24, from October 24,
1994 (date of 1994 (date of
Year Ended December 31, inception) to inception) to
---------------------------------- December 31, December 31,
1996 1995 1994 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................... $ (438,565) $ (110,428) $ (3,308) $ (552,301)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Equity in loss of unconsolidated partnership 92,284 46,206 - 138,490
Depreciation and amortization............... 11,275 211 38 11,524
Amortization of debt discount and issuance 14,008 - - 14,008
costs.......................................
Loss on disposal of non-network equipment... - 31 - 31
Changes in assets and liabilities:
Receivables.............................. (16,991) (340) - (17,331)
Inventory................................ (72,414) - - (72,414)
Prepaid expenses and other assets........ (21,608) (178) (10) (21,796)
Accounts payable and accrued expenses.... 211,555 45,672 3,745 260,972
Long-term compensation obligation........ 9,500 1,856 - 11,356
-------------- --------------- -------------- ---------------
Net cash provided by (used in) (210,956) (16,970) 465 (227,461)
operating activities.................
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.......................... (683,886) (31,763) (451) (716,100)
Proceeds on sale of equipment................. - 37 - 37
Microwave relocation costs.................... (123,354) - - (123,354)
Purchase of PCS licenses...................... - (2,006,156) (118,438) (2,124,594)
Investment in unconsolidated partnership...... - (131,752) - (131,752)
Loan to unconsolidated partnership............ (172,000) (655) - (172,655)
-------------- --------------- -------------- ---------------
Net cash used in investing activities.. (979,240) (2,170,289) (118,889) (3,268,418)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt...... 674,201 - - 674,201
Payments on long-term debt.................... (24) - - (24)
Debt issuance costs........................... (71,791) - - (71,791)
Limited partner interest in consolidated - 5,000 - 5,000
subsidiary....................................
Borrowings from affiliates.................... - 5,000 - 5,000
Partner capital contributions................. 669,509 2,173,368 123,438 2,966,315
Dividends paid................................ (32,834) - - (32,834)
Net cash provided by financing -------------- --------------- -------------- ---------------
activities............................ 1,239,061 2,183,368 123,438 3,545,867
INCREASE (DECREASE) IN CASH AND -------------- --------------- -------------- ---------------
CASH EQUIVALENTS.............................. 48,865 (3,891) 5,014 49,988
CASH AND CASH EQUIVALENTS, Beginning of Period.. 1,123 5,014 - -
============== =============== =============== =================
CASH AND CASH EQUIVALENTS, End of Period........ $ 49,988 $ 1,123 $ 5,014 $ 49,988
============== =============== =============== =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid, net of amount capitalized... $ 323 $ - $ - $ 323
NON-CASH INVESTING ACTIVITIES:
- - The equity interest in an unconsolidated
partnership of $165,917 was transferred to
Sprint Spectrum Holding Company on August
31, 1996.
- - Capital expenditures and microwave relocation
costs of $807,241 for the year ended December
31, 1996 are net of construction obligations
of $714,934.
See notes to consolidated financial statements
F-13
</TABLE>
<PAGE>
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Sprint Spectrum L.P. (the "Company") is a limited partnership formed in Delaware
on March 28, 1995, by Sprint Spectrum Holding Company, L.P. ("Holdings") and
MinorCo, L.P. ("MinorCo") both of which were formed by Sprint Enterprises, L.P.,
TCI Spectrum Holdings, Inc. (formerly known as TCI Telephony Services, Inc., as
successor to TCI Network Services), Cox Telephony Partnership and Comcast
Telephony Services (together the "Partners"). The Company was formed pursuant to
a reorganization of the operations of an existing partnership, WirelessCo, L.P.
("WirelessCo") which transferred certain operating functions to Holdings. The
Partners are subsidiaries of Sprint Corporation ("Sprint"), Tele-Communications,
Inc. ("TCI"), Comcast Corporation ("Comcast") and Cox Communications, Inc.
("Cox", and together with Sprint, TCI and Comcast, the "Parents"), respectively.
The Company and certain other affiliated partnerships offer services as Sprint
PCS.
The Partners of the Company have the following ownership interests as of
December 31, 1996 and 1995:
Sprint Spectrum Holding Company, L.P. (general partner).......greater than 99%
MinorCo, L.P. (limited partner)...................................less than 1%
The Company is consolidated with its subsidiaries, WirelessCo, Sprint Spectrum
Equipment Company, L.P. ("EquipmentCo"), Sprint Spectrum Realty Company, L.P.
("RealtyCo") and Sprint Spectrum Finance Corporation ("FinCo"). On May 15, 1996,
EquipmentCo and RealtyCo were organized for the purpose of holding PCS
network-related real estate interests and assets. On May 20, 1996, FinCo, was
also formed to be a co-obligor of the debt obligations discussed in Note 5.
Partnership Agreement - The Amended and Restated Agreement of Limited
Partnership of Sprint Spectrum L.P. (formerly MajorCo Sub, L.P.), (the
"Partnership Agreement"), dated as of March 28, 1995, among Holdings and MinorCo
provides that the purpose of the Company is to engage in wireless communications
services. The Partnership Agreement provides for the governance and
administration of partnership business, allocation of profits and losses
(including provisions for special and curative allocations), tax allocations,
transactions with partners, disposition of partnership interests and other
matters.
The Partnership Agreement generally provides for the allocation of profits and
losses first to the general partner (Holdings) and secondly to the limited
partner (MinorCo), after giving effect to special allocations. After special
allocations, profits are allocated first to the general partner to the extent of
cumulative net losses previously allocated. Secondly, the limited partner is
allocated profits to the extent of cumulative net losses previously allocated
and then up to the cumulative Preferred Return, as defined in the agreement. The
general partner is allocated all remaining profits. Losses are allocated, after
considering special allocations, to the general partner until its capital
account is zero and secondly to the limited partner to the extent of its capital
account balance.
Any remaining losses are allocated to the general partner.
The limited partner interest of MinorCo in WirelessCo is reflected as a minority
interest. Pursuant to the Amended and Restated Agreement of Limited Partnership
of WirelessCo ("WirelessCo Agreement"), MinorCo has not been allocated any
F-14
<PAGE>
losses incurred by WirelessCo. The WirelessCo Agreement stipulates that all
losses are to be allocated to Sprint Spectrum L.P., the general partner, until
the general partner's capital account is depleted.
Partner Capital Commitments - The Holdings partnership agreement provides for a
planned capital amount to be contributed by the Partners ("Total Mandatory
Contributions"), which represents the sum of $4.2 billion, which includes agreed
upon values attributable to the contributions of certain additional PCS
licenses. The Total Mandatory Contributions amount is required to be contributed
in accordance with capital contribution schedules to be set forth in approved
annual budgets if requested by the Holdings partnership board (or by the Chief
Executive Officer of Holdings pursuant to authority to be granted in each annual
budget or such other authority as may be delegated to the Chief Executive
Officer by the Holding partnership board). The partnership board of Holdings may
request capital contributions to be made in the absence of an approved budget or
more quickly than provided for in an approved budget, but always subject to the
Total Mandatory Contributions limit. The proposed budget for 1997 has not yet
been approved by the partnership board. The Amended and Restated Capital
Contribution Agreement (the "Amended Agreement") was executed effective October
2, 1996, between the Parents and the Company. The Amended Agreement recognizes
that through December 31, 1995, approximately $2.2 billion of the planned
capital amount to be contributed by the Partners had been contributed to Sprint
Spectrum L.P., and designates that $1.0 billion of the balance of the Total
Mandatory Contributions shall be contributed to Sprint Spectrum L.P. At December
31, 1996, approximately $2.6 billion of the total capital commitment had been
contributed to the Company and approximately $0.4 billion had been contributed
to APC.
Development Stage Company - The Company and its subsidiaries are development
stage enterprises. The success of the Company's development is dependent on a
number of business factors, including securing financing to complete network
construction and fund initial operations, successfully deploying the PCS network
and attaining profitable levels of market demand for Company products and
services.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - Prior to July 1, 1996, substantially all wireless
operations of the Company and subsidiaries and Holdings and subsidiaries were
conducted at Holdings and substantially all operating assets and liabilities,
with the exception of the interest in an unconsolidated subsidiary and the
ownership interest in PCS licenses, were held at Holdings. As of July 1, 1996,
Holdings transferred these net assets, and assigned agreements related to the
wireless operations to which it was a party to Sprint Spectrum L.P., EquipmentCo
and RealtyCo (the "Reorganization").
For purposes of these consolidated financial statements, these transactions have
been treated as transactions between entities under common control and accounted
for in a manner similar to a pooling of interest ("As Reorganized"). The
Company, as used in these financial statements, includes the pooled operations
of Holdings through June 30, 1996.
Accordingly, for periods prior to July 1, 1996, Sprint Spectrum L.P.'s
historical financial statements have been restated to reflect those operations
of Holdings that were transferred on July 1, 1996 on a pooled basis. Information
with respect to the financial position and results of operations of the separate
operations pooled herein is as follows (in thousands):
F-15
<PAGE>
<TABLE>
<CAPTION>
Sprint
Spectrum L.P. Holdings Combined
Total Assets
<S> <C> <C> <C>
December 31, 1995.................................. $ 2,211,918 $ 2,244,343 $ 2,244,343
June 30, 1996...................................... 2,268,805 2,561,328 2,561,328
Partners' Capital & Accumulated Deficit
December 31, 1995.................................... 2,201,704 2,178,069 2,183,070
June 30, 1996...................................... 2,258,426 2,469,529 2,472,384
Net Loss
December 31, 1995.................................. (49,531) (110,429) (110,428)
June 30, 1996...................................... (81,278) (158,195) (158,195)
</TABLE>
Trademark Agreement - Sprint(R) is a registered trademark of Sprint
Communications Company, L.P. and is licensed to the Company on a royalty-free
basis pursuant to a trademark license agreement between the Company and Sprint.
Revenue Recognition - Operating revenues for PCS services are recognized as
service is rendered. Operating revenues for equipment sales are recognized at
the time the equipment is sold to a customer or an unaffiliated agent.
Cash and Cash Equivalents - The Company considers all highly liquid instruments
with original maturities of three months or less to be cash equivalents. Under
the Company's cash management system, checks issued but not presented to banks
frequently result in overdraft balances for accounting purposes and are included
in Accounts payable in the consolidated balance sheets.
Accounts Receivable - Accounts receivable are net of an allowance for doubtful
accounts of approximately $202,000 at December 31, 1996. No allowance was
recorded for the year ended December 31, 1995.
Inventory - Inventory consists of wireless communication equipment (primarily
handsets). Inventory is stated at the lower of cost or replacement cost. Gains
and losses on the sales of handsets are recognized at the time of sale.
Property, Plant and Equipment - Property, plant and equipment are stated at
cost. Construction work in progress represents costs incurred to design and
construct the PCS network. Repair and maintenance costs are charged to expense
as incurred. When network equipment is retired, or otherwise disposed of, its
book value, net of salvage, is charged to accumulated depreciation. When
non-network equipment is sold, retired or abandoned, the cost and accumulated
depreciation are removed from the accounts and any gain or loss is recognized.
Property, plant and equipment are depreciated using the straight-line method
based on estimated useful lives of the assets. Depreciable lives range from 3 to
20 years.
Investment in PCS Licenses and Other Intangibles - During 1994 and 1995, the
Federal Communications Commission ("FCC") auctioned PCS licenses in specific
geographic service areas. The FCC grants licenses for terms of up to ten years,
and generally grants renewals if the licensee has complied with its license
obligations. The Company believes it has and will continue to meet all
requirements necessary to secure renewal of its PCS licenses. The Company has
also incurred costs associated with microwave relocation in the construction of
the PCS network. Amortization of PCS licenses and microwave relocation costs
F-16
<PAGE>
will commence as each service area becomes operational, over estimated useful
lives of 40 years. Amortization expense for PCS licenses and microwave
relocation costs of approximately $1,711,000 is included in Depreciation and
amortization expense in the consolidated statement of operations for the year
ended December 31, 1996. No amortization expense was recorded in 1995, or in the
period from October 24, 1994 (date of inception) to December 31, 1994. Interest
expense capitalized pertaining to the acquisition of the PCS licenses has been
included in Property, plant and equipment.
The ongoing value and remaining useful life of intangible assets are subject to
periodic evaluation. The Company currently expects the carrying amounts to be
fully recoverable. Impairments of intangibles and long-lived assets are assessed
based on an undiscounted cash flow methodology.
Capitalized Interest - Interest costs associated with the construction of
capital assets incurred during the period of construction are capitalized. The
total capitalized in 1996 was approximately $30,461,000. There were no amounts
capitalized in 1995 or 1994.
Debt Issuance Costs - Included in Other assets are costs associated with
obtaining financing. Such costs are capitalized and amortized to interest
expense over the term of the related debt instruments using the effective
interest method. Amortization expense for the year ended December 31, 1996 was
approximately $1,944,000.
Major Customer - The Company markets its products through multiple distribution
channels, including Company-owned retail stores and third-party retail outlets.
Sales to one third-party retail customer exceeded 10% of Equipment revenue in
the consolidated statement of operations for the year ended December 31, 1996.
Income Taxes - The Company has not provided for federal or state income taxes
since such taxes are the responsibility of the individual Partners.
Financial Instruments - The carrying value of the Company's short-term financial
instruments, including cash and cash equivalents, receivables from customers and
affiliates and accounts payable approximates fair value. The fair value of the
Company's long-term debt is based on quoted market prices for the same issues or
current rates offered to the Company for similar debt. A summary of the fair
value of the Company's long-term debt at December 31, 1996 is included in Note
5.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Reclassifications - Certain reclassifications have been made to the 1995 and
1994 financial statements to conform with the 1996 financial statement
presentation.
F-17
<PAGE>
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following at December 31, 1996 and
1995 (in thousands):
1996 1995
---- ----
Land $ 905 $ -
Buildings and leasehold improvements 86,467 -
Office furniture and fixtures 68,210 2,902
Network equipment 255,691 -
Telecommunications plant - construction
work in progress 1,006,990 29,200
-------------- -------------
1,418,263 32,102
Less accumulated depreciation (9,583) (205)
-------------- -------------
$ 1,408,680 $ 31,897
============== =============
4. INVESTMENT IN UNCONSOLIDATED PARTNERSHIP
American PCS,L.P. - On January 9, 1995, the Company acquired a 49% limited
partnership interest in American PCS, L.P. ("APC"). American Personal
Communications II, L.P. ("APC II") holds a 51% interest in APC and is the
general managing partner. The investment in APC is accounted for under the
equity method. Concurrently with the execution of the partnership agreement, the
Company entered into an affiliation agreement with APC which provides for the
reimbursement of certain allocable costs and payment of affiliate fees.
Effective August 31, 1996, the Company's interest in APC, the existing loans to
APC, and obligations to provide additional funding to APC were transferred to
Holdings pursuant to an amendment to the Partnership agreement. The Company
retained the rights and obligations under the affiliation agreement with APC.
Summarized financial information is as follows (in thousands):
August 31, 1996 December 31, 1995
------------------ --------------------
Total assets............ $ 292,069 $ 237,326
Total liabilities....... 341,576 171,180
Total revenues.......... 40,921 5,153
Net loss................ 123,601 51,551
The partnership agreement, prior to amendment, between the Company and APC II
specifies that losses are allocated based on capital contributions and certain
other factors. Under the equity method, the Company recognized the majority of
the partnership losses in its financial statements until the transfer to
Holdings based on its capital contributions and the underlying commitments to
provide initial funding.
In January 1997, Holdings and APC II amended the APC partnership agreement with
respect to the allocation of profits and losses. For financial reporting
purposes, profits and losses are to be allocated in proportion to Holdings' and
APC II's respective partnership interests, except for costs related to stock
appreciation rights and interest expense attributable to FCC interest payments
which shall be allocated entirely to APC II. The change in methodology of
allocating profits and losses was made effective to January 1, 1996 and
retroactively applied. The retroactive adjustment for the year ended December
31, 1996 was recognized by Holdings.
F-18
<PAGE>
The unamortized excess of the Company's investment over its equity in the
underlying net assets of APC at the date of acquisition was approximately
$10,139,000. The excess investment amount has been eliminated as a result of the
recognition of the Company's equity in APC's losses. Amortization included in
equity in loss of unconsolidated partnership prior to such elimination totaled
approximately $128,000 for the period ended August 31, 1996 and $240,000 for the
year ended December 31, 1995.
5. LONG-TERM DEBT AND BORROWING ARRANGEMENTS
The long-term debt of the Company as of December 31, 1996 is summarized as
follows (in thousands):
11% Senior Notes due in 2006 $ 250,000
12 1/2% Senior Discount Notes due in 2006, net of
unamortized discount of $214,501 285,499
Credit facility - term loan 150,000
Note payable to affiliate due in 1997 5,000
Other 742
---------------
Total debt 691,241
Less current maturities 5,049
---------------
Long-term debt $ 686,192
===============
Senior Notes and Senior Discount Notes - In August 1996, Sprint Spectrum L.P.
and Sprint Spectrum Finance Corporation (together, the "Issuers") issued $250
million aggregate principal amount of 11% Senior Notes due 2006 ("the Senior
Notes"), and $500 million aggregate principal amount at maturity of 12 1/2%
Senior Discount Notes due 2006 (the "Senior Discount Notes" and, together with
the Senior Notes, the "Notes"). The Senior Discount Notes were issued at a
discount to their aggregate principal amount at maturity and generated proceeds
of approximately $273 million. Cash interest on the Senior Notes will accrue at
a rate of 11% per annum and is payable semi-annually in arrears on each February
15 and August 15, commencing February 15, 1997. Cash interest will not accrue or
be payable on the Senior Discount Notes prior to August 15, 2001. Thereafter,
cash interest on the Senior Discount Notes will accrue at a rate of 12 1/2% per
annum and will be payable semi-annually in arrears on each February 15 and
August 15, commencing February 15, 2002.
On August 15, 2001, the Issuers will be required to redeem an amount equal to
$384.772 per $1,000 principal amount at maturity of each Senior Discount Note
then outstanding ($192 million in aggregate principal amount at maturity,
assuming all of the Senior Discount Notes remain outstanding at such date).
The Notes are redeemable at the option of the Issuers, in whole or in part, at
any time on or after August 15, 2001 at the redemption prices set forth below,
respectively, plus accrued and unpaid interest, if any, to the redemption date,
if redeemed during the 12 month period beginning on August 15 of the years
indicated below:
F-19
<PAGE>
Senior Discount
Senior Notes Notes
Year Redemption Price Redemption Price
--------
2001 105.500% 110.000%
2002 103.667% 106.500%
2003 101.833% 103.250%
2004 and thereafter 100.000% 100.000%
---------
In addition, prior to August 15, 1999, the Issuers may redeem up to 35% of the
originally issued principal amount of the Notes. The redemption price of the
Senior Notes is equal to 111.0% of the principal amount of the Senior Notes so
redeemed, plus accrued and unpaid interest, if any, to the redemption date with
the net proceeds of one or more public equity offerings, provided that at least
65% of the originally issued principal amount of Senior Notes would remain
outstanding immediately after giving effect to such redemption. The redemption
price of the Senior Discount Notes is equal to 112.5% of the accreted value at
the redemption date of the Senior Discount Notes so redeemed, with the net
proceeds of one or more public equity offerings, provided that at least 65% of
the originally issued principal amount at maturity of the Senior Discount Notes
would remain outstanding immediately after giving effect to such redemption.
The Notes contain certain restrictive covenants, including (among other
requirements) limitations on additional indebtedness, limitations on restricted
payments, limitations on liens, and limitations on dividends and other payment
restrictions affecting restricted subsidiaries.
Bank Credit Facility - The Company entered into an agreement with The Chase
Manhattan Bank ("Chase") as agent for a group of lenders for a $2 billion bank
credit facility dated October 2, 1996. The proceeds of this facility are to be
used to finance working capital needs, subscriber acquisition costs, capital
expenditures and other general Company purposes.
The facility consists of a revolving credit commitment of $1.7 billion and a
$300 million term loan commitment, $150 million of which was drawn down
subsequent to closing and $150 million of which was to be drawn within 90 days
after closing. The amount available under the revolving credit facility was $450
million on December 31, 1996. There were no borrowings under the revolving
credit facility as of December 31, 1996. The availability will be increased upon
the achievement of certain financial and operating conditions as defined in the
agreement. Commitment fees for the revolving portion of the agreement are
payable quarterly based on average unused revolving commitments.
The revolving credit commitment expires July 13, 2005. Availability will be
reduced in quarterly installments ranging from $75 million to $175 million
commencing January 2002. Further reductions may be required after January 1,
2000, to the extent that the Company meets certain financial conditions.
Subsequent to December 31, 1996, the Company borrowed $200 million under the
revolving credit facility.
The term loans are due in sixteen consecutive quarterly installments beginning
January 2002 in aggregate principal amounts of $125,000 for each of the first
fifteen payments with the remaining aggregate outstanding principal amount of
the term loans due as the last installment.
F-20
<PAGE>
Interest on the term loans and/or the revolving credit loans is at the
applicable LIBOR rate plus 2.5% ("Eurodollar Loans"), or the greater of the
prime rate or 0.5% plus the Federal Funds effective rate, plus 1.5% ("ABR
Loans"), at the Company's option. The interest rate may be adjusted downward for
improvements in the bond rating and/or leverage ratios. Interest on ABR Loans
and Eurodollar Loans with interest period terms in excess of 3 months is payable
quarterly. Interest on Eurodollar Loans with interest period terms of less than
3 months is payable on the last day of the interest period. As of December 31,
1996, the interest rate on the first $150 million term loan was 8.19%.
Borrowings under the Bank Credit Facility are secured by the Company's interests
in WirelessCo, RealtyCo and EquipmentCo and certain other personal and real
property (the "Shared Lien"). The Shared Lien equally and ratably secures the
Bank Credit Facility, the Vendor Financing (Note 6) and certain other
indebtedness of the Company. The credit facility is jointly and severally
guaranteed by WirelessCo, RealtyCo and EquipmentCo and is non-recourse to the
Parents and the Partners.
The Bank Credit Facility agreement and the Vendor Financing agreements contain
certain restrictive financial and operating covenants, including (among other
requirements) maximum debt ratios (including debt to total capitalization),
limitations on capital expenditures, limitations on additional indebtedness and
limitations on dividends and other payment restrictions affecting certain
restricted subsidiaries. The loss of the right to use the Sprint trademark, the
termination or non-renewal of any FCC license that reduces population coverage
below specified limits, or changes in controlling interest in the Company, as
defined, among other provisions, constitute events of default.
Note payable to affiliate - As of December 31, 1996, the Company had a note
payable of $5 million, bearing interest at 6.5% and payable on July 31, 1997,
due to an affiliated entity, NewTelco, L.P.
The estimated fair value of the Company's long-term debt at December 31, 1996 is
as follows (in thousands):
Carrying Estimated
Amount Fair Value
------------ --------------
11% Senior Notes $ 250,000 $ 270,625
12 1/2% Senior Discount Notes 285,499 337,950
Credit facility - term loan 150,000 151,343
At December 31, 1996, scheduled maturities of long-term debt during each of the
next five years are as follows (in thousands):
1997 $ 5,049
1998 54
1999 60
2000 66
2001 192,459
F-21
<PAGE>
6. COMMITMENTS AND CONTINGENCIES
Operating Leases - Minimum rental commitments as of December 31, 1996, for all
noncancelable operating leases, consisting principally of leases for cell and
switch sites and office space, are as follows (in thousands):
1997 $ 68,616
1998 61,186
1999 57,407
2000 38,356
2001 13,468
Gross rental expense for cell and switch sites aggregated approximately
$13,097,000 for the year ended December 31, 1996. Gross rental expense for
office space approximated $11,432,000, $687,000 and $105,000 for the years ended
December 31, 1996 and December 31, 1995, and for the period October 24, 1994
(date of inception) to December 31, 1994, respectively. Certain leases contain
renewal options that may be exercised from time to time and are excluded from
the above amounts.
Procurement Contracts - On January 31, 1996, the Company entered into
procurement and services contracts with AT&T Corp. (subsequently assigned to
Lucent Technologies, Inc., "Lucent") and Northern Telecom, Inc. ("Nortel" and
together with Lucent, the "Vendors") for the engineering and construction of a
PCS network. Each contract provides for an initial term of ten years with
renewals for additional one-year periods. The Vendors must achieve substantial
completion of the PCS network within an established time frame and in accordance
with criteria specified in the procurement contracts. Pricing for the initial
equipment, software and engineering services has been established in the
procurement contracts. The procurement contracts provide for payment terms based
on delivery dates, substantial completion dates, and final acceptance dates. In
the event of delay in the completion of the PCS network, the procurement
contracts provide for certain amounts to be paid to the Company by the Vendors.
The minimum commitments for the initial term are $0.8 billion and $1.0 billion
from Lucent and Nortel, respectively, which include, but are not limited to, all
equipment required for the establishment and installation of the PCS network.
Handset Purchase Agreements - In June, 1996, the Company entered into a
three-year purchase and supply agreement with a vendor for the purchase of
handsets and other equipment totaling approximately $500 million. During 1996,
the Company purchased $85 million under the agreement. The total purchase
commitment must be satisfied by April 30, 1998.
In September, 1996, the Company entered into a second three-year purchase and
supply agreement for the purchase of handsets and other equipment totaling more
than $600 million. Purchases under the second agreement will commence on or
after April 1, 1997, and the total purchase commitment must be satisfied during
the three-year period after the initial handset purchase.
Vendor Financing - As of October 2, 1996, the Company entered into financing
agreements with Nortel and Lucent for multiple drawdown term loan facilities
totaling $1.3 billion and $1.8 billion, respectively. The proceeds of such
facilities are to be used to finance the purchase of goods and services provided
by the Vendors.
Nortel has committed to provide financing in two phases. During the first phase,
Nortel will finance up to $800 million. Once the full $800 million has been
utilized and the Company obtains additional equity commitments and/or subordin-
F-22
<PAGE>
ated unsecured loans of at least $400 million and achieves certain operating
conditions, Nortel will finance up to an additional $500 million. The amount
available under the Nortel facility was $1.3 billion on December 31, 1996. In
addition, the Company will be obligated to pay origination fees on the date of
the initial draw down loan under the first and second phases. The Nortel
agreement terminates on the earliest of (a) the date the availability under the
commitments is reduced to zero, (b) December 31, 2000, or (c) March 31, 1997 if
no borrowings under the agreements have been drawn.
Lucent has committed to financing up to $1.5 billion through December 31, 1997,
and up to an aggregate of $1.8 billion thereafter. The Company pays a facility
fee on the daily amount of loans outstanding under the agreement, payable
quarterly. The Lucent agreement terminates June 30, 2001. Subsequent to December
31, 1996, the Company borrowed approximately $274 million under the Lucent
facility.
Certain amounts included under Construction Obligations on the consolidated
balance sheet may be financed under the Vendor Financing agreements.
The principal amounts of the loans drawn under both the Nortel and Lucent
agreements are due in twenty consecutive quarterly installments, commencing on
the date which is thirty-nine months after the last day of such "Borrowing Year"
(defined in the agreements as any one of the five consecutive 12-month periods
following the date of the initial drawdown of the loan). The aggregate amount
due each year is equal to percentages ranging from 10% to 30% multiplied by the
total principal amount of loans during each Borrowing Year.
The agreements provide two borrowing rate options. During the first phase of the
Nortel agreement and throughout the term of the Lucent agreement "ABR Loans"
bear interest at the greater of the prime rate or 0.5% plus the Federal Funds
effective rate, plus 2%. "Eurodollar Loans" bear interest at the London
interbank (LIBOR) rate (any one of the 30-, 60- or 90-day rates, at the
discretion of the Company), plus 3%. During the second phase of the Nortel
agreement, ABR Loans bear interest at the greater of the prime rate or 0.5% plus
the Federal Funds effective rate, plus 1.5%; and Eurodollar loans bear interest
at the LIBOR rate plus 2.5%. Interest from the date of each loan through one
year after the last day of the Borrowing Year is added to the principal amount
of each loan. Thereafter, interest is payable quarterly.
Borrowings under the Vendor Financing are secured by the Shared Lien (Note 5).
The Vendor Financing is jointly and severally guaranteed by WirelessCo, RealtyCo
and EquipmentCo and is non-recourse to the Parents and the Partners.
Service Agreement - The Company has entered into an agreement with a vendor to
provide PCS call record and retention services. Monthly rates per subscriber are
variable based on overall subscriber volume. If subscriber fees are less than
specified annual minimum charges, the Company will be obligated to pay the
difference between the amounts paid for processing fees and the annual minimum.
Annual minimums range from $20 million to $60 million through 2001.
The agreement extends through December 31, 2001, with two automatic, two-year
renewal periods, unless terminated by the Company. The company may terminate the
agreement prior to the expiration date, but would be subject to specified
termination penalties.
F-23
<PAGE>
7. EMPLOYEE BENEFITS
Employees performing services for the Company were employed by Sprint
Corporation through December 31, 1995. Amounts paid to Sprint Corporation
relating to pension expense and employer contributions to the Sprint Corporation
401(k) plan for these employees approximated $323,000 in 1995. No expense was
incurred through December 31, 1994.
The Company maintains short-term and long-term incentive plans. All salaried
employees are eligible for the short-term incentive plan commencing at date of
hire. Short-term incentive compensation is based on incentive targets
established for each position based on the Company's overall compensation
strategy. Targets contain both an objective Company component and a personal
objective component. Charges to operations for the short-term plan approximated
$12,332,000 and $3,491,000 for the years ended December 31, 1996 and 1995,
respectively. No expense was incurred through December 31, 1994.
Long-term Compensation Plan - Effective July 1, 1996, a long-term compensation
plan was adopted. Employees meeting certain eligibility requirements are
considered to be participants in the plan. Participants will receive 100% of the
pre-established targets for the period from July 1, 1995 to June 30, 1996 (the
"Introductory Term"). Participants may elect a payout of the amount due or
convert 50% or 100% of the award to appreciation units. Unless converted to
appreciation units, payment for the Introductory Term will be made in the third
quarter of 1998. Appreciation units vest 25% per year commencing on the second
anniversary of the date of grant. Participants have until March 15, 1997 to make
payout or conversion elections. For the years ended December 31, 1996 and 1995,
$9.5 million and $1.9 million, respectively, has been expensed. The ultimate
liability will be based on actual payout vs. conversion elections and the final
results of an independent valuation of the Company as of June 30, 1997. The
Company has applied APB Opinion No. 25, "Accounting for Stock Issued to
Employees" for 1996. No significant difference would have resulted if SFAS No.
123, "Accounting for Stock-Based Compensation" had been applied.
Savings Plan - Effective January, 1996, the Company established a savings and
retirement program (the "Savings Plan") for certain employees, which is intended
to qualify under Section 401(k) of the Internal Revenue Code. Most permanent
full-time, and certain part-time, employees are eligible to become participants
in the plan after one year of service or upon reaching age 35, whichever occurs
first. Participants make contributions to a basic before tax account and
supplemental before tax account. The maximum contribution for any participant
for any year is 16% of such participant's compensation. For each eligible
employee who elects to participate in the Savings Plan and makes a contribution
to the basic before tax account, the Company makes a matching contribution. The
matching contributions equal 50% of the amount of the basic before tax
contribution of each participant up to the first 6% that the employee elects to
contribute. Contributions to the Savings Plan are invested, at the participants
discretion, in several designated investment funds. Distributions from the
Savings Plan generally will be made only upon retirement or other termination of
employment, unless deferred by the participant. Expense under the Savings Plan
approximated $1,125,000 in 1996.
Profit Sharing (Retirement) Plan - Effective January, 1996, the Company
established a profit sharing plan for its employees. Employees are eligible to
participate in the plan after completing one year of service. Profit sharing
contributions are based on the compensation, age, and years of service of the
employee. Profit sharing contributions are deposited into individual accounts of
the Company's 401(k) plan. Vesting occurs once a participant completes five
years of service. For the year ended December 31, 1996, expense under the profit
sharing plan approximated $726,000.
F-24
<PAGE>
8. RELATED PARTY TRANSACTIONS
Business Services - The Company reimburses Sprint Corporation for certain
accounting and data processing services, for participation in certain
advertising contracts, for certain cash payments made by Sprint Corporation on
behalf of the Company and other management services. The Company is allocated
the costs of such services based on direct usage. Allocated expenses of
approximately $11,900,000 and $2,646,000 are included in Selling and General and
administrative expense in the consolidated statement of operations for 1996 and
1995, respectively. No reimbursement was made through December 31, 1994.
Cox Communications PCS, L.P. - On December 31, 1996, Holdings acquired a 49%
limited partner interest in Cox Communications PCS, L.P. ("Cox PCS"). Concurrent
with the execution of this partnership agreement, the Company entered into an
affiliation agreement with Cox PCS which provides for the reimbursement of
certain allocable costs and payment of affiliate fees. For the year ended
December 31, 1996, allocable costs of approximately $7,339,000 are included in
the related operating expense captions in the accompanying consolidated
statement of operations and in receivables from affiliates in the consolidated
balance sheet. In addition, the Company purchases certain equipment, such as
handsets, on behalf of Cox PCS. Receivables from affiliates for handsets and
related equipment were approximately $6 million at December 31, 1996.
Paging Services - In 1996, the Company commenced paging services pursuant to
agreements with Paging Network Equipment Company ("PageNet") and Sprint
Communications Company, L.P. ("Sprint Communications"). For the year ended
December 31, 1996, Sprint Communications received agency fees of approximately
$4.9 million.
9. Quarterly Financial Data (Unaudited)
Summarized quarterly financial data for 1996 and 1995 is as follows (in
thousands):
1996 First Second Third Fourth
---- ----- ------ ----- ------
Operating revenues.............. $ - $ - $ - $ 4,175
Operating expenses.............. 30,978 46,897 87,135 195,038
Net loss........................ 67,425 90,770 94,487 185,883
1995
----
Operating revenues.............. $ - $ - $ - $ -
Operating expenses.............. 3,655 4,589 11,844 46,463
Net loss........................ 6,789 9,718 19,488 74,433
F-25
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors of Sprint Spectrum Finance Corporation
Kansas City, Missouri
We have audited the accompanying balance sheets of Sprint Spectrum Finance
Corporation (a wholly-owned subsidiary of Sprint Spectrum L.P.), as of December
31, 1996 and May 21, 1996 (date of inception) and the related statement of
operations, stockholder's equity and cash flows for the period from inception
(May 21, 1996) to December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such balance sheets presents fairly, in all material respects,
the financial position of Sprint Spectrum Finance Corporation as of December 31,
1996 and May 21, 1996 and the results of its operations and its cash flows for
the period from inception (May 21, 1996) to December 31, 1996 in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
March 14, 1997
F-26
<PAGE>
SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
BALANCE SHEETS
December 31, May 21,
1996 1996
- -------------------------------------------------- -------------
(Inception)
ASSETS
Receivable from parent............. $ 100 $ 100
------------- -------------
TOTAL ASSETS....................... $ 100 $ 100
============= =============
STOCKHOLDER'S EQUITY
Common stock, $1.00 par value; 1,000
shares authorized; 100 shares
issued and outstanding........... $ 100 $ 100
------------- -------------
TOTAL STOCKHOLDER'S EQUITY......... $ 100 $ 100
============= =============
See notes to financial statements
F-27
<PAGE>
SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
STATEMENT OF OPERATIONS
Period from
May 21, 1996
(date of inception)
to December 31,
1996
--------------------
Operating Revenues.................... $ -
Operating Expenses.................... -
--------------------
Net Income............................ $ -
====================
See notes to financial statements
F-28
<PAGE>
SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
Common Stock
------------------------------------
Shares Dollars
--------------- -----------------
BALANCE, May 21, 1996.............. 100 $ 100
=============== =================
BALANCE, December 31, 1996......... 100 $ 100
=============== =================
See notes to financial statements
F-29
<PAGE>
SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
STATEMENT OF CASH FLOWS
From date
of inception
to December 31,
1996
---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net income to
net cash used in operating activities:
Net income................................................. $ -
Changes in assets and liabilities:
Receivables.............................................. (100)
Net cash used in operating ---------------
Net cash used in operating activities................. (100)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock..................................... 100
---------------
Net cash provided by financing activities............. 100
---------------
INCREASE (DECREASE IN CASH AND CASH EQUIVALENTS................ -
CASH AND CASH EQUIVALENTS, Beginning of Period................. -
---------------
CASH AND CASH EQUIVALENTS, End of Period....................... $ -
===============
See notes to financial statements
F-30
<PAGE>
SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Sprint Spectrum Finance Corporation ("FinCo"), a Delaware corporation,
was formed on May 21, 1996 and is a wholly-owned subsidiary of Sprint Spectrum
L.P. (the "Partnership"). FinCo was formed to be a co-obligor of the debt
obligations discussed in Note 2.
The Partnership contributed $100 to FinCo on May 21, 1996 in exchange
for 100 shares of common stock.
2. SENIOR NOTES AND SENIOR DISCOUNT NOTES
In August 1996, the Partnership and FinCo (together, the "Issuers")
issued $250 million aggregate principal amount of 11% Senior Notes due 2006 (the
"Senior Notes"), and $500 million aggregate principal amount at maturity of 12
1/2% Senior Discount Notes due 2006 (the "Senior Discount Notes" and, together
with the Senior Notes, the "Notes"). The Senior Discount Notes were issued at a
discount to their aggregate principal amount at maturity and generated proceeds
of approximately $273 million. Cash interest on the Senior Notes will accrue at
a rate of 11% per annum and is payable semi-annually in arrears on each February
15 and August 15, commencing February 15, 1997. Cash interest will not accrue or
be payable on the Senior Discount Notes prior to August 15, 2001. Thereafter,
cash interest on the Senior Discount Notes will accrue at a rate of 12 1/2% per
annum and will be payable semi-annually in arrears on each February 15 and
August 15, commencing February 15, 2002.
On August 15, 2001, the Issuers will be required to redeem an amount equal to
$384.772 per $1,000 principal amount at maturity of each Senior Discount Note
then outstanding ($192 million in aggregate principal amount at maturity,
assuming all of the Senior Discount Notes remain outstanding at such date).
The Notes are redeemable at the option of the Issuers, in whole or in part, at
any time on or after August 15, 2001 at the redemption prices set forth below,
respectively, plus accrued and unpaid interest, if any, to the redemption date,
if redeemed during the 12 month period beginning on August 15 of the years
indicated below:
Senior Discount
Senior Notes Notes
Year Redemption Price Redemption Price
-------- ---------------- -----------------
2001 105.500% 110.000%
2002 103.667% 106.500%
2003 101.833% 103.250%
2004 and thereafter 100.000% 100.000%
In addition, prior to August 15, 1999, the Issuers may redeem up to 35% of the
originally issued principal amount of the Notes. The redemption price of the
Senior Notes is equal to 111.0% of the principal amount
F-31
<PAGE>
of the Senior Notes so redeemed, plus accrued and unpaid interest, if any, to
the redemption date with the net proceeds of one or more public equity
offerings, provided that at least 65% of the originally issued principal amount
of Senior Notes would remain outstanding immediately after giving effect to such
redemption. The redemption price of the Senior Discount Notes is equal to 112.5%
of the accreted value at the redemption date of the Senior Discount Notes so
redeemed, with the net proceeds of one or more public equity offerings, provided
that at least 65% of the originally issued principal amount at maturity of the
Senior Discount Notes would remain outstanding immediately after giving effect
to such redemption.
The Notes contain certain restrictive covenants, including (among other
requirements) limitations on additional indebtedness, limitations on restricted
payments, limitations on liens, and limitations on dividends and other payment
restrictions affecting restricted subsidiaries.
F-32
<PAGE>
Exhibit 10.6
The omitted portions indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
AMENDED AND RESTATED
PROCUREMENT AND SERVICES CONTRACT
between
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.,
Owner
and
LUCENT TECHNOLOGIES INC.,
Vendor
Dated as of October 9, 1996
<PAGE>
P
AMENDED AND RESTATED PROCUREMENT AND SERVICES CONTRACT
This Amended and Restated Procurement and Services Contract
(the "Contract") is made and is effective as of October 9, 1996 (the "Effective
Date"), by and between Sprint Spectrum Equipment Company, L.P., a Delaware
limited partnership (the "Owner"), and Lucent Technologies Inc., a Delaware
corporation (the "Vendor" and, together with the Owner, the "Parties").
RECITALS:
A. The Federal Communications Commission (the "FCC") granted to
Sprint Spectrum Holding Company L.P. ("Holdings"), a Delaware limited partner-
ship (formerly known as MajorCo L.P.) and certain of its affiliates personal
communications services licenses (the "PCS FCC Licenses") to build and operate
PCS Systems (as defined below) in specified geographic areas in the United
States;
B. Holdings and AT&T Corp. ("AT&T"), a New York corporation by and
through its Network Systems Group entered into a Procurement and Services
Contract dated as of January 31, 1996 (the "Procurement and Services Contract").
Effective as of February 1, 1996, pursuant to subsection 27.22 of the
Procurement and Services Contract and a Notice of Assignment dated as of
February 1, 1996 (the "AT&T Assignment"), AT&T assigned all of its right, title
and interest in and to, and delegated and transferred all of its duties,
obligations and liabilities, under the Procurement and Services Contract to
Lucent Technologies Inc., a Delaware corporation (the "Vendor") and the full
successor to the Network Systems Group of AT&T. Pursuant to the AT&T Assignment,
AT&T was released and discharged from all duties, obligations and liabilities
under the Procurement and Services Contract. Effective as of June 21, 1996,
pursuant to an Assignment, Assumption and Amendment No. 1 dated as of June 21,
1996 ("Amendment No. 1") by and among Holdings, Sprint Spectrum L.P., a Delaware
limited partnership ("Sprint Spectrum"), the Owner and the Vendor, all of
Holdings' right, title and interest in and to the Procurement and Services
Contract was assigned to and all of its duties and obligations under the
Procurement and Services Contract were delegated to Sprint Spectrum and Holdings
was released and discharged from any and all liabilities, obligations or duties
under or in respect of the Procurement and Services Contract. Pursuant to
Amendment No. 1, all of Sprint Spectrum's right (other than certain rights under
the Procurement and Services Contract to exercise remedies under the Procurement
and Services Contract in lieu of any such exercise by the Owner), title and
interest in and to the Procurement and Services Contract was assigned to and all
of its duties and obligations under the Procurement and Services Contract were
delegated to the Owner and further, the Procurement and Services Contract was
amended. Pursuant to Amendment No. 2 to the Procurement and Services Contract
dated as of July 15, 1996 ("Amendment No. 2"), the Procurement and Services
Contract was further amended. For the purposes hereof, the Procurement and
Services Contract as assigned pursuant to the AT&T Assignment and Amendment No.
1 and as amended pursuant to Amendment No. 1 and Amendment No. 2 is hereinafter
referred to as the "Existing Contract";
C. The Owner desires to have the Vendor engineer and construct PCS
Systems and PCS Sub-Systems in the geographic areas specified for such PCS
Systems and PCS Sub-Systems on Schedule 4 (collectively, the "System Areas")
pursuant to the terms of this Contract;
D. The Vendor, itself or through its Subcontractors (as defined
below), desires to provide Products (as defined below) and Services (as defined
below) to the Owner in connection with the engineering and construction of PCS
Systems and PCS Sub-Systems in the System Areas (as certain of such System Areas
may be divided into the certain sub-areas ("System Sub-Areas") set forth on
Schedule 4) including, but not limited to, the Vendor's obligation to engineer,
equip, install, build, test and service and operate PCS Systems and PCS
Sub-Systems in such System Areas and System Sub-Areas in accordance with the
terms and conditions set forth herein; and
E. The Parties desire to amend and restate the Existing Contract
to provide for, among other things, the incorporation of all prior amendments
and the subdivision of certain PCS Systems into certain defined PCS Sub-Systems;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the Parties hereby agree that the Existing Contract
will be and hereby is amended and restated in its entirety to read herein as
follows:
<PAGE>
SECTION 1 DEFINITIONS
1.1 Definitions. In addition to the terms listed below, certain
additional terms are defined in the Exhibits (as defined below), subject to the
provisions of subsection 1.2 hereof. As used in this Contract, the following
terms have the following meanings:
"AAA" means the American Arbitration Association.
"Acceptance Certificates" means the collective reference to the
Factory Test Certificate, the Initial PCS System Certificate, the Substantial
Completion Certificate and the Final Acceptance Completion Certificate.
"Acceptance Tests" means the collective reference to the
performance and reliability demonstrations and tests specified in Exhibits B1,
B2 and B3 to determine whether the Products, the Services, any of the PCS
Systems, PCS Sub-Systems and/or the System meet the Specifications and the terms
and conditions of any applicable order and this Contract.
"Access Manager HLR (AM/HLR)" means Equipment and Software that
provides the call processing logic which comprises the stand-alone HLR service.
The stand-alone service being that service which contains the PCS subscriber's
or group of PCS subscribers' profile data used to provide call completion and
enhanced services as further described in Appendix A.
"Access Manager Specifications ("AM/HLR Specifications")" means the
Access Manager Specifications set forth in Appendix A.
"Actiview" means Vendor's Actiview application software that is
used for provisioning of services features ("SFP") within the Owner's services
operations, including, but not limited to, over-the-air provisioning and
non-over-the-air provisioning and computer desk to functions as defined in the
Actiview Statement of Work.
"Actiview Acceptance Test Period" means the applicable period of
time in days that the Vendor has to test and the Owner has to accept Actiview
Products and Services as specified in the Actiview Statement of Work.
"Actiview Completion Dates" means the dates and milestones set
forth in the Actiview Statement of Work that are required to be met by the
Vendor for the successful and timely completion of the provision of the Actiview
Products and Services.
"Actiview Final Acceptance" means the Owner's final acceptance of
the relevant Actiview Products and Services, and, to the extent applicable, the
installation thereof, pursuant to and in accordance with the Actiview Final
Acceptance Tests set forth in Appendix S; provided that in no event can Actiview
Final Acceptance occur with respect to Actiview Products or Services prior to
thirty (30) days after the completion of Actiview Final Acceptance Testing.
"Actiview Final Acceptance Tests" and "Actiview Final Acceptance
Testing" means the Actiview Products and Services final acceptance testing as
set forth in Appendix S.
"Actiview Functional Acceptance" means the Owner's initial
acceptance of Actiview Products and Services, and, to the extent applicable, the
installation thereof, pursuant to and in accordance with the Actiview Functional
Acceptance Tests set forth in Appendix S.
"Actiview Functional Acceptance Test" and "Actiview Functional
Acceptance Testing" means the initial field tests performed pursuant to and in
accordance with Appendix S during the Actiview Acceptance Test Period to
determine whether the Actiview Products and Services meet the requirements and
specifications set forth in the Actiview Statement of Work.
"Actiview Maintenance and Instruction Manuals" has the meaning
ascribed thereto in subsection 2.22.
"Actiview Operating Manuals" has the meaning ascribed thereto in
subsection 2.20.3.
"Actiview Price" means the aggregate price set forth in Appendix T
for all of the Actiview Products and Actiview Services to be provided under the
Contract and described in the Actiview Statement of Work.
"Actiview Product Warranty Period" has the meaning ascribed thereto
in subsection 17.1.3.
"Actiview Products" means the collective reference to Actiview
Software, Actiview documentation and any other ancillary Actiview items provided
by the Vendor to the Owner.
"Actiview Services" means those services provided by the Vendor to
the Owner as part of the provision, installation and continuing operation and
maintenance of the Actiview Products pursuant to and in accordance with the
Actiview Statement of Work.
"Actiview Software" means the work management Software forming part
of the application Software provided by the Vendor to the Owner pursuant to and
in accordance with the Actiview Statement of Work.
"Actiview Statement of Work" means the requirements, specifications
and milestones set forth in Appendix U.
"Adaptations" means any derivative work based on service package
application licensed Software including (i) any work incorporating any service
package application licensed Software directly, (ii) any work incorporating any
computer program from service package application licensed Software rewritten in
a different computer language or converted to operate on a different type of
CPU, (iii) any work utilizing a method or concept from service package
application licensed Software that the Owner is obligated to keep in confidence
hereunder or (iv) any work otherwise covered by any of the Vendor's intellectual
property rights in service package application licensed Software.
"Additional Affiliate" has the meaning ascribed thereto in subsec-
tion 3.1.
"Additional Affiliate Agreement" has the meaning ascribed thereto
in subsection 3.3.
"Additional Affiliate Arrangement" means a formal arrangement
between the Owner and a Person to be designated an Additional Affiliate under
the terms of this Contract, which arrangement will include, but not be limited
to, agreements on marketing, backhaul, common billing, resale agreements and/or
revenue sharing.
"Affiliates" means the collective reference to the Initial Affil-
iates and the Additional Affiliates.
"Annual Release Maintenance Fees" means those recurring annual fees
of the Vendor, usually invoiced annually in January, the Owner's payment of
which entitles the Owner to receive all Combined Software Releases, Software
Enhancements, and Software Upgrades applicable to PCS Products (but not Optional
Software Features) which will be made available to the Owner when made generally
available to the Vendor's Customers during the period for which the fees were
paid. All Annual Release Maintenance Fees will be as in the Vendor's Customer
Price Guides (subject to Section 26) except as otherwise set forth on Schedule
3. The Annual Release Maintenance Fees applicable to the Owner will for the
period from the Effective Date until the Final Acceptance of the last PCS System
within the Initial System always cover at least those PCS Products included in
the Initial System.
"ANSI" means the American National Standards Institute.
"APC" means American PCS, L.P., a Delaware limited partnership.
"Applicable Laws" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, all United States or foreign laws (including, but not limited to, any
Environmental Laws), treaties, ordinances, judgments, decrees, injunctions,
writs, orders and stipulations of any court, arbitrator or governmental agency
or authority and statutes, rules, regulations, orders and interpretations
thereof of any federal, state, provincial, county, municipal, regional,
environmental or other Governmental Entity, instrumentality, agency, authority,
court or other body (i) applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject or (ii)
having jurisdiction over a or any part of any PCS System, the System or the Work
to be performed pursuant to the terms of this Contract.
"Applicable Permits" means any waiver, exemption, zoning, building,
variance, franchise, permit, authorization, approval, license or similar order
of or from any United States, foreign, federal, state, provincial, county,
municipal, regional, environmental or other governmental body, instrumentality,
agency, authority, court or other body having jurisdiction over all or any part
of any PCS System, the System or the Work to be performed pursuant to the terms
of this Contract.
"Application Software ("AS")" or "AS Software," means the Software
used for operations and maintenance support as part of the Vendor provided AS
Products and Services described in Appendix G.
"AS Acceptance Date" means the date or dates on which the AS
Products successfully complete the AS Functional Acceptance Tests or the AS
Final Acceptance Tests, as the case may be.
"AS Acceptance Test(s)" means the collective reference to the AS
Functional Acceptance Tests and the AS Final Acceptance Tests.
"AS Acceptance Test Period" means the applicable period of time in
days that the Vendor has to test and the Owner has to accept or reject certain
AS Products as specified in the AS Statement of Work.
"AS Completion Dates" means the dates and milestones set forth in
Appendix G that are required to be met by the Vendor for the successful and
timely completion of the AS Statement of Work in accordance with the AS
Statement of Work.
"AS Equipment" means certain third party manufactured or other
Equipment provided to the Owner by the Vendor as necessary for the operation and
integration of the AS Software and the AS Services pursuant to and in accordance
with the AS Statement of Work.
"AS Final Acceptance" means the Owner's final acceptance of the AS
Products and installation thereof, pursuant to and in accordance with the AS
Final Acceptance Tests; provided that in no event can AS Final Acceptance occur
with respect to AS Software and/or AS Services prior to thirty (30) days after
the completion of AS Functional Acceptance Testing.
"AS Final Acceptance Tests" and "AS Final Acceptance Testing" means
the AS Product final acceptance tests set forth in Appendix K.
"AS Functional Acceptance" means the Owner's initial acceptance of
AS Products and Services, and, to the extent applicable, the installation
thereof, pursuant to and in accordance with the AS Functional Acceptance Tests.
"AS Functional Acceptance Test" and "AS Functional Acceptance
Testing" means the initial functional tests performed pursuant to and in
accordance with Appendix K.
"AS/OAM&P Statement of Work" or "AS Statement of Work" means the
scope of work to be performed by the Vendor in accordance with the terms of
Appendix G.
"AS Operating Manuals" has the meaning ascribed thereto in subsec-
tion 2.20.1.
"AS Price" means the aggregate price set forth in Appendix I for
all of the AS Products and AS Services to be provided under the Contract and
described in the AS Statement of Work.
"AS Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.1.
"AS Products" means the collective reference to AS Software and AS
Equipment.
"AS Services" means those OAM&P Services (including, but not
limited to, Optional AS Services) provided by the Vendor as part of the
provision, installation and continuing operation and maintenance of the AS
Products pursuant to and in accordance with the AS Statement of Work.
"AS/T&M" means the AS Services time and material pricing set forth
in Appendix I describing the quantity of hours involved and material expenses
related to a specific AS Statement of Work requirement which is done in
accordance with and pursuant to the AS Statement of Work; provided that AS/T&M
charges will only be charged (to the extent applicable) by the Vendor for AS
Services (other than Optional AS Services requested by the Owner in accordance
with Appendix G) requested by the Owner for performance by the Vendor of
applicable AS Services at any time after July 15, 1999.
"Backwards Compatibility" or "Backwards Compatible" means that any
referenced prior Software Revision Level or Levels of the applicable Software or
any referenced prior Equipment Revision Level or Levels of the applicable
Equipment, as the case may be, remain fully functional in accordance with and up
to the performance levels to which it was performing immediately prior to any
such enhancement and/or revision after the integration with the succeeding
Software Revision Level or Equipment Revision Level, as the case may be, and
that after such integration such prior Software Revision Level or Equipment
Revision Level loses no functionality and such succeeding Software Revision
Level or Equipment Revision Level interoperates with all such functionalities of
such prior Software Revision Level or Equipment Revision Level.
"Base Station ("BTS")" means the radio subsystem that handles the
Owner's PCS radio traffic in a designated cell. The Base Station includes all
amplification, modulation, synchronization and other circuitry required to
process a radio signal. The inputs to a Base Station are a landline or radio
signal (e.g., T1) and the radio signal that is fed into antenna lines.
"best efforts" means a Party's best efforts under the
circumstances, provided that the use of best efforts will not require the Party
to breach any outstanding contract or to violate any Applicable Law.
"Bolt-down" means for the purposes of each PCS Product all work
that needs to be done by the Vendor in order to permanently and securely place
such PCS Product in its appropriate location within the relevant System Element
Location, provided that Bolt-down will not necessarily constitute installation
of any such PCS Product.
"Build Notice" has the meaning ascribed thereto in subsection
2.7(a).
"Building Ready Date" has the meaning ascribed thereto in subsec-
tion 2.5.
"Business Day" means any day of the year other than a Saturday,
Sunday or a United States national holiday.
"Cable Microcell Integrator ("CMI")" means a form of cable
microcell integrator that provides for transportation of wireless communication
signals over a cable TV distribution plant. The CMI takes certain signals from
the cable TV distribution plant (the "cable PCS band or bands") and suitably
heterodynes, filters and amplifies these signals such that they can be radiated
by a CMI antenna or antennas in the designated PCS band to PCS wireless
handsets. The CMI takes signals received from the PCS wireless handsets from one
or more CMI receiving antennas and suitably heterodynes, filters and amplifies
these signals for transportation by the cable TV distribution plant to a Headend
Interface Converter ("HIC") or Distributive Cable Access Provider ("DCAP") at a
PCS Base Station. Additionally, the CMI unit responds to control signaling and
provides status signals. The CMI is normally collocated with the cable TV
distribution plant and takes power from the cable plant.
"Cable Partner" has the meaning ascribed thereto in subsection
27.23.
"CDMA" means code division multiple access as specified in
ANSI-J-STD-008.
"Change Orders" has the meaning ascribed thereto in subsection 7.2.
"Channels" means the voice channeling units contained in each cell
site.
"Civil Work" means the labor and materials necessary in the
performance of demolition, construction and renovation work (e.g., roads,
grading, fencing and structural improvements, including, but not limited to, any
buildings, towers and antennas) in order to construct a System Element Facility
in accordance with Exhibit E.
"Completion Cure Period" has the meaning ascribed thereto in sub-
section 15.3(a).
"Computer Program" means any Source Code or object-code instruction
or group of such instructions for controlling the operation of a CPU.
"Configuration Engineering" means the engineering required to
establish System Element configuration including, without limitation, preparing
component, inventory (including T1 quantities and configurations) and layout
drawings, Equipment labels, cable tray layout drawings, and "as-built" drawings
and Documentation. Configuration Engineering also includes the design, power
distribution and supply for each of the System Elements.
"Continental" means Continental Cablevision, Inc.
"Contract" has the meaning ascribed thereto in the prefatory
paragraph to this Amended and Restated Contract hereof. "Contract" will in all
instances include all Exhibits, Schedules, Appendices and Specifications and
will, unless specifically stated otherwise, always be deemed to include all
amendments, modifications and supplements to the Contract or any part thereof
(including any Exhibits, Schedules, Appendices or the Specifications) pursuant
to the terms of this Contract.
"Contract Cover Damages" has the meaning ascribed thereto in sub-
section 15.4.
"Contract Price" has the meaning ascribed thereto in subsection
6.1.
"CPU" means a central processing unit.
"Custom Material" has the meaning ascribed thereto in subsection
11.9.1.
"Customer" means any PCS customer of the Vendor doing business in
North America or any PCS customer doing business in North America of any of the
Vendor's affiliates or subsidiaries.
"Customer Price Guide" means the Vendor's published "Network
Wireless Systems Price Reference Guide" or other price notification releases
furnished for the purpose of communicating the Vendor's list pricing or
pricing-related items applicable to PCS Products to Customers intending to
operate PCS systems in the United States, provided that the term does not
necessarily include firm price quotes.
"Customer Service Request ("CSR")" has the meaning ascribed thereto
in subsection 2.26.2.
"Defects and Deficiencies," "Defects or Deficiencies" or
"Defective" means any one or a combination of the following items or other items
of a substantially similar nature:
(a) when used with respect to the performance of labor or service
items of Work (including any work by any Subcontractor), such items that are not
provided in a workmanlike manner and in accordance with the standards and/or
Specifications set forth herein;
(b) when used with respect to structures, materials, Equipment and
Software items of Work (including any Work by any Subcontractor), such items
that are not (i) new and of good quality and free from improper workmanship and
defects in accordance with the standards and/or Specifications set forth herein
or established hereunder and standards of good procurement, manufacturing and
construction standards, or (ii) free from errors and omissions in design or
engineering services in light of such standards; or
(c) in general, (i) Work (including any Work by any Subcontractor)
that does not conform to the Specifications and/or requirements of this
Contract, or (ii) any design, engineering, start-up activities, materials,
Equipment, Software, tools, supplies, Installation or Training that (1) does not
conform to the standards and/or Specifications set forth herein or established
hereunder, (2) has improper or inferior workmanship, (3) would materially and
adversely affect the ability of the System and/or any PCS System and/or any PCS
Sub-System and/or any material part thereof to meet the performance criteria
specified in Exhibit F on a consistent and reliable basis or (4) would
materially and adversely affect the continuous operation of the System and/or
any PCS System and/or any PCS Sub-System or any material part thereof in
accordance with the standards and/or Specifications set forth herein or
established hereunder. Defects and Deficiencies will be deemed to exist when
actually discovered or when they should have been apparent to a Person in the
Vendor's position after reasonable inspection and testing.
"Designated Processor" has the meaning of the AS Product for which
the "RTU" License specified in subsection 11.1 is granted.
"Discontinued Products" has the meaning ascribed thereto in sub-
section 10.1.
"Documentation" means the documentation for the System and/or any
PCS System and/or PCS Sub-System and/or any material part thereof.
"Effective Date" has the meaning ascribed thereto in the prefatory
paragraph to this Contract.
"E1 Emergency Condition ("E1")" has the meaning ascribed thereto in
subsection 2.26.3(b).
"E2 Emergency Condition ("E2")" has the meaning ascribed thereto in
subsection 2.26.3(b).
"Emergency Technical Assistance ("ETA")" means the provision of
emergency technical assistance to the Owner for the purpose of diagnosing and
resolving a problem which adversely affects the System and/or any PCS System
and/or any PCS Sub-System and/or any material part thereof, its operation and/or
its service pursuant to and in connection with subsection 2.26.3.
"Engineer" means the engineer or engineers appointed from time to
time by the Owner to do certain work and/or inspections and reviews on behalf of
the Owner and/or provide advice or information to the Owner in connection with
the System and/or any PCS System and/or any PCS Sub-System and/or any part
thereof.
"Engineering" means all of the engineering required to be done by
the Vendor to complete the System in accordance with the Specifications
including, but not limited to, RF Engineering, Configuration Engineering and
Facilities Engineering done in accordance with the Specifications and the CDMA
standards.
"Environmental Laws" means any and all United States and foreign,
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Entity, or
requirements of law (including, without limitation, common law) relating in any
manner to contamination, pollution, or protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equipment" means all equipment, hardware and other items of
personal property which are required to be furnished by the Vendor or any
Subcontractor pursuant to and in accordance with the terms and conditions of
this Contract and in connection with the System and/or any PCS System and/or any
PCS Sub-System and/or any part thereof in accordance with the Specifications
including, without limitation, additional equipment required as a result of the
expansion or additional coverage required pursuant to subsection 2.2, or
otherwise pursuant to the terms of this Contract, and the equipment listed on
Exhibit D or on Schedule 7 (parts A and B).
"Equipment Combined Release" has the meaning ascribed thereto in
subsection 13.1(a).
"Equipment Enhancements" means modifications or improvements made
to the PCS Equipment which improve performance or capacity of such Equipment
(sometimes referred to by the Vendor as its "Class B" changes).
"Equipment Revision Level" means each version of an Item of PCS
Equipment that reflects any modification or change from the immediately
preceding version of such Item of Equipment.
"Equipment Upgrade" means a change or modification in any delivered
PCS Equipment which fixes or otherwise corrects faults, design shortcomings or
shortcomings in meeting the Specifications, required to correct defects of a
type that result in inoperative conditions, unsatisfactory operating conditions,
or which is recommended to enhance safety (sometimes referred to by the Vendor
as its "Class A" changes).
"Escrow Agreement" has the meaning ascribed thereto in subsection
11.7.
"ETA" means Emergency Technical Assistance.
"Exchange Act" has the meaning ascribed thereto in subsection
27.22.
"Exhibits" means all of the schedules, exhibits, appendices or
other attachments hereto and made a part of this Contract as any such schedules,
exhibits, appendices and/or attachments may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Contract.
"Existing Contract" has the meaning ascribed thereto in the reci-
tals hereof.
"Expansions" means any additional Products or Services resulting
from a modification by the Owner to the Specifications, the performance criteria
set forth in Exhibit F or the Project Milestones set forth on Exhibit A
resulting in a change to the System and/or any PCS System and/or any PCS
Sub-System and/or any material part thereof, including, but not limited to, the
extension or expansion of the System and/or any PCS System and/or any PCS
Sub-System (i) into geographic areas outside of the System Areas or System
Sub-Areas, as the case may be, covered by the applicable PCS Systems or PCS
Sub-Systems, as the case may be, identified in Schedule 4, or (ii) to increase
capacity and/or performance of the System and/or any PCS System and/or any PCS
Sub-System beyond the performance criteria and/or Specifications originally
contemplated herein. Expansions will not include any additional Products or
Services required to meet the Specifications applicable to the Initial System.
For the purposes of this definition, "Expansions" will specifically not include
the extension of a PCS Sub-System into a geographic area covered or to be
covered by a PCS System of which such PCS Sub-System is a part.
"Extraordinary Transportation" means the Vendor's or its
Subcontractors' transport of Products and/or other materials pursuant to the
terms of this Contract where the circumstances of such transport require the
Vendor to use any one or a combination of the following extraordinary means of
transport and/or extraordinary methods of achieving access to the Owner's
facilities: (i) four-wheel drive vehicle (other than those typically used for
the delivery of Products), (ii) helicopter, (iii) boat, (iv) airplane, (v)
bulldozer, (vi) clear physical obstructions requiring the building of a new road
by the Vendor or its Subcontractors, or (vii) a construction crane.
"Facilities Engineering" means the engineering required to design
each System Element Facility including, without limitation, System Element
Locations and System Element layout, drawings and relevant Specifications for
the construction of the buildings, towers, generators, cable and antennae and
all other items required to make the System Element Facility functional.
Facilities Engineering does not include Configuration Engineering.
"Facilities Preparation Services" means all Facilities Engineering,
Civil Work, Site Plan Architectural Work, Structural Architectural Work, and
Utilities Work, all of which must be performed in accordance with the
Specifications. Pursuant to the definition of Civil Work, Facilities Preparation
Services will (unless otherwise agreed by the Owner) include all Work to
complete the Civil Work in a given System Element Location including, but not
limited to, the supply, building and installation of all buildings, towers and
antennas. Facility Preparation Services does not include Site Acquisition,
Network Interconnection, Microwave Relocation or any of the above referenced
activities for the construction of a Switch Site (except as otherwise provided
in this Contract).
"Facilities Preparation Services Warranty Period" has the meaning
ascribed thereto in subsection 17.2(b).
"Factory Test Certificate" means a document submitted by the Vendor
to the Owner and signed by an authorized representative of the Owner and an
authorized officer of the Vendor stating that in accordance with the
requirements of Exhibit B3 and this Contract the Vendor has successfully
completed all factory tests on the PCS Products (of the type to be installed as
part of the Initial System) in accordance with the requirements of Exhibit B3
and this Contract.
"FCC" has the meaning ascribed thereto in the recitals to this Con-
tract.
"Field Acceptance" means the Owner's initial acceptance of SCP/HLR
Products and the installation thereof, pursuant to and in accordance with the
Field Acceptance Tests set forth in Appendix E.
"Field Acceptance Tests" and "Field Acceptance Testing" means the
SCP/HLR field acceptance testing as set forth in Appendix E.
"Final Acceptance" means, as to any PCS System and/or PCS
Sub-System, the successful completion by the Vendor of all of the final
acceptance tests and requirements applicable to such PCS System and/or PCS
Sub-System set forth in Exhibit B3 in accordance with the requirements of
Exhibit B3 and the terms of this Contract. For the purposes of this Contract for
any PCS System that has been divided into PCS Sub-Systems, the Final Acceptance
of such PCS System will be deemed to have occurred upon the Final Acceptance of
the last PCS Sub-System within such PCS System.
"Final Acceptance Completion Certificate" means, with respect to a
given PCS System or PCS Sub-System, a document submitted by the Vendor to the
Owner and signed by an authorized representative of the Owner and an authorized
officer of the Vendor stating that the Vendor has successfully completed the
Acceptance Tests and requirements applicable to the Final Acceptance of the Work
to be done in such PCS System or PCS Sub-System, as the case may be, in
accordance with the requirements of Exhibit B3.
"Final RF Engineering Plan" has the meaning ascribed thereto in
subsection 2.6(c).
"Final RF Review Period" has the meaning ascribed thereto in sub-
section 2.6(c).
"Final Site Count" has the meaning ascribed thereto in subsection
2.6(c).
"Financing Interim Period" has the meaning ascribed thereto in sub-
section 24.9(a).
"Firmware" means a combination of (i) Equipment and (ii) Software
represented by a pattern of bits contained in such Equipment.
"Force Majeure" means the following:
(a) Acts of God, epidemic, earthquake, landslide,
lightning, fire, explosion, accident, tornado, drought, flood,
hurricane, or extraordinary weather conditions more severe than
those normally and typically experienced in the affected area
constituted by each of the specified System Areas in which the
Vendor is seeking to claim Contract suspension due to Force
Majeure;
(b) Acts of a public enemy, war (declared or undeclared),
blockade, insurrection, riot or civil disturbance, sabotage,
quarantine, or any exercise of the police power by or on behalf of
any public entity;
(c) (i) The valid order, judgment or other act of any
federal, state or local court, administrative agency, Governmental
Entity or authority issued after the Effective Date; (ii) with
respect to the Vendor, the suspension, termination, interruption,
denial or failure of or delay in renewal or issuance of any
Applicable Permit required by this Contract to be obtained by the
Owner; (iii) with respect to the Owner, the suspension,
termination, interruption, denial or failure of or delay in renewal
or issuance of any Applicable Permit required by this Contract to
be obtained by the Vendor; or (iv) a change in Applicable Law
(including the adoption of a new Applicable Law); provided that no
such order, judgment, act, event or change is the result of the
action or inaction of, or breach of this Contract by, the Party
relying thereon;
(d) Strikes, boycotts or lockouts, except for any such
strike, boycott or lockout involving the employees of the Vendor or
the permanent employees (not hired on a contract basis) of a
Subcontractor (for the period from the Effective Date until the
Final Acceptance of the last PCS System within the Initial System
but in no event to exceed three (3) years from the Effective Date);
(e) A partial or entire delay or failure of utilities; or
transportation embargoes; or
(f) The presence of (i) any Hazardous Waste on or at any
System Element Location which materially interferes with the Work
to be done thereon or otherwise materially endangers the safety of
any personnel at such location; (ii) any unknown historical or
archeological sites which are not shown or indicated in the survey
of any System Element Locations and of which the Vendor could not
have reasonably been expected to be aware; or (iii) any mining or
water recovery activities (other than such activities by the Vendor
or its Subcontractors) at or under any System Element Location
after the Effective Date.
Events of Force Majeure include the failure of a Subcontractor to
furnish labor, services, materials, or equipment in accordance with its
contractual obligations, only if such failure is itself due to an event of Force
Majeure. A Force Majeure does not include any delay in performance to the extent
due to the failure of the Vendor or any Subcontractor to provide an adequate
number of engineers or other workmen or to manufacture or procure an adequate
amount of Equipment, Software and/or Services.
"Governmental Entity" means any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Substantial Completion Date" means the date which is
defined in Exhibit A1 as "Milestone 8."
"Hazardous Waste" means any and all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any fraction
thereof) and petroleum products, asbestos and asbestos-containing materials,
pollutants, contaminants, polychlorinated biphenyls and any and all other
materials, substances, regulated pursuant to any Environmental Laws or that
could result in the imposition of liability under any Environmental Laws.
"HCUs" means the High Density Channel Card Units which carry eight
(8) voice Channels per card.
"Headend Interface Converter ("HIC")" means a form of CMI that
provides for transportation of wireless communication signals over a cable TV
distribution plant. The HIC takes signals from the PCS Base Station transmitter
and suitably heterodynes, filters and amplifies these signals for processing by
the PCS Base Station receiver. Additionally, the HIC provides reference and
control signals to the CMI units and receives and processes status signals from
the CMI unit.
"HLR Completion Dates" means the dates and milestones set forth in
Appendix E that are required to be met by the Vendor for the successful and
timely completion of the HLR Statement of Work.
"HLR Designated Switch Sites" means the Switch Sites within the
Nationwide Network in which the Owner requires the installation of AM/HLRs
within the Denver and Kansas City System Areas and the Philadelphia System Area
(as defined in the PhillieCo Contract) and the installation of SCP/HLRs within
the San Francisco, New York, Dallas, Denver and Kansas City System Areas and the
Philadelphia System Area (as defined in the PhillieCo Contract).
"HLR Final Acceptance" means the Owner's final acceptance of
SCP/HLR Products and the installation thereof, pursuant to and in accordance
with the HLR Final Acceptance Tests; provided that in no event can HLR Final
Acceptance occur with respect to any SCP/HLR Product prior to thirty (30) days
after the completion of Field Acceptance Testing for such SCP/HLR Product(s).
"HLR Final Acceptance Tests" and "HLR Final Acceptance Testing"
means the SCP/HLR final acceptance tests set forth in Appendix E.
"HLR Statement of Work" means the statement of work applicable to
the AM/HLRs and the SCP/HLRs set forth in Appendix E.
"In Revenue Service" or "In Revenue" means the commercial operation
of any PCS System and/or PCS Sub-System, or a portion thereof, exclusive of
operation for purposes of conducting Acceptance Tests; provided that In Revenue
Service or In Revenue will not by itself constitute acceptance in accordance
with the terms of this Contract of any such PCS System and/or PCS Sub-System or
any portion thereof.
"Indemnitees" has the meaning ascribed thereto in subsection
20.1(a).
"Independent Auditor" means any of the Persons set forth on
Schedule 15.
"Initial Affiliate Agreement" has the meaning ascribed thereto in
subsection 3.2.
"Initial Affiliates" means the collective reference to each of the
Persons set forth on Schedule 5.
"Initial Commitment" has the meaning ascribed thereto in subsection
7.1.
"Initial PCS System" means the Fresno PCS Sub-System or as
otherwise mutually agreed between the Parties.
"Initial PCS System Certificate" means a document submitted by the
Vendor to the Owner and signed by an authorized representative of the Owner and
an authorized officer of the Vendor stating that the Vendor has successfully
completed the Acceptance Tests applicable to the Initial PCS System in
accordance with the requirements of Exhibit B3.
"Initial System" means the build-out of that portion of the System
Areas and System Sub-Areas shown on Schedule 4 prior to any Expansions or Owner
requests for additional coverage for such System Areas and System Sub-Areas
pursuant to the terms of this Contract.
"Initial Term" has the meaning ascribed thereto in subsection 5.1.
"Inspector" means a qualified Person designated as an authorized
representative of the Owner assigned to make all necessary inspections of the
Work, or of the labor, materials and equipment furnished or being furnished by
the Vendor or any of its Subcontractors at the System Element Locations and the
other sites where the Vendor or any Subcontractor is prosecuting the Work,
subject to appropriate safety, security and confidentiality requirements.
"Installation" or "Installed" means the performance and supervision
by the Vendor of all installation of Products within the System and/or any PCS
System and/or any PCS Sub-System.
"Intellectual Property Rights" has the meaning ascribed thereto in
subsection 14.2(a).
"Interim Delay Penalty" has the meaning ascribed thereto in subsec-
tion 15.2.
"Interim Milestone" has the meaning ascribed thereto in subsection
15.2.
"Interoperability" means (i) the ability of the System and/or any
PCS System and/or any PCS Sub-System and/or any material part thereof to
interconnect and successfully operate with the equipment and software of other
systems and/or PCS systems and/or PCS sub-systems and/or any material part
thereof of the Vendor (including, for purposes of this definition, the PhillieCo
System) and/or the Other Vendors and/or other suppliers whose equipment and
software also meet the relevant ANSI standards and other Specifications
identified in Exhibit D and (ii) the ability of each of the Products to operate
with one another and to operate with and within the System, including, but not
limited to, the ability of the handsets (to be delivered pursuant to subsection
2.3) to operate with and within the System (including, for purposes of this
definition, the PhillieCo System), all in accordance with the Specifications.
Since certain sections of the ANSI standards are currently undefined, and
certain sections are left available for independent development by suppliers,
the potential for such interoperability or incompatibility with properly
designed systems exists, and must be resolved by the Vendor or any Subcontractor
providing PCS Systems or PCS Sub-Systems to the Vendor in accordance with the
terms hereof.
"Item" means any item at any time listed in any of the Vendor's
price lists and it specifically includes, without limitation, all Software
Upgrades, Software Enhancements, Equipment Upgrades, Equipment Enhancements and
modifications, enhancements, updates or other revisions of any kind in any such
item, spare parts with respect to any of the foregoing and any other
PCS/CDMA-related item.
"Late Completion Payment Cap" has the meaning ascribed thereto in
subsection 15.3.
"Late Completion Payments" has the meaning ascribed thereto in sub-
section 15.3.
"Liabilities" has the meaning ascribed thereto in subsection
20.1(a).
"Liquidated Damages" has the meaning ascribed thereto in subsection
15.1.
"Lucent/Nortel License Agreement" means the Interface License
Agreement between the Vendor and Nortel dated as of June 14, 1996 attached
hereto as Appendix D1.
"Lucent/Nortel License Agreement-OAM&P" means the OAM&P Interface
License Agreement between the Vendor and Nortel dated as of July 24, 1996
attached hereto as Appendix D2.
"M5 Forecast" has the meaning ascribed thereto in subsection
2.7(a).
"Maintenance and Instruction Manuals" means the manuals prepared by
the Vendor and delivered to the Owner pursuant to subsection 2.21 containing
detailed procedures and specifications for the ongoing maintenance of the
System.
"Major Portion" of the Work means a segregated portion of the Work
with a cost to the Owner of $10,000,000 or more.
"MFC Certificate" has the meaning ascribed thereto in subsection
26.1(b).
"Microwave Delay Period" has the meaning ascribed thereto in sub-
section 2.38(a).
"Microwave Relocation" means the process by which incumbent
point-to-point microwave users of the 1850 - 1990 Mhz frequency spectrum are
moved to other frequencies or alternate transmission facilities in order to
clear the licensed PCS spectrum for broadband wireless service.
"Microwave Relocation Completion" means, with respect to any given
PCS System or PCS Sub-System, the point at which the Owner will have finished
sufficient Microwave Relocation in such PCS System or PCS Sub-System to permit
the commercially viable and marketable operation of such PCS System or PCS
Sub-System in accordance with the terms of this Contract.
"Minimum Commitment" means sixty percent (60%) of the Initial
Commitment.
"Nationwide Network" means all of the PCS Systems and PCS
Sub-Systems built or to be owned and/or operated by the Owner or its Affiliates
in North America.
"NDAB" means the New Development Advisory Board established
pursuant to the terms of this Contract including subsections 2.11, 2.32 and
2.33.
"Network Interconnection" means the transmission links between Base
Stations and MSCs, between an MSC and another MSC, and between MSCs and PSTNs
but does not include connections between demarcation points of transmission
links and System Elements for which the Vendor will be responsible pursuant to
the terms of this Contract, including its obligations to install and test upon
the Owner's completion of such transmission links.
Typically T1 transmission links are used for connectivity.
"NewTelCo" means NewTelCo. L.P., a Delaware limited partnership.
"Non-Essential Equipment" means a Product, other than a PCS
Product, obtained from a third party supplier and furnished to the Owner as part
of Facilities Preparation Services in accordance with the terms of this
Contract, which Product will be furnished with an assignable warranty from the
such third party supplier of a length and scope determined by the Parties in the
development of the Specifications in accordance with the terms of Exhibit E for
the Product pursuant to the terms of this Contract, including, but not limited
to:
Antennas
Transmission towers
Monopoles
Prefabricated equipment shelters Power transformers
Batteries Rectifiers Uninterrupted power sources.
Non-Essential Equipment does not include normal construction materials
(including, but not limited to pipes, conduits, concrete, fences, lighting and
paving materials) used by the Vendor or its Subcontractors in the performance of
its Facilities Preparation Services.
"Nortel" means Northern Telecom Inc., a Delaware corporation.
"Nortel Contract" means that certain Procurement and Services
Contract between the Owner and Nortel dated as of January 31, 1996.
"North America" means the United States, Canada (including the
Province of Quebec) and Mexico.
"Notice to Proceed" means a written notice given by the Owner to
the Vendor in the form attached hereto as Schedule 9 and in compliance with the
provisions of this Contract, fixing the date on which the Vendor will have the
full right, in accordance with the terms of this Contract, and the full
obligation, subject to the terms of this Contract, to commence the Work to be
performed under this Contract.
"Notice to Proceed Date" means the date on which any Notice to
Proceed is issued by the Owner in accordance with the terms of this Contract.
"OAM&P" means operations administration maintenance and provision-
ing as described in Appendix G.
"OCC" has the meaning ascribed thereto in subsection 2.26.2.
"OM&P" has the meaning ascribed thereto in subsection 2.23(a).
"Operating Manuals" means the manuals to be prepared by the Vendor
and delivered to the Owner pursuant to subsections 2.20, 2.22 and 2.23
containing detailed procedures and specifications for the operation of the
System and/or any part thereof.
"Operative" has the meaning ascribed thereto in subsection 27.26.
"Optional AS Services" means those AS services classified as
optional, as set forth in Appendix G, which are only provided to the Owner upon
the request of the Owner.
"Optional Software Features" means Software features for PCS
Products available to Customers on an optional, separate fee, basis. The initial
fees for such Optional Software Features are not included in Annual Release
Maintenance Fees.
"OTAF" means the collective reference to SPARC/OTAF and SCP/OTAF.
"OTAF Acceptance Test Period" means the applicable period of time
in days that the Vendor has to test and the Owner has to accept certain OTAF
Products and Services (in each case as applicable to the SCP/OTAF Products and
Services and the SPARC/OTAF Products and Services) as specified in the OTAF
Statement of Work.
"OTAF Completion Dates" means the dates and milestones as set forth
in Appendix M that are required to be met by the Vendor for the successful and
timely completion of the OTAF Statement of Work (in each case as applicable to
the SCP/OTAF Products and Services and the SPARC/OTAF Products and Services).
"OTAF Equipment" means the collective reference to the SCP/OTAF
Equipment and the SPARC/OTAF Equipment.
"OTAF Field Acceptance" means the Owner's initial acceptance of
OTAF Products and Services (in each case as applicable to the SCP/OTAF Products
and Services and the SPARC/OTAF Products and Services) and the installation
thereof, pursuant to and in accordance with the OTAF Field Acceptance Tests (in
each case as applicable to the SCP/OTAF Products and Services and the SPARC/OTAF
Products and Services) set forth in Appendix P.
"OTAF Field Acceptance Test" and "OTAF Field Acceptance Testing"
means the initial field tests performed pursuant to and in accordance with
Appendix P during the OTAF Acceptance Test Period to determine whether the OTAF
Products and Services meet the requirements and specifications set forth in the
OTAF Statement of Work (in each case as applicable to the SCP/OTAF Products and
Services and the SPARC/OTAF Products and Services).
"OTAF Final Acceptance" means the Owner's final acceptance of the
relevant OTAF Products and Services (in each case as applicable to the SCP/OTAF
Products and Services and the SPARC/OTAF Products and Services) and installation
thereof, pursuant to and in accordance with the OTAF Final Acceptance Tests set
forth in Appendix P; provided that in no event can OTAF Final Acceptance occur
with respect to any OTAF Products and Services prior to thirty (30) days after
the completion of OTAF Final Acceptance Testing applicable thereto.
"OTAF Final Acceptance Tests" and "OTAF Final Acceptance Testing"
means the OTAF Products and Services final acceptance testing as set forth in
Appendix P (in each case as applicable to the SCP/OTAF Products and Services and
the SPARC/OTAF Products and Services).
"OTAF Maintenance and Instruction Manuals" has the meaning ascribed
thereto in subsection 2.22.
"OTAF Operating Manuals" has the meaning ascribed thereto in sub-
section 2.20.2.
"OTAF Price" means the aggregate price set forth in Appendix O for
all of the SCP/OTAF Products and Services to be provided under the Contract and
described in the OTAF Statement of Work.
"OTAF Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.2.
"OTAF Products" means the collective reference to SCP/OTAF Products
and SPARC/OTAF Products.
"OTAF Services" means those services provided by the Vendor as part
of the provision, installation and continuing operation and maintenance of the
SPARC/OTAF Products and/or the SCP/OTAF Products, as the case may be, pursuant
to and in accordance with the OTAF Statement of Work.
"OTAF Software" means the collective reference to the SCP/OTAF
Software and the SPARC/OTAF Software.
"OTAF Statement of Work" means the over-the-air provisioning
functionality requirements, specifications and milestones as set forth in
Appendix M.
"Other Vendors" means vendors, other than the Vendor, with whom the
Owner has entered, or may enter in the future, into a contract for the provision
of products and services for the engineering and construction of any portion of
the Nationwide Network. Other Vendors does not include any Subcontractors in
connection with the Work to be performed under this Contract in their capacity
as Subcontractors.
"Outage" has the meaning ascribed thereto in subsection 17.4(b).
"Owner" has the meaning ascribed thereto in the prefatory paragraph
to this Contract.
"Owner Loss" means an insured loss incurred by the Owner relating
to the System.
"Owner's Succeeding Entity" has the meaning ascribed thereto in
subsection 27.22.
"Parties" has the meaning ascribed thereto in the prefatory para-
graph to this Contract.
"Patent License" has the meaning ascribed thereto in subsection
14.5.
"P1 Major Condition ("P1")" has the meaning ascribed thereto in
subsection 2.26.3(g).
"P2 Significant Problem ("P2")" has the meaning ascribed thereto in
subsection 2.26.3(g).
"P3 Minor Problem ("P3")" has the meaning ascribed thereto in sub-
section 2.26.3(g).
"Partners" means the collective reference to Sprint Corporation, a
Delaware corporation, Sprint Enterprises, L.P., a Delaware limited partnership
("Sprint"), TeleCommunications Inc., a Delaware corporation, TCI Telephony
Services, Inc., a Colorado corporation ("TCI"), Comcast Corporation, a Delaware
corporation, Comcast Telephony Services, a Delaware general partnership
("Comcast"), Cox Communications, Inc., a Delaware corporation and Cox Telephony
Partnership, a Delaware general partnership ("Cox").
"PCS" means personal communication services authorized by the FCC.
"PCS FCC Licenses" has the meaning ascribed thereto in the recitals
of this Contract.
"PCS Products" means the Vendor's PCS Equipment and Software, as
offered from time to time in the Customer Price Guide; provided that for the
purposes of this Contract, PCS Products will always (subject to subsection 10.1)
include at least (i) the SCP/HLRs, (ii) the SCP/HLR Products, (iii) the AM/HLR
(to the extent not already a PCS Product), (iv) SMS, (v) SCE, (vi) the AS
Products, (vii) the OTAF Products (viii) the Actiview Products, (ix) the TCUs
and/or the HCUs as the case may be, and (x) those other Items listed on the
Vendor's Customer Price Guide as of the Effective Date. As the context requires
and notwithstanding the above, the term PCS Products includes all Vendor
manufactured Products provided to the Owner in connection with its obligations
pursuant to the terms of this Contract, but excludes Items furnished solely as
part of Facilities Preparation Services not otherwise integral to the operation
or maintenance of the PCS Items set forth on the Customer Price Guide, including
Non-Essential Equipment.
"PCS Sub-System" means all Products and other equipment, tools and
software, all System Elements Sites and any property located thereat necessary
or desirable to provide PCS in a System Sub-Area.
"PCS Sub-System Percentage" has the meaning ascribed thereto in
subsection 17.4(c).
"PCS Sub-System Specific Outage" has the meaning ascribed thereto
in subsection 17.4(c).
"PCS System" means all Products and other equipment, tools and
software, all System Element Sites and any property located thereat necessary or
desirable to provide PCS in a given specified System Area. Each PCS System is
and will be inclusive of all PCS Sub-Systems, if any, within such PCS Systems.
"Permitted Transaction" has the meaning ascribed thereto in sub-
section 27.23.
"Person" means an individual, partnership, limited partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
"PhillieCo" means PhillieCo L.P., a Delaware limited partnership.
"PhillieCo Contract" means that certain Procurement and Services
Contract between PhillieCo L.P., a Delaware limited partnership and the Vendor,
as the same may be amended, supplemented or otherwise modified from time to
time.
"PhillieCo System" means the System, as defined in the PhillieCo
Contract.
"Preliminary RF Design" means an RF Engineering design which
incorporates as many prequalified System Element Locations (including existing
structures and other sites provided by Site Acquisition that have a high
likelihood of meeting the zoning requirements) as possible without compromising
the quality of the System or System Element Location counts, design grids,
signal level plots and prequalified site map overlays for each of the System
Areas and System Sub-Areas. The Preliminary RF Design must also include those
Items listed on Schedule 1. The Preliminary RF Design must be based upon all
information reasonably available to the Vendor or provided to the Vendor by the
Owner as of the Effective Date including, but not limited to, the information
set forth in this Contract.
"Product Contract Price" means, at the time of determination, the
Contract Price minus the costs applicable to and actually invoiced to such date
by the Owner pursuant to and in accordance with Section 6 for Facilities
Preparation Services and RF Engineering.
"Product Warranty Period" has the meaning ascribed thereto in sub-
section 17.1(a).
"Products" means the collective reference to the PCS Products, the
Equipment and the Software provided by the Vendor or any Subcontractor pursuant
to and in accordance with the terms of this Contract.
"Project Milestones" means the collective reference to the mile-
stone dates and intervals set forth in Exhibits A1 and A2. Each a "Milestone."
"Proprietary Information" has the meaning ascribed thereto in sub-
section 27.19(a).
"Punch List" means that list prepared in conjunction with the
Acceptance Tests and included in any Acceptance Certificate, which contains one
or more immaterial non-service-affecting items (specifying the cost of
completing such items either determined as of the date of the Substantial
Completion of the relevant PCS System or PCS Sub-System or within a reasonable
time thereafter) which have not been fully completed by the Vendor as of the
Substantial Completion of any PCS System or PCS Sub-System; provided that such
incomplete portion of the Work will not, during its completion, materially
impair the normal daily operation of such PCS System or PCS Sub-System in
accordance with the Specifications.
"Reviewers" has the meaning ascribed thereto in subsection 2.14.
"RF" means radio frequency.
"RF Engineering" means radio frequency engineering required in
connection with the architectural design of the System and/or any PCS System
and/or any PCS Sub-System.
"RFP" has the meaning ascribed thereto in subsection 11.9.1(a).
"RTM License" has the meaning ascribed thereto in subsection 11.6.
"RTU License" has the meaning ascribed thereto in subsection 11.1.
"SCE" means the Service Creation Environment Equipment and Software
as further described in Appendix B.
"SCP/HLR" means the Equipment and Software that provide the call
processing logic which comprises the stand-alone HLR service which contains the
PCS subscriber's or group of PCS subscriber's profile data used to provide call
completion and enhanced services and further described in Appendix B.
"SCP/HLR Hardware" means the SCP/HLR Equipment and platform
Software as set forth in Appendix B.
"SCP/HLR Price" means the aggregate price for all of the SCP/HLRs
as set forth on Appendix F.
"SCP/HLR Products" means the collective reference to SCP/HLR
Hardware, and SCP/HLR Software, SMSs, SCEs and RTUs.
"SCP/HLR Services" means those Services provided by the Vendor to
the Owner pursuant to and in accordance with the HLR Statement of Work, the
AM/HLR Specifications and the SCP/HLR Specifications.
"SCP/HLR Specifications" means the SCP/HLR specifications as set
forth in Appendix B and including, but not limited to, the specifications for
the SCE and the SMS.
"SCP/HLR Software" means the SCP/HLR Software as more fully
described in Appendix B.
"SCP/OTAF" means those Service Control Point ("SCP") OTAF Products
and Services provided by the Vendor to the Owner as further detailed in Appendix
M.
"SCP/OTAF Software" means the SCP based software for over-the-air
provisioning functionality provided to the Owner by the Vendor pursuant to and
in accordance with the OTAF Statement of Work.
"SCP/OTAF Equipment" means the equipment and hardware provided to
the Owner by the Vendor as necessary for the operation and integration of the
SCP/OTAF Software and the SCP/OTAF Services pursuant to and in accordance with
the OTAF Statement of Work. "Services" means the collective reference to all of
the services to be conducted by the Vendor as part of the Work pursuant to the
terms of this Contract including, but not limited to, Installation, Facilities
Preparation Services, RF Engineering, System Maintenance Support, System Support
Services and other repair and maintenance services, performed in accordance with
the terms of this Contract including, but not limited to, the Specifications.
Services does not include Site Acquisition, Network Interconnection or Microwave
Relocation.
"Services Warranty Period" has the meaning ascribed thereto in sub-
section 17.2(b).
"Site Acquisition" means the services to be performed by the Owner
and/or its subcontractors necessary for identifying and acquiring sufficient
rights to the System Element Locations within the System Areas and System
Sub-Areas including all requisite zoning approvals and all building approvals
required by any Governmental Entity; provided that Site Acquisition does not
include any of the Site Plan Architectural Work or the Facilities Engineering.
"Site Acquisition Delay Period" has the meaning ascribed thereto in
subsection 2.41.
"Site Acquisition Substantial Completion" means, with respect to
any PCS System or PCS Sub-System, the point at which the Owner will have
acquired, by purchase, lease or otherwise, rights to a sufficient number of
System Element Locations within the specified System Area or System Sub-Area to
be covered by such PCS System or PCS Sub-System such that the performance
criteria specified in Exhibit F applicable to such PCS System or PCS Sub-System
would be substantially satisfied in the reasonable opinion of the Owner subject
to the reasonable acceptance of the Vendor. If the Vendor upon receiving notice
from the Owner that Site Acquisition Substantial Completion has been achieved in
any PCS System or PCS Sub-System disagrees with the Owner's claim, then the
Vendor will have ten (10) Business Days to detail its disagreement in writing to
the Owner and a Third Party Engineer chosen by the Owner and such Third Party
Engineer will have ten (10) Business Days from the receipt of such writing to
make a determination whether or not the Owner's claim of Site Acquisition
Substantial Completion is reasonable. The Third Party Engineer will have no
discretion or authority to provide the Parties with any answer other than
whether in its judgment the Owner's claim is reasonable. Such determination by
the Third Party Engineer will be final and binding upon the Parties.
"Site Acquisition Substantial Completion Date" means with respect
to any PCS System or PCS Sub-System the date on which the Owner will have
achieved Site Acquisition Substantial Completion.
"Site Plan Architectural Work" means the preparation of
architectural and/or engineering drawings, plans and/or specifications necessary
to obtain zoning permits and/or approvals, building permits and/or approvals
and/or conditional use permits for any given System Element Facility.
"SMS" means the service management system equipment and software
described in Appendix B.
"Software" means (a) all computer software furnished hereunder for
use with any Equipment including, but not limited to, computer programs
contained on a magnetic or optical storage medium, in a semiconductor device, or
in another memory device or system memory consisting of (i) hardwired logic
instructions which manipulate data in central processors, control input-output
operations, and error diagnostic and recovery routines, or (ii) instruction
sequences in machine-readable code furnished hereunder that control call
processing, peripheral equipment and administration and maintenance functions,
(b) any Software Enhancements, Software features and Software Upgrades furnished
by the Vendor to the Owner hereunder, and (c) any Documentation furnished
hereunder for use and maintenance of the Software; provided that no Source Code
versions of Software are included in the term Software.
"Software Combined Release" means a Software Upgrade which is at
any time combined with any Software Enhancement.
"Software Enhancements" means modifications or improvements made to
the Software relating to PCS Products which improve performance or capacity of
the Software or which provide additional functions to the Software.
"Software Licenses" means the collective reference to the RTU Li-
cense and the RTM License.
"Software Revision Level" means each version of Software that
reflects any amendment, modification or change from the immediately preceding
version.
"Software Upgrades" means periodic updates to the Software issued
by the Vendor to the Owner under Warranty and Software maintenance obligations
to correct Defects or Deficiencies in the Software relating to PCS Products.
"Sony/Qualcomm Agreement" has the meaning ascribed thereto in sub-
section 2.3(a).
"Source Code" means Software in human-readable form and all
documentation, such as flow charts, schematics and annotations, that comprise
the precoding detailed design specifications (which constitutes the "embodiment
of the intellectual property" of the Software (excluding Third Party Software)
as such concept is referenced in Section 365(n) of the United States Bankruptcy
Code, as amended), which is necessary to enable the Owner to maintain and modify
the Software in accordance with the licenses granted in this Contract.
"SPARC" means certain Sun System workstation equipment.
"SPARC/OTAF" means those SPARC OTAF Products and Services provided
by the Vendor to the Owner as further detailed in Appendix M.
"SPARC/OTAF Equipment" means the equipment and hardware provided to
the Owner by the Vendor as necessary for the operation and integration of the
SPARC/OTAF Software and the OTAF Services pursuant to and in accordance with the
SPARC/OTAF Statement of Work.
"SPARC/OTAF Software" means the SPARC based software for
over-the-air provisioning functionality provided to the Owner by the Vendor
pursuant to and in accordance with the OTAF Statement of Work.
"Specifications" means the collective reference to the
specifications and performance standards of the design, Facilities Preparation
Services, Engineering, Products, Installation and Services contemplated by this
Contract and includes any Expansions, amendments, modifications and/or other
revisions thereto made in accordance with the terms of this Contract and as more
fully set forth in Exhibits C, D, E and F and in the AM/HLR Specifications, the
SCP/HLR Specifications, the HLR Statement of Work, the AS Statement of Work, the
OTAF Statement of Work and the Actiview Statement of Work or as otherwise
determined hereunder pursuant to the terms of the Contract; provided that,
except as otherwise provided in or determined pursuant to the Contract or as
otherwise mutually agreed between the Parties, the applicable Specifications for
an Item will be the Vendor's or other manufacturer's standard technical
specifications for such Item, as applicable, unless the Owner will have
specifically not agreed with such Vendor or other manufacturer specification;
and provided further, that with respect to Facilities Preparation Services,
design, Engineering, Products, Installation and Services for which
specifications and performance standards are not provided and listed in such
Exhibits (such Exhibits including, but not limited to, the AM/HLR
Specifications, SCP/HLR Specifications, the HLR Statement of Work, the AS
Statement of Work, the OTAF Statement of Work and the Actiview Statement of
Work), "Specifications" refers to performance, functionality and fitness for the
intended purpose in which such design, Facilities, Preparation Services,
Engineering, Products, Installation and Services are employed.
"Structural Architectural Work" means the preparation of all
architectural drawings and blueprints relating to the structural specifications
for a System Element Facility.
"Subcontractor" means a contractor, vendor, supplier, licensor or
other Person, having a direct or indirect contract with the Vendor or with any
other Subcontractor of the Vendor who has been hired specifically to assist the
Vendor in certain specified areas of its performance of its obligations under
this Contract including, without limitation, performance of any part of the
Work.
"Substantial Completion" means the point at which the Vendor has
completed a portion of the Work other than specified Items set forth on
applicable Punch Lists such that the geographic areas of any System Area and/or
System Sub-Areas as specified in Schedule 4 all have been covered to the extent
set forth in Schedule 4, in accordance with the Specifications and the System
Standards and as verified to the Owner in accordance with the criteria and
requirements set forth in Exhibit B3.
"Substantial Completion Certificate" means, with respect to a given
PCS System and/or PCS Sub-System, a document submitted by the Vendor to the
Owner and signed by an authorized representative of the Owner and an authorized
officer of the Vendor stating that the Vendor has successfully completed the
Acceptance Tests applicable to the Substantial Completion of the Work to be done
in such PCS System and/or PCS Sub-System, as the case may be, in accordance with
the requirements of Exhibit B3.
"Successor" has the meaning ascribed thereto in subsection 27.22.
"Switch Site" means the System Element Location designated by the
Owner as the site in which it wants the MSC(s) to be Installed in any given PCS
System.
"Switch Site Notice" has the meaning ascribed thereto in subsection
2.6(d).
"Switch Site Notice Date" has the meaning ascribed thereto in sub-
section 2.6(d).
"Switch Site Ready Date" has the meaning ascribed thereto in sub-
section 2.6(d).
"System" means all of the PCS Systems and PCS Sub-Systems built by
the Vendor in the System Areas and System Sub-Areas allocated to the Vendor
pursuant to the terms of this Contract and as set forth on Schedule 4.
"System Areas" has the meaning ascribed thereto in the recitals to
this Contract.
"System Element" means the Equipment and Software required to
perform radio, switching and/or functions for the System and/or any PCS System
and/or any PCS Sub-System (which may include, without limitation, Base Station
("BTS"), Equipment Identity Register ("EIR"), Messaging System ("MXE"), Mobile
Switching Center/Visitor Location Register ("MSC/VLR"), Mobile Service Node
("MSN"), Signal Transfer Point ("STP"), Home Location Register ("HLR"), Service
Control Point ("SCP"), Intelligent Peripheral ("IP") and Access Manager ("AM")).
"System Element Facility" means the structures, improvements,
foundations, towers, and other facilities necessary to house or hold any System
Element and any related Equipment to be located at a particular System Element
Location.
"System Element Location" means the physical location for a System
Element.
"System Element Site" means the collective reference to a
particular System Element, together with the related System Element Location and
System Element Facility.
"System Element Verification" means the Vendor's laboratory level
testing on the Products conducted by the Vendor in accordance with Exhibit B3.
"System Maintenance Support" means those Services offered by the
Vendor for maintenance of any of the Products and/or any System Element or
collection thereof.
"System Managers" means each of the managers designated by the
Owner and the Vendor, respectively, for the purposes of subsection 23.1.
"System Standards" means the collective reference to the industry
standards specified in Exhibits C, D, F, G and H.
"System Sub-Areas" has the meaning ascribed thereto in the recitals
to this Contract.
"System Support Services" means those services offered by the
Vendor relating to System design, enhancement and optimization.
"System Warranty Period" has the meaning ascribed thereto in sub-
section 17.3.
"TCG" means the collective reference to Teleport Communications
Group, Inc. and TCG Partners.
"TCUs" means the Two Channel Card Units which currently carry two
voice paths in the existing cells.
"Technical Documentation" means the documentation identified as
such in the Specifications.
"Term" has the meaning ascribed thereto in subsection 5.2.
"Test-bed Laboratory" has the meaning ascribed thereto in subsec-
tion 2.5.
"Third Party Engineer" means any one of the Persons listed on
Schedule 14.
"Third Party Software" means Software which is independently
developed by a third party, sublicensed to the Owner under this Contract or
otherwise provided with the Products in accordance with the Specifications.
"Training" has the meaning ascribed thereto in subsection 2.23.
"Trouble Report ("TR")" has the meaning ascribed thereto in sub-
section 2.26.2.
"United States" means the fifty states of the United States and the
District of Columbia.
"Utilities Work" means the installation of electric and telephone
utilities at the System Element Locations.
"Vendor" has the meaning ascribed thereto in the prefatory para-
graph to this Contract.
"Vendor-Controlled Location" has the meaning ascribed thereto in
subsection 2.12.
"Vendor Developments" has the meaning ascribed thereto in subsec-
tion 2.11.1.
"Vendor Event of Default" has the meaning ascribed thereto in sub-
section 24.2.
"Vendor Patents" has the meaning ascribed thereto in subsection
14.5.
"Vendor procedural error" has the meaning ascribed thereto in sub-
section 17.4(c).
"Vendor's Succeeding Entity" has the meaning ascribed thereto in
subsection 27.22.
"Warranty Damages" has the meaning ascribed thereto in subsection
17.4(c).
"Warranty Periods" means the collective reference to the Product
Warranty Period, the Services Warranty Period and the System Warranty Period.
"Work" means all phases of this Contract, including, as required by
the terms of this Contract, engineering and design, procurement, manufacture,
construction and erection, installation, training, start-up (including
calibration, inspection and start-up operation), testing and start-up and
testing operation with respect to the System and/or any PCS System and/or any
PCS Sub-System and/or any part thereof to be performed by the Vendor or its
Subcontractors pursuant to this Contract. As required by the terms of this
Contract, Work includes (i) all labor, materials, equipment, services, and any
other items to be used by the Vendor or its Subcontractors in the prosecution of
this Contract, wherever the same are being engineered, designed, procured,
manufactured, delivered, constructed, installed, trained, erected, tested,
started up or operated during start-up and testing and whether the same are on
or are not on any System Element Location or any other site within the System
and/or any PCS System and/or any PCS Sub-System and (ii) all related items which
would be required of a contractor of projects of comparable size and design
which are necessary for the System and/or any PCS System and/or any PCS
Sub-System and/or any part thereof to (x) operate in accordance with all
Applicable Laws and Applicable Permits, and (y) provide the operating personal
communications service systems required pursuant to this Contract. The Vendor
will be responsible for providing in accordance with the terms of this Contract
any and all additional items and services which are not expressly included by
the terms of this Contract and which are reasonably required for construction
and start-up of the System and/or any PCS System and/or any PCS Sub-System.
1.2 Other Definitional Provisions. (a) When used in this Contract,
unless otherwise specified herein, all terms defined in this Contract will have
the defined meanings set forth herein. Terms defined in the Exhibits are deemed
to be terms defined herein; provided that in the case of any terms that are
defined both in this Contract (excluding Exhibits) and/or an Exhibit, the
definitions contained in this Contract will supersede such other definitions for
all purposes of this Contract; provided further, that definitions contained in
any Exhibit will control as to such Exhibit.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Contract refer to this Contract as a whole and
not to any particular provision of this Contract and Section, subsection,
Schedule and Exhibit references are to this Contract unless otherwise specified.
(c) The meanings given to terms defined in this Contract are
equally applicable to both the singular and plural forms of such terms.
(d) Notwithstanding anything to the contrary, the provisions of
subsections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9(b), 2.10, 2.25, 2.38, 2.40, 2.41,
6.4, 6.5, 6.7, 6.8, and 7.1 and Section 4 are not applicable to (i) AS Products
and AS Services and (ii) Actiview Products and Actiview Services.
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
2.1 Scope of Work. Upon the terms and conditions herein set forth,
the Vendor will provide all Products and Services to the Owner required for the
establishment of the System including, but not limited to, the Vendor's
obligation to engineer, equip, install, build, test and service the PCS Systems
and the PCS Sub-Systems in the System Areas and System Sub-Areas set forth on
Schedule 4 in accordance with the Specifications and that otherwise satisfies
all conditions of Final Acceptance; provided, that the Vendor will not be
responsible for Site Acquisition (except to the extent certain Facilities
Preparation Services, including Site Plan Architectural Work, are required for
the successful completion of Site Acquisition), Network Interconnection or
Microwave Relocation. The Vendor must complete the Work in accordance with the
Project Milestones set forth in Exhibit A1 and as further specified herein. The
Vendor must furnish all labor, materials, tools, transportation and supplies
required to complete the Work in accordance with the Specifications and the
terms of this Contract. For the purposes of this Contract, it is expressly
understood and agreed between the Parties that certain PCS Systems (the System
Areas of which are set forth on Schedule 4) are divided into PCS Sub-Systems
(the System Sub-Areas of which are set forth on Schedule 4) and that any such
PCS System that is so divided shall not be deemed to work and/or operate in
accordance with the terms of this Contract, including, but not limited to, the
Specifications, until and unless all of the PCS Sub-Systems within such PCS
System work in accordance with the Specifications.
2.2 Additional Coverage. (a) The Owner has the option from time to
time, upon not less than thirty (30) days written notice to the Vendor, to
designate additional geographic areas in the United States, including, but not
limited to, additional System Sub-Areas and/or System Areas, as to which the
Owner may purchase from the Vendor some or all, as determined by the Owner in
its sole discretion, of the Products and Services required for the PCS coverage
of such areas as provided for in this Contract, all on the terms and conditions
set forth in this Contract; provided that the Parties will mutually agree in
good faith on the payment terms (provided that pricing will be as set forth in
this Contract), liquidated damages, Project Milestones and the System
performance criteria applicable to such additional coverage pursuant to this
subsection 2.2; and provided further that any such agreement on (i) such Project
Milestones must be based on substantially the same intervals (including, but not
limited to, the number of days specified in each such interval) as are set forth
in Exhibits A1 and A2, to the extent possible, (ii) such payment terms and
liquidated damages must be based on substantially the same terms as are
otherwise set forth in this Contract, and (iii) such System performance criteria
must be based on substantially the same System performance criteria as are set
forth in Exhibit F, to the extent possible. The Parties agree that this
subsection 2.2(a) will be effective at any time during the Term of this Contract
as to the determination of payment terms (other than pricing) and Project
Milestones applicable to the Vendor's provision of additional coverage pursuant
to this subsection 2.2(a) only if (i) the aggregate price of the Products and
Services to be provided by the Vendor at such time under this subsection 2.2(a)
is at such time at least five million dollars ($5,000,000) and (ii) the Vendor
is at such time providing Installation Services and at least one other Service
provided for under this Contract in connection with such additional coverage
provided by the Vendor at any time during the Term of this Contract pursuant to
this subsection 2.2(a). Unless otherwise mutually agreed among the Parties, the
payment terms for additional Products provided by the Vendor after Final
Acceptance of the last PCS System within the Initial System not otherwise
covered by or otherwise determined pursuant to this subsection 2.2(a) will be
subject to the terms of Section 6.
(b) The Owner has the option from time to time upon not less than
thirty (30) days' prior written notice to the Vendor and in accordance with the
applicable change order provisions of subsection 7.2, to require the Vendor to
increase the level of capacity or coverage of an already allocated PCS System
and/or PCS Sub-System (whether such PCS System or PCS Sub-System has been so
allocated pursuant to Schedule 4 or subsection 2.2(a)), all on the terms and
conditions of this Contract. From time to time prior to the Substantial
Completion of the given PCS System which would be so affected, the Owner will
have the right to, upon thirty (30) days prior written notice to the Vendor,
divide an applicable System Area into separate System Sub-Areas for the
build-out of separate PCS Sub-System(s) not indicated on Schedule 4 as of the
Effective Date; provided that such additional PCS Sub-System will at least meet
the requirements set forth in clauses (i) and (ii) of the second to last
sentence of subsection 2.2(a) above. In such event, such a newly created PCS
Sub-System will, from such point forward, be treated as a PCS Sub-System
pursuant to the terms of this Contract.
(c) Where the Owner wishes to purchase PCS Products or Services for
use and/or application in a country outside the United States but within North
America including any territory of the United States not otherwise covered by
the definition of the "United States" as set forth herein, the Owner and the
Vendor will, in good faith, negotiate a separate agreement for such purchase
upon substantially all of the same terms set forth in this Contract, with only
such modifications as may reasonably be appropriate to reflect the international
nature of such transaction and to assure protection of the Vendor's intellectual
property. The PCS Product and Software prices and price discounts set forth in
this Contract will prevail in any such separate agreement, subject only to
reasonable pricing adjustments which will be in no event ten percent (10%)
higher than the prices set forth in or determined pursuant to this Contract plus
foreign import duties and taxes. Any such agreement may, at the Vendor's option,
be entered into by any of the subsidiaries or other affiliates of the Vendor as
listed on Schedule 13.
2.2.1 AS Products and AS Services Additional Coverage. Where the
Owner wishes to purchase AS Products or AS Services for use and/or application
in a country outside the United States but within North America including any
territory of the United States not otherwise covered by the definition of the
"United States" as set forth herein, the Owner and the Vendor will, in good
faith, negotiate a separate agreement for such purchase upon substantially all
of the same terms set forth in this Contract, with only such modifications as
may reasonably be appropriate to reflect the international nature of such
transaction and to assure protection of the Vendor's intellectual property
applicable to such AS Products and AS Services.
2.3 Handsets. (a) The Vendor must supply the Owner with two
thousand (2,000) subscriber handsets at the prices set forth on Schedule 2 and
substantially meeting the applicable criteria set forth in Exhibit H within
sixty (60) days prior to the Substantial Completion of the Initial PCS System in
accordance with Exhibit B3; provided that the criteria set forth in Exhibit H
will substantially conform to the applicable specifications and/or criteria (but
which will in no event be more than what is required by Exhibit H) agreed
between the Owner and Sony/Qualcomm (the "Sony/Qualcomm Agreement").
(b) The Vendor must supply at the prices set forth on Schedule 2
one hundred (100) handsets per PCS System within the Initial System, acceptable
to the Owner, and the necessary equipment related thereto for testing and
operation of each such PCS System pursuant to, and in accordance with, the terms
of this Contract, Exhibit B3 and substantially in accordance with Exhibit H to
the extent applicable; provided however, with the consent of the Owner, which
consent will not be unreasonably withheld, such handsets will not be required to
be in substantial compliance with the criteria set forth in Exhibit H if they
will otherwise be sufficient to test and accurately demonstrate that the PCS
System meets the Specifications. The one hundred (100) for each PCS System
handsets required to be delivered by the Vendor pursuant to the immediately
preceding sentence will be delivered to the Owner on or before Milestone 7 (as
set forth in Exhibit A1) for the first PCS Sub-System completed in such PCS
System.
(c) Notwithstanding any other provision of this Contract, including
Section 17, the Vendor does not warrant the handsets provided hereunder, but to
the extent that the Vendor is authorized to do so by the terms of any applicable
agreement or agreements with such third party suppliers, the Vendor will assign
or otherwise transfer any warranty received from its supplier(s) of the handsets
to the Owner at no additional cost to the Owner. For the purposes of this
Contract a supplier of handsets to the Vendor will not be deemed a
Subcontractor.
2.4 Initial PCS System. Pursuant to Exhibit B3, the Vendor must
achieve Substantial Completion of the Initial PCS System in accordance with the
requirements of Exhibit B3 prior to, and as a condition of, the Substantial
Completion of any other PCS System and/or PCS Sub-System within the Initial
System. This requirement in no way relieves the Vendor of its obligations prior
to the Substantial Completion of the Initial PCS System to continue with the
Work on all of the PCS Systems and PCS Sub-Systems constituting the Initial
System in accordance with the requirements of this Contract and the Project
Milestones applicable to each such PCS System and/or PCS Sub-System.
2.5 System Element Verification; Test-bed Laboratory. (a) In
accordance with Milestone 4 (as set forth on Exhibit A1) the Vendor must
successfully complete System Element Verification pursuant to the terms of this
Contract including, but not limited to, the Specifications and Exhibit B3 no
later than August 19, 1996.
(b) The Vendor will supply, at no additional cost to the Owner
(except as provided in Exhibit I), the Products and Services necessary for the
establishment of a test-bed laboratory, which laboratory will include the
Products and Services set forth on Exhibit I (the "Test-bed Laboratory"). Such
Products and Services will be subject to the applicable warranty terms of this
Contract. The Vendor will provide all relevant Software Upgrades, Software
Enhancements and Software Combined Releases applicable to the Test-bed
Laboratory. Equipment Upgrades, Equipment Enhancements and Equipment Combined
Releases will be available for the Test-bed Laboratory as provided in this
Contract. The Test-bed Laboratory will be provided by the Vendor in accordance
with Milestone 3 applicable to the Initial PCS System as set forth on Exhibit
A1, but in no event will the Vendor be required to provide the Test-bed
Laboratory earlier than ninety (90) days after the building site for such
laboratory has been made ready by the Owner and the Vendor has received the
Owner's notice thereof, provided that such notice will not be delivered to the
Vendor before April 19, 1996 (the "Building Ready Date"). The Owner expressly
agrees that it will not use the Test-bed Laboratory for In Revenue Service or
any purpose other than testing without the prior written consent of the Vendor,
which consent the Vendor will not unreasonably withhold or delay.
(c) The Vendor will supply (and Exhibit I will be deemed to
include), at no cost to the Owner, (i) one mated pair SCP/HLRs with one SMS,
(ii) one SCE with eight RTUs, (iii) one AM/HLR, (iv) one source code compiler
and (v) one copy of "Execution Environment" all in accordance with and pursuant
to the Specifications for the Test-bed Laboratory no later than the dates
specified in the HLR Statement of Work. All provisions of subsections 2.5(a) and
2.5(b) above will apply similarly to the Products listed in this subsection
2.5(c). Nothing in this subsection 2.5(c) will be deemed to release or
accelerate the Project Milestones and/or delivery requirements set forth in
subsections 2.5(a) and 2.5(b) above.
(d) The Vendor will supply (and Exhibit I will be deemed to
include), at not cost to the Owner (i) a SPARC/OTAF Product platform (consisting
of at least two (2) CPUs) plus accompanying OTAF Software and OTAF Equipment all
in accordance with and pursuant to the Specifications for the Test-bed
Laboratory no later than October 23, 1996 and (ii) SCP/OTAF Software all in
accordance with and pursuant to the Specifications for the Test-bed Laboratory
no later than May 15, 1997. All provisions of subsections 2.5(a) and 2.5(b)
above will apply similarly to the Products listed in clauses (i) and (ii) above
provided by the Vendor pursuant to this subsection 2.5(d). Nothing in this
subsection 2.5(d) will be deemed to release or accelerate the project Milestones
and/or delivery requirements set forth in subsections 2.5 (a) and 2.5 (b) above.
(e) The Vendor will supply (and Exhibit I will be deemed to
include) at no cost to the Owner and simultaneous with each release of Actiview
Software, an installed copy of such Actiview Software for the Test-bed
Laboratory all in accordance with and pursuant to the Specifications. All
provisions of subsections 2.5(a) and 2.5(b) above will apply similarly to the
Products listed in the first sentence of this subsection 2.5(e) provided by the
Vendor pursuant to this subsection 2.5(e). Nothing in this subsection 2.5(e)
will be deemed to release or accelerate the project Milestones and/or delivery
requirements set forth in subsections 2.5 (a) and 2.5 (b) above.
2.6 RF Engineering; Site Acquisition and MSC Installation. (a) In
accordance with Milestone 2 as set forth on Exhibit A1, the Vendor has delivered
to the Owner the Preliminary RF Design for each of the System Areas and System
Sub-Areas in accordance with the requirements and criteria set forth in Exhibit
B1 and Schedule 1. The Vendor has provided the Owner with the applicable search
rings for each PCS Sub-System based upon the Preliminary RF Design. The Owner
and the Vendor agree to cooperate with each other to complete the RF Engineering
and the Site Acquisition. The Owner must notify the Vendor of desired coverage
areas, RF Engineering parameters or other information or restrictions the Owner
wishes to be included in the Final RF Engineering Plan for each PCS System
and/or PCS Sub-System. In accordance with Exhibit B1, the Vendor will do the RF
Engineering in each of the PCS Systems and/or PCS Sub-Systems and in connection
therewith will use the parameters, information and restrictions supplied by the
Owner. As part of the RF Engineering, the Vendor will establish "search rings"
in each of the PCS Systems and/or PCS Sub-Systems that will specify areas in
which the Owner may proceed with Site Acquisition.
(b) In accordance with Exhibit B1 the Vendor, at its request, must
be kept informed of the progress made on ongoing Site Acquisition within each
System Area and System Sub-Area. As the Site Acquisition progresses, the Vendor
agrees to regularly alter the RF Engineering plan to determine a new search ring
or rings to take into account any changes or modifications requested by the
Owner or otherwise requested by the Owner due to the Owner's inability to
acquire sufficient rights to a location which could constitute a System Element
Location in a timely or economic manner. When making changes to the RF
Engineering plan the Vendor must take into account the Site Acquisition already
completed by the Owner.
(c) Milestone 5 (as set forth in Exhibit A1) will be achieved in
each PCS System and PCS Sub-System in accordance with this subsection 2.6(c);
provided that for each PCS System and PCS Sub-System the appropriate MSCs have
been installed by the Vendor in the Owner's relevant Switch Sites within each
such PCS System and PCS Sub-System in accordance with subsection 2.6(d) below.
In accordance with the Project Milestones set forth on Exhibit A1 and the
requirements and criteria set forth in Exhibit B1, within five (5) days of the
Owner achieving Site Acquisition Substantial Completion within any System Area
or System Sub-Area (the "Final RF Review Period"), the Owner and the Vendor will
use their best efforts to agree on a final System Element Location count (the
"Final Site Count") and a final RF Engineering plan (the "Final RF Engineering
Plan") for such System Area or System Sub-Area, as the case may be, upon which
the PCS System for such System Area and/or System Sub-Area, as the case may be,
will be built by the Vendor. Failure of the Owner and the Vendor to reach
satisfactory agreement on a Final Site Count and/or a Final RF Engineering Plan
for any given System Area or System Sub-Area within the Final RF Review Period
will automatically result in the referral of any such disagreement to the most
senior RF engineers of both the Owner and the Vendor for their review and
resolution within five (5) days after the end of any such Final RF Review
Period. If the senior RF engineers fail to resolve any such disagreement within
the extended five (5) day resolution period, the disagreement will automatically
be referred for resolution in accordance with subsection 23.1. It is understood
by the Parties that during the period of any such disagreement and the
resolution thereof in accordance with the Contract, the Work on such PCS System
and/or PCS Sub-System, to the extent possible, will be ongoing and that
Substantial Completion on such PCS System and/or PCS Sub-System shall require
agreement by the Parties on a Final RF Engineering Plan and/or a Final Site
Count for such PCS System and/or System Area and/or PCS Sub-System.
(d) The Vendor will install each of the MSCs in each of the Switch
Sites within sixty (60) days of the Switch Site Ready Date; provided that (i)
the Owner will have provided the Vendor with the MSC configuration engineering
information at least one hundred (100) days prior to the Switch Site Notice
Date, for each such MSC, such that the Vendor may actually perform the Owner's
MSC configuration engineering (other than the Switch Site layout configuration),
(ii) the Owner will have provided the Vendor with the applicable Switch Site
description (in appropriate detail) at least sixty (60) days prior to the Switch
Site Notice Date and (iii) as of such Switch Site Ready Date the applicable
Switch Site will have been made ready by the Owner such that the relevant MSC
can in fact be installed by the Vendor. For the purposes hereof (i) the "Switch
Site Ready Date" means the date specified by the Owner as the date on which the
Switch Site will in fact be ready for MSC installation as communicated to the
Vendor by the Owner in the Owner's Switch Site Notice to the Vendor, (ii) the
"Switch Site Notice Date" will mean, as to any Switch Site Notice, the date on
which such notice was delivered to the Vendor by the Owner and (iii) the "Switch
Site Notice" will mean the notice provided to the Vendor by the Owner in
sufficient detail to describe the Switch Site so that the Vendor may reasonably
engineer the layout of the MSC configuration specifically for such Switch Site.
Nothing contained herein will in any way limit the Vendor's obligation pursuant
to the terms of this Contract to do the MSC engineering and the RF Engineering
in accordance with the terms of this Contract. Pursuant to this subsection
2.6(d) in no event will the Owner provide the Vendor the Switch Site Notice more
than sixty (60) days later than the date the Owner delivers the Vendor the Build
Notice pursuant to subsection 2.7(a).
2.7 Facilities Preparation Services and Installation. (a) For any
PCS System and/or PCS Sub-System within the Initial System prior to Milestone 5
(as set forth on Exhibit A1) for such PCS System or PCS Sub-System, as the case
may be, the Owner (i) may, in its discretion, provide notice to the Vendor when
it has achieved Site Acquisition of at least fifty (50) System Element Locations
in any given PCS System and/or PCS Sub-System, as the case may be, or (ii) in
any event, (if the Owner hasn't already provided notice pursuant to clause (i)
above) will provide such notice to the Vendor when it has achieved Site
Acquisition of at least thirty percent (30%) of the System Element Locations in
such PCS Sub-System, as the case may be (in either event, the "Build Notice").
The Build Notice calculation will be based upon the Owner's reasonable estimate
of System Element Locations within or in connection with the Preliminary RF
Design applicable to the PCS System and/or PCS Sub-System in which such Build
Notice is issued to the Vendor. The Build Notice for each PCS System or PCS
Sub-System will also include the Owner's best forecast based upon information
available at such time (the "M5 Forecast") of when it expects to be able to
declare Site Acquisition Substantial Completion within such PCS System or PCS
Sub-System. The Owner understands that the Vendor will not be required to
commence Facilities Preparation Services and/or Installation in any PCS System
or PCS Sub-System until and unless the Vendor has received the applicable Build
Notice pursuant to and in accordance with this subsection 2.7.
(b) In accordance with the Project Milestones specified in Exhibit
A and the requirements and criteria of Exhibit B2, for each System Area and/or
System Sub-Area the Vendor must complete the Facilities Preparation Services for
all System Element Locations within such PCS System and/or PCS Sub-System, as
applicable, in accordance with the construction criteria set forth in Exhibit E
and the performance criteria set forth in Exhibit F no later than ninety (90)
days from the Owner/Vendor agreement on a Final Site Count and a Final RF
Engineering Plan for such System Area and/or System Sub-Area; provided that upon
the prior written request of the Vendor, the Owner may consent (which consent
will not be unreasonably withheld) to postpone Milestone 6 (as set forth in
Exhibit A1) with respect to any PCS System and/or PCS Sub-System by not more
than an additional sixty (60) days in the event that more than ten percent (10%)
of the System Element Locations in such PCS System and/or PCS Sub-System
estimated as of the date of the Build Notice for such PCS System and/or PCS
Sub-System have not been fully acquired by the Owner immediately prior to the
date on which Milestone 5 (as set forth in Exhibit A1) otherwise occurs in such
PCS System and/or PCS Sub-System. Pursuant to the Project Milestones the Vendor
must complete Installation of the Products for any given PCS System within
thirty-two and one half (32-1/2) days of its completion of the Facilities
Preparation Services in accordance with Milestone 6 (as set forth on Exhibit A1)
for such PCS System pursuant to the requirements and criteria set forth in
Exhibit D and Exhibit F.
2.8 Site Acquisition Modifications. In the event that the Owner
determines that it is unlikely to achieve Site Acquisition Substantial
Completion for any PCS System and/or PCS Sub-System in a timely and
cost-effective manner, the Vendor will modify certain performance criteria set
forth in Exhibit F with respect to such PCS System and/or PCS Sub-System in the
manner and to the degree that the Owner reasonably specifies in writing to the
Vendor in accordance with the terms of Exhibit B3. In the event the Owner
notifies the Vendor of a modification to the System performance criteria for
such PCS System and/or PCS Sub-System pursuant to this subsection 2.8, such
modified criteria, including any such lower number of System Element Locations
that the Owner, in its sole discretion, deems at such time to be satisfactory so
as to constitute Site Acquisition Substantial Completion, will be deemed the
performance criteria and the System Element Location count applicable to such
PCS System for the purposes of Milestone 5 (as set forth on Exhibit A1) and all
other remaining Project Milestones for such PCS System and/or PCS Sub-System
thereafter.
2.9 Design/System Architecture and Engineering; Interoperability.
(a) The Vendor must provide all Engineering and design services necessary for
the completion of the Work and the System in conformity with the Specifications
and the CDMA standards, including, but not limited to, the Engineering and
design necessary to describe and detail the System and the specified PCS Systems
and/or PCS Sub-Systems.
(b) Pursuant to and in accordance with the terms of Exhibits B3 and
G, BTS/BSC-MSC Interoperability must be demonstrated on or before December 1,
1996 (provided that such date will change to reflect the actual delay beyond
December 31, 1995 in the finalization of "Attachment A" to be attached to
Exhibit G); provided that in any event the requirements of this subsection
2.9(b) are a condition to the Vendor's Substantial Completion of the last PCS
System within the Initial System and Substantial Completion of such last PCS
System will not be deemed to have been achieved by the Vendor unless and until
such Interoperability will have been demonstrated in accordance with the
criteria set forth in Exhibit G; provided further that any delay in such
Interoperability which is not due substantially to the fault of the Vendor, in
the reasonable opinion of the Owner, will not be a delay pursuant to the terms
of this subsection 2.9(b).
(c) It is expressly understood and agreed by the Vendor that the
Substantial Completion of any PCS System and/or PCS Sub-System will (in addition
to all other requirements of PCS System (and/or PCS Sub-System) Substantial
Completion set forth in this Contract) be subject to, and conditioned upon, such
PCS System and/or PCS Sub-System, as the case may be, pursuant to and in
accordance with the Specifications, operating and interoperating with any then
operating and/or in service Owner and/or Affiliate PCS Systems and PCS
Sub-Systems (and/or PCS systems and/or PCS sub-systems, as the case may be)
which comply with the relevant ANSI standards and other specifications
identified in Exhibit D.
(d) The Vendor will use its best efforts to work with Nortel in
order to ensure that the AM/HLRs and SCP/HLRs work with the Equipment and
Software (as defined in the Nortel Contract) provided by Nortel so that in a
timely manner the AM/HLR and SCP/HLR Products and Services provide service to
the entire Nationwide Network (including, but not limited to, the Nortel
constructed portion of the Nationwide Network) in accordance with the AM/HLR
Specifications and the SCP/HLR Specifications, as applicable. Notwithstanding
anything stated herein to the contrary, the Vendor will not be liable for the
failure of any of the AM/HLRs and/or the SCP/HLRs to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the
AM/HLRs and/or SCP/HLRs in accordance with and pursuant to the Lucent/Nortel
License Agreement. The Vendor will also use its best efforts to work with Nortel
in order to ensure that the AS Products work with the Equipment and Software (as
defined in the Nortel Contract) provided by Nortel so that in a timely manner
the AS Products and Services provide service to the entire Nationwide Network
(including, but not limited to, the Nortel constructed portion of the Nationwide
Network) in accordance with the AS Statement of Work, as applicable.
Notwithstanding anything stated herein to the contrary, the Vendor will not be
liable for the failure of any of the AS Products to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the AS
Products in accordance with and pursuant to the Lucent/Nortel License
Agreement-OAM&P.
(e) Commencing as of July 15, 1996, the Vendor will have and will
continue to regularly update (including the provision of at least monthly
written updates) the Owner as to the Vendor's progress in developing and being
able to timely deliver the AM/HLRs and the SCP/HLRs for both the Test-bed
Laboratory and the Nationwide Network.
(f) Notwithstanding anything to the contrary in the Contract,
Substantial Completion of any PCS System or PCS Sub-System, as the case may be,
within the Initial System, and the testing required therefor, will expressly
require and be conditioned upon the successful integration and interoperation
(in accordance with the AM/HLR Specifications), of the other Products within any
such PCS System and/or PCS Sub-System with the then existing AM/HLRs within the
Nationwide Network.
(g) For each applicable Actiview Software release, the Acceptance
Procedures for such release are to be mutually agreed between the Parties no
later than one (1) week prior to the delivery by the Vendor of any such release.
Failure of the Parties to so mutually agree at such time will in no way modify
the Vendor's obligation to timely deliver any such Actiview Software release
pursuant to and in accordance with the Actiview Statement of Work.
2.10 Certification. The Vendor must coordinate its performance of
the Services described in subsection 2.9 with the Engineering and design efforts
(including, without limitation, any and all RF Engineering and/or Site
Acquisition) of all Subcontractors, the Owner, the Other Vendors, any and all
supply and transportation requirements and all federal, state and local
authorities or agencies. The Vendor will be fully knowledgeable about and will,
after reasonable review thereof, accept all Engineering, including, without
limitation, RF Engineering and design, irrespective of whether the Vendor, the
Other Vendors, the Owner or third parties such as the Subcontractors may furnish
such services. All Engineering requiring certification must be certified by
professional engineers licensed or properly qualified to perform such
Engineering services in all appropriate jurisdictions if such certification is,
in the Owner's opinion, appropriate and reasonable under the circumstances. This
subsection 2.10 will not modify or restrict the Vendor's obligation and/or right
to provide the Services contracted for pursuant to the terms of this Contract.
2.11 Notice of Developments.
2.11.1 Vendor Developments. The Vendor must provide the Owner,
through the NDAB or the Owner's vice president and/or director of product
development, with reasonable prior notice of any PCS Product developments,
innovations and/or technological advances (collectively "Vendor Developments")
relevant to the System prior to giving such notice to any other Customer or
otherwise making any such Vendor Development public within the relevant
marketplace; provided that the Vendor will not be obligated to provide the Owner
such notice before any other Customer if doing so would not be reasonable under
the circumstances and/or otherwise breach any contractual obligation to any
other Customer; provided further that any such notice pursuant to this
subsection 2.11.1 need not include any information originated by another
Customer which is proprietary to such other Customer of the Vendor. For the
purposes of this subsection 2.11.1 the term "Vendor" includes the Vendor and its
affiliates and subsidiaries.
2.11.2 Participation in Testing. The Owner has the right, but not
the obligation, to witness and/or participate in any initial testing and/or
application of any such Vendor Development (other than a Vendor Development
originated by another Customer which includes information which is proprietary
to such other Customer); provided that any such initial testing of Vendor
Developments will be subject to (i) scheduling as reasonably determined by the
Vendor, (ii) the qualification that the Owner's PCS System or PCS Sub-System, as
the case may be, meets the technical requirements for the testing of such Vendor
Development as reasonably determined by the Vendor (or otherwise that the Owner
is willing to update such PCS System or PCS Sub-System, as the case may be, to
meet such requirements), (iii) the Owner's acknowledgement that it will be able
to provide the resources necessary to implement the initial testing for such
Vendor Development, and (iv) the Owner and the Vendor executing a verification
office testing agreement that identifies the scope, terms, pricing,
responsibilities and schedule related to the initial testing of such Vendor
Development. The Vendor must provide the Owner at least thirty (30) days prior
notice of its intent to test any such Vendor Development and upon the Owner's
written request the Vendor will allow the Owner to participate in such testing
upon terms and in a testing environment reasonably acceptable to the Parties at
such time. The Owner will make its Test-bed Laboratory and/or certain of its PCS
Systems and/or PCS Sub-Systems (following Final Acceptance thereof) available to
the Vendor for any such testing in which the Owner has the right, and will have
notified the Vendor of its desire, to participate in pursuant to the terms of
this subsection 2.11.2. Where the Vendor and the Owner have agreed that the
Owner's Test-bed Laboratory or PCS System and/or PCS Sub-System will be used as
a test bed for Vendor Developments, the Owner will not unreasonably refuse the
Vendor's requests for other Customers to observe the tests or to release results
of the tests to other Customers; provided that the Owner will have had
reasonable prior notice that the Vendor would like to have other Customers
observe such testing and that the Vendor will remain liable in all respects
pursuant to the terms of this Contract for the protection of Proprietary
Information in connection with any such testing. The length of the prior notice
period described above may be shortened to under thirty (30) days if necessary
and appropriate under the circumstances, but in no event will any such prior
notice period be less than ten (10) days.
2.12 Safety. To the extent the Vendor is in control of any System
Element Location, or other site within the System or any System Area during the
term of this Contract (a "Vendor-Controlled Location") including, but not
limited to, during the build-out of the Initial System, the Vendor will be
solely responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with all such Vendor-Controlled
Locations. The Vendor must materially comply with Applicable Laws and Applicable
Permits and the Specifications bearing on safety of persons or property or
protection against injury, damages or loss. The Vendor must provide a written
report to the Owner describing fully all incidents affecting safety on any
Vendor-Controlled Location and must also furnish to the Owner copies of all
MSHA, OSHA and workers' compensation reports. The Vendor acknowledges and agrees
that until Bolt-down of all of the PCS Products to be provided by the Vendor
pursuant to the terms of this Contract on any given System Element Location
(other than the Switch Site or the Test-bed Laboratory) within any given PCS
System and/or PCS Sub-System is achieved the Vendor will be deemed to be in
control of all Products, tools, designs, buildings, structures and/or
Engineering (other than those Products, tools, designs, buildings, structures
and/or Engineering specific to and necessary for Site Acquisition, Network
Interconnection and/or Microwave Relocation) at, in or upon any such System
Element Location within such PCS System and/or PCS Sub-System; provided that in
any event for each such System Element Location the Vendor will always be deemed
to be in control of such System Element Location until the Facilities
Preparation Services for such System Element Location have been completed in
accordance with Exhibit B2.
2.13 Emergencies. In the event of any emergency at a
Vendor-Controlled Location endangering life or property, the Vendor must take
such action as may be reasonable and necessary to prevent, avoid or mitigate
injury, damage or loss and will, as soon as possible, report any such incidents,
including the Vendor's response thereto, to the Owner. Whenever, in the
reasonable opinion of the Owner, the Vendor has failed to take sufficient
precautions for the safety of the public or the protection of the Work or of
structures or property on or adjacent to any Vendor-Controlled Location,
creating, in the reasonable opinion of the Owner, an emergency requiring
immediate action, then the Owner, after having given reasonable prior notice to
the Vendor, may cause such sufficient precautions to be taken or itself provide
such protection. The taking or provision of any such precautions or protection
by the Owner or its agents or representatives will be for the account of the
Vendor and the Vendor must reimburse the Owner for the cost thereof.
2.14 Right of Inspection. The Owner, the parties providing
financing in connection with the build-out of the Nationwide Network and their
duly appointed representatives, including Inspectors (collectively "Reviewers"),
will at all reasonable times have access to the various sites where the Vendor
or its Subcontractors are prosecuting the Engineering, design, procurement,
testing or manufacture of the Work; provided that this subsection 2.14 will not
be presumed to give access to the Vendor's or its Subcontractors' sites to
direct competitors of the Vendor provided that such sites are not otherwise
Owner sites. For these purposes, reasonable access will be given during normal
business hours to the Vendor's and its Subcontractors' plants, premises, storage
and deposit areas, facilities and offices, sources of materials, Equipment being
assembled, already assembled or in operation, Equipment being performance tested
or tested to the Vendor's specifications and to any other places or areas
occupied by the Vendor or its Subcontractors in connection with the Work.
Notwithstanding anything herein to the contrary, any Reviewer's right of access
to the Vendor's and/or the Subcontractors' plants, premises, storage and deposit
areas, facilities and offices, sources of materials, Equipment being assembled,
already assembled or in operation, Equipment being performance tested or tested
to the Vendor's specifications and to any other places or areas occupied by the
Vendor or its Subcontractors in connection with the Work will be subject to the
reasonable confidentiality, safety and security requirements of same and further
subject to such Reviewers' non-interference with the Work and other work being
performed thereon. The Vendor must provide reasonable temporary office space (in
the Vendor's facilities where such space is available) and services for the
Reviewers to the extent necessary.
2.15 Transportation. The Vendor must provide for the transport and
delivery of all the Products to be delivered pursuant to, and in accordance
with, the terms of this Contract. The costs for such transportation will be
borne by the Vendor as part of the Contract Price; provided that the Owner will
reimburse the Vendor for any costs incurred by the Vendor for any Extraordinary
Transportation in such cases where the Vendor, subject to prior notice to the
Owner, found it actually necessary to utilize such Extraordinary Transportation;
provided, further that any amounts due to the Vendor from the Owner pursuant to
the first proviso of this subsection 2.15 will be reduced by the amount of
non-extraordinary transportation costs which otherwise would have been
applicable to the transport of such Products.
2.16 Security. Subject to subsection 2.12, during the course of the
Work, the Vendor will perform the security services necessary to ensure the
safety and security of the System Element Locations, the Products and/or other
materials or designs relevant to the Work.
2.17 Materials and Equipment. Except for materials or Equipment to
be supplied by Subcontractors identified on part B of Schedule 7, whenever
materials or Equipment are specified or described in this Contract (including
the Specifications) by using the name of a proprietary item or the name of a
particular supplier, the naming of the item is intended to establish the type,
function and quality required, and substitute materials or Equipment may
nonetheless be used, provided that such materials or Equipment are equivalent or
equal to that named. If the Vendor wishes to furnish or use a substitute item of
material or Equipment, the Vendor must first certify that the proposed
substitute will perform at least as well the functions and achieve the results
called for by this Contract, will be substantially similar or of equal substance
to that specified and be suited for the same use as that specified. The Owner
may require the Vendor to furnish, at the Vendor's expense, additional data
about the proposed substitute as required to evaluate the substitution. For
Major Portions of the Work, or materials or Equipment listed on part B of
Schedule 7, the Vendor must first receive prior written approval of the Owner
for any substitution. The Owner will be allowed a reasonable time within which
to evaluate each proposed substitute. Notwithstanding the foregoing, with
respect to PCS Products, prior to the shipment of such PCS Products pursuant to
the terms of this Contract, the Vendor may at any time without notice to or
consent of the Owner make changes in a Vendor PCS Product furnished pursuant to
this Contract, or modify the drawings and published specifications relating
thereto, or substitute Products of similar or later design to fulfill its
obligations under this Contract or otherwise fill an order, provided that the
changes, modifications or substitutions will in no way affect or otherwise
impact upon the form, fit, or function of an ordered Product pursuant to and in
accordance with the applicable Specifications. With respect to changes,
modifications and substitutions which do in fact affect the form, fit, or
function of an ordered Product pursuant to and in accordance with the
Specifications, the Vendor must notify the Owner in writing at least thirty (30)
days prior to the effective dates of any such changes, modifications or
substitutions. In the event that any such change, modification or substitution
is not desired by the Owner, the Owner will notify the Vendor within thirty (30)
days from the date of notice and the Vendor will not furnish any such changed
Products to the Owner on any orders in process at the time the Owner is so
notified; provided that nothing contained herein will otherwise modify the
Vendor's obligations under the terms of this Contract.
2.18 Equipment and Data. The Vendor must furnish all drawings,
specifications, specific design data, preliminary arrangements and outline
drawings of the Equipment and all other information as required in accordance
with this Contract in sufficient detail to indicate that the Equipment and
fabricated materials to be supplied under this Contract comply with the
Specifications.
2.19 References to Certain Sources. Reference to standard
specifications, manuals or codes of any technical society, organization or
association or to the laws or regulations of any Governmental Entity, whether
such reference is specific or by implication, by this Contract, means the latest
standard specification, manual, code, laws or regulations in effect at the time
of such reference, except as may be otherwise specifically agreed to by the
Owner. However, no provision of any reference, standard, specification, manual
or code (whether or not specifically incorporated by reference in this Contract)
will be effective to change the duties and responsibilities of the Owner, the
Vendor, the Subcontractors or any of their consultants, agents or employees from
those set forth in this Contract; provided that nothing contained in this
Contract will require the Vendor to violate then existing and enforceable
Applicable Laws.
2.20 Operating Manuals. The Vendor will provide the Owner Operating
Manuals in accordance with this subsection 2.20 as soon as they are reasonably
available but in no event less than thirty (30) days prior to Substantial
Completion of the Initial PCS System, the Vendor will provide the Owner with as
many sets of the Operating Manuals for the entire System as the Owner then
reasonably requires. The Operating Manuals will be prepared in accordance with
the relevant Specifications and in sufficient detail to accurately represent the
System and all of its component System Elements as constructed and will
recommend procedures for operation. Operating Manuals with up to date (but not
"as-built") drawings, specifications and design sheets will be available for the
Training as set forth in subsection 2.23. All other Technical Documentation not
already delivered to the Owner pursuant to the terms of the Contract must be
delivered to the Owner within ten (10) days after the successful achievement of
all Final Acceptance tests in accordance with Exhibit B3. The Owner will not be
required to deliver the Final Acceptance Certificate until all such Technical
Documentation has been so delivered (and Final Acceptance will not be deemed to
have occurred earlier than the date that is ten (10) days prior to the date of
delivery of such Technical Documentation).
2.20.1 AS Products and Services Operating Manuals. The
Vendor will provide the Owner operating and instruction manuals for the AS
Products and AS Services (the "AS Operating Manuals") in accordance with
this subsection as soon as they are reasonably available but in no event later
than the dates and times set forth in Appendix G. The Vendor will provide the
Owner with the quantity of AS Operating Manuals set forth in the AS Statement of
Work. The AS Operating Manuals will be prepared in accordance with the AS
Statement of Work and in sufficient detail to accurately describe the opera-
tions and instructions for the AS Products and all of such AS Products component
parts and will recommend procedures for operation and maintenance.
2.20.2 OTAF Products and Services Operating Manuals. The
Vendor will provide the Owner operating and instruction manuals for the OTAF
Products and OTAF Services (the "OTAF Operating Manuals") in accordance with
this subsection as soon as they are reasonably available but in no event later
than the dates and times as set forth in the OTAF Statement of Work. The
Vendor will provide the Owner with the quantity of OTAF Operating Manuals
set forth in the OTAF Statement of Work. The OTAF Operating Manuals will be
prepared in accordance with the requirements and specifications of the OTAF
Statement of Work and in sufficient detail to accurately describe the OTA
Products and Services (including SPARC/OTAF and SCP/OTAF) and will recommend
procedures for OTAF operation and maintenance.
2.20.3 Actiview Products and Services Operating Manuals.
The Vendor will provide the Owner operating and instruction manuals for the
Actiview Products and Actiview Services (the "Actiview Operating Manuals")
in accordance with this subsection as soon as they are reasonably available
but in no event later than the dates and times set forth in the Actiview State-
ment of Work. The Vendor will provide the Owner with the quantity of Acti-
view Operating Manuals set forth in the Actiview Statement of Work. The
Actiview Operating Manuals will be prepared in accordance with the Actiview
Statement of Work and in sufficient detail to accurately describe the Acti-
view Products (and all of their component parts) and Services and will recommend
procedures for Actiview operation and maintenance.
2.21 Maintenance and Instruction Manuals. The Vendor will provide
the Owner Maintenance and Instruction Manuals in accordance with this subsection
2.21 as soon as they are reasonably available but in no event less than thirty
(30) days prior to Substantial Completion of the Initial PCS System, the Vendor
must provide the Owner with as many sets of the Maintenance and Instruction
Manuals for the entire System as the Owner then reasonably requires. The
Maintenance and Instruction Manuals will be prepared in accordance with the
Specifications and in sufficient detail to accurately represent the System and
all of its component System Elements as constructed and will set forth
procedures for inspection and maintenance. Maintenance and Instruction Manuals
with up to date (but not "as-built") drawings, specifications and design sheets
will be available for the Training set forth in subsection 2.23. The Maintenance
and Instruction Manuals must include the volumes compiled by the Vendor
containing all as-built Subcontractor furnished product data.
2.22 Standards for Manuals. All Operating Manuals and Maintenance
and Instruction Manuals required to be provided by the Vendor pursuant to this
Contract must be:
(a) detailed, comprehensive and prepared in conformance with the
System Standards and generally accepted national standards of professional care,
skill, diligence and competence applicable to telecommunications and operation
practices for facilities similar to the System;
(b) consistent with good quality industry operating practices for
operating personal communications service systems of similar size, type and
design;
(c) sufficient to enable the Owner to operate and maintain each PCS
System and/or PCS Sub-System in each System Area or System Sub-Area, as the case
may be, and the System as a whole on a continuous basis; and
(d) prepared subject to the foregoing standards with the goal of
achieving operation of the System at the capacity, efficiency, reliability,
safety and maintainability levels contemplated by this Contract and the
Specifications and required by all Applicable Laws and Applicable Permits.
In addition to, and without limiting the requirements set forth in
the preceding sentence, the Operating Manuals and the Maintenance and
Instruction Manuals will be submitted to the Owner in CD-ROM format (as soon as
such format is available provided that such availability will be no later than
December 1996) in addition to hard-copy volume format if so requested by the
Owner. In addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject the Operating Manual and the Maintenance and
Instruction Manuals if in its reasonable judgment any of the foregoing does not
meet the standards set forth in this Contract.
In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the AS Operating Manuals for
the AS Products and Services will be submitted to the Owner in hard-copy volume
format if so requested by the Owner. In addition to any of the Owner's other
rights and remedies, the Owner will have the right to reject such AS Operating
Manuals if in its reasonable judgment any of them do not meet the standards set
forth in this Contract.
In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the OTAF Operating Manuals and
the OTAF Products and Services maintenance and instruction manuals (the "OTAF
Maintenance and Instruction Manuals") for the OTAF Products and Services, will
be submitted to the Owner in hard-copy volume format if so requested by the
Owner. In addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject the OTAF Operating Manuals and OTAF Maintenance
and Instruction Manuals if in its reasonable judgment any of the foregoing does
not meet the standards set forth in this Contract. Furthermore, the Actiview
Operating Manuals and the Actiview Products and Services maintenance and
instruction manuals (the "Actiview Maintenance and Instruction Manuals") for the
Actiview Products and Services, will be submitted to the Owner in hard-copy
volume format if so requested by the Owner. In addition to any of the Owner's
other rights and remedies, the Owner will have the right to reject such Actiview
Operating Manuals and Actiview Maintenance and Instruction Manuals if in its
reasonable judgment any of the foregoing does not meet the standards set forth
in this Contract.
2.23 Training. As more fully described below, starting at least one
hundred and eighty (180) days prior to the Substantial Completion of the Initial
PCS System, the Vendor must provide to the Owner a practical and participatory
and, where feasible, on-site training program with respect to the System, which
program will include technical education (collectively, the "Training"). The
Vendor will provide, upon the Owner's prior written request and at the time or
times mutually agreed in good faith by the Owner during the Initial Term of this
Contract, (i) not less than a minimum of twelve thousand fifty (12,050) man-days
of Training and Training materials for the Owner's personnel, at no cost to the
Owner plus (ii) an additional one thousand (1,000) man-days of Training at no
cost to the Owner for the SCP/HLRs and/or AM/HLRs. The Vendor will be required
to commence provision of SCP/HLR training no later than October 1, 1996. The
Owner will be responsible for the travel and living expenses of personnel
receiving Training. Such Training must be kept current to encompass the latest
Software and Equipment, or any other Software Revision Level and/or Equipment
Revision Level directed by the Owner pursuant to the terms of this Contract.
Subject to the foregoing, Training course size, content and material will be
designed and agreed to by mutual consent between the Parties. The Vendor will
conduct classes for the subjects described below:
(a) Operations, maintenance and provisioning ("OM&P") Training will
include System Training to technical personnel presumed not qualified or trained
specifically on operating a PCS System and/or PCS Sub-System or the Equipment
and/or Software included therein. The subject matter will include (i) a general
overview of PCS/CDMA technology and the System, (ii) a System overview of the
Equipment, Software initiation and configuration requirements, required
interconnections, troubleshooting and testing requirements, recovery from System
failures, and (iii) any other information necessary to successfully operate,
maintain, or set up the Equipment and the Software to work in accordance with
the System Element performance criteria set forth in Exhibit D, in each case so
that each PCS System successfully operates in accordance with the performance
criteria set forth in Exhibit F within its System Area;
(b) The Vendor must provide PCS/CDMA qualified technical staff and
material to train the Owner's personnel so as to enable them to train other
personnel of the Owner (i.e., train the trainers) on the subject matter topics
listed below. The Owner's personnel trained by the Vendor will be evaluated and
certified by the Vendor upon successful completion of the course as competent to
train other personnel of the Owner. Such content and materials may be tailored
or customized by the Owner for internal use only and include, without
limitation, Training with respect to the following topics:
(i) System Element configuration;
(ii) Communication interfaces and protocols;
(iii) Software operating system (current to the latest
Software Revision Level);
(iv) Database configuration, structure and content;
(v) Database down loading;
(vi) Program function;
(vii) Stand-alone SCP/HLR operations;
(viii) OAM&P and AS Products operations;
(ix) SPARC/OTAF Products and Services and SCP/OTAF Prod-
ucts and Services operations and maintenance;
(x) Actiview operations and maintenance;
(xi) Troubleshooting procedures; and
(xii) Other subject matter which is necessary or
desirable to understand the operation of the
System and maintenance of the System as well as
any enhancements as they are added to the System
and/or any part thereof.
(c) Except for certain plug-in modules and certain Software
delivered under this Contract, the Vendor does not provide, nor does this
Contract require that the Vendor provide, Training, training manuals, Operating
manuals or Maintenance and Instruction Manuals intended to make the Owner
proficient in Installation of any of the Products furnished under this Contract.
In the event that the Vendor should elect to provide training, documentation
and/or test equipment to facilitate self-installation of the Products by a
Customer purchasing PCS Products from the Vendor, the Vendor agrees to make such
items available to the Owner under the Vendor's standard terms and conditions
for such offering as they may exist from time to time subject to the Vendor's
obligations under Section 26; and
(d) Promptly upon execution of this Contract, the Vendor will
establish a training coordinator, whose responsibility will be to work with the
Owner to ensure that the Owner receives the Training set forth above. Such
coordinator (or his or her replacement) will continue in such assignment until
the earlier of (i) the Final Acceptance of the last PCS System within the
Initial System, or (ii) receipt by the Owner of all of the Training required to
be provided at no cost under this subsection.
2.23.1 [INTENTIONALLY OMITTED]
2.23.2 Actiview Training. Any Training for Actiview requested by
the Owner and provided by the Vendor at the prices and terms set forth in the
Actiview Statement of Work will be provided by the Vendor at the Owner's
locations as such locations are designated by the Owner to the Vendor.
2.24 Manuals and Training. The training and the documentation
provided in connection herewith, including, without limitation, all
documentation provided in CD-ROM format, and pursuant to subsections 2.20, 2.21
and 2.23 will be updated pursuant to and in accordance with all Product upgrades
and/or modifications applicable to the System, any PCS System and/or any part
thereof.
2.25 Spare Parts. (a) Prior to the Substantial Completion of the
Initial PCS System the Vendor and the Owner will agree, pursuant to and in
accordance with the terms of this subsection 2.25, as to the type, quantity and
storage location of the spare parts required to continually operate the Initial
System as intended and in accordance with the Specifications. For a period of
two (2) years following Final Acceptance of each PCS Sub-System, the Vendor
will, if requested by the Owner, provide such spare parts at its own expense.
Following the expiration of such two (2) year period, the Vendor will provide
such spare parts pursuant to Schedule 12A and at the prices set forth on
Schedule 12B. After the expiration of such two (2) year period invoices for such
System spare parts will be issued directly to the Owner and will be paid for
directly by the Owner in accordance with the invoice and payment terms of this
Contract. Any PCS spare parts applicable to the System utilized or withdrawn
from any PCS System and/or PCS Sub-System during such two (2) year period will
be promptly replaced by the Vendor at its own cost. With respect to such spare
parts provided at the Vendor's expense, the Owner expressly agrees that (i) the
Owner will not utilize such spare parts for increasing the performance or
capacity of the PCS Sub-Systems and/or PCS Sub-Systems for which they were
provided or otherwise expanding such PCS Sub-Systems and/or PCS Sub-Systems or
any other PCS systems, (ii) until any such spare part is drawn from storage and
utilized as a replacement in a PCS System and/or PCS Sub-System or until the
Owner pays for such spare part, title to such spare part will remain with the
Vendor, (iii) risk of loss of or damage to such a spare part will be with the
Owner from the time of delivery to the Owner, and (iv) the Owner will, at its
expense, return to the Vendor any Item replaced by a spare part delivered to the
Owner pursuant to the terms of this subsection 2.25.
(b) The Owner has the right to withhold from its final payment to
the Vendor with respect to any PCS System and/or PCS Sub-System an amount equal
to the Owner's reasonably estimated cost of any utilized spare parts for such
PCS System and/or PCS Sub-System, as the case may be, not so replaced prior to
Final Acceptance; provided that such withheld funds will be released upon such
satisfactory replacement of such spare parts by the Vendor.
(c) To the extent that System PCS spare parts need to be acquired
from third party suppliers, the Vendor will use its reasonable efforts to obtain
from suppliers a supply of System spare parts at no additional cost as part of
the original Product package. To the extent that the Vendor is able to so obtain
such System spare parts at no additional cost as part of the original Product
package, it will provide such System spare parts to the Owner without cost (and
without any charge for the procurement of such spare parts by the Vendor).
2.26 System Support Services. The Vendor will provide the specified
support services for the operation, maintenance and repair of the System and all
Products to the extent set forth herein below and at the Annual Release
Maintenance Fees.
2.26.1 Vendor Assistance. (a) Upon receipt of a request
for technical assistance from the Owner, the nature of the problem will be iden-
tified by the Owner, and a priority assigned by the Owner (upon discussion
with the Vendor which in no event will require the agreement and/or consent
of the Vendor) as either an emergency or non-emergency condition and resolution
thereof will be expedited in accordance with the severity levels set forth be-
low.
(b) Following attempted corrective actions by the Owner in
accordance with applicable Maintenance and Instruction Manuals provided by the
Vendor, when the Vendor is notified by the Owner that the System, any PCS
System, any PCS Sub-System or any part thereof fails to operate in accordance
with the Specifications, the Vendor will promptly commence and diligently pursue
all reasonable efforts to identify the Defect or Deficiency and, in the event
the Vendor has responsibility therefor, to correct such Defect or Deficiency.
(c) The Vendor's correction of such Defects or Deficiencies in the
System, any PCS System, any PCS Sub-System, or any part thereof, may take the
form of new software codes, new or supplementary operating instructions or
procedures, modifications of the software codes in the Owner's possession, or
any other commonly used method for correcting Defects or Deficiencies in
Software, as the Owner and the Vendor deem appropriate.
(d) When appropriate, the Vendor will provide non-emergency
technical support to the Owner via telephone, facsimile transmission, modem, or
other means acceptable to the Owner during the Owner's normal business hours.
(e) The Vendor will provide emergency technical assistance to the
Owner via an ETA telephone number designated to the Owner in advance by the
Vendor, twenty-four (24) hours per day, three hundred sixty-five (365) days per
year.
(f) The Vendor will provide remote intervention and assistance
capability to the Owner for remotely accessing operating System Elements. Upon
mutual agreement between the Parties, the Vendor may remotely access operating
System Elements for the purpose of ETA.
2.26.2 Trouble Reports. From time to time, failures in,
or degradation of, Products may cause services provided by the System to be ad-
versely affected. It is necessary that immediate assistance be provided by
the Vendor to allow the Owner to restore the affected service. Critical ser-
vice outages that cannot be resolved by the Owner's field technicians or techni-
cal support engineers using procedures described in the Operating Manuals,
Maintenance and Instruction Manuals and Training will be transmitted to
the Vendor as a Trouble Report ("TR"). The Vendor will assign an identi-
fying number to each TR to aid in tracking its resolution. TRs will be imme-
diately addressed by the Vendor through Emergency Technical Assistance under
guidelines set forth in subsection 2.26.3. TRs may not be considered conclud-
ed until the solution is concurred upon by an employee of the Owner within the
Owner's operations control center ("OCC"). The root cause of problems re-
sulting in TRs may be Defects or Deficiencies which must be corrected through
Product or procedure changes. Problems with the System requiring such
changes will be referred to the Vendor for action through a Customer Ser-
vice Request ("CSR"). The Vendor is authorized by the Owner to install and
integrate, at the Vendor's expense, any Software Upgrade or Software Enhancement
pursuant to mutual agreements reached between the Vendor and the Owner.
<PAGE>
2.26.3 Emergency Technical Assistance. (a) When a prob-
lem is encountered that adversely affects service or performance with respect
to the Products, any PCS System and/or PCS Sub-System, the System or any part
thereof, in each case provided by the Vendor, an Owner maintenance techni-
cian will attempt to repair or replace any malfunctioning Product adversely
affecting such service or performance using the procedures recommended in the
Maintenance and Instruction Manuals or the Operating Manuals. If unsuccess-
ful, a technical representative of the Owner will consult the Vendor's desig-
nated ETA group at the telephone number provided by the Vendor in subsection
2.26.3(c) below. Following receipt of notification by the ETA group, the ETA
group will utilize all available technical resources and will ensure that a
qualified technical engineer is communicating with the Owner's personnel
regarding the problem on average within fifteen (15) minutes of any such noti-
fication; provided that no single response will exceed thirty (30) minutes.
If necessary and appropriate the Owner's technician will be dispatched to
assist in the normal change-out of replaceable hardware units.
(b) A problem adversely affecting service that has a
severity level defined below either as an "E1 Emergency Condition" or an
"E2 Emergency Condition" is to be addressed under the ETA procedures set
forth below in this subsection 2.26.3 and in subsection 2.26.4.
(i) An E1 Emergency Condition (this roughly corresponds to a
Critical Condition in the Vendor's ISO 9001 documentation)
means a problem resulting from any one or more of the
following events:
o [ ].
The Vendor must clear all E1 Emergency Conditions within
twelve (12) hours of notification of their occurrence.
Work must continue without any cessation until the defect
causing the E1 Emergency Condition is solved or the
severity thereof is reduced to a "P1 Major Condition", as
defined below, or less.
(ii) An E2 Emergency Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001
documentation) means a problem resulting from any one or
more of the following events:
o [ ].
The Vendor must clear all E2 Emergency Conditions within
twenty-four (24) hours of notification of such E2
Emergency Conditions. Work must continue without any
cessation until the defect causing the E2 Emergency
Condition is solved or the severity is reduced to a P1
Major Condition or less.
(c) In the event that an E1 Emergency Condition or an E2
Emergency Condition should remain unresolved following referral to the Vendor.
by the Owner, the problem causing such condition must be reported to the
levels of management set forth below (with comparable titles, if different)
to ensure all available resources necessary to address the problem will be
committed in accordance with the following:
The following are the reporting levels if an E1 Emergency Condition
or an E2 Emergency Condition is not resolved within the time periods set forth
below, as amended from time to time with the reasonable acceptance of the Owner,
following referral thereof to the Vendor by the Owner:
Vendor Contact Vendor Contact Name Telephone Number
One hour -- Technical Assistance Mgr. to be designated to be designated
Two hours -- Customer Service Director to be designated to be designated
Three hours -- Customer Service AVP R.B. Andrews (708) 713-1500
Four hours -- Vice President R.G. Garriques to be designated
(d) If the Owner reasonably determines that the Vendor has not provided
sufficient ETA to resolve any E1 Emergency Condition or E2 Emergency Condition
on a timely basis, the Owner will be entitled to withhold all payments with
respect to the affected PCS System and/or PCS Sub-System then due or outstanding
prior to the date of such determination until such time as adequate ETA is
provided to the Owner to resolve such Emergency Condition.
(e) If an E1 Emergency Condition or an E2 Emergency Condition exists in
a PCS System and/or PCS Sub-System prior to Final Acceptance of such PCS System
or PCS Sub-System, as the case may be, the Vendor will use all reasonable
efforts to deliver to the Owner each Software Upgrade and each Equipment Upgrade
developed by or on behalf of the Vendor to resolve any E1 Emergency Condition or
E2 Emergency Condition within forty-eight (48) hours following completion of
development of such Software Upgrades or availability of such Equipment
Upgrades.
(f) The term "Non-Emergency Services" includes providing to the Owner
any requested technical assistance and support, remote monitoring and outage
review consultation and the handling of CSRs.
(g) Technical assistance and support must be provided for the purpose
of resolving non-emergency problems defined below as "P1 Major Condition", "P2
Significant Problem" and "P3 Minor Problem" which are reported to the Vendor.
(i) P1 Major Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001
documentation) means any non-emergency failure of
specific features or functions of the System, any PCS
System, any PCS Sub-System or any Product that
restricts its operations, but does not render the
System, any PCS System, any PCS Sub-System or any
Product inoperable, impact traffic capacity or coverage
or require significant manual intervention for the
System, any PCS System, any PCS Sub-System or any
Product to operate properly and in accordance with its
applicable Specifications. These events will include
loss of diagnostic capabilities and loss of reporting
functions. The Vendor will use all reasonable efforts
to use by-pass or work-around procedures to alleviate
such P1 Major Condition until it is corrected and, upon
mutual agreement of the Parties, the Vendor will
resolve such P1 Major Condition during the next
available scheduled Software Upgrade or Equipment
Upgrade.
(ii) P2 Significant Problem (this roughly corresponds to
Severity 2 Conditions in the Vendor's ISO 9001
documentation) means any non-emergency, intermittently
occurring problem related to specific primary functions
or features or any inoperable secondary functions that
do not have a significant adverse effect on the overall
performance of the System, any PCS System, any PCS
Sub-System or any Product. The Vendor will undertake
appropriate and reasonable efforts to correct such P2
Significant Problem.
(iii)P3 Minor Problem (this roughly corresponds to Severity
3 Conditions in the Vendor's ISO 9001 documentation)
means any non-emergency problem that does not affect
the performance or functions of the System, any PCS
System, any PCS Sub-System or any Product, and, despite
such problem, the System, any PCS System, any PCS
Sub-System or any Product is fully operable without
restrictions. Such P3 Minor Problems may include
documentation inaccuracies, cosmetics, minor requests
for changes or maintenance requests. The Vendor will
undertake appropriate and reasonable efforts to correct
such P3 Minor Problem.
(h) Should a non-emergency problem remain unresolved for the period or
periods of time set forth below following referral to the Vendor by the Owner,
such problem must be reported to the levels of management set forth below to
ensure all available resources necessary to correct such problem will be
committed to address such problem pursuant to the following:
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REPORTING LEVELS IF NON-EMERGENCY
IS NOT RESOLVED WITHIN
- -------------------- -------------------- -------------------- -----------------
CONDITION 30 DAYS 45 DAYS 60 DAYS
- -------------------- -------------------- -------------------- -----------------
P1 Technical Manager Customer Service Vice President
Major Condition Director
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P2 Technical Manager Customer Service
Significant Problem Director
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P3 Technical
Minor Problem Manager
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Non-emergency problems referred to the Vendor as a CSR will be resolved
based upon the priority assigned to them as determined by the Owner or as
mutually agreed by the Parties and, to the extent reasonably possible, will be
incorporated into the next scheduled Software release.
2.26.4 ETA and CSR. In the event that emergency technical
support provided from the Vendor's technical support center is not sufficient to
resolve an E1 Emergency Condition, the Vendor must send a technically qualified
person or persons to the site of such emergency condition or problem to assist
the Owner's employees in solving such condition or problem. The Vendor's
technically qualified person or persons must be on-site as soon as possible, but
in no event more than twenty-four (24) hours after notification to the Vendor by
the Owner, or at such later time as may be mutually agreed on by the Parties. In
the event that emergency technical support provided from the Vendor's technical
support center is not sufficient to resolve an E2 Emergency Condition, then the
Parties will mutually agree to a desired course of action, which may include
requiring the Vendor to send a technically qualified person or persons to the
site of such emergency.
A CSR may be submitted by the Owner to request a repair or
work-around of an emergency condition or repair of a non-emergency problem, or
to request a Software Upgrade or an Equipment Upgrade or other Software or
Equipment operational enhancement. The Owner's CSRs will define the condition or
problem and state whether the Owner considers the CSR to be for a Software
Upgrade or an Equipment Upgrade or other Software or Equipment operational
enhancement. Changes to the System, any PCS System or any PCS Sub-System
resulting from any CSR must be fully tested and accepted in accordance with the
Specifications. The Vendor must respond to the submission of a CSR by the Owner
within five (5) Business Days, acknowledging receipt of the CSR. Within thirty
(30) days of receipt of the CSR, the Vendor will respond to the CSR summarizing
the Vendor's intended actions to handle the CSR. A CSR may result in System
fixes or enhancements, or in Product modifications reasonably acceptable to the
Owner.
Notwithstanding the above, no event, lack of functionality or
failure of the Test-bed Laboratory will be assigned as an E1 Emergency Condition
or E2 Emergency Condition. Any such event, lack of functionality or failure
applicable to the Test-bed Laboratory, which would otherwise be assigned such a
category in accordance with the definitions above, will be assigned a P1 Major
Condition.
<PAGE>
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2.27 Supply of Additional Products. During the Initial Term of this
Contract and for a period of three (3) years thereafter, the Vendor will make
available for purchase by the Owner, on applicable terms and conditions set
forth in this Contract or as otherwise mutually agreed between the Parties, PCS
Products to enable the Owner to expand the System and/or any PCS System and/or
any PCS Sub-System and/or any part thereof, which Products will provide
equivalent functionality for and will be compatible with the System or any such
PCS System or PCS Sub-System at such time. Nothing herein will be deemed to
prohibit the Vendor from designating any specific PCS Products as Discontinued
Products in accordance with Section 10 of this Contract.
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2.28 Review of Contract. The Vendor has examined in detail and
carefully studied and compared the Contract with all other information furnished
by the Owner and has promptly reported to the Owner any material errors,
inconsistencies or omissions so discovered or discovered by any of the
Subcontractors. The Vendor will not prosecute any Major Portion of the Work
knowing that it involves a material error, inconsistency or omission in the
Contract without prior written notice to and approval by the Owner. If for any
reason the Vendor violates this subsection 2.28, the Vendor will, in addition to
being subject to any other remedies of the Owner, assume responsibility for such
violation and, in such case, will be deemed to have waived any claims for an
adjustment in any of the Specifications and/or System Standards which results
directly from any such error, inconsistency or omission. This subsection 2.28
does not, nor will be deemed to, in any manner limit the terms of subsection
2.39.
2.29 Licenses, Permits and Approvals. Except as otherwise provided for
herein with respect to Site Acquisition, Microwave Relocation and Network
Interconnection, any Applicable Permits (in connection with the Vendor's Work)
required by any Government Entity relating to the manufacture, importation,
safety or use of the Products, the System, any PCS System or any PCS Sub-System
throughout the United States or in any state or any political sub-division
thereof will be the sole responsibility of the Vendor. Prior to the commencement
of any Work and/or other activities by the Vendor or any of its Subcontractors
in connection with or pursuant to this Contract, upon request of the Owner the
Vendor will furnish the Owner with evidence that such Applicable Permits have
been obtained and are in full force and effect to the extent that Applicable
Permits are necessary for the commencement or undertaking of such activities,
and from time to time thereafter the Vendor, upon the reasonable request of the
Owner, will provide such further evidence as the Owner will deem reasonably
necessary.
2.30 Eligibility under Applicable Laws and Applicable Permits. The
Vendor will be responsible for ensuring that the Vendor and its Subcontractors
are and remain eligible under all Applicable Laws and Applicable Permits to
perform the Work under this Contract in the various jurisdictions involved.
2.31 Customs Approvals. The Owner agrees to reasonably assist, so long
as such assistance will not involve the incurrence of any costs or expenses by
the Owner, the Vendor to obtain and maintain (i) Applicable Permits for
importation into the Products on a duty and customs free basis and (ii) entry or
work permits, visas or authorizations required for personnel engaged by the
Vendor to perform Work under this Contract.
2.32 Owner Participation. In addition to the right of observation
contained in subsection 9.4 hereof, the Owner will be entitled to participate in
the Vendor's research and development activities (subject to the reasonable
acceptance of the Vendor) and product development and testing activities
pursuant to this Contract (other than research and development activities
originated by another Customer which is proprietary to such other Customer);
provided that such observation and participation will not affect the Vendor's
responsibilities and warranties hereunder and will not otherwise interfere with
the Vendor's research and development activities. Nothing contained in this
subsection 2.32 purports to grant the Owner rights to the Vendor's research and
development other than such rights otherwise granted to the Owner pursuant to
the terms of this Contract or as otherwise mutually agreed by the Parties at
such time.
2.33 New Development Advisory Board. In order to accommodate the
Owner's participation pursuant to this Contract, including, without limitation,
pursuant to subsections 2.11 and 2.32, the Owner and the Vendor will establish
an NDAB within sixty (60) days of the Effective Date. The purpose of the NDAB
will be to review the development requirements and high level development
milestones, to ensure that the Vendor understands the Owner's requirements for
each PCS System, each PCS Sub-System the System, and/or any extensions thereto,
including, without limitation, any subsequent Products and/or enhancements. The
NDAB will provide an executive forum to discuss product ideas, Owner
requirements and its recommended development prioritization for improved
infrastructure-based subscriber features and System features, functions and
capabilities. The focus of the NDAB will be on System features and services, new
PCS Products, System enhancements, critical operational issues, future
developments beyond CDMA cellular without the need for System additions and on
such other matters as the Parties mutually agree upon from time to time.
2.34 Market Development Manager. The Vendor will provide a market
development manager to coordinate the efforts of the Vendor in meeting its
obligations relating to the NDAB who will specifically focus on new Products,
CDMA services and features. Such market development manager must be
knowledgeable in CDMA technology and the Owner's System and must work closely,
and on a regularly scheduled basis, with the Owner's senior engineering and
marketing personnel on feature development, feature roll-out, future road maps
for PCS Products, and any other marketing aspect of providing PCS that the Owner
believes is beneficial to the System and/or any PCS System and/or any PCS
Sub-System at such time. The Vendor's market development manager and the
manager's staff will serve as the Owner's direct liaison with the Vendor to
ensure that the Vendor's product development teams are focusing on the Owner's
priorities as described to the Vendor by the Owner from time to time either
through the NDAB or by any other means acceptable to the Parties. Nothing
contained in this subsection 2.34 will in any way limit and/or modify the
Owner's ability to enforce its rights under this Contract or to otherwise
maintain contacts with the Vendor in any other way it sees fit.
2.35 Further Assurances. The Vendor will execute and deliver all
further instruments and documents, and take all further action, including, but
not limited to, assisting the Owner in filing notices of completion with the
appropriate state and local lien recording offices, that may be necessary or
that the Owner may reasonably request in order to enable the Vendor to complete
performance of the Work or to effectuate the purposes or intent of this
Contract.
2.36 Liens and Other Encumbrances. (a) In consideration of the mut-
ual undertakings herein and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Vendor:
(i) covenants and agrees to protect and keep free the System
and/or any PCS System and/or any PCS Sub-System and any and all
interests and estates therein, and all improvements and materials now
or hereafter placed thereon under the terms of this Contract, from any
and all claims, liens, charges or encumbrances of the nature of
mechanics, labor or materialmen liens or otherwise arising out of or in
connection with performance by any Subcontractor, including services or
furnishing of any materials hereunder, and to promptly have any such
lien released by bond or otherwise;
(ii) will give notice of this subsection 2.36 to each
Subcontractor before such Subcontractor furnishes any labor or
materials for the System and/or any PCS System and/or any PCS
Sub-System; and
(iii) will make any and all filings reasonably requested by the
Owner in order that the Owner may take advantage of the relevant local
mechanics' lien waiver procedures with respect to mechanics' liens of
any such Subcontractor.
(b) If any laborers', materialmen's, mechanics', or other similar lien
or claim thereof is filed by any Subcontractor, the Vendor will cause such lien
to be satisfied or otherwise discharged, or will file a bond in form and
substance satisfactory to the Owner in lieu thereof within ten (10) days of the
Vendor's receipt of notice of such filing. If any such lien is filed or
otherwise imposed, and the Vendor does not cause such lien to be released and
discharged forthwith, or file a bond in lieu thereof, then, without limiting the
Owner's other available remedies, the Owner has the right, but not the
obligation, to pay all sums necessary to obtain such release and discharge or
otherwise cause the lien to be removed or bonded to the Owner's satisfaction
from funds retained from any payment then due or thereafter to become due to the
Vendor.
(c) The Owner reserves the right to post or place within the System
and/or any PCS System and/or any PCS Sub-System notices of non-responsibility or
to do any other act required by Applicable Law, to exempt the Owner and the
System from any liability to third parties by reason of any work or improvements
to be performed or furnished hereunder; provided that failure by the Owner to do
so will not release or discharge the Vendor from any of its obligations
hereunder.
2.37 Forecasting and Ordering. Throughout the Term of this Contract, on
a monthly basis commencing on the Effective Date, the Owner will provide the
Vendor with rolling twelve-month forecasts of its ongoing Product and Service
requirements. Such forecasts will, to the extent applicable, include, but not be
limited to, the Owner's Site Acquisition, Switch Site Ready Date, Network
Interconnection and Microwave Relocation progress to such date. Upon the review
and reasonable acceptance of such forecasts by the Vendor pursuant to the terms
of this Contract, the Owner will have the right, but not the obligation, to
confirm to the Vendor its orders for the Products and Services set forth in such
forecasts pursuant to the Owner's delivery to the Vendor of formal written
orders specifying the Products and/or Services to be purchased in connection
with the terms of this Contract. The Vendor's obligation to deliver in
accordance with accepted forecasts will be subject to receipt of the Owner's
orders in accordance with the applicable ordering procedures. If the Owner fails
to deliver any forecast pursuant to this subsection 2.37 for any reason, the
Vendor will be responsible for asking the Owner to actually deliver such
forecast to the extent it requires such forecast at such time.
2.38 Microwave Relocation; Network Interconnection. (a) The Vendor will
not be responsible for Microwave Relocation within the System. Unless otherwise
waived by the Owner, however, completion of Microwave Relocation in any given
System Area or System Sub-Area will be a prerequisite to the commencement of the
Substantial Completion testing to be performed by the Vendor in accordance with
Exhibit B3 in such System Area or System Sub-Area. The Owner may at its option
choose instead to modify the System performance criteria as set forth in Exhibit
F by way of a Change Order in order to account for the failure to fully and/or
satisfactorily complete Microwave Relocation in any such System Area or System
Sub-Area such that Substantial Completion testing in accordance with the
requirements of Exhibit B3 may proceed. Notwithstanding anything stated herein
to the contrary (other than clause (b) below), the Owner's failure and/or
inability to fully complete Microwave Relocation in any such System Area or
System Sub-Area within twelve (12) months of Milestone 6 (as set forth in
Exhibit A1) (the "Microwave Delay Period") will entitle the Vendor to otherwise
commence Substantial Completion testing (as deemed applicable and appropriate
pursuant to good faith mutual agreement between the Parties at such time) for
the PCS System or PCS Sub-System in such System Area or System Sub-Area, as the
case may be, in accordance with Exhibit B3. Pursuant to the requirements of
Exhibits A1, B1 and B3 with respect to any PCS System or any PCS Sub-System
within the System the Owner may, upon the prior written request of the Vendor,
consent (such consent not to be unreasonably withheld) to extend the scheduling
of the Vendor's Substantial Completion testing by not more than an additional
sixty (60) days pursuant to Milestone 8 in the event that more than ten percent
(10%) of the System Element Sites in such PCS System or PCS Sub-System as set
forth in the Final Site Count for such PCS System or PCS Sub-System require
Vendor optimization pursuant to Exhibit B1 that was otherwise delayed due to
incomplete Microwave Relocation in such PCS System or PCS Sub-System immediately
prior to the date scheduled for Substantial Completion testing pursuant to
Milestone 8 (as set forth on Exhibit A1).
(b) The Vendor will not be responsible for Network Interconnection
within the System. In any given System Area or System Sub-Area, completion of
Network Interconnection in such System Area or System Sub-Area at least sixty
(60) days (or as otherwise mutually agreed between the Parties at such time)
prior to Milestone 7 (as set forth on Exhibit A1) will be a prerequisite to the
Vendor's obligation pursuant to the terms of this Contract to successfully
achieve Milestone 7 (as set forth in Exhibit A1) in such System Area or System
Sub-Area.
2.39 Vendor To Inform Itself Fully; Waiver of Defense. (a) The Vendor
will be deemed to have notice of and to have fully examined and approved the
Specifications and all other documents referred to herein, and all drawings,
specifications, schedules, terms and conditions of this Contract, regulations
and other information in relation to this Contract and/or any amendments,
modifications or supplements thereto at any time on or after the Effective Date
and to have fully examined, understood and satisfied itself as to all
information of which the Vendor is aware or should have been aware and which is
relevant as to the risks, contingencies and other circumstances which could
affect this Contract and in particular the installation of the System, any PCS
System, any PCS Sub-System or any part thereof. The Owner, its directors,
officers, employees and agents and all of them have no liability in law or
equity or in contract or in tort with respect to any such specifications,
drawings, information, risks, contingencies or other circumstances.
(b) The fact that the Owner may have prepared or taken part in the
preparation of Specifications, documents, drawings, Engineering, designs,
specifications, schedules, terms or conditions, or may have designated
particular types of Products and/or Services to be furnished hereunder or
designated particular manufacturers or suppliers of Products or Services, or may
have taken part in the designation of any particular Subcontractor(s) or
subcontractor(s), or given vetoes or approvals with respect to the Work, or
otherwise become involved in the Work, will not give rise to any claim by the
Vendor or any Subcontractor or any defense to any warranty or other claims
asserted against the Vendor or any Subcontractor to the extent that any such
claim or defense arises out of any specifications, drawings, documents, or other
information, which the Vendor is deemed to have had notice of pursuant to
subsection 2.39(a) above and with respect to any such information arising after
the Effective Date which the Vendor had a reasonable opportunity to review.
2.40 CMI/HIC. From time to time throughout the Term of this Contract
the Parties may mutually agree as to the incorporation and integration of
CMI/HIC into the System in accordance with Exhibit D.
2.41 Site Acquisition Delay Testing. In any given System Area or System
Sub-Area within the Initial System, in the event Site Acquisition Substantial
Completion is delayed more than one hundred and fifty (150) days beyond the
forecasted date for Site Acquisition Substantial Completion as set forth in the
M5 Forecast (the "Site Acquisition Delay Period") provided to the Vendor with
the Build Notice applicable to such System Area or System Sub-Area, as the case
may be, due solely to the Owner's inability to achieve sufficient Site
Acquisition in such System Area and/or System Sub-Area, as the case may be, the
Vendor will have the right, but not the obligation, to commence Substantial
Completion testing (as deemed applicable and appropriate pursuant to good faith
mutual agreement between the Parties at such time but in any event to be
completed within thirty (30) days of such commencement) for that portion of the
otherwise incomplete PCS System or PCS Sub-System, as the case may be, in which
the Vendor has (i) completed all applicable Facilities Preparation Services and
(ii) fully Installed, to the extent possible at such time, all such Products to
be Installed by the Vendor or its Subcontractors on otherwise fully constructed
System Element Locations within such PCS System or PCS Sub-System. Subject to
Section 6, in the event the Vendor successfully completes such modified
Substantial Completion testing for such Installed portion of such otherwise
incomplete PCS System or PCS Sub-System, as the case may be, pursuant to and in
accordance with this subsection 2.41 and Exhibit B3, the Vendor will be entitled
to such portion of the payments that otherwise would be made by the Owner
pursuant to subsection 6.3(b) as applicable only to those Services and Products
actually provided by the Vendor pursuant to and in accordance with the terms of
this Contract in such portion of the otherwise incomplete PCS System and/or PCS
Sub-System, as the case may be, that was subject to testing pursuant to this
subsection 2.41. Nothing contained herein to the contrary will in any way modify
the Vendor's obligations as to the completion and testing of the remaining
portion of such PCS System pursuant to and in accordance with the terms of this
Contract, including but not limited to the Project Milestones set forth in
Exhibit A1. Nothing contained herein to the contrary will in any way require the
Owner to pay the Vendor amounts already paid or otherwise provided for pursuant
to any other provision of this Contract.
SECTION 3 AFFILIATES
3.1 Additional Affiliates. On a quarterly basis commencing on the
Effective Date and during the term of this Contract, the Owner may, upon fifteen
(15) days' prior written notice to the Vendor, designate any Person who has been
licensed or has access to or rights to use licenses for PCS in the United States
which is not an Initial Affiliate as an "Additional Affiliate"; provided that
the Vendor will have a reasonable opportunity to review and approve such
designation, such approval not to be unreasonably withheld, based upon (i)
reasonable credit criteria within the context of the PCS industry, (ii) the fact
that such proposed Additional Affiliate has not in the past materially breached
prior material agreements with the Vendor, (iii) the fact that the proposed
Additional Affiliate is not, at the time of such determination, a direct
competitor to the Vendor in the wireless telecommunications business and (iv)
the fact that the proposed Additional Affiliate is not, at the time of such
determination, otherwise engaged with the Vendor in a material agreement for the
purchase and/or supply of PCS CDMA wireless technology; and provided, further,
that (x) the Owner, any Partner or any Initial Affiliate has at least a ten
percent (10%) equity ownership in such Person, (y) such Person is controlled by
or under the common control with the Owner, any Partner or any Initial Affiliate
or (z) there exists between the Owner and such Person an Additional Affiliate
Arrangement.
3.2 Agreements with Initial Affiliates. During the term of this
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Initial Affiliate designated
by the Owner (each, an "Initial Affiliate Agreement") for the supply of Products
and Services on similar terms and conditions as those set forth herein that
relate to the initial build-out of the Initial System as set forth on Schedule
4; provided that the Vendor will not be required to include in any Initial
Affiliate Agreement any provisions substantially similar to those set forth in
subsections 2.3(a), 2.5, 2.23 (but only to the extent of the specific amounts
set forth in such subsection 2.23), 3.1, 3.3, 11.7, 15.1, 21.1, 24.1 and 27.5;
and provided further that after the date on which Final Acceptance of the last
PCS System to reach Final Acceptance has occurred, Initial Affiliate Agreements
(whether or not executed prior to such date) need not contain or retain
substantially the same terms and conditions as those set forth herein, except
for those terms and conditions related to pricing and warranties as are then
available to the Owner pursuant to this Contract. Any Initial Affiliate that
enters into an Initial Affiliate Agreement with the Vendor will have the right
to choose among the Products and Services offered to the Owner under this
Contract solely for use within the Nationwide Network.
3.3 Agreements with Additional Affiliates. During the term of this
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Additional Affiliate
designated by the Owner (each, an "Additional Affiliate Agreement") for the
supply of Products and Services at similar price and warranty terms as are then
available to the Owner pursuant to the terms of this Contract. The Vendor must
enter into good faith negotiations for the establishment of such Additional
Affiliate Agreements with any such Additional Affiliate promptly upon the
designation of such Additional Affiliate by the Owner and upon notice to the
Vendor that such Additional Affiliate desires to enter into an Additional
Affiliate Agreement. Any Additional Affiliate that enters into an Additional
Affiliate Agreement with the Vendor will have the right to choose among the
Products and Services offered to the Owner under this Contract solely for use
within the Nationwide Network.
3.4 Affiliate Rights. Notwithstanding anything herein contained to the
contrary, Affiliates will not be deemed third party beneficiaries to this
Contract or otherwise have any rights hereunder. Only the Owner may designate a
Person as an Affiliate in accordance with the terms of this Section 3 and only
the Owner has the right and/or the ability to enforce any rights hereunder
against the Vendor.
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors. The Vendor will select Subcontractors in connection
with the performance of the Work such that all Products and Services provided by
any such Subcontractors meet the System Standards and reliability and
performance requirements set forth in this Contract. Regardless of whether or
not the Vendor obtains approval from the Owner of a Subcontractor or whether the
Vendor uses a Subcontractor recommended by the Owner, use by the Vendor of a
Subcontractor will not, under any circumstances: (i) give rise to any claim by
the Vendor against the Owner if such Subcontractor breaches its subcontract or
contract with the Vendor; (ii) give rise to any claim by such Subcontractor
against the Owner; (iii) create any contractual obligation by the Owner to the
Subcontractor; (iv) give rise to a waiver by the Owner of its rights to reject
any Defects or Deficiencies or Defective Work; or (v) in any way release the
Vendor from being solely responsible to the Owner for the Work to be performed
under this Contract.
4.2 The Vendor's Liability. The Vendor is the general contractor for
the Work and remains responsible for all of its obligations under this Contract,
including the Work, regardless of whether a subcontract or supply agreement is
made or whether the Vendor relies upon any Subcontractor to any extent. The
Vendor's use of Subcontractors for any of the Work will in no way increase the
Vendor's rights or diminish the Vendor's liabilities to the Owner with respect
to this Contract, and in all events, except as otherwise expressly provided for
herein, the Vendor's rights and liabilities hereunder with respect to the Owner
will be as though the Vendor had itself performed such Work. The Vendor will be
liable for any delays caused by any Subcontractor as if such delays were caused
by the Vendor.
4.3 No Effect of Inconsistent Terms in Subcontracts. The terms of this
Contract will in all events be binding upon the Vendor regardless of and without
regard to the existence of any inconsistent terms in any agreement between the
Vendor and any Subcontractor whether or not and without regard to the fact that
the Owner may have directly and/or indirectly had notice of any such
inconsistent term.
4.4 Assignability of Subcontracts to Owner. Each agreement between the
Vendor and a Subcontractor must contain a provision stating that, in the event
that the Vendor is terminated for cause, convenience, abandonment of this
Contract or otherwise, (i) each Subcontractor will continue its portion of the
Work as may be requested by the Owner and (ii) such agreement permits assignment
thereof without penalty to the Owner and, in order to create security interests,
to the Other Vendors, in either case at the option of the Owner and for the same
price and under the same terms and conditions as originally specified in such
Subcontractor's agreement with the Vendor.
4.5 Removal of Subcontractor or Subcontractor's Personnel. The Owner
has the right at any time to require removal of a Subcontractor and/or any of a
Subcontractor's personnel from Work on the System upon reasonable grounds and
reasonable prior notice to the Vendor. The exercise of such right by the Owner
will have no effect on the provisions of subsections 4.1 and 4.2.
4.6 Subcontractor Insurance. The Vendor must require its Subcontractors
to obtain, maintain and keep in force during the time they are engaged in
providing Products and Services hereunder adequate insurance coverage consistent
with Section 18 and Schedule 6 (provided that the maintenance of any such
Subcontractor insurance will not relieve the Vendor of its other obligations
pursuant to Section 18 and Schedule 6). The Vendor will, upon the Owner's
request, furnish the Owner with evidence of such insurance in form and substance
reasonably satisfactory to the Owner. All such insurance will be subject to the
Owner's approval. All Subcontractors must be of bondable financial condition.
Nothing herein will be deemed to bar the Vendor or any Subcontractor from
obtaining such insurance on a project basis for each of the Subcontractors
participating in such project.
4.7 Review and Approval not Relief of Vendor Liability. Any inspection,
review or approval by the Owner permitted under this Contract of any portion of
the Work by the Vendor or any Subcontractor will not relieve the Vendor of any
duties, liabilities or obligations under this Contract, but nothing contained in
this subsection 4.7 will be deemed a bar of any waiver given by the Owner to the
Vendor pursuant to and in accordance with the terms of this Contract.
4.8 Vendor Warranties. Except as otherwise expressly provided in
Section 17, the warranties of the Vendor pursuant to Section 17 will be deemed
to apply to all Work performed by any Subcontractor as though the Vendor had
itself performed such Work. Except as otherwise specifically provided in Section
17, the Parties agree that such warranties will not be enforceable merely on a
"pass-through" basis. The Owner may, but will not be obligated to, enforce such
warranties of any Subcontractor to the extent that the Owner determines that the
Vendor is not paying and/or performing its warranties; provided that any such
election by the Owner will not relieve the Vendor from any obligations or
liability with respect to any such warranty.
4.9 Payment of Subcontractors. The Vendor must make all payments to all
Subcontractors (except in the case of legitimate disputes between the Vendor and
any such Subcontractor arising out of the agreement between the Vendor and such
Subcontractor) in accordance with the respective agreements between the Vendor
and its Subcontractors such that Subcontractors will not be in a position to
enforce liens and/or other rights against the Owner, the System or any part
thereof.
SECTION 5 TERM OF CONTRACT
5.1 Initial Term. The initial term of this Contract (the "Initial
Term") is ten (10) years from the Effective Date, subject to the terms and
conditions of this Contract including, without limitation, the termination
provisions set forth in Section 24.
5.2 Renewal. This Contract is subject to renewal for one year periods
(all such periods plus the Initial Term, the "Term") following the expiration of
the Initial Term, on the same terms and conditions contained herein, unless
either Party gives notice to each other Party of its intention not to renew this
Contract within ninety (90) days prior to the expiration of the then current
Term.
SECTION 6 PRICES AND PAYMENT
6.1 Prices. The prices for the Work to be performed pursuant to this
Contract (collectively, the "Contract Price") are as set forth on Schedules 2
and 3, subject to the price variation provisions contained on Schedule 2.
Notwithstanding the prices set forth on Schedules 2 and 3 and the Contract
Price, the Vendor will provide the Owner credits in aggregate value not to
exceed [ ] dollars ($[ ]) to purchase any Products in the following System Areas
(and any and all System Sub-Areas included therein) and in the following amounts
per such System Areas:
System Area Credit Amount
Detroit $[ ]
Milwaukee $[ ]
Denver $[ ]
Salt Lake $[ ]
Spokane $[ ]
The Owner is also entitled to additional purchase credits of up to [_________]
dollars ($[__________]) to be applied in the Owner's discretion to the purchase
of any Products in any or all of the above listed System Areas (and any and all
System Sub-Areas included therein). At any time during the Term of this Contract
that the Owner wishes to apply the purchase credits referenced in this
subsection 6.1 to any of its Product purchases for the System Areas listed
immediately above, the Owner must notify the Vendor of its intent to do so and
it will be the Vendor's sole responsibility, throughout the Term of this
Contract, to keep account of the remaining purchase credits available to the
Owner. Prices for the Work not otherwise set forth on Schedules 2 or 3, if not
otherwise set forth in this Contract, will be no greater than the Vendor's best
list prices then in effect at the time of ordering by the Owner (as established
by the Vendor's then applicable Customer Price Guide for sales in the United
States) and at discounts otherwise provided to the Owner pursuant to the terms
of this Contract. Notwithstanding the foregoing, the aforesaid credits may not
be applied to the purchase of any OTAF Products or Services and/or any Actiview
Products or Services.
6.2 Price Reduction. The Contract Price will be reduced by all amounts
saved as a result of Engineering changes suggested by the Owner which are
incorporated into the Specifications by the Vendor provided that the Vendor
reasonably believes that such changes will not make it impossible or
impracticable to comply with any of its obligations under this Contract,
including, without limitation, those Vendor obligations relating to the
performance criteria applicable to the System. Any reduction in Contract Price
pursuant to the preceding sentence will be agreed upon promptly by the Owner and
the Vendor. Failure of the Parties to mutually agree to such price reductions
within ten (10) days from the date the Owner delivered written notice to the
Vendor of the need for such price reduction due to incorporated Engineering
changes will result in the automatic reference of such matter to dispute
resolution in accordance with subsection 23.1. During the pendency of any such
dispute resolution prices payable pursuant to subsection 6.1 will be payable by
the Owner to the Vendor at the reduced level pursuant to this subsection 6.2. If
in accordance with subsection 23.1 such dispute resolution results in a finding
that such price reduction was not in fact justified then the Owner will
reimburse the Vendor the amounts that would otherwise have been payable to the
Vendor during the pendency of such dispute resolution.
6.2.1 TCU Payments. Notwithstanding anything contained in this
Section 6 to the contrary, the Owner will purchase and the Vendor will provide
the first eleven thousand one hundred (11,100) TCUs at a price of two thousand
three hundred fifteen dollars ($2,315.00) each. Any additional TCUs purchased by
the Owner in excess of eleven thousand one hundred (11,100) TCUs will be sold by
the Vendor to the Owner for one thousand five hundred five dollars ($1,505.00)
each. From July 15, 1997 through December 31, 1997, the Vendor will provide one
(1) HCU free of charge for every four (4) TCUs purchased by the Owner at the one
thousand five hundred five dollars ($1,505.00) price per unit. At any time after
December 31, 1997, any TCUs or HCUs purchased by the owner will be provided at
the prices otherwise set forth in Schedules 2 and 3 to the Contract.
6.2.2 Additional Cabinet Payments. Notwithstanding anything
contained in this Section 6 to the contrary, the Vendor shall supply to the
Owner at the Vendor's sole cost and expense any and all equipment (including any
and all power supplies, cables, cabinets, T-1 facilities and any other ancillary
equipment), labor, materials and services, including installation and
de-installation, in connection with the supply of additional cabinets to the
Owner where a requirement for more than twenty four (24) Channels already exists
or such a requirement arises before the later of (i) July 15, 1997 and (ii) the
first general availability of any HCU(s) by the Vendor to the Owner. On or
before November 15, 1997, the Owner will advise the Vendor of its requirements
concerning disposition of the TCUs purchased for one thousand five hundred five
dollars ($1,505.00) each and any additional cabinets provided by the Vendor to
accommodate TCUs in excess of the first eleven thousand one hundred (11,100)
TCUs. If the Owner elects to redeploy or retain any such additional TCUs and/or
cabinets, the Vendor may invoice the Owner for such additional Equipment based
upon the applicable prices set forth in Schedules 2 and 3 to the Contract. The
Vendor will be responsible for any and all costs arising out of or in connection
with deinstallation and/or removal of any such additional Equipment.
6.3 Payments. Except with respect to Facilities Preparation Services,
RF Engineering, SCP/HLR Products, AS Products and Services, OTAF Products and
Services and Actiview Products and Services as set forth below, an invoice may
be submitted to the Owner only after shipment of a Product or performance of a
Service. Invoices for Products delivered and Services performed for any given
PCS System or PCS Sub-System on or prior to Final Acceptance of the PCS System
and/or PCS Sub-System to which such invoices relate are payable in the following
manner:
(a) [__________] percent of the amount of each invoice will be paid
within [__________] days from receipt of the invoice by the Owner;
(b) [__________] percent of the amount of such invoice will be paid
within [_________] days from the later of (i) Substantial Completion of the PCS
System or PCS Sub-System to which such invoice relates and (ii) receipt of the
invoice by the Owner;
(c) subject to subsection 6.3(d) below, [__________]percent of the
amount of the invoice will be paid within [__________] days from the later of
(i) Final Acceptance of a PCS System to which such invoice relates and (ii)
receipt of the invoice by the Owner. The Owner will not be obligated to make any
such Final Acceptance payment pursuant to this subsection 6.3(c) to the Vendor
for any PCS System or PCS Sub-System within the Initial System, until and unless
the SCP/HLRs to be delivered and installed in accordance with the SCP/HLR
Specifications are so delivered and installed and operating in accordance with
such SCP/HLR Specifications;
(d) Notwithstanding anything stated in this subsection 6.3 to the
contrary, upon the Final Acceptance of any PCS Sub-System, the Owner will only
be required to pay to the Vendor [__________]percent of the amount of the
invoice applicable to such PCS Sub-System within thirty (30) days from the later
of (i) Final Acceptance of such PCS Sub-System and (ii) receipt of the invoice
applicable to such PCS Sub-System by the Owner. The Owner will pay the remaining
[__________] percent of the amount of the invoice applicable to such PCS
Sub-System upon the earlier of (i) ninety (90) days after the date of Final
Acceptance of such PCS Sub-System and (ii) the Final Acceptance of the next
succeeding PCS Sub-System within such PCS System; and
(e) Pursuant to subsection 2.6(d) and provided that any MSCs sought to
be covered hereby have in fact been installed by the Vendor in accordance with
subsection 2.6(d), the Owner will pay to the Vendor [__________] percent of the
price invoiced to the Owner for any MSC within any PCS System within the Initial
System upon the Vendor's successful achievement of Milestone 5 (as set forth in
Exhibit A1) in such PCS System and an additional [__________] percent of the
price invoiced to the Owner for any such MSC upon the Vendor's successful
achievement of Milestone 8 (as set forth in Exhibit A1) in such PCS System. All
other amounts payable by the Owner to the Vendor for MSCs within any PCS System
within the Initial System will be otherwise payable in accordance with the terms
of this Contract provided that the Owner will not be obligated to make any
payments to the Vendor for MSCs pursuant to subsection 6.3(b) to the extent it
made any payments for any such MSCs pursuant to this subsection 6.3(d).
Notwithstanding the foregoing, (i) invoices for RF Engineering for each
PCS System and/or PCS Sub-System will be payable in accordance with subsection
6.4(b) below and (ii) invoices for Facilities Preparation Services within any
PCS System may be submitted by the Vendor in accordance with the terms of
Exhibit B2 and will be payable by the Owner with respect to each System Element
Facility within thirty (30) days after the date of acceptance by the Owner of
such System Element Facility in accordance with the terms of Exhibit B2.
Payments for third party manufactured Products (other than any PCS Products or
any Products integral to construction (e.g., concrete, nuts, bolts and other
customary building supplies)) purchased by the Vendor or its Subcontractors for
installation on the Owner's System Element Locations during the course of and as
part of Facilities Preparation Services may be made by the Owner on a current
basis (but in no event more often than monthly during the course of such
Facilities Preparation Services) as mutually agreed by the Parties.
6.3.1 Additional Products not in Initial System or Otherwise
Provided for in Section 2.2. Any invoice for Products delivered and installed by
the Vendor and Services performed by the Vendor not otherwise provided for under
this subsection 6.3.1, subsection 2.2(a), subsection 2.2(b), subsection 2.2(c)
or as otherwise specifically set forth in this Contract will be payable as
follows: [__________] percent of the amount of the invoice will be payable
within thirty (30) days following receipt of such Products by the Owner or the
full performance of the Services by the Vendor and the outstanding balance will
be payable upon final acceptance by the Owner of the Products or Services to
which such invoice relates. Any invoice (not otherwise provided for under this
subsection 6.3) for Products delivered by the Vendor but not installed by the
Vendor to which such invoice relates will be payable by the Owner at the level
of [__________] percent of the amount of such invoice within thirty (30) days
from the date of delivery of such invoice to the Owner. For any Services not
otherwise covered by the last paragraph of subsection 6.3 above, including,
without limitation, repair services, Engineering and Installation Services not
performed pursuant to a combined furnish and install order, and maintenance fees
(including Annual Release Maintenance Fees), an invoice will be payable by the
Owner at the level of [__________] percent of the amount of such invoice within
thirty (30) days from the date of delivery of such invoice to the Owner or as
otherwise mutually agreed in good faith between the Parties. For the purposes of
this last paragraph of this subsection 6.3 any acceptance or "final acceptance"
relevant to the Owner's obligation to pay will be deemed to occur on the
earliest of (i) the Owner's In Revenue use of such Products and/or Services,
(ii) the Owner's notification of acceptance of such Products and/or Services and
(iii) thirty (30) days following, as applicable, the Owner's completion of
Installation of the Products (where the Vendor is not performing Installation
Services), without the Owner's having given notice of non-acceptance of such
Products and/or Services.
6.3.2 SCP/HLR Payments. Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for SCP/HLR Products delivered
and/or installed by the Vendor will be payable as follows: (a) (i) [__________]
percent of the amount of any invoice for SCP/HLR Hardware will be payable within
[________] days following the installation by the Vendor of such SCP/HLR
Hardware at the appropriate HLR Designated Switch Sites, (ii) [__________]
percent of the amount of any invoice for SCP/HLR Hardware will be payable within
[_______] days following the Owner's Field Acceptance of such installed SCP/HLR
Hardware in accordance with the SCP/HLR Specifications and (iii) the remaining
[__________] percent of the amount of any invoice for SCP/HLR Hardware will be
payable within [_________] days of the Owner's Final Acceptance of such
installed SCP/HLR Hardware in accordance with the SCP/HLR Specifications; and
(b) (i) [__________] percent of the amount of any invoice for SCP/HLR Software
will be payable within [________] days of the Owner's Field Acceptance in
accordance with the SCP/HLR Specifications and (ii) the remaining [__________]
percent of the amount of any invoice for SCP/HLR Software will be payable within
[________] days of the Owner's HLR Final Acceptance in accordance with the
SCP/HLR Specifications.
6.3.3. AS Products Payments. (a) Notwithstanding anything
contained in this Section 6 to the contrary, any invoice for AS Software
delivered and/or installed by the Vendor will be payable by the Owner as
follows: (i) [__________] percent of the total price for any AS Software order
for such AS Software will be payable within [_________] days of the order
placement for such AS Software by the Owner, (ii) [__________] percent of the
amount of any invoice for ordered AS Software will be payable within
[__________] days of the time of delivery by the Vendor of such AS Software,
(iii) [__________] percent of the amount of any invoice for ordered AS Software
will be payable within [__________] days of AS Functional Acceptance of such AS
Software, and (iv) the remaining [__________] percent of the amount of any
invoice for ordered AS Software will be payable within [__________] days of AS
Final Acceptance of such AS Software.
(b) The Vendor may invoice the Owner for [_________]
percent of the passed-through cost (without mark-ups, add-ons or charges of
any kind (except as explicitly provided in Appendix I)) of any third party man-
ufactured AS Equipment supplied by the Vendor for the AS Software for the AS
Software System in accordance with the AS Statement of Work and the Owner will.
be required to pay any such invoice for third-party AS Equipment within [______]
days of the Owner's receipt and reasonable acceptance thereof. The Vendor may
invoice the Owner for AS Services (if applicable) pursuant to the first sen-
tence of subsection 6.3.1 above. AS Software Annual Maintenance Services
will be provided by the Vendor in accordance with the Annual Application
Software Maintenance Services Fees set forth on Appendix I and such fees will
be invoiced to the Owner with the Annual Software Release Maintenance Fees.
6.3.4 OTAF Payments. Any and all SPARC/OTAF Products and
Services provided by the Vendor to the Owner pursuant to the OTAF Statement of
Work will be provided, installed and tested at the Vendor's sole cost and
expense. Any such SPARC/OTAF Products may be retained by the Owner, to the
extent it so chooses in its sole and absolute discretion, upon the provision and
installation of SCP/OTAF Products. The Vendor will be solely responsible for any
and all costs associated with the deinstallation and/or removal of any
SPARC/OTAF Products upon the availability and provision of SCP/OTAF Products
pursuant to the OTAF Statement of Work. Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for SCP/OTAF Products delivered
and/or installed by the Vendor will be payable as follows: (i) [__________]
percent of the amount of any invoice for SCP/OTAF Products will be payable
within [__________] days following the installation by the Vendor of the
SPARC/OTAF Products in the Test-bed Laboratory in accordance with the OTAF
Statement of Work, (ii) [__________] percent of the amount of any invoice for
SCP/OTAF Products will be payable within [__________] days following the Owner's
OTAF Field Acceptance of installed SPARC/OTAF Products in accordance with the
OTAF Statement of Work, (iii) [__________] percent of the amount of any invoice
for SCP/OTAF Products will be payable within [__________] days following the
delivery of OTAF Software to the Test-bed Laboratory, (iv) [__________] percent
of the amount of any invoice for SCP/OTAF Products will be payable within
[__________] days following the Owner's OTAF Field Acceptance of installed
SCP/OTAF Products in accordance with the OTAF Statement of Work, and (v) the
remaining [__________] percent of the amount of any invoice for SCP/OTAF
Products will be payable within [__________] days of the Owner's Final
Acceptance of such installed SCP/OTAF Products in accordance with the OTAF
Statement of Work.
6.3.5 Actiview Payments. (a) Notwithstanding anything
contained in this Section 6 to the contrary, any invoice for Actiview Software
delivered and/or installed by the Vendor will be payable by the Owner as
follows: (i) [__________] percent of the total price for any Actiview Software
order for such Actiview Software will be payable within [__________] days of the
order placement for such Actiview Software by the Owner, (ii) [__________]
percent of the amount of any invoice for ordered Actiview Software will be
payable within [__________] days of the time of delivery by the Vendor of such
Actiview Software, (iii) [__________] percent of the amount of any invoice for
ordered Actiview Software will be payable within [__________] days of Actiview
Functional Acceptance of such Actiview Software, and (iv) the remaining
[__________] percent of the amount of any invoice for ordered Actiview Software
will be payable within [__________] days of Actiview Final Acceptance of such
Actiview Software.
(b) The Vendor may invoice the Owner for Actiview
Services (if applicable) pursuant to the first sentence of subsection 6.3.1
above. Actiview Software Annual Maintenance Services will be provided by
the Vendor pursuant to the Annual Application Software Maintenance Ser-
vices Fees as set forth on Appendix T and such fees will be invoiced to the
Owner with the Annual Software Release Maintenance Fees.
6.4 Payments for Facilities Preparation Services. (a) Upon receipt of
payment from the Owner for Facilities Preparation Services the Vendor will
promptly pay each Subcontractor for Facilities Preparation Services the amount
to which each Subcontractor is entitled pursuant to such Subcontractor's
agreement with the Vendor, based on each Subcontractor's portion of such Work.
By appropriate agreement in each Subcontractor's agreement with the Vendor, the
Vendor will require such Subcontractor to make payments to sub-Subcontractors
and materialmen in a similar manner. The Owner has no duty or obligation to
insure the payment of money to a Subcontractor, sub-Subcontractor, materialman
or any other third party, any such payment being the obligation of the Vendor.
Subcontractors, sub-Subcontractors, materialmen and any other third parties will
not be deemed third party beneficiaries of the Owner's obligations to pay the
Vendor. On or before the Owner's acceptance of the Facilities Preparation
Services of any System Element Facility within any given PCS System in
accordance with the terms of Exhibit B2, the Owner will have received details
(in a form reasonably satisfactory to the Owner) of all invoices and charges for
such Facilities Preparation Services incurred by the Vendor in connection with
the Facilities Preparation Services for such System Element Facility.
(b) The Owner will make payment to the Vendor for RF Engineering
Services performed by the Vendor within any given System Area pursuant to the
terms of this Contract based upon the following: (i) [__________] percent of the
"RF Engineering Services price" within the applicable System Area will be
payable by the Owner within [__________] days after receiving the Preliminary RF
Design for such System Area pursuant to Milestone 2 for such System Area as set
forth on Exhibit A1; (ii) [__________] percent of the RF Engineering Services
price within the applicable PCS System will be payable by the Owner within
[__________] days after the determination of the Final Site Count and delivery
of the Final RF Design for such PCS System in accordance with subsection 2.6 and
Milestone 5 for such System Area as set forth on Exhibit A1; and (iii)
[__________] percent of the RF Engineering Services price will be payable by the
Owner within the applicable PCS System within [__________] days of the Vendor's
Installation of the Products for such PCS System in accordance with the terms of
the Contract and Milestone 7 for such System Area as set forth on Exhibit A1.
For the purposes of this subsection 6.4(b) the term "RF Engineering Services
price" will mean the number of System Element Facilities within the applicable
PCS System pursuant to the build-out of the Initial System multiplied by the
Vendor's System Element Facility RF Engineering price as set forth on Schedule
3. In any given PCS System and/or System Area the RF Engineering Services price
will be readjusted (and any amounts owed to either Party will be reimbursed) at
the point in time that payment would be made for such RF Engineering pursuant to
clause (iii) of this subsection 6.4(b) in accordance with the determination of
the actual Final Site Count and delivery of Final RF Design applicable to such
PCS System.
6.5 Monthly Forecasts. Commencing on the Effective Date, the Vendor
will provide the Owner with monthly forecasts of the costs of RF Engineering and
Facilities Preparation Services in each PCS System and PCS Sub-System in which
such Services are being provided by the Vendor and/or any of its Subcontractors
throughout the period that any such Services are being provided during the Term
of this Contract. The forecasts provided by the Vendor pursuant to this
subsection 6.5 must be in sufficient detail to reasonably inform the Owner of
the nature of the costs to be incurred for each of RF Engineering and Facilities
Preparation Services in each of the PCS Systems and/or any PCS Sub-Systems in
which such Services are being provided by the Vendor and/or any of its
Subcontractors pursuant to the terms of this Contract.
6.6 No Payment in Event of Material Breach. Notwithstanding any other
provision to the contrary contained herein, the Owner will have no obligation to
make any payment with respect to the affected PCS System and/or PCS Sub-System
in addition to amounts previously paid to the Vendor at any time the Vendor is
in material breach of this Contract with respect to such PCS System and/or PCS
Sub-System, as the case may be, until and unless such breach is cured or waived
by the Owner in accordance with the terms of this Contract.
6.7 Microwave Relocation Delay Partial Payments. In the event the
Vendor has achieved Milestone 7 (as set forth on Exhibit A1) within any given
PCS System and/or PCS Sub-System, as the case may be, but there is a delay in
the Owner's completion of Microwave Relocation in such PCS System and/or PCS
Sub-System, as the case may be, pursuant to and in accordance with subsection
2.38, then during the Microwave Delay Period within such PCS System and/or PCS
Sub-System, as the case may be, the Owner agrees to pay to the Vendor (i)
[__________] percent of the amounts otherwise due to the Vendor under subsection
6.3(b) on or before [_________] of such Microwave Delay Period, (ii) an
additional [__________] percent of the amounts otherwise due to the Vendor under
subsection 6.3(b) on or before [_____________] of such Microwave Delay Period,
(iii) an additional [__________] percent of the amounts otherwise due to the
Vendor under subsection 6.3(b) on or before [______________] of such Microwave
Delay Period, and (iv) any remaining amounts still outstanding pursuant to
subsection 6.3(b) on the last day of such Microwave Delay Period provided that
Substantial Completion (as deemed applicable and appropriate pursuant to good
faith mutual agreement between the Parties at such time) of such PCS System
and/or PCS Sub-System, as the case may be, will have been achieved by the Vendor
in accordance with the terms of this Contract and Exhibit B3. Nothing contained
herein to the contrary will in any way release the Vendor from its obligations
or otherwise modify the Vendor's obligations as to the completion of testing in
accordance with Exhibit B3 once Microwave Relocation in such affected PCS
System, PCS Sub-System or affected portion of a PCS System and/or PCS Sub-System
has been successfully achieved by the Owner. Nothing contained herein to the
contrary will in any way require the Owner to pay the Vendor amounts already
paid or otherwise provided for pursuant to any other provision of this Contract.
6.8 In Revenue Payments. At any time during the Site Acquisition Delay
Period or the Microwave Delay Period, as the case may be, the Owner may, in its
sole discretion, decide to place the PCS System or PCS Sub-System, as the case
may be, or any portion thereof which is subject to such delay into In Revenue
Service. In the event the Owner does in fact decide, in its sole discretion, to
place any PCS System or PCS Sub-System, as the case may be, or any portion of a
PCS System or PCS Sub-System, as the case may be, into In Revenue Service during
any such Site Acquisition Delay Period or Microwave Delay Period, as the case
may be, the Owner will be obligated to pay to the Vendor the amounts it would
have otherwise paid to the Vendor upon the Substantial Completion of such In
Revenue PCS System or In Revenue portion of such PCS System, as the case may be,
and the Vendor will be entitled to commence Substantial Completion testing for
such In Revenue PCS System or In Revenue portion of such PCS System; provided
that the Owner understands that the Vendor can only do such Substantial
Completion testing as set forth in Exhibit B3 as is at such time applicable and
appropriate (pursuant to the good faith mutual agreement of the Parties at such
time) to such In Revenue PCS System or PCS Sub-System or In Revenue portion of
such PCS System or PCS Sub-System. The Parties expressly understand and agree
that this subsection 6.8 will only be effective in the event that the Owner
chooses, in its sole discretion, to place a PCS System, PCS Sub-System or a
portion thereof In Revenue during a Microwave Delay Period or Site Acquisition
Delay Period, as applicable to such In Revenue PCS System or In Revenue portion
of such PCS System or PCS Sub-System, as the case may be. Nothing contained
herein to the contrary will in any way modify the Vendor's obligations as to the
completion and testing of the remaining incomplete non-In Revenue portion of any
such PCS System or PCS Sub-System, as the case may be, which is otherwise
partially In Revenue pursuant to and in accordance with the terms of this
Contract, including but not limited to the Project Milestones set forth on
Exhibit A1. Nothing contained herein to the contrary will in any way require the
Owner to pay the Vendor amounts already paid or otherwise provided for pursuant
to any other provision of this Contract.
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment. Subject to subsection 7.2 and to subsection 2.6
and the determination of the Final Site Count and the delivery of the Final RF
Engineering Plan for each PCS System and PCS Sub-System, the Parties understand
that the quantities of Products and Services identified on Schedules 2 and 3
which are necessary for the build-out by the Vendor of the Initial System
pursuant to the terms and conditions of this Contract constitute the Owner's
initial purchase commitment under this Contract (the "Initial Commitment").
7.2 Change Orders. The Owner has the right by way of written orders
("Change Orders") to request Expansions, other revisions and/or modifications in
the Work, including but not limited to the Specifications, the manner of
performance of the Work or the timing of the completion of the Work; provided
that specific Change Orders will be submitted to the Vendor and the Vendor
(subject to the Owner's agreement) will be entitled to make reasonable price
and/or Project Milestone adjustments to the Contract Price in the case of
material modifications. The Vendor must promptly notify the Owner of any such
requested change or changes to Products which may materially affect the
operation and/or maintenance of the System, any PCS System, any PCS Sub-System
or any part thereof. The Parties agree that within fifteen (15) Business Days
after the Owner's initial request for a Change Order pursuant to this subsection
7.2 they will mutually agree to all aspects of such Change Order which agreement
will be evidenced by a writing executed by an authorized representative of each
of the Parties. In the event the Vendor refuses to agree to any such Change
Order within such fifteen (15) day period then the Vendor will provide a written
notice to the Owner detailing its reasons for such refusal and if the Owner, at
such time, disagrees with the reasons set forth in such Vendor notice the matter
will then be referred to dispute resolution pursuant to Section 23. Nothing
contained in this subsection 7.2 is intended to limit the Vendor's right, from
time to time, to make suggestions for modifications to the Work or the
Specifications pursuant to and in accordance with this subsection 7.2 and the
terms of this Contract, provided that in any such event the Owner, in its sole
and absolute discretion pursuant to the terms of this Contract may refuse to
make any such modification or otherwise agree to issue a Change Order
incorporating any such Vendor suggestion.
7.3 Cancellation. During the term of this Contract, and subject to
Section 24, the Owner will have the right, but not the obligation, at any time
to cancel, in whole or in part, any order made pursuant to the terms of this
Contract upon advance written notice to the Vendor. In the event of a
cancellation permitted hereunder, the Owner will pay to the Vendor order
cancellation charges in accordance with, and pursuant to, the terms of Schedule
11.
SECTION 8 INSTALLATION
8.1 Installation. The Vendor will furnish and install the Products
pursuant to the Project Milestones set forth on Exhibit A and in accordance with
the requirements and criteria set forth in Exhibit D. In accordance with and
subject to the Project Milestones set forth on Exhibit A (and the intervals set
forth therein and herein), the Vendor will complete all Product Installation in
any given PCS System and/or PCS Sub-System in conformance with the requirements
and criteria set forth in Exhibit D within thirty-two and one-half (32-1/2) days
of completion of the Facilities Preparation Services pursuant to Milestone 6 (as
set forth in Exhibit A1) in such PCS System and/or PCS Sub-System.
8.2 No Interference. The Vendor will install the Products and build
each of the PCS Systems and PCS Sub-Systems so as to cause no unauthorized
interference with or obstruction to lands and thoroughfares or rights of way on
or near which the Installation work may be performed. The Vendor must exercise
every reasonable safeguard to avoid damage to existing facilities, and if
repairs or new construction are required in order to replace facilities damaged
by the Vendor due to its carelessness, negligence or willful misconduct, such
repairs or new construction will be at the Vendor's sole cost and expense.
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing. The Vendor must carry out the Acceptance Tests
on the Products, the PCS Systems and the PCS Sub-Systems as specified in Exhibit
B3 and each PCS System and PCS Sub-System must successfully achieve acceptance
(including Substantial Completion and Final Acceptance) in accordance with the
terms of Exhibit B3.
9.2 Costs and Expenses. The costs and expenses of such Acceptance Tests
will be borne by the Vendor, and the Owner will not be charged or billed for
such costs and expenses, except to the extent that such charges or expenses are
not included in the Contract Price pursuant to and in accordance with the terms
of this Contract. If the Acceptance Tests performed by the Vendor are not
satisfied in accordance with the relevant requirements of Exhibit B3 or are
otherwise inconclusive in the reasonable judgment of the Owner, the Owner will
have the right to order further Acceptance Tests at the sole cost and expense of
the Vendor.
9.3 Notification. The Vendor will notify the Owner at least ten (10)
days prior to the performance of any Acceptance Tests. Prior to or at the first
practicable date after such notification, the Vendor and the Owner will each
agree upon and approve any test forms to be used as part of the particular
Acceptance Test being conducted.
9.4 Presence at Acceptance Tests. The Owner and its representatives
will be permitted to witness and have unrestricted access to the Vendor's and
its Subcontractors' Acceptance Tests, provided that no such access will
materially interfere with or cause undue delay of the Vendor's Work. Nothing
herein will be deemed to require the Vendor to reimburse the Owner for any costs
incurred by the Owner in the Owner's participation in or observation of
Acceptance Tests or other tests performed by the Vendor pursuant to and in
accordance with the terms of this Section 9.
9.5 Correction of Defects. (a) If any Acceptance Test is not satisfied,
the Vendor will, at its sole cost and expense, (i) in writing, notify the Owner
of such failure, and (ii) promptly correct whatever Defects or Deficiencies
caused such Acceptance Test not to be satisfied. After such correction, the
Vendor must (i) repeat at its sole cost and expense the failed Acceptance Tests
and as many other Acceptance Tests as are necessary to ensure in the reasonable
opinion of the Owner that such correction made by the Vendor would not have
affected the outcome of such other Acceptance Tests, and (ii) in writing, notify
the Owner as to what correction was made and what Acceptance Tests were
repeated.
(b) If Final Acceptance of a PCS System and/or PCS Sub-System, as the
case may be, cannot be achieved after Substantial Completion of such PCS System
or PCS Sub-System (provided that the Vendor will have fully built-out the Final
RF Engineering Plan in accordance with the Final Site Count in accordance with
the terms of this Contract) because such PCS System or PCS Sub-System, as the
case may be, fails to meet applicable performance criteria as set forth in
Exhibit F, but would do so with only the implementation and installation of
additional Base Stations at additional System Element Locations over and above
the Final Site Count for such PCS System or PCS Sub-System, as the case may be,
the Owner will have the right, in its sole and absolute discretion, to (i)
finally accept such PCS System and/or PCS Sub-System, as the case may be, in
which case the Parties will mutually agree in good faith on revised performance
criteria for such PCS System or PCS Sub-System, as the case may be, or (ii)
require the Vendor to continue to work (in which case Final Acceptance of such
PCS System or PCS Sub-System, as the case may be, will be delayed until
completion of the work and testing contemplated herein and in Exhibit B3) to
cause such PCS System or PCS Sub-System, as the case may be, to perform at the
applicable levels of the then existing performance criteria as set forth in
Exhibit F, in which case, the required additional Base Stations and additional
System Element Locations will be treated as provided for in subsections 17.5(c)
and 17.10. Any additional Base Station(s) paid for by the Owner pursuant to this
subsection 9.5(b) (which would only have to be paid for (including any costs
associated with the installation thereof) by the Owner upon the subsequent
achievement of Final Acceptance by the Vendor in accordance with Exhibit B3
which such payment will be made with the payments otherwise made on Final
Acceptance pursuant to Section 6) will be offset against the number of new Base
Stations that may subsequently be for the account of the Owner pursuant to the
terms of subsection 17.5(c). If the Parties are unable to agree upon revised
performance criteria as provided in clause (i) above, the matter will be
resolved in accordance with the provisions of subsection 23.3.
9.6 Acceptance Certificate. Upon the successful completion of the
Acceptance Tests for a PCS System, and/or a PCS Sub-System or any part thereof
conducted by the Vendor, the Vendor must submit to the Owner an Acceptance
Certificate certifying that (i) such Acceptance Tests have been successfully
completed, (ii) the Work so tested has been completed in accordance with the
terms of this Contract, and (iii) if applicable, that the remainder of the Work
is continuing in accordance with the Project Milestones set forth on Exhibit A.
Upon its reasonable satisfaction that such Acceptance Certificate is correct and
complete, the Owner will acknowledge such certification by signing the
Acceptance Certificate. In the event of any dispute as to the results of any
Acceptance Tests, such dispute will be resolved pursuant to the dispute
resolution mechanisms set forth in Section 23 including, but not limited to, the
Third Party Engineer review mechanism set forth in subsection 23.3.
9.7 AS Acceptance Testing and Acceptance. (a) After installation of the
AS Software, or any part thereof as set forth in Appendix K, the Owner will
carry out Functional Acceptance Tests in accordance with the provisions of
Appendix K, testing the compliance of the AS Software with the AS Statement of
Work. The Owner will start the AS Functional Acceptance Tests no later than
seven (7) days after installation of such AS Software and complete the AS
Functional Acceptance Tests no later than fourteen (14) days after installation
of such AS Software.
(b) After such AS Software has successfully passed the Functional
Acceptance Tests, the Owner will commence the AS Final Acceptance Test in
accordance with the provisions of Appendix K. The duration of the AS Final
Acceptance Test shall be thirty (30) days after successful completion of the AS
Functional Acceptance Test.
(c) If the Owner fails to conduct either the AS Functional Acceptance
Tests or the Final Acceptance Test within the time periods set forth in
subsections 9.7(a) and 9.7(b), the AS Software shall be deemed to have met the
Acceptance Test criteria on the last day of the time period allotted for the
applicable AS Acceptance Test.
(d) The costs and expenses of the AS Acceptance Tests will be borne by
the Owner. Upon request of the Owner, the Vendor will provide reasonable support
to the Owner during the AS Functional Acceptance Tests and the AS Final
Acceptance Tests.
(e) If the AS Acceptance Tests show that the AS Software complies with
the AS Statement of Work, such AS Software will be accepted by the Owner by
confirming the results in a written report.
(f) If any AS Acceptance Test is not satisfied, the Owner will (i) in
writing, notify the Vendor of such failure, and (ii) the Vendor will promptly
correct whatever Defects or Deficiencies caused such AS Acceptance Test not to
be satisfied. After such correction, the Vendor must (i) repeat at its sole cost
and expense the failed AS Acceptance Tests and as many other AS Acceptance Tests
as are necessary to ensure in the reasonable opinion of the Owner that such
correction made by the Vendor would not have affected the outcome of such other
AS Acceptance Tests, and (ii) in writing, notify the Owner as to what correction
was made and what AS Acceptance Tests were repeated. Nothing stated herein to
the contrary will in any way limit the Owner's right to liquidated damages
pursuant to subsection 15.8 or other remedies under this Contract in the event
the Vendor fails to deliver AS Products in accordance with the requirements of
Appendix G on the dates originally scheduled for such deliveries.
(g) Minor Defects and shortcomings not affecting the operational use of
any part of the AS Software shall not give rise to withholding the acceptance
provided that the Vendor undertakes to remedy such Defects and shortcomings as
soon as reasonably possible, pursuant to the procedures described in Appendix K.
9.8 Actiview Acceptance Testing and Acceptance. (a) After installation
of Actiview Software as set forth in Appendix S, the Owner will carry out
Actiview Functional Acceptance Tests in accordance with the provisions of
Appendix S, testing the compliance of the Actiview Software with the Actiview
Statement of Work. The Owner will start the Actiview Functional Acceptance Tests
no later than thirty (30) days after installation of such Actiview Software and
complete the Actiview Functional Acceptance Tests no later than sixty (60) days
after installation of such Actiview Software.
(b) After the Actiview Software has successfully passed the Actiview
Functional Acceptance Tests, the Owner will commence the Actiview Final
Acceptance Test in accordance with the provisions of Appendix S. The Actiview
Final Acceptance Test shall be thirty (30) days after successful completion of
the Actiview Functional Acceptance Test.
(c) If the Owner fails to conduct either the Actiview Functional
Acceptance Tests or the Actiview Final Acceptance Tests within the time periods
set forth in subsections 9.8(a) and 9.8(b), the Actiview Software will be deemed
to have met the Actiview Acceptance Test criteria on the last day of the time
period allotted for the applicable Actiview Acceptance Test unless any such
delay is caused by or due to an act or omission of the Vendor and/or a Defect in
the Actiview Software.
(d) The Owner will be responsible for the costs and expenses of the
Actiview Acceptance Tests. The Vendor will provide the support services to the
Owner set forth in the Actiview Statement of Work.
(e) If the Actiview Acceptance Tests show that any of the Actiview
Software complies with the Actiview Statement of Work, such Actiview Software
will be accepted by the Owner by confirming the results in a written report.
(f) If any Actiview Acceptance Test is not satisfied, the Owner will
(i) in writing, notify the Vendor of such failure, and (ii) the Vendor will
promptly correct whatever Defects or Deficiencies caused such Actiview
Acceptance Test not to be satisfied. After such correction, the Vendor must (i)
repeat at its sole cost and expense the failed Actiview Acceptance Tests and as
many other Actiview Acceptance Tests as are necessary to ensure in the
reasonable opinion of the Owner that such correction made by the Vendor would
not have affected the outcome of such other Actiview Acceptance Tests, and (ii)
in writing, notify the Owner as to what correction was made and what Actiview
Acceptance Tests were repeated. Nothing stated herein to the contrary will in
any way limit the Owner's right to liquidated damages pursuant to subsection
15.10 or other remedies under the Contract in the event the Vendor fails to
deliver Actiview Products in accordance with the requirements of Appendix U on
the dates originally scheduled for such deliveries.
(g) Minor Defects and shortcomings not affecting the operational use of
any part of the Actiview Software shall not give rise to withholding the
acceptance provided that the Vendor undertakes to remedy such Defects and
shortcomings as soon as reasonably possible, pursuant to the procedures
described in Appendix S.
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation. During the Term of this Contract the
Vendor agrees to provide the Owner, or the respective Affiliates as the case may
be, except under extraordinary circumstances not less than one (1) year notice
before the Vendor discontinues accepting orders for a PCS Product ("Discontinued
Products") sold under this Contract. Where the Vendor offers a product for sale
that is equivalent in form, fit and function in accordance with and pursuant to
the Specifications, the notification period may vary but in no event will be
less than the applicable notice period set forth in subsection 2.17.
Notwithstanding the foregoing, the Vendor will not discontinue accepting orders
for any PCS Product applicable to or otherwise used in the System or any portion
thereof until and unless the Vendor and the Owner have agreed upon a mutually
acceptable transition plan that takes into account the Owner's and its
Affiliates' existing investment in the Item scheduled for discontinuance subject
to the minimum terms and conditions set forth in subsections 10.2 and 10.3
below. The Parties' failure to reach agreement within sixty (60) days or such
other reasonable time as they may mutually establish will, upon the request of
either Party, be referred for resolution pursuant to Section 23. In the event of
the foregoing, the Vendor must continue to furnish PCS Products fully compatible
with the System Elements within the System at such time during the Term of the
Contract; provided that nothing herein will bar the Vendor from discontinuing
individual Items of PCS Products as provided in and pursuant to this subsection
10.1.
10.2 Discontinuation During Warranty Period. If, during the Warranty
Period applicable to the relevant Discontinued Product pursuant to Section 17,
the Vendor does not make such Discontinued Products available to the Owner, the
price of any Products provided as a replacement for the Discontinued Product by
the Vendor and required to be purchased by the Owner during such Warranty Period
to replace existing Discontinued Products delivered to the Owner in order to
maintain performance and functionality equivalent to that previously provided by
the Discontinued Products will be discounted by an amount equal to fifty percent
(50%) of the price previously paid for such Discontinued Products.
10.3 Discontinuation After Warranty Period. In the event that the
Vendor discontinues the manufacture of a Product following the expiration of the
applicable Warranty Period and the Owner is required to replace an existing
Discontinued Product with a new Product in order to maintain performance and
functionality, the Owner will receive a credit in an amount equal to the
percentage set forth below multiplied by the purchase price paid for such
original Product, which credit will be applied against the Vendor's then-current
list price for a replacement for such Discontinued Product; provided that the
credit will not exceed the Vendor's then-current best list price (as determined
by the Customer Price Guide) for such replacement Product subject to the
discounts available to the Owner pursuant to Section 26 and the other terms of
this Contract:
(i) up to and including one year following expiration of the
applicable Warranty Period: 40%;
(ii) more than one year and up to and including two years following
expiration of the applicable Warranty Period: 30%; and
(iii)more than two years and up to and including three years following
expiration of the applicable Warranty Period: 20%.
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License. The Owner is hereby granted a perpetual,
non-exclusive, non-transferable (except as set forth in subsections 11.4 and
27.4), fully paid-up, multi-site (capability to have deployed Software in any
number of sites) right to use license for the Software ("RTU License"), to
operate the Products provided in each of the PCS Systems and/or PCS Sub-Systems,
as the case may be, and the System as a whole, subject to payment of any license
fees in accordance with the terms of this Contract. Except as otherwise provided
herein, the Owner is granted no title or ownership rights to the Software. Such
rights will remain with the Vendor, its Subcontractors or suppliers, as
appropriate. The RTU License granted hereunder includes and is deemed to cover
any Affiliate of the Owner to the extent such Affiliate is (i) developing,
constructing and/or operating a PCS system and (ii) seeking to access and/or use
the Products and Services available on or as a part of the Owner's System.
11.2 Owner's Obligations. The Owner agrees that the Software, whether
or not modified, will be treated as proprietary to the Vendor, its Subcontrac-
tors or its suppliers, as appropriate and the Owner will:
(a) Utilize the Software solely in conjunction with the System and/or
any PCS System or any PCS Sub-System; provided that the Vendor acknowledges that
the Software will be integrated across interfaces with systems, equipment and
software provided by other suppliers and customers including, but not limited
to, the Other Vendors;
(b) Ensure that all copies of the Software will, upon any reproduction
by the Owner authorized by the Vendor and whether or not in the same form or
format as such Software, contain the same proprietary, confidentiality and
copyright notices or legends which appear on the Software provided pursuant
hereto; and
(c) Hold secret and not disclose the Software (or, subject to
subsection 27.19, interfaces to or with such Software) to any person, except to
(i) such of its employees, contractors, agents or Affiliates that are involved
in the operation or management of the System and/or any PCS System or any PCS
Sub-System and need to have access thereto to fulfill their duties in such
capacity, or (ii) other Persons who need to use such Software to permit
integration of the System and/or any PCS System and/or any PCS Sub-System with
systems and software of other suppliers and customers including, but not limited
to, the Other Vendors; provided that such Persons agree, or are otherwise
obligated, to hold secret and not disclose the Software to the same extent as if
they were subject to this Contract.
(d) When and if the Owner determines that it no longer needs the
Software or if the Owner's license is canceled or terminated pursuant to the
terms of this Contract, return all copies of such Software to the Vendor or
follow reasonable written disposition instructions provided by the Vendor. If
the Vendor authorizes disposition by erasure or destruction, the Owner will
remove from the medium on which Software resides all electronic evidence of the
Software, both original and derived, in such manner that prevents subsequent
recovery of such original or derived Software.
11.3 Backwards Compatibility. (a) In addition to the warranties
contained in Section 17 of this Contract, the Vendor represents and warrants
that each Software Revision Level during the Term of this Contract will be
Backwards Compatible with all existing in-service Equipment provided by the
Vendor and the immediately preceding Software Revision Level of such Software
made available to Customers by the Vendor.
(b) In the event that Software supplied by the Vendor at any System
Element Site at any time does not provide Backwards Compatibility as required by
this subsection 11.3, then the Vendor will provide, without charge to the Owner,
the most current Software Updates of the Software to each such System Element
Location, and otherwise take such steps as may be necessary to achieve Backwards
Compatibility.
11.4 Transfer and Relocation. (a) Except as provided in subsection
27.4, where the Owner or any successor to the Owner's title in the Products (i)
elects to transfer a Product to a third party, and where such Product will
remain in place and operational for the purpose of continuing to provide PCS in
the franchise area in which such Product is installed, or (ii) elects to
transfer Products to an Affiliate for reuse within the United States, the Owner
may transfer its RTU License for the Software furnished under this Contract for
use with such Product, without the payment of any additional Software
right-to-use fees by the transferee, but only under the following conditions:
(A) The right to use such Software may be transferred
only together with the Products with which the Owner
has a right to use such Software, and such right to
use the Software will continue to be limited to use
with such Products;
(B) Before any such Software is transferred, the Owner
will notify the Vendor of such transfer and the
transferee will have agreed in writing (a copy of
which will be provided to the Vendor) to keep the
Software in confidence and to corresponding
conditions respecting possession and use of Software
as those imposed on the Owner in this Contract; and
(C) The transferee will have the same right to Software
warranty and Software maintenance for such Software
as the transferor, provided the transferee continues
to pay the fees, including recurring fees, such as
Annual Release Maintenance Fees, if any, associated
with such Software warranty or maintenance.
(b) Except as provided in subsection 11.4(a) or subsection 27.4, and
except as may otherwise in this Contract be provided expressly, the Owner or any
successor to the Owner's title in the Products will have no right to transfer
Software furnished by the Vendor under this Contract without the consent of the
Vendor. If the Owner or such successor elects to transfer a Product purchased
under this Contract for which it does not under this Contract have the right to
transfer related Software, the Vendor agrees that upon written request of the
transferee of such Product, or of the Owner or such successor, the Vendor will
not without reasonable cause fail to grant to the transferee a license to use
such Software with the Products, whether to be located within the United States
or elsewhere, upon payment of a relicensing fee to the Vendor in an amount equal
to fifty percent (50%) of the license fee for the Software originally paid by
the Owner to the Vendor at the time of the original purchase of the Software
from the Vendor; provided that such relicensing fee will in no event exceed
fifteen percent (15%) of the price paid by the transferee to the Owner for the
Product with respect to which such Software is used.
11.5 Survival. The obligations of the Owner under the Software Licenses
will survive the termination of this Contract, regardless of the cause of
termination.
11.6 Access to Source Codes. The Vendor grants the Owner a right to
access the Source Code and to modify the Software (the "RTM License") for the
maintenance, enhancement and support of those Products purchased from the Vendor
and owned or operated by the Owner under the following circumstances which will
be set forth in the Escrow Agreement:
(a) If the Vendor becomes insolvent, makes a general assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or an involuntary
petition in bankruptcy is filed against the Vendor which is not dismissed within
sixty (60) days, or suffers or permits the appointment of a receiver for its
business, or its assets become subject to any proceeding under a bankruptcy or
insolvency law, domestic or foreign, or has liquidated its business, or the
Vendor, or a business unit of the Vendor that is responsible for maintenance of
the Software, ceases doing business without providing for a successor, and the
Owner has reasonable cause to believe that any such event will cause the Vendor
to be unable to meet its warranty service or support requirements hereunder; or
(b) If it is determined, pursuant to the dispute resolution mechanisms
set forth in subsection 23.1, that the Vendor, its assignee or designee has
failed, or is unable, to provide the warranty service or support of the System
and/or any PCS System and/or any PCS Sub-System contemplated by this Contract.
11.7 Escrow Agreement. The Vendor agrees, at the Owner's request, to
become party to a Source Code escrow agreement (the "Escrow Agreement") which
will allow the Owner to obtain access to the applicable Source Codes in the
circumstances set forth in subsection 11.6 and such Escrow Agreement. The Owner
will pay all costs, including the Vendor's reasonable costs incurred in
gathering, organizing and delivering such Source Code, associated with such
Escrow Agreement. The Vendor represents, warrants and agrees that (i) the Source
Codes delivered into escrow in accordance with the Escrow Agreement will
comprise the full Source Code language statement of the Software as used, or
required to be used, by the Vendor to maintain or modify the System and/or any
PCS System and/or any PCS Sub-System without the help of any other Person or
reference to any other material, (ii) such Source Codes will include all
versions thereof from the date of initial creation, and (iii) such Source Codes
must be kept up to date, including all updates needed to maintain compliance
with the Specifications and the System Standards. In addition, all parts of the
Source Codes from the date of creation thereof, and all updates thereto
(including, without limitation, those that are necessary to maintain compliance
with the Specifications) must be delivered into escrow in accordance with the
Escrow Agreement; provided that the Vendor will not be required to update and/or
deliver into escrow any updates of any Owner Software modifications made
pursuant to subsections 12.5, 12.6 or 12.7.
11.8 Software Maintenance. The Vendor represents and warrants that the
Software delivered to the escrow agent pursuant to subsection 11.7 for
redelivery to the Owner pursuant to the Escrow Agreement will be in a form
suitable for reproduction by the Owner and will include the full Source Code
language statement of the Software as used by the Vendor sufficient to allow
maintenance and modification.
11.9 Custom Development.
11.9.1 Request for Custom Material. (a) From time to time, the
Owner may have requirements for custom Software (including, but not limited to,
development of identified features or modifications to Software or Software
Enhancements) or custom development of Equipment (including, but not limited to,
development of identified features or modifications to Equipment or Equipment
Enhancements) to be provided by the Vendor under this Contract (the "Custom
Material"). If the Owner has a requirement for Custom Material that is a
specific enhancement or modification of a previously licensed feature or of
previously purchased Products, the Owner will identify to the Vendor in writing
a summary of any such proposed development of Custom Material. Such summary will
provide a description of any proposed Custom Material sufficient to enable the
Vendor to determine the general demand for, and its plans, if any, to develop
the same or similar Products. The Vendor will respond to such summary within
thirty (30) days after receipt thereof and indicate if it has the ability to
fulfill a subsequent Request for Proposal ("RFP") from the Owner for such
development of Custom Material. The Owner acknowledges that the Vendor will have
no obligation to develop any proprietary materials for Owner.
(b) If the Vendor decides that it does not have the technical ability
or the capacity to fulfill a subsequent RFP for such Custom Material
development, the Vendor's response pursuant to subsection 11.9.1(a) will (i)
provide the Owner an explanation of why it cannot fulfill such RFP and (ii) use
reasonable diligence to work with the Owner to identify an alternative source
for such development reasonably acceptable to the Owner. In determining whether
the Vendor has the technical ability or the capacity to fulfill the RFP, the
Vendor may consider factors including, but not limited to, (1) the Vendor's
likelihood of recovering its costs for performing such development, (2) the
impact of such development on the Vendor's actual outstanding commitments to
perform work for other Customers and to pursue strategic development activities;
and (3) whether the Vendor can perform the work utilizing existing software
development staff without stopping work underway.
(c) If the Vendor fails to agree to a request for Custom Material
development pursuant to the terms of this subsection 11.9 then the matter may,
at the Owner's option, be referred to dispute resolution pursuant to Section 23.
11.9.2 Vendor Response. After reviewing an RFP issued for such
Custom Material, the Vendor will respond to the Owner within thirty (30) days,
unless otherwise agreed by the Parties, stating the terms and conditions upon
which the Vendor would be willing to undertake such development, including, but
not limited to, a listing of specifications, custom development charges, planned
license fees and a proposed delivery schedule.
11.9.3 Ownership of Intellectual Property. The Vendor will own
all forms of intellectual property rights (including, but not limited to,
patent, trade secret, copyright and mask rights) pertaining to Products, and
will have the right to file for or otherwise secure and protect such rights. The
foregoing notwithstanding, the Parties understand and agree that from time to
time the Owner may devise, develop or otherwise create ideas or other concepts
for services or new products which are patentable or otherwise capable of
receiving protection from duplication. In such event, the Owner will have the
right to patent or otherwise protect such ideas or concepts for its own use and
benefit.
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees. So long as the Owner pays the
applicable Annual Release Maintenance Fees in accordance with the terms of this
Contract during the Term (including at any time after the Term so long as the
Owner at such time continues to pay the Annual Release Maintenance Fees), the
Vendor will provide to the Owner, at such times as they become generally
available to the Vendor's Customers, all Software Upgrades, all Software
Enhancements and all Combined Releases (but not Optional Software Features,
unless otherwise mutually agreed between the Parties) applicable to Software for
PCS Products for which the Owner has obtained an RTU License pursuant to the
terms of this Contract.
12.2 Notice. The Vendor must give the Owner not less than ninety (90)
days prior written notice of the introduction of any Software Enhancement
release or any Software Combined Release or any Optional Software Features
release. In addition, in each February and August of each year during the Term
of this Contract, the Vendor must provide the Owner with a forecast of future
Software Enhancement releases or Software Combined Releases or any Optional
Software Features release, as the case may be, then currently being developed by
or on behalf of the Vendor.
12.3 Installation, Testing and Maintenance. The installation and
testing of the Software by the Vendor and the acceptance thereof by the Owner
will be performed in accordance with the criteria set forth in Exhibit B3.
12.4 Software Fixes. In the event that any Software Upgrade, Software
Enhancement or Software Combined Release supplied by the Vendor during the Term
of this Contract has the effect of preventing the System and/or any PCS System
and/or any PCS Sub-System, as the case may be, or any part thereof from
satisfying, or performing in accordance with the Specifications, the System
Standards and/or Exhibit F or otherwise adversely affects the functionality or
features of the System, any PCS System, any PCS Sub-System or any part thereof,
then the Vendor will promptly retrofit or take such other corrective action as
may be necessary to assure that the System, any such PCS System or any PCS
Sub-System or any such affected part, as modified to include each such Software
Upgrade, Software Enhancement or Software Combined Release, will satisfy, and
perform in accordance with, the Specifications, the System Standards and/or
Exhibit F and restore all pre-existing functionality and features as well as
provide any new features and functionality provided by any of the foregoing
modifications, in each case without any charge to the Owner (other than payment
of the applicable Annual Release Maintenance Fees pursuant to the terms of this
Contract).
12.5 Right to Modify SCP/HLR Software. The Vendor grants to the Owner a
personal, non-transferable, non-exclusive and royalty-free license to modify the
following component layers of the SCP/HLR Software provided herein to run on the
SCP/HLR Hardware, solely for use by the Owner in its business of providing
telecommunications services (the names for the component layers set forth below
being used in conformity with the conventions displayed on the graphic element
of Appendix B):
(i) Service Customization Layer
(ii) Application Oriented Layer
(iii) Capability Creation Layer
(iv) Platform Enhancement Layer
Such right to modify includes the right for the Owner, its
employees, and agents to modify and copy the Source Code of the above named
component layers (including, but not limited to, access to the "SCP Action
Execution Library" (including IS41 Rev. B and IS41 Rev. C)) of the SCP/HLR
Software provided solely for the purposes of maintaining and enhancing or
supplementing the object code versions of such provided Software. The Owner
agrees to use the modifications to Licensed Software made in the exercise of the
license granted in this subsection 12.5 in accordance with its licensed rights
in the SCP/HLR Software hereunder, except as otherwise provided in this
subsection 12.5. The license to modify set forth in this subsection 12.5 will be
royalty-free and without fee with respect to code implementing features or
capabilities provided within the above-enumerated layers of releases or versions
of the Software which are provided by the Vendor in accordance with or pursuant
to the Annual Release Maintenance Fees.
Intellectual property rights in modifications to the SCP/HLR
Software by the Owner, its employees or agents for hire in the exercise of a
right of modification granted in this subsection 12.5 will vest in the Owner,
subject to the Vendor's intellectual property rights in the Vendor's proprietary
"SLL" programming language and compiler and in the Vendor's unmodified SCP/HLR
Licensed Software. The unmodified Computer Programs provided by the Vendor,
including, but not limited to, the SCP/HLR Software, will remain the
intellectual property of the Vendor; and nothing in this subsection 12.5 will be
deemed to confer upon the Owner ownership in any aspect of the unmodified
SCP/HLR Software. Except as provided in subsection 11.4, nothing contained
herein will be deemed to confer upon the Owner any right to license or
sublicense use of the unmodified SCP/HLR Software, or any part thereof, to third
persons. The Vendor will be entitled to license any right to use and to
sublicense modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally designates, in
writing, a specific modification or modifications to be restricted from such
licensing for a specific period of time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which are reasonably
necessary to the exercise of the Owner's rights of modification granted in this
subsection 12.5, upon mutually agreed prices, terms and conditions. The Vendor
will endeavor in subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its SCP/HLR Software to accommodate the Owner's
need to preserve compatibility between the Owner's modifications and such
Vendor-provided programs.
Nothing contained in this subsection 12.5 to the contrary
authorizes the Owner to engage any entity or person as an agent for hire to
modify the Vendor's SCP/HLR Software which entity or person (i) is substantially
and directly engaged in competition with the Vendor in manufacturing or
developing PCS systems; or (ii) does not agree in writing to recognize and
respect the Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated herein) and to
maintain the secrecy of information proprietary to the Vendor regarding the
structure and contents of the Vendor's computer programs upon terms comparable
to the Owner's undertakings to maintain the confidentiality of the Vendor's
Proprietary Information.
12.6 Right to Modify AS Software and Actiview Software. The Owner may
add to, delete from, or modify AS Software modules or menus, if available from
the Vendor. Such changes or modifications, however extensive shall not affect
the Vendor's title to the AS Software. The Owner may add to, delete from, or
modify Actiview Software modules or menus, if available from the Vendor. Such
changes or modifications, however extensive, shall not affect the Vendor's title
to the Actiview Software.
12.7 Right to Modify OTAF Software. The Vendor grants to the Owner a
personal, non-transferable, non-exclusive and royalty-free license to modify the
operations environment of the OTAF Software provided under the Contract to run
on the OTAF Equipment, solely for use by the Owner in its business of providing
telecommunications services.
Such right to modify includes the right for the Owner, its
employees and agents to modify and copy the Source Code for the operations
environment of the OTAF Software (including, but not limited to, access to the
"SCP Action Execution Library" (including IS41 Rev. B and IS41 Rev. C) of the
SCP/OTAF Software provided solely for the purposes of maintaining and enhancing
or supplementing the object code versions of such provided Software. The Owner
agrees to use the modifications to Software made in the exercise of the license
granted in this subsection 12.7 in accordance with its licensed rights in the
OTAF Software hereunder, except as otherwise provided in this subsection 12.7.
The license to modify set forth in this subsection 12.7 will be royalty-free and
without fee with respect to code implementing features or capabilities provided
within the OTAF operating environments of releases or versions of the Software
which are provided by the Vendor in accordance with or pursuant to the Annual
Release Maintenance Fees.
Intellectual property rights in modifications to the OTAF
Software by the Owner, its employers or agents for hire in the exercise of a
right of modification granted in this subsection 12.7 will vest in the Owner,
subject to the Vendor's intellectual property rights in the Vendor's proprietary
"SLL" programming language and compiler and in the Vendor's unmodified OTAF
Software. The unmodified Computer Programs provided by the Vendor, including,
but not limited to, the OTAF Software, will remain the intellectual property of
the Vendor; and nothing in this subsection 12.7 will be deemed to confer upon
the Owner ownership in any aspect of the unmodified OTAF Software. Nor will
anything herein be deemed to confer upon the Owner any right to license or
sublicense use of the unmodified OTAF Software, or any part thereof, to third
persons. The Vendor will be entitled to license any right to use and to
sublicense modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally designates, in
writing, a specific modification or modifications to be restricted from such
licensing for a specific period of time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which is reasonably
necessary to the exercise of the Owner's rights of modification granted in this
subsection 12.7, upon mutually agreed prices, terms and conditions. The Vendor
will endeavor in subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its OTAF Software to accommodate the Owner's need
to preserve compatibility between the Owner's modifications and such
Vendor-provided programs.
Nothing contained in this subsection 12.7 to the contrary
authorizes the Owner to engage any entity or person as an agent for hire to
modify the Vendor's OTAF Software which entity or person (i) is substantially
and directly engaged in competition with the Vendor in manufacturing or
developing PCS systems; or (ii) does not agree in writing to recognize and
respect the Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated herein) and to
maintain the secrecy of information proprietary to the Vendor regarding the
structure and contents of the Vendor's computer programs upon terms comparable
to the Owner's undertakings to maintain the confidentiality of the Vendor's
Proprietary Information. The right to modify OTAF Software shall not apply to
any third party manufactured or provided OTAF Software unless the Vendor owns
the rights to such third party OTAF Software. The list of third party OTAF
Software excluded from the right to modify set forth in this subsection 12.7
consists of "NewNet SS-7", "ESI-BACE", "ESIE Background", "BACE Background",
"Rogueware Tools H++", and "FairCom c-tree".
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades. (a) Equipment Upgrades will be provided to the
Owner by the Vendor at no charge to the Owner as provided in subsection 13.1(b)
below. Equipment Enhancements must be provided to the Owner by the Vendor, if
requested by the Owner, and the Owner is obligated to make payment therefor in
an amount that is no higher than that payable by any Customer other than the
Owner, which amount of payment will be adjusted as set forth in subsections 6.2,
7.2 and 27.16 Section 26. If the Vendor at any time issues an Equipment Upgrade
which is combined with any Equipment Enhancement (collectively, the "Equipment
Combined Release") to such Equipment, the Equipment Combined Release will be
provided at no charge to the Owner unless and until the Owner elects to use any
of the feature enhancement or enhancements included within the Equipment
Combined Release and has accepted such Equipment Combined Release.
(b) (i) After a PCS Product has been shipped to the Owner, if the
Vendor issues an Equipment Upgrade ("Class A change") or Equipment Enhancement
("Class B change"), or where a modification to correct an error in field
documentation is to be introduced, the Vendor will promptly notify the Owner of
such change through the Vendor's design change management system or another
Vendor notification procedure. Each change notification, whether or not it bears
a restrictive legend, will be subject to subsection 27.19, except that such
information may be reproduced by the Owner for the Owner's use as required
within the System. If the Vendor has engineered, furnished, and installed a
Product which is subject to an Equipment Upgrade, the Vendor will implement such
change, at its sole cost and expense, if it is announced within fifteen (15)
years from the date of shipment of that Product, by, at its option (subject to
the reasonable review and acceptance of the Owner at such times as the Owner
reasonably determines that it needs to review such Vendor decision), either (A)
modifying the Product at the Owner's site; (B) modifying the Product which the
Owner has returned to the Vendor in accordance with the Vendor's reasonable
instructions pursuant to and in accordance with the terms of this Contract; or
(C) replacing the Product requiring the change with a replacement Product for
which such change has already been implemented. If the Vendor has not engineered
the original Product application and accordingly office records are not
available to the Vendor, the Vendor will provide the generic change information
and associated parts for the Owner's use in implementing such change.
(ii) In any of the instances described in clause (i) above,
if the Vendor and the Owner agree that a Product or
part thereof subject to such change is readily
returnable, the Owner, at its expense, will remove and
return such Product or part to the Vendor's designated
facility within the United States and the Vendor, at
its sole expense, will implement such change (or
replace it with a Product or part for which such change
has already been implemented) at its facility and
return such changed (or replacement) Product or part at
its sole cost and expense to the Owner's designated
location within the United States. Any such
reinstallation will be performed by the Owner at its
sole expense. At any such time that the Owner's spares
or plug-in stocks are not available to implement a
rotational program for an Equipment Upgrade, the Vendor
will provide a seed stock, where feasible and
necessary.
(iii)If the Owner does not make or permit the Vendor to
make an Equipment Upgrade as stated above within one
(1) year from the date of change notification or such
other period as the Vendor may agree, subsequent
changes, repairs or replacements affected by the
failure to make such change may, at the Vendor's
option, be invoiced to the Owner whether or not such
subsequent change, repair or replacement is covered
under the warranty provided in this Contract for such
Product. If requested by the Owner, Equipment Upgrades
announced more than fifteen (15) years from the date of
shipment will be implemented at the Owner's expense.
(iv) If the Vendor issues an Equipment Enhancement after a
PCS Product has been shipped to the Owner, the Vendor
will promptly notify the Owner of such change if it is
being offered to any of the Vendor's Customers. Except
as otherwise set forth above in subsection 13.1(a),
when an Equipment Enhancement is requested by the
Owner, the pricing set for such Equipment Enhancements
will be at the Vendor's standard charges subject to the
applicable discounts set forth in this Contract and
Section 26.
(v) All change notifications for Equipment Upgrades and
Equipment Enhancements provided by the Vendor to the
Owner pursuant to the terms of this Contract must
contain the following information: (i) a detailed
description of the change; (ii) the reason for the
change; (iii) the effective date of the change; and
(iv) the implementation schedule for such change, if
appropriate.
13.2 Notice. The Vendor will give the Owner not less than ninety (90)
days prior written notice of the introduction of any Equipment Enhancement or
any Equipment Combined Release. In addition, in February and August of each year
during the Term of this Contract, the Vendor will provide the Owner with a
forecast of future Equipment Enhancements to the Equipment or Equipment Combined
Releases then currently being developed by or on behalf of the Vendor.
13.3 Installation, Testing and Acceptance. The Installation and testing
of the Equipment by the Vendor and the acceptance thereof by the Owner must be
performed in accordance with Exhibit B3 pursuant to the Project Milestones in
Exhibit A.
13.4 Equipment Fixes. In the event that any Equipment Upgrade or
Equipment Enhancement supplied by the Vendor during the Term of this Contract
has the effect of preventing the System and/or any PCS System and/or any PCS
Sub-System or any part thereof from satisfying, or performing in accordance
with, the Specifications, the System Standards and/or Exhibit F or otherwise
adversely affects the functionality, interoperability or features of the System,
any such PCS System or PCS Sub-System or any part thereof, then the Vendor will
without any charge to the Owner promptly retrofit or take such other corrective
action as may be necessary to assure that the System, any such PCS System or PCS
Sub-System or any such affected part, as modified to include each such Equipment
Upgrade and Equipment Enhancement, will satisfy, and perform in accordance with,
the Specifications, the System Standards and/or Exhibit F and restore all
pre-existing functionality and features as well as provide any features and
functionality provided by any of the foregoing modifications.
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property. The Vendor grants the Owner rights to state
that it is using the Vendor's Products or Services in the Owner's marketing,
advertising or promotion of the System, any PCS System, any PCS Sub-System or
any part thereof. The Owner has the right to use for such marketing, advertising
or promotion the Vendor's advertising and marketing materials (including
pamphlets and brochures) provided to the Owner by the Vendor describing the
System, any PCS System, any PCS Sub-System or any part thereof, or any Product.
Other than as set forth in this subsection 14.1, the Owner has the right to use
the trademarks and service marks of the Vendor or its assignee in the Owner's
marketing, advertising and promotion of the System, any PCS System, any PCS
Sub-System or any part thereof only with the written consent of the Vendor not
to be unreasonably withheld subject to and in accordance with the terms of
subsection 27.13.
14.2 Infringement. (a) The Vendor agrees that it will defend, at its
own expense, all suits and claims against the Owner for infringement or
violation (whether by use, sale or otherwise) in the United States of any
patent, trademark, copyright, trade secret or other intellectual property rights
of any third party (collectively, "Intellectual Property Rights"), covering, or
alleged to cover, the Equipment, Software, the System and/or any PCS System, any
PCS Sub-System or any component thereof for its intended use, in the form
furnished or as subsequently modified by the Vendor or as otherwise modified by
the Owner pursuant to the direction or approval of the Vendor. The Vendor agrees
that it will pay all sums, including, without limitation, attorneys' fees and
other costs, which, by final judgment or decree, or in settlement of any suit or
claim to which the Vendor agrees, may be assessed against the Owner on account
of such infringement or violation, provided that:
(i) the Vendor will be given prompt written
notice of all claims of any such infringement or
violation and of any suits or claims brought or
threatened against the Owner or the Vendor of which
the Owner has actual knowledge;
(ii) the Vendor will be given full authority
to assume control of the defense (including appeals)
thereof through its own counsel at its sole expense
and will have the sole right to settle any suits or
claims without the consent of the Owner; provided
that the Vendor will have no right to agree to
injunctive relief against the Owner; provided further
that the Vendor will notify the Owner of any proposed
settlement condition prior to the Vendor's acceptance
of such settlement; and
(iii) the Owner will cooperate fully with
the Vendor in the defense of such suit or claims and
provide the Vendor, at the Vendor's expense, such
assistance as the Vendor may reasonably require in
connection therewith.
(b) The Vendor's obligation under this subsection 14.2 will not extend
to alleged infringements or violations that arise because the Products provided
by the Vendor are used in combination with other products furnished by third
parties and where any such combination was not installed, recommended, approved,
explicitly or by implication, by the Vendor.
14.3 Vendor's Obligation to Cure. If in any such suit so defended, all
or any part of the Equipment, Software, the System, any PCS System, any PCS
Sub-System or any component thereof is held to constitute an infringement or
violation of Intellectual Property Rights and its use is enjoined, or if in
respect of any claim of infringement or violation the Vendor deems it advisable
to do so, the Vendor will at its sole cost, expense and option take one or more
of the following actions: (i) procure the right to continue the use of the same
without interruption for the Owner; (ii) subject to the terms of subsection 2.17
replace the same with noninfringing Equipment or Software that meets the
Specifications; or (iii) modify said Equipment, Software, the System, any PCS
System, any PCS Sub-System or any component thereof so as to be noninfringing,
provided that the Equipment, Software, the System, any PCS System, any PCS
Sub-System or any component thereof as modified meets all of the Specifications.
In the event that the Vendor is not able to cure the infringement pursuant to
clause (i), (ii) or (iii) in the immediately preceding sentence, the Vendor will
refund to the Owner the full purchase price paid by the Owner for such
infringing Product or feature, and the Owner will be under no obligation to
return to the Vendor such infringing Product or feature regardless of whether,
or by what means, the Owner, on its own or otherwise, subsequently cures such
infringement.
14.4 Vendor's Obligations. The Vendor's obligations under this Section
14 will not apply to any infringement or violation of Intellectual Property
Rights to the extent caused by modification of the Equipment, Software, the
System, any PCS System, any PCS Sub-System or any component thereof by the
Owner, or any infringement caused solely by the Owner's use and maintenance of
the Products other than in accordance with the Specifications and the purposes
contemplated by this Contract, except as expressly authorized or permitted by
the Vendor. The Owner will indemnify the Vendor against all liabilities and
costs, including reasonable attorneys' fees, for defense and settlement of any
and all claims against the Vendor for infringements or violations based upon
this subsection 14.4.
14.5 License to Use Vendor Patents. (a) The Vendor grants to the Owner
and its Affiliates, under patents which the Vendor owns or has a right to
license ("Vendor Patents"), a worldwide, royalty-free, nonexclusive license (the
"Patent License") to use any Product furnished by the Vendor under this Contract
(including any combination of products and services, whether or not furnished at
the same time or as part of a larger combination) for provision of
telecommunications services; provided, however, that no rights are conveyed to
the Owner and its Affiliates with respect to any invention which is directed to
(i) a combination of a Product or Products furnished with any other Item which
the Vendor does not furnish to the Owner under this Contract wholly or in part
for such use, or (ii) a method or process which is other than an inherent use of
the Products furnished. As used in this subsection 14.5, the term "inherent use"
means a use that can be completely performed by a Product furnished by the
Vendor (or a combination of Products furnished by the Vendor), without the need
for any additional product, service, development modification or programming by
the Owner and its Affiliates or by a third party.
(b) The Owner and any successor to the Owner's title in the Products
has the right (subject to written approval of the Vendor, which approval will
not be unreasonably withheld), to assign the Patent Licenses to any other Person
who acquires legal title to the Products including, but not limited to, any
Person or Persons taking part in the financing of any part of the Nationwide
Network, provided that no such assignment to Persons taking part in the
financing of any part of the Nationwide Network will be permitted except in
accordance with the provisions of subsection 27.4 of this Contract. Nothing
contained in this subsection 14.5 is intended to, and shall not, limit any
rights or privileges that the Owner has under this Contract or otherwise under
Applicable Law.
SECTION 15 DELAY
15.1 Liquidated Damages. The Parties agree that damages for delay are
difficult to calculate accurately and, therefore, agree that liquidated damages
(the "Liquidated Damages") will be paid for non-performance or late performance
of the Vendor's obligations under this Contract pursuant to the terms hereof.
15.2 Interim Delay. (a) Failure of the Vendor to complete the Work
necessary to achieve each of the Project Milestones applicable to any PCS System
and/or any PCS Sub-System, as the case may be (other than Milestone 3 (as set
forth on Exhibit A1)), on or before the date applicable to such Milestone for
such PCS System or PCS Sub-System, as the case may be, that is required to be
achieved by the Vendor prior to the Guaranteed Substantial Completion Date for
such PCS System or PCS Sub-System (each an "Interim Milestone") will result in
the Vendor being liable to pay to the Owner an amount equal to [__________];
provided that no such Interim Delay Penalty will be due if the delay is directly
and expressly attributable solely to (i) an event constituting a Force Majeure
pursuant to the terms of this Contract or (ii) an act or omission of the Owner.
Interim Delay Penalties accrued pursuant to this subsection 15.2(a) will be
offset against the payment to be made by the Owner to the Vendor upon
Substantial Completion of the PCS System or PCS Sub-System to which such interim
delay relates. The Interim Delay Penalty applicable to Milestone 4 (as set forth
on Exhibit A1) will be [__________]. This subsection 15.2 will not be applicable
to Milestone 3 (as set forth on Exhibit A1) for either the System or any PCS
System or any PCS Sub-System.
(b) To the extent that the Vendor is responsible for Interim Delay
Penalties pursuant to subsection 15.2(a) such penalties will be credited back to
the Vendor by the Owner to the extent that (i) the Vendor successfully achieves
the Interim Milestone subject to delay within thirty (30) days of the date
scheduled therefore pursuant to the terms hereof and Exhibit A and (ii) such
interim delay does not otherwise materially adversely affect the Owner, such PCS
System or PCS Sub-System and/or the System as a whole. Any such reimbursement
will be credited back to the Vendor such that the Interim Delay Penalty
otherwise offset against the relevant Substantial Completion payment in
accordance with subsection 15.2(a) above will be added back to such Substantial
Completion payment to be made to the Vendor by the Owner.
15.3 Completion Delay. (a) For each day that any PCS System and/or any
PCS Sub-System, as the case may be, fails to [__________], the Vendor will pay,
subject to the limitations otherwise set forth in this subsection 15.3, an
amount equal to [_____________] percent of the Product Contract Price applicable
to such PCS System or PCS Sub-System, as the case may be, [_________]. In no
event will the Late Completion Payments payable by the Vendor with respect to
any PCS System or such PCS Sub-System, as the case may be, exceed [___________].
(b) If any PCS System or any PCS Sub-System does not achieve
Substantial Completion by the Guaranteed Substantial Completion Date applicable
thereto but the Owner nonetheless chooses (in its sole discretion) to commence
In Revenue Service in such incomplete PCS System or incomplete PCS Sub-System,
as the case may be (such action in no way constituting the Owner's acceptance,
express or implied, of the System or such PCS System or such PCS Sub-System or
any part thereof), then the Vendor will be required to pay, on a daily basis,
only that percentage of the daily Late Completion Payment equal to that
percentage of the geographic area to be otherwise covered by such PCS System or
PCS Sub-System, as the case may be, not otherwise placed In Revenue Service by
the Owner.
(c) In the event of a change in the Product Contract Price pursuant to
subsections 6.2, 7.2 or 27.16 or Section 26 during the Term of this Contract
from the amount originally set forth in this Contract pursuant to Section 6 the
per diem amount of Late Completion Payments set forth above will be increased or
decreased, as appropriate, by an amount equal to the increase or decrease in the
Owner's per diem interest payment obligation resulting from any change in the
amount of debt incurred or to be incurred by the Owner related to such change in
the Product Contract Price.
(d) Late Completion Payments, including any portions of such payments
payable in accordance with paragraphs (a) and (b) above, will be accrued during
the Completion Cure Period and offset against payments otherwise due to the
Vendor upon the achievement of Substantial Completion pursuant to the terms of
subsection 6.3. If the Vendor fails to achieve Substantial Completion within
sixty (60) days of the Guaranteed Substantial Completion Date for any reason
other than primarily because of (i) a Force Majeure event pursuant to Section 16
or (ii) the direct and explicit act or omission of the Owner, then the Owner
will have the option to terminate this Contract with respect to the PCS System
and/or the PCS Sub-System, as the case may be, affected by any such delay
without any penalty or payment obligation (other than payment obligations under
this Contract outstanding as of the date of any such termination; provided that
any such amounts payable by the Owner will not include any amounts that would
have been payable to the Vendor only upon Substantial Completion or Final
Acceptance); provided further that in the event the Vendor fails to achieve
Substantial Completion within such sixty (60) day period in any combination of
two (2) PCS Systems and/or PCS Sub-Systems within the Initial System over any
period of time (regardless of whether such events are concurrent or whether the
first such event was subsequently cured) the Owner will have the right, but not
the obligation, to terminate this Contract in its entirety.
15.4 SCP/HLR Delay. (a) Failure of the Vendor to properly deliver,
install and test any of the SCP/HLR Products at the then existing HLR Designated
Switch Sites in accordance with the SCP/HLR Specifications and the milestones
set forth therein applicable to SCP/HLR Products by the HLR Completion Dates
will result in the Vendor being liable to pay to the Owner contract cover
damages (the "Contract Cover Damages") equal to any and all reasonable and
actual increased costs and expenses including, but not limited to, increased
costs and expenses associated with network modifications, extra equipment,
software or training or re-engineering incurred by the Owner due to the Vendor's
failure to deliver, install and test the SCP/HLR Products by the HLR Completion
Dates in accordance with SCP/HLR Specifications and the HLR Statement of Work.
15.5 AM/HLR Interim Solution. In order to meet the Owner's projected
service date the Vendor will provide to the Owner, [_____________], and at the
Owner's then existing HLR Designated Switch Sites, AM/HLRs pursuant to and in
accordance with the AM/HLR Specifications and the HLR Statement of Work as an
interim solution so that the Nationwide Network may operate in accordance with
the Specifications; provided that the Vendor will continue to use its best
efforts, [______________] (but with all reasonable cooperation from the Owner),
to replace such interim AM/HLR solution with a comprehensive SCP/HLR system in
accordance with the SCP/HLR Specifications and the HLR Statement of Work.
15.6 AM/HLR Redeployment. After acceptance of the SCP/HLRs, the Owner
will, at the Owner's sole discretion, have the Vendor redeploy the AM/HLRs as
Access Managers to other sites within the System at the Vendor's sole cost and
expense for any and all costs associated with such redeployment, including
removal, transportation, and delivery but not installation or the cost of such
Access Manager; provided that if the Access Manager is not moved to another
location but redeployed in the same location in a separate function or for a
separate MSC, the Owner will only be liable for the cost of the Access Manager
and the Vendor will be responsible for all other costs. All payments, if any,
for redeployed AM/HLRs will be made by the Owner pursuant to subsections
6.3(a)-(d); provided that in the event that any such redeployment is to a PCS
System which has already achieved Substantial Completion then the payment terms
of subsection 6.3.1 will apply.
15.7 SCP/HLR Delay Termination. If after thirty (30) days after the HLR
Completion Dates the Vendor is still unable to satisfactorily complete the Final
Acceptance Tests applicable to the SCP/HLRs and/or any of the SCP/HLR Products
to be delivered in accordance with the terms of this Contract (including, but
not limited to, the SCP/HLR Specifications) the Owner will have the right (in
addition to any rights under subsection 15.4 above), but not the obligation, to
terminate the Contract only with respect to the SCP/HLR Products and will have
the right to seek from the Vendor reimbursement for any of its reasonable and
actual increased costs associated with acquiring reasonable replacement SCP/HLR
Products from a third-party supplier. The remedies set forth in subsections
15.4, 15.5 and 15.7 will be the Owner's sole and exclusive remedies in the event
the Owner chooses to terminate the delivery of SCP/HLR Products pursuant to the
terms of this subsection 15.7.
15.8 AS Software Delay. With respect to the AS Products and Services,
in the event the Vendor fails to deliver any such AS Statement of Work compliant
AS Products and/or AS Services within seven (7) days (except as provided below,
the "AS Delay Grace Period") of the applicable dates for delivery set forth in
Appendix G, the Vendor will (to the extent the Owner will not have cancelled the
applicable order therefor pursuant to the terms of the Contract) credit to the
Owner (in the form of purchase credits for any Vendor Products including, but
not limited to, AS Products) as liquidated damages for such late performance for
each of the first thirty (30) days beyond such AS Delay Grace Period, an amount
equal to [____________] percent per day (for such [________] day period) of the
total price of such undelivered or unsatisfactory AS Products or AS Services;
provided that upon the timely AS Functional Acceptance (on the dates originally
scheduled for such AS Functional Acceptance) of any such AS Products and/or AS
Services, any delay penalties accrued therefor shall be forgiven; and provided
further for AS Software "release 0.1" (as defined in Appendix G) the AS Delay
Grace Period will be [________] days from the delivery dates set forth in
Appendix G for the delivery of such AS Software release 0.1.
15.9 OTAF and/or Actiview Delay Termination. If after thirty (30) days
after the OTAF Completion Dates the Vendor is still unable to satisfactorily
complete the OTAF Final Acceptance Tests and/or any of the OTAF Products and/or
Services to be delivered in accordance with the terms of this Contract
(including, but not limited to, the OTAF Statement of Work) the Owner will have
the right, but not the obligation, to terminate the Contract only with respect
to the OTAF Products and/or Services and will have the right to seek from the
Vendor reimbursement for any of its reasonable and actual increased costs
associated with acquiring reasonable replacement OTAF Products and/or Services
from a third-party supplier. If after thirty (30) days after the Actiview
Completion Dates the Vendor is still unable to satisfactorily complete the
Actiview Final Acceptance Tests and/or any of the Actiview Products and/or
Services to be delivered in accordance with the terms of this Contract
(including, but not limited to, the Actiview Statement of Work) the Owner will
have the right, but not the obligation, to terminate the Contract only with
respect to the Actiview Products and/or Services and will have the right to seek
from the Vendor reimbursement for any of its reasonable and actual increased
costs associated with acquiring reasonable replacement Actiview Products and/or
Services from a third-party supplier. Pursuant to and in accordance with the
Actiview Statement of Work, the Owner will be responsible for the timely
furnishing of the Actiview operations environment, which includes delivery,
installation and testing of third party equipment and third party software
applicable and necessary for the operation of the Actiview Software. The Parties
understand and agree that the dates set forth in Section 12 of Appendix M for
the delivery of SCP/OTAF Products and Services are subject to modification
pursuant to the mutual good faith agreement between the Parties on or before
October 14, 1996; provided, that, the Vendor agrees that the delivery dates for
SCP/OTAF Products and Services will in no event be modified to be more than
forty-five (45) days beyond the dates for such deliveries set forth in Section
12 of Appendix M as of the Effective Date.
15.10 OTAF and/or Actiview Delay. (a) (i) With respect to the
SPARC/OTAF Products (other than any OTAF Maintenance and Instruction Manuals or
OTAF Operating Manuals) and SPARC/OTAF Services, in the event the Vendor fails
to deliver any such OTAF Statement of Work compliant SPARC/OTAF Products and/or
Services within seven (7) days (the "OTAF Delay Grace Period") of the applicable
dates for delivery set forth in the OTAF Statement of Work, the Vendor will (to
the extent the Owner will not have cancelled the applicable order therefor
pursuant to the terms of the Contract) credit to the Owner (in the form of
purchase credits for any Vendor Products including, but not limited to, OTAF
Products) as liquidated damages for such late performance for each of the first
[________] days beyond such OTAF Delay Grace Period, an amount equal to
[__________] percent per day (for such [_________] day period) of the OTAF
Price; provided that upon the timely SPARC/OTAF Field Acceptance (on the dates
originally scheduled for such SPARC/OTAF Field Acceptance) of any such
SPARC/OTAF Products and/or SPARC/OTAF Services, any delay penalties accrued
therefor shall be forgiven. (ii) With respect to the SCP/OTAF Products (other
than any OTAF Maintenance and Instruction Manuals or OTAF Operating Manuals) and
Services, in the event the Vendor fails to deliver any such OTAF Statement of
Work compliant SCP/OTAF Products (other than any OTAF Maintenance and
Instruction Manuals or OTAF Operating Manuals) or Services within seven (7) days
of the applicable dates for delivery set forth in the OTAF Statement of Work,
the Vendor will (to the extent the Owner will not have cancelled the applicable
order therefor pursuant to the terms of the Contract) credit to the Owner (in
the form of purchase credits for any Vendor Products including, but not limited
to, OTAF Products) as liquidated damages for such late performance for each of
the first [_________] days beyond such OTAF Delay Grace Period, an amount equal
to [___________] percent per day (for such [_________] day period) of the OTAF
Price; provided that upon the timely SCP/OTAF Field Acceptance (on the dates
originally scheduled for such SCP/OTAF Field Acceptance) of any such SCP/OTAF
Products and/or SCP/OTAF Services, any delay penalties accrued therefor shall be
forgiven.
Furthermore and in addition to any and all damages and/or
remedies available to the Owner pursuant to this Section 15, with respect to a
delay in the Specification compliant availability and installation of SCP/OTAF
Products and Services in accordance with the dates and requirements of the OTAF
Statement of Work that is in excess of thirty (30) days beyond the dates
originally scheduled for any such SCP/OTAF Products and Services availability
and installation, the Owner will be entitled to and the Vendor will provide for
the Owner's Nationwide Network, SPARC/OTAF Products and Services that are equal
in features and functionality to the SCP/OTAF Products and Services that would
have been available and installed pursuant to the OTAF Statement of Work but for
such delay in the availability and/or installation of Specification compliant
SCP/OTAF Products or Services.
(b) With respect to the Actiview Products and Actiview Services, in the
event the Vendor fails to deliver any such Actiview Statement of Work compliant
Actiview Products and/or Services within seven (7) days (the "Actiview Delay
Grace Period") of the applicable dates for delivery set forth in the Actiview
Statement of Work, the Vendor will (to the extent the Owner will not have
cancelled the applicable order therefor pursuant to the terms of the Contract)
credit to the Owner (in the form of purchase credits for any Vendor Products
including, but not limited to, Actiview Products) as liquidated damages for such
late performance for each of the first [______] days beyond such Actiview Delay
Grace Period, an amount equal to [__________] percent per day (for such
[________] day period) of the total price of such undelivered or unsatisfactory
Actiview Products or Actiview Services; provided that upon the timely Actiview
Functional Acceptance (on the dates originally scheduled for such Actiview
Functional Acceptance) of any such Actiview Products and Actiview Services, any
delay penalties accrued therefor shall be forgiven.
SECTION 16 FORCE MAJEURE
16.1 Force Majeure. (a) Either Party may make a claim for excusable
failure or delay with respect to any obligation of such Party under this
Contract, except any obligation to make payments when due. Excusable failure or
delay will be allowed only in the event of an event of Force Majeure that is
beyond the reasonable control of the affected Person. Notwithstanding the
foregoing, the Vendor will not be entitled to relief under this Section 16 to
the extent that any event otherwise constituting an event of Force Majeure
results from the negligence or fault of the Vendor or any Subcontractor, and the
Owner will not be entitled to relief under this Section 16 to the extent any
event otherwise constituting an event of Force Majeure results from the
negligence or fault of the Owner.
(b) The Party claiming the benefit of excusable delay hereunder must
(i) promptly notify the other Party of the circumstances creating the failure or
delay and provide a statement of the impact of such Party failure or delay and
(ii) use reasonable efforts to avoid or remove such causes of nonperformance,
excusable failure or delay. If an event of Force Majeure prevents the Vendor
from performing its obligations under this Contract for a period exceeding sixty
(60) days, the Owner may, upon prior written notice to the Vendor, terminate
this Contract.
(c) The Party not claiming the benefit of excusable delay hereunder
will likewise be excused from performance of its obligations hereunder on a
day-for-day basis to the extent such Party's obligations are affected due to the
other Party's delayed performance.
(d) In the event of a Force Majeure which the Party claiming relief for
such event has used all best efforts to resolve in accordance with the terms of
this Contract, upon the written request of either Party, the other Party will in
good faith negotiate modifications, to the extent reasonable and necessary, in
scheduling and performance criteria in order to reasonably address the impact of
such Force Majeure.
SECTION 17 WARRANTIES
17.1 Product Warranty. (a) The Vendor warrants that, for a period of
two (2) years from the date of Final Acceptance of any PCS System and/or PCS
Sub-System, as the case may be (the "Product Warranty Period"), all Products and
all of the Installation and the Configuration Engineering thereof within such
PCS System and/or PCS Sub-System, as the case may be, will materially conform
with and perform the functions set forth in the Specifications and the relevant
performance criteria set forth in Exhibit D, to the extent applicable, and will
be free from Defects and Deficiencies in material or workmanship which impair
service to subscribers, System performance, billing, administration and/or
maintenance. In the case of Software, the Product Warranty Period applicable to
any such Software will be automatically extended upon, and simultaneous with,
any Software Upgrade issued pursuant to the terms of Section 12. The Vendor will
assign to the Owner all outstanding Subcontractor warranties attributable to
Non-Essential Equipment at such time that the Vendor's warranty on such
Non-Essential Equipment pursuant to this subsection 17.1 expires pursuant to and
in accordance with the Product Warranty Period applicable to such Item of
Non-Essential Equipment. The Warranty Period for a PCS Product or part thereof
repaired or provided as a replacement under this Product warranty is six (6)
months or the unexpired term of the new Product Warranty Period applicable to
the repaired or replaced PCS Product or part, whichever is longer.
(b) To the extent the Owner orders additional Products from the Vendor
in accordance with the terms of this Contract including, but not limited to,
subsections 2.2 and/or 7.2, any such Products so ordered by the Owner and
delivered and installed by the Vendor or its Subcontractors will be warranted to
the same extent as set forth in clause (a) above for a period of not less than
twenty four (24) months from the earlier of (i) the date the Owner puts such
additional Products into In Revenue Service, (ii) the date of the Owner's
acceptance and (iii) thirty (30) days after the Vendor completes the
installation of such additional Products. If in the event, pursuant to the
Owner's order for such additional Products the Vendor is not required to install
such additional Products, the warranty on such additional products will run
twenty-four (24) months from the date the Vendor shipped such products to the
Owner.
17.1.1 AS Products Warranty. Notwithstanding anything stated
herein to the contrary, for the AS Products provided hereunder, the Vendor
warrants that, from the date of AS Final Acceptance of the installation and
Engineering thereof, the AS Products will materially conform with and perform
the functions set forth in the AS Statement of Work, to the extent applicable,
and will be free from Defects and Deficiencies for a warranty period (each as
applicable, an "AS Product Warranty Period") of (i) in the case of AS Software,
ninety (90) days and (ii) in the case of AS Equipment, one (1) year. In the case
of AS Software, the AS Product Warranty Period applicable to any such AS
Software will be automatically extended for a new ninety (90) day period
commencing on the date of the completion of any applicable Software Upgrade
and/or Software Enhancement upon, and simultaneous with, any Software Upgrade
and/or Software Enhancement issued pursuant to the terms of Section 12. To the
extent the Owner orders additional AS Products not otherwise covered pursuant to
Appendix G from the Vendor in accordance with the terms of this Contract, any
such AS Products so ordered by the Owner and delivered and installed by the
Vendor or its Subcontractors will be warranted to the same extent as set forth
above, from the earlier of (i) the date the Owner puts such additional AS
Products into In Revenue Service, (ii) the date of the Owner's acceptance of
such additional AS Products and (iii) thirty (30) days after the Vendor
completes the installation of such additional AS Products.
17.1.2 OTAF Products Warranty. Notwithstanding anything stated
herein to the contrary, for the OTAF Products provided hereunder, the Vendor
warrants that, from the date of OTAF Final Acceptance, the OTAF Products will
materially conform with and perform the functions set forth in the OTAF
Statement of Work, to the extent applicable, and will be free from Defects and
Deficiencies in material or workmanship which impair service to subscribers
and/or System performance, administration and/or maintenance for a warranty
period (each as applicable, an "OTAF Product Warranty Period") of (c) in the
case of OTAF Software, ninety (90) days and (d) in the case of OTAF Equipment,
one (1) year. In the case of OTAF Software, the OTAF Product Warranty Period
applicable to any such OTAF Software will be automatically extended for a new
ninety (90) day period commencing on the date of the completion of any
applicable Software Upgrade and/or Software Enhancement applicable to such OTAF
Software upon, and simultaneous with, any Software Upgrade and/or Software
Enhancement applicable to such OTAF Software issued pursuant to the terms of
Section 12.
17.1.3 Actiview Products Warranty. Notwithstanding anything
stated herein to the contrary, for the Actiview Products provided hereunder, the
Vendor warrants that, from the date of Actiview Final Acceptance, the Actiview
Products will materially conform with and perform the functions set forth in the
Actiview Statement of Work, to the extent applicable, and will be free from
Defects and Deficiencies in material or workmanship which impair service to
subscribers and/or System performance, administration and/or maintenance for a
warranty period (each as applicable, an "Actiview Product Warranty Period") of
ninety (90) days from the date of such Actiview Final Acceptance. The Actiview
Product Warranty Period applicable to Actiview Software will be automatically
extended for a new ninety (90) day period commencing on the date of the
completion of any applicable Software Upgrade and/or Software Enhancement
applicable to such Actiview Software upon, and simultaneous with, any Software
Upgrade and/or Software Enhancement applicable to such Actiview Software issued
pursuant to the terms of Section 12. To the extent the Owner orders additional
Actiview Software not otherwise covered pursuant to Appendix U from the Vendor
in accordance with the terms of this Contract, any such additional Actiview
Software so ordered by the Owner and delivered and installed by the Vendor or
its Subcontractors will be warranted to the same extent as set forth above, from
the earlier of (i) the date of the Owner puts such additional Actiview Software
into In Revenue Service, (ii) the date of the Owner's acceptance of such
additional Actiview Software and (iii) thirty (30) days after the Vendor
completes the installation of such additional Actiview Software.
17.2 Services Warranty (a) The Vendor warrants that, for a period of
not less than three (3) years from the date of completion of RF Engineering done
by the Vendor or its Subcontractors (but in no event earlier than the
achievement of Milestone 5 in such PCS System or PCS Sub-System) in any given
PCS System or PCS Sub-System, as the case may be (the "RF Services Warranty
Period"), the Final Site Count within and the Final RF Design applicable to such
PCS System or PCS Sub-System, as the case may be, will be accurate based upon
the environmental circumstances in such PCS System or PCS Sub-System, as the
case may be, as they existed at the time of the Final Acceptance of such PCS
System or PCS Sub-System, as the case may be, provided that the projections of
subscriber growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially exceeded or
the applicable and relevant industry standards have not materially changed; and
provided further that in no event will the RF Engineering warranty pursuant to
this subsection 17.2(a) cover or warrant items or performance otherwise covered
or warranted pursuant to subsection 17.3 below.
(b) The Vendor warrants that, for a period of not less than two (2)
years from the date of completion of Facilities Preparation Services within any
PCS System or PCS Sub-System, as the case may be, but in no event later than the
achievement of Milestone 8 pursuant to Exhibit A1 in such PCS System or PCS
Sub-System, as the case may be (provided that in the event of a Microwave Delay
Period in such PCS System or PCS Sub-System, as the case may be, pursuant to
subsection 2.38, the commencement of the Facilities Preparation Services
Warranty Period will not be later than three (3) months from the date the Vendor
would have otherwise been able to commence Substantial Completion testing in
such PCS System or PCS Sub-System, as the case may be, in accordance with
Exhibit B3 and Milestone 8 as set forth on Exhibit A1 but for the existence of
such Microwave Delay Period) (the "Facilities Preparation Services Warranty
Period" and collectively with the RF Services Warranty Period, the "Services
Warranty Periods"), such Facilities Preparation Services will be (i) operational
in accordance with the Specifications, (ii) in compliance with all material
Applicable Laws and material Applicable Permits in effect at the time of the
completion of such Facilities Preparation Services in such PCS System or PCS
Sub-System, as the case may be, and (iii) free from Defects or Deficiencies.
(c) The Vendor warrants that, for a period of six (6) months from the
date of completion, with respect to other Services performed by the Vendor and
not otherwise covered elsewhere in this Section 17, including, but not limited
to, repair Services, such other Service(s) will be free from Defects or
Deficiencies for which the Vendor is responsible pursuant to the terms of this
Contract.
17.3 System Warranty. The Vendor warrants that, for a period ending
three (3) years from the Final Acceptance of the last PCS System within the
Initial System (the "System Warranty Period"), the ongoing performance of each
PCS System together with all other PCS Systems and PCS Sub-Systems within the
System will conform with and perform to the performance criteria set forth on
Exhibit F as of the date of the Final Acceptance of such PCS System based on the
circumstances within such PCS System on such date. The System warranty pursuant
to this subsection 17.3 will be limited to the extent that the projections of
subscriber growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially exceeded or
the applicable and relevant industry standards have not materially changed.
17.4 Breach of Warranties. (a) In the event of any breach of any of the
Warranties during any of the applicable Warranty Periods set forth in
subsections 17.1(a), 17.2(a), 17.2(b), 17.2(c) and 17.3, the Vendor will, in
accordance with the terms of this Section 17, promptly repair or replace the
defective or nonconforming Product or otherwise cure any Defects and
Deficiencies so that each PCS Sub-System and each PCS System and the System as a
whole will perform in accordance with the Specifications and Exhibit F. If the
Vendor fails to promptly repair, replace and/or cure such defect, the Owner may,
in addition to exercising any other remedies available to it, itself cause such
repair, replacement and/or cure, at its option and at the sole cost and expense
of the Vendor.
(b) The Vendor recognizes that the Owner may suffer injury and may be
damaged in an amount which will be difficult to determine with certainty as a
result of Outages resulting from causes attributable to the failure of the
Vendor's Products and/or Services to perform in accordance with the
Specifications. As used herein, "Outage" means an unscheduled loss of
functionality of the System, any PCS System or any PCS Sub-System due to the
failures of PCS Products or any combination thereof defined as the loss of the
capability to originate or terminate [___________] percent or more of the active
voice channels then in service within the System or such PCS System and/or PCS
Sub-System for a period of time exceeding [_____] minutes.
(c) During the System Warranty Period, the Vendor will be liable to the
Owner for damages (the "Warranty Damages") for Outages (for other than in the
Test-bed Laboratory) that result from (i) the failure of the Vendor's Equipment
and/or Software to perform in accordance with the Specifications, (ii) the
failure of the Vendor to provide Services in accordance with the Specifications
applicable thereto, (iii) a Vendor procedural error or (iv) inaccurate Technical
Documentation, excluding marketing bulletins, sales literature or other
promotional materials provided by the Vendor to the Owner. As used herein,
"Vendor procedural error" means an error or improper deviation from the Vendor's
or its Subcontractors' procedures by, or attributable to, the Vendor's
personnel. Warranty Damages will be calculated based upon
[______________]dollars for each Outage occurring in any given PCS System to the
extent such Outage exceeds [__________] from the time the Owner notified the
Vendor of such Outage (not including such [__________]), plus [___________]
dollars per minute for [___________] the duration of the Outage exceeds
[___________] from the time the Owner notifies the Vendor of such Outage (not
including such [__________]). In the event any Outage is specific only to a PCS
Sub-System and not any other portion of the PCS System of which such PCS
Sub-System is a part (each a "PCS Sub-System Specific Outage"), then the amount
of the Warranty Damages payable to the Owner for any such PCS Sub-System Outage
pursuant to the terms of this subsection 17.4(c) will be calculated by
multiplying the applicable amounts set forth in this subsection 17.4(c) by the
percentage equal to the Contract Price for such PCS Sub-System divided by the
Contract Price for the entire PCS System of which such PCS Sub-System is a part
(for each PCS Sub-System, the "PCS Sub-System Percentage"). [______________].
(d) In no event will the Vendor's liability for Warranty Damages
pursuant to this subsection 17.4 exceed [___________] dollars with respect to
each Outage in any given PCS System; provided that the Warranty Damages cap
applicable to each PCS Sub-System Specific Outage will be [___________] dollars
multiplied by the applicable PCS Sub-System Percentage. In addition, the
Vendor's total liability for Warranty Damages pursuant to this subsection 17.4
will not exceed [___________] dollars per calendar year during the Term of this
Contract with respect to Outages in any given PCS System per calendar year;
provided that the annual Warranty Damages cap applicable to each PCS Sub-System
for all PCS Sub-System Specific Outages in each such PCS Sub-System will not
exceed [___________] dollars multiplied by the applicable PCS Sub-System
Percentage.
(e) Notwithstanding the foregoing, the Vendor will have no liability
pursuant to this subsection 17.4 for:
(i) Outages caused by a Force Majeure event
as described in Section 16 other than to the extent
that any of the Vendor's Products and/or Services
resulting in such Outages should, in accordance with
the Specifications be able to withstand any such
Force Majeure event;
(ii) Outages resulting from a scheduled
activity, including, but not limited to, System
maintenance or loading of Software or Equipment
Upgrades, Enhancements or Combined Releases, unless
said Outage (without fault of the Owner) extends
beyond the expected downtime, as provided in the
Specifications applicable thereto, associated with
such Equipment or Software maintenance Upgrades,
Enhancements or Combined Releases;
(iii) alterations by the Owner and/or the
Vendor at the Owner's request or otherwise pursuant
to the terms of this Contract to the System and/or
any PCS System and/or any PCS Sub-System, excluding
normal maintenance or parameter changes as prescribed
by the applicable Technical Documentation;
(iv) Outages resulting from the Owner's, its
subcontractors' or any third party's (if such third
party is employed by the Owner) failure to follow the
Technical Documentation;
(v) Outages resulting from the negligence,
gross negligence or willful misconduct of the Owner,
or any of its employees, agents or contractors or any
other third party (other than any Subcontractor or
any employees, representatives or agents of the
Vendor); or
(vi) Outages resulting from failure of
equipment or software not supplied by the Vendor or
any Subcontractors or from the performance of
services not performed by the Vendor or any
Subcontractors; or
(vii) Outages caused by the Owner's
deactivation of the System or any portion thereof,
unless the deactivation is undertaken in avoidance of
an unplanned outage; or
(viii) Outages caused by the failure of the
Network Interconnection facilities.
(f) On or before the beginning of each quarter of each calendar year
during the Term of this Contract, the Owner will provide the Vendor a written
report summarizing any Outages occurring during the previous calendar quarter.
The amount of any Warranty Damages will be determined by the Owner as of the end
of the fourth quarter of each calendar year during the Term, for the preceding
four quarterly reporting periods during such Term. The Owner will notify the
Vendor of any such Warranty Damages in writing. Such Damages will be payable in
credits on future purchases under this Contract or otherwise if this Contract is
terminated for any reason within thirty (30) days of the occurrence. Any
disputes regarding the determination of the cause of an Outage or the amount of
any such Warranty Damages will be resolved in accordance with the provisions of
Section 23.
17.5 Repair and Return. (a) If the Owner claims a breach of warranty
under subsections 17.1, 17.2 or 17.3, it must notify the Vendor of the claimed
breach within a reasonable time after its determination that a breach has in
fact occurred. The Owner will allow the Vendor to inspect the Products, the
Services or the System, as the case may be, on-site, or, upon the Vendor's
reasonable request and, subject to subsection 17.5(d) below, at the Vendor's
sole expense: (i) with respect to Products, return such Products to any of the
Vendor's repair facilities located in the United States and listed on Schedule
8, or (ii) with respect to Non-Essential Equipment, return such Non-Essential
Equipment to the Vendor (or to the third party manufacturer if previously
requested by the Vendor) for further return to the applicable third party
manufacturer. The Vendor or such third party manufacturer may use either new,
remanufactured, reconditioned, refurbished, or functionally equivalent Products
or parts pursuant to the terms of this Contract, including, but not limited to,
the Specifications, in the furnishing of warranty repairs or replacements under
this Contract.
(b) The Vendor agrees to commence work on all such Products,
Non-Essential Equipment, Services or any System Defect, as the case may be, or
Installation defects as soon as practicable, but the Vendor will use reasonable
efforts to commence such Work in no event later than twenty-four (24) hours
after notification of such defect, and, subject to subsections 17.5(e) and
17.5(f), the Vendor will cure such defect as promptly as practicable. During the
Product Warranty Period electronic circuit board components of Equipment or
Non-Essential Equipment, as the case may be, will be repaired or replaced by the
Vendor.
(c) Failure of the System to function to the level of the performance
warranty as set forth in subsection 17.3 will result in the obligation of the
Vendor to promptly make whatever repairs, modifications, alterations, expansions
or to take any other action of any kind, including but not limited to the
provision of additional Products and/or Services, necessary to satisfactorily
fix that portion of the System causing any failure for which the Vendor is
responsible. In the event of a breach of the warranties in Section 17 which will
be cured with the installation of additional PCS Products, the Vendor will
provide such PCS Products, together with related transportation, Installation
and optimization Services, as are reasonably required to remedy the shortfall,
at no charge to the Owner, provided that, if in order to remedy the shortfall,
the number of additional Base Stations required to cure the Vendor's breach
under these warranties is not in excess of five percent (5%) of the total number
of Base Stations in the relevant PCS System (as such "total number" is as set
forth in the Final RF Engineering Plan), the Vendor will not be obligated to pay
for the Base Stations and the installation and transportation related thereto
required to cure such breach, provided further that the Vendor will be obligated
to provide and pay for any Base Stations and the installation and transportation
related thereto in excess of any such five percent (5%) shortfall.
(d) All costs associated with (i) removing or disconnecting the
Products or the Non-Essential Equipment subject to the warranty claim pursuant
to the terms of this Section 17 from any other Products, the respective PCS
System or PCS Sub-System or any part thereof or from other equipment, any other
PCS system or any part thereof to which they are attached or connected, or (ii)
dismantling surrounding Products, the respective PCS System or PCS Sub-System or
any part thereof or any other equipment or other PCS system or any part thereof
in order to so remove or disconnect the Products or Non-Essential Equipment
subject to such warranty claim will be borne by the Vendor throughout the
applicable Warranty Period unless such Products are readily returnable to the
Vendor in which case the Owner will bear all such costs. All packaging, shipping
and freight charges incurred in connection with the return of Items to the
Vendor will be borne by the Owner. The Vendor will be responsible for packing,
shipping and freight charges for return of repaired or replacement Items to the
Owner, unless the Products or Non-Essential Equipment, as the case may be,
returned are not Defective or otherwise not covered by the Vendor's warranty
pursuant to subsection 17.1, in which case the Owner will pay for all such
charges between the Owner's point of origin and the Vendor's applicable repair
facility in the United States.
(e) For routine warranty service, the Vendor will, during the
respective Warranty Period, ship replacement or repaired Products or
Non-Essential Equipment (or components thereof) within thirty (30) days of
receipt of the Defective Equipment or Non-Essential Equipment (or components
thereof) from the Owner. In the event such replacement or repaired Products or
Non-Essential Equipment cannot be shipped within such time period, or if the
Vendor determines that due to the particular circumstances, on-site repairs or
services are required, the Vendor will undertake such repairs or replacement
services on-site within thirty (30) days of notification of the warranty Defect
by the Owner. In the event that the Vendor fails to repair or replace Defective
Products and/or Non-Essential Equipment within thirty (30) days from the Owner's
notice to the Vendor, then the Vendor will be deemed to be in breach of its
obligations pursuant to this Contract and the Owner will be entitled to receive
a refund of all amounts previously paid to the Vendor for the Defective Products
or Non-Essential Equipment, and will have no further obligation to pay
additional amounts in connection with the Defective Products or Non-Essential
Equipment. The Owner will return such Defective Products and Non-Essential
Equipment to the Vendor at the Vendor's sole cost and expense.
(f) For emergency warranty service situations, the Vendor will, during
the applicable Warranty Periods, use its best efforts to ship replacement
Products or Non-Essential Equipment (or components thereof) no later than twelve
(12) hours after notification of the warranty Defect by the Owner. The Owner
will ship the Defective Products or Non-Essential Equipment to the Vendor within
thirty (30) days of receipt of the replacement Products or Non-Essential
Equipment, as the case may be. In the event the Vendor fails to receive such
Defective Products or Non-Essential Equipment within such thirty (30) day
period, the Vendor will invoice the Owner for the replacement Products or
Non-Essential Equipment at the then-current price in effect therefor pursuant to
the terms of this Contract. If in an emergency warranty service situation, the
Owner and/or the Vendor determines that due to the particular circumstances,
on-site technical assistance is necessary, the Vendor will dispatch emergency
service personnel to the site in accordance with the terms of subsection 2.26.
For the purpose of this subsection 17.5, an emergency warranty service situation
will be deemed to exist upon the occurrence of any E1 Emergency Condition or E2
Emergency Condition. The Vendor agrees to commence work on all Equipment,
Non-Essential Equipment, Facilities Preparation Services or any System defect,
as the case may be, or Installation defects materially impairing service to
subscribers, System performance, billing, administration and/or maintenance as
soon as practicable, but in no event later than twenty-four (24) hours after
notification of such defect, and the Vendor will cure such defect as promptly as
practicable.
17.6 Technical Assistance Center. The Vendor must maintain a technical
assistance center in the United States, and during the Warranty Periods
established pursuant to subsections 17.1(a), 17.1(b), 17.2 and 17.3,
respectively, will make such support center available to the Owner twenty-four
(24) hours per day free of any additional charge to the Owner (other than
applicable Annual Release Maintenance Fees).
17.7 Scope of Warranties. Unless otherwise stated herein, the Vendor's
warranties under this Section 17 will not apply to:
17.7.1 damage or defects resulting from the negligence, gross
negligence or willful misconduct of the Owner, or any of its employees, agents
or contractors;
17.7.2 any Equipment or Software damaged by accident or
disaster, including without limitation, fire, flood, wind, water, lightning or
power failure other than to the extent that any such Equipment or Software
should in accordance with the Specifications and/or the Vendor's representations
be able to withstand any such events; or
17.7.3 non-integral items (other than any Non-Essential
Equipment otherwise covered by subsection 17.1) normally consumed in operation
or which has a normal life inherently shorter than the Warranty Periods (e.g.,
fuses, lamps, magnetic tape); or
17.7.4 damages or defects resulting directly from Other
Vendor's equipment provided that this will in no event limit the Vendor's
obligations as to Interoperability pursuant to the terms of this Contract;
17.7.5 Products which have had their serial numbers or months
and year of manufacture removed or obliterated by the Owner;
17.7.6 failures or deficiencies in BTS performance resulting
solely from changed environmental conditions, including, but not limited to, the
growth of trees and other foliage, the erection of buildings, and interference
from third party radio transmissions not otherwise engineered for by the Vendor;
or
17.7.7 Owner modifications to (i) SCP/HLR Software (including
the Platform Software in SCP/HLR Hardware) done pursuant to subsection 12.5,
(ii) Owner modifications to AS Software and/or Actiview Software done pursuant
to subsection 12.6 or (iii) Owner modifications to OTAF Software done pursuant
to subsection 12.7.
except when any such damage or defects are made, done or caused by the Vendor or
any of its Subcontractors.
17.8 Expenses. Except as otherwise provided in this Section 17, the
Owner will reimburse the Vendor for the Vendor's out-of-pocket expenses incurred
at the Owner's request in responding to and/or remedying Products, Non-Essential
Equipment, Services or any System defect, or service Deficiencies not covered by
the warranties set forth herein or otherwise covered under a separate System
maintenance agreement (subject, however, to the terms and conditions of any such
agreement) between the Vendor and the Owner.
17.9 Third Party Warranties. If the Vendor purchases or subcontracts
for the manufacture of any part of the System or the performance of any of the
Services to be provided hereunder from a third party, the warranties given to
the Vendor by such third party will inure, to the extent assigned to the Owner
pursuant to this Section 17 or permitted by law, to the benefit of the Owner,
and the Owner will have the right, at its sole discretion, to enforce such
warranties directly and/or through the Vendor. The warranties of such third
parties will be in addition to and will not, unless otherwise expressly stated
herein, be in lieu of any warranties given by the Vendor under this Contract.
17.10 Additional System Element Locations. In the event that under the
remedy provisions of this Section 17 the Vendor is required to provide
additional MSC and/or Base Stations requiring additional System Element
Locations, the Owner will be responsible for all Site Acquisition and Facilities
Preparation Services costs (other than any construction management costs or fees
which will be borne by the Vendor).
17.11 EXCLUSIVE REMEDIES. THE FOREGOING PRODUCT, SERVICES AND SYSTEM
WARRANTIES AND REMEDIES ARE EXCLUSIVE FOR THE PURPOSES OF ANY BREACH BY THE
VENDOR OF ANY SUCH WARRANTY AND ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED
WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
SECTION 18 INSURANCE
18.1 Insurance. The Vendor will maintain insurance in accordance with
the provisions set forth in Schedule 6.
SECTION 19 TAXES
19.1 Taxes. The amounts to be paid by the Owner under this Contract do
not include any state, provincial or local sales and use taxes, however
designated, which may be levied or assessed on the System, any PCS System, any
PCS Sub-System or any component thereof, including, but not limited to, the
Services. With respect to such taxes, the Owner will either furnish the Vendor
with an appropriate exemption certificate applicable thereto or pay to the
Vendor, upon presentation of invoices therefor, such amounts thereof as the
Vendor may by law be required to collect or pay; provided, however, that the
Vendor will use its best efforts to minimize the amount of any such taxes. The
Owner has no obligation to the Vendor with respect to other taxes, including,
but not limited to, those relating to franchise, net or gross income or revenue,
license, occupation, other real or personal property, and fees relating to
importation of the Products in the United States.
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity. (a) The Vendor will indemnify and hold the Owner
and its Affiliates, partners, directors, officers, agents and employees (the
"Indemnitees") harmless from and against all third party claims, demands suits,
proceedings, damages, costs, expenses, liabilities (including, without
limitation, reasonable legal fees) or causes of action (collectively,
"Liabilities") brought against or incurred by any Indemnitee for (i) injury to
persons (including physical or mental injury, libel, slander and death), or (ii)
loss or damage to any property, or (iii) violations of Applicable Laws,
Applicable Permits, codes, ordinances or regulations by the Vendor, or (iv) any
patent or trademark claims arising out of the Vendor's obligation subject to
subsection 14.2 or (v) any other liability, resulting from the acts or
omissions, negligence, error, willful misconduct or strict liability, of the
Vendor, its officers, agents, employees, or Subcontractors in the performance of
this Contract. If the Vendor and the Owner jointly cause such Liabilities, the
Parties will share the liability in proportion to their respective degree of
causal responsibility.
(b) The Vendor's obligation to indemnify under subsection 20.1(a) with
respect to any Liability will not arise unless the Owner or the Indemnitee (i)
notifies the Vendor in writing of such potential Liability, in the case of the
Owner, within a reasonable time after the Owner will receive written notice of
such Liability; provided that the lack of such notice will not affect the
Vendor's obligation hereunder (A) if the Vendor otherwise has knowledge of such
Liability and (B) unless such lack of notice is the cause of the Vendor being
unable to adequately and reasonably defend such Liability, (ii) gives the Vendor
the opportunity and authority to assume the defense of and settle such
Liability, subject to the provisions of the next two sentences, and (iii)
furnishes to the Vendor all such reasonable information and assistance available
to the Owner (or other Indemnitees) as may be reasonably requested by the Vendor
and necessary for the defense against such Liability. The Vendor will assume on
behalf of the Indemnitee and conduct with due diligence and in good faith the
defense of such Liability with counsel (including in-house counsel) reasonably
satisfactory to the Indemnitee; provided that the Indemnitee will have the right
to be represented therein by advisory counsel of its own selection and at its
own expense. If the Indemnitee will have reasonably concluded that there may be
legal defenses available to it which are different from or additional to, or
inconsistent with, those available to the Vendor, the Indemnitee will have the
right to select separate counsel reasonably satisfactory to the Vendor to
participate in the defense of such action on its own behalf at the Vendor's
expense. In the event the Vendor fails to defend any Liability as to which an
indemnity might be provided herein, then the Indemnitee may, at the Vendor's
expense, contest or settle such matter without the Vendor's consent. All
payments, losses, damages and reasonable costs and expenses incurred in
connection with such contest, payment or settlement will be to the Vendor's
account and may be deducted from any amounts due to the Vendor. The Vendor will
not settle any such Liability without consent of the Indemnitee, which consent
will not be unreasonably withheld. This indemnity is in lieu of all other
obligations of the Vendor, expressed or implied, in law or in equity, to
indemnify the Indemnitees (except pursuant to Section 14 or any other Vendor
indemnitees set forth in this Contract).
20.2 LIMITATION ON LIABILITY. EXCEPT AS PROVIDED IN SUBSECTIONS 14.2,
15.2, 15.3, 15.4, 15.5, 15.6, 15.7, 15.8, 15.9, 15.10, 17.4, 20.1, AND 20.3
HEREOF, IN NO EVENT, AS A RESULT OF BREACH OF CONTRACT OR BREACH OF WARRANTY,
WILL EITHER PARTY HERETO BE LIABLE UNDER THIS CONTRACT TO THE OTHER PARTY FOR
ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS OR REVENUES OF
SUCH PARTY, BEFORE OR AFTER ACCEPTANCE, WHETHER OR NOT SUCH DAMAGES ARE
FORESEEABLE.
20.3 Damages for Fraud or Willful Misconduct (a) The Vendor will be
responsible for all damages, including without limitation, indirect, incidental
and consequential damages, incurred by the Owner as a result of any damage or
injury caused by or resulting from the fraud or willful misconduct of the
Vendor.
(-)
(b) The Vendor will be responsible for all damages, but excluding
indirect, incidental and consequential damages, incurred by the Owner as a
result of any damages or injury caused by or resulting from the fraud, gross
negligence or willful misconduct of any of the Subcontractors related to the
performance of the Work, to the extent the Vendor would have liability therefor
under this Contract if the Vendor had engaged in such conduct.
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor. The Vendor hereby
represents and warrants to the Owner as follows:
21.1.1 Due Organization of the Vendor. The Vendor is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York and has all requisite corporate power and
authority to own and operate its business and properties and to carry on its
business as such business is now being conducted and is duly qualified to do
business in all jurisdictions in which the transaction of its business in
connection with the performance of its obligations under this Contract makes
such qualification necessary or required.
21.1.2 Due Authorization of the Vendor; Binding Obligation.
The Vendor has full corporate power and authority to execute and deliver this
Contract and to perform its obligations hereunder, and the execution, delivery
and performance of this Contract by the Vendor have been duly authorized by all
necessary corporate action on the part of the Vendor; this Contract has been
duly executed and delivered by the Vendor and is the valid and binding
obligation of the Vendor enforceable in accordance with its terms, except as
enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and (iii) provided
the remedy of specific enforcement or of injunctive relief is subject to the
discretion of the court before which any proceeding therefore may be brought.
21.1.3 Non-Contravention. The execution, delivery and
performance of this Contract by the Vendor and the consummation of the
transactions contemplated hereby do not and will not contravene the certificate
of incorporation or by-laws of the Vendor and do not and will not conflict with
or result in (i) a breach of or default under any indenture, mortgage, lease,
agreement, instrument, judgment, decree, order or ruling to which the Vendor is
a Party or by which it or any of its properties is bound or affected, or (ii) a
breach of any Applicable Law.
21.1.4 Regulatory Approvals. All authorizations by, approvals
or orders by, consents of, notices to, filings with or other acts by or in
respect of any Governmental Entity or any other Person required in connection
with the execution, delivery and performance of this Contract by the Vendor have
been obtained or will be obtained in due course.
21.1.5 Non-Infringement. The Vendor represents and warrants to
the best of its knowledge based on reasonable diligence under the circumstances
that as of the Effective Date there are no actual claims or threatened or actual
suits in connection with patents and other intellectual property matters that
would materially adversely affect the Vendor's ability to perform its
obligations under this Contract.
21.1.6 Scope. The representations and warranties of the Vendor
pursuant to this subsection 21.1 will be deemed to apply to all of the Work
performed by any Subcontractor employed by the Vendor as though the Vendor had
itself performed such Work.
21.1.7 Requisite Knowledge. The Vendor represents and warrants
that it has all requisite knowledge, know-how, skill, expertise and experience
to perform the Work in accordance with the terms of this Contract.
21.1.8 Financial Capacity. The Vendor represents and
warrants the financial, management and manufacturing capacity and capabilities
to do the Work in a timely manner in accordance with the terms of this
Contract.
21.2 Representations and Warranties of the Owner. The Owner hereby .
represents and warrants to the Vendor as follows:
21.2.1 Due Organization of the Owner. The Owner is a limited
partnership, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own and operate its
business and properties and to carry on its business as such business is now
being conducted and is duly qualified to do business in Delaware and in any
other jurisdiction in which the transaction of its business makes such
qualification necessary.
21.2.2 Due Authorization of the Owner; Binding Obligation. The
Owner has full power and authority to execute and deliver this Contract and to
perform its obligations hereunder, and the execution, delivery and performance
of this Contract by the Owner have been duly authorized by all necessary
partnership action on the part of the Owner; this Contract has been duly
executed and delivered by the Owner and is the valid and binding obligation of
the Owner enforceable in accordance with its terms, except as enforcement
thereof may be limited by or with respect to the following: (i) applicable
insolvency, moratorium, bankruptcy, fraudulent conveyance and other similar laws
of general application relating to or affecting the rights and remedies of
creditors; (ii) application of equitable principles (whether enforcement is
sought in proceedings in equity or at law); and (iii) provided the remedy of
specific enforcement or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
21.2.3 Non-Contravention. The execution, delivery and
performance of this Contract by the Owner and the consummation of the
transactions contemplated hereby do not and will not contravene the partnership
arrangements governing the conduct of the partners in the Owner and do not and
will not conflict with or result in (i) a breach of or default under any
indenture, mortgage, lease, agreement, instrument, judgment, decree, order or
ruling to which the Owner is a Party or by which it or any of its properties is
bound or affected, or (ii) a breach of any Applicable Law.
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title. Title to each Item of Equipment (but in no case Software)
will pass to the Owner upon delivery thereof by the Vendor to the System Element
Location to which each such Item belongs or such other location specifically
requested by the Owner or as otherwise mutually agreed to by the Parties. Prior
to acquiring title to the Equipment, the Owner will not cause or permit the
Equipment to be sold, leased or subjected to a lien or other encumbrance.
22.2 Risk of Loss. Risk of loss of any Products furnished to the Owner
in connection with this Contract will pass from the Vendor to the Owner upon the
completion of the Bolt-down by the Vendor of any PCS Product or at the
completion of installation of any other Product each at the appropriate System
Element Location within the given PCS System and/or PCS Sub-System provided that
the risk of loss of any such PCS System or PCS Sub-System within the System will
not pass to the Owner until such time as the Vendor is fully prepared to
commence testing for the Substantial Completion of such PCS System or PCS
Sub-System in accordance with and pursuant to Exhibit B3 and Exhibit A1;
provided, however, that the Owner will assume the risk of loss prior to such
Substantial Completion by the Vendor for any such Products damaged due to the
gross negligence or willful misconduct of the Owner (provided that the Owner
will also assume the risk of loss for its own negligence at any time after
Milestone 6 (as set forth in Exhibit A1) in each PCS System and/or PCS
Sub-System within the System). With respect to Products delivered by the Vendor
but not otherwise installed by the Vendor pursuant to and in accordance with the
terms of this Contract, risk of loss will pass to the Owner upon delivery by the
Vendor to the Owner's designated site. Until such time as risk passes to the
Owner, the Vendor will, at its sole cost and expense, remedy, repair and replace
all physical damage, loss or injury to such property; provided that, prior to
the passing of risk of loss to the Owner, any actual proceeds of its applicable
insurance payable with respect to such physical damage at such time, loss or
injury are paid to the Vendor as necessary to achieve such remedy, repair or
replacement.
22.3 AS Products Risk of Loss. Notwithstanding anything contained in
this Section 22 to the contrary, risk of loss as to AS Products will pass to the
Owner upon the delivery to the Owner's designated location.
22.4 OTAF and Actiview Products Risk of Loss. Notwithstanding anything
contained in this Section 22 to the contrary, risk of loss as to OTAF and/or
Actiview Products (as appropriate) will pass to the Owner upon delivery (and
installation to the extent applicable) thereof to the Owner's designated
location.
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution. Subject to subsection 23.4 and subsection
24.3, in the event any controversy, claim, dispute, difference or
misunderstanding arises out of or relates to this Contract, any term or
condition hereof, any of the Work to be performed hereunder or in connection
herewith, the respective System Managers of the Owner and the Vendor will meet
and negotiate in good faith in an attempt to amicably resolve such controversy,
claim, dispute, difference or misunderstanding in writing. Such System Managers
must meet for this purpose within ten (10) Business Days, or such other time
period mutually agreed to by the Parties, after such controversy, claim,
dispute, difference or misunderstanding arises. If the Parties are unable to
resolve the controversy, claim, dispute, difference or misunderstanding through
good faith negotiations within such ten (10) business day period, each Party
will, within five (5) Business Days after the expiration of such ten (10)
business day period, prepare a written position statement which summarizes the
unresolved issues and such Party's proposed resolution. Such position statement
must be delivered by the Vendor to the Owner's Vice President of Engineering or
Operations and by the Owner to the Vendor's corresponding officer or
representative for resolution within (5) Business Days, or such other time
period mutually agreed to by the Parties.
If the Parties continue to be unable to resolve the controversy, claim,
dispute, difference or misunderstanding, either Party may initiate arbitration
in accordance with the provisions of subsection 23.2 below; provided, however,
that with respect to any controversy, claim, dispute, difference or
misunderstanding arising out of or relating to this Contract by which either
Party seeks to obtain from the other monetary damages in excess of twenty-five
million dollars ($25,000,000), either Party, in such case, may commence an
action in any state or federal court in accordance with subsection 27.7 to
resolve such matter in lieu of proceeding with an arbitration pursuant to and in
accordance with subsection 23.2. The arbitrators hired or otherwise chosen
pursuant to and in accordance with the terms of this Contract will determine
issues of arbitrability pursuant to the terms of this Contract but may not in
any way limit, expand or otherwise modify the terms of this Contract nor will
they have any authority to award punitive or other damages in excess of
compensatory damages (other than as specifically set forth in this Contract) and
each Party irrevocably waives any such claim thereto when invoking the
arbitration provisions of subsection 23.2.
23.2 Arbitration. An arbitration proceeding initiated by either Party
under this Contract with respect to any controversy, claim, dispute, difference
or misunderstanding will be conducted in Kansas City, Missouri in accordance
with the Commercial Arbitration rules of the AAA, except that, at the request of
either Party, a stenographic transcript of the testimony and proceedings will be
taken and the arbitrators will base their decision upon the records and briefs
of the Parties.
Such arbitration will be initiated by either Party by notifying the
other Party in writing and will be settled before three (3) impartial
arbitrators, one of whom will be named by the Owner, one by the Vendor and the
third by the two arbitrators appointed by the Owner and the Vendor,
respectively. All of the named arbitrators will have significant experience in
the wireless telecommunications industry. If either the Owner or the Vendor
fails to select an arbitrator within ten (10) days after notice has been given
of the initiation of the arbitration, the officer in charge of the Kansas City,
Missouri office of the AAA will have the right to appoint the other arbitrator,
and the two arbitrators thus chosen will then select the third arbitrator.
Except as the Parties may otherwise mutually agree, the arbitration
hearings will commence within fifteen (15) Business Days after a Party's
initiation of the arbitration. The Federal Rules of Evidence will apply and
reasonable discovery, including depositions, will be permitted. Discovery issues
will be decided by the arbitrators and post-hearing briefs will be permitted.
The arbitrators will render a decision within ten (10) days after the
conclusion of the hearing(s) and submission of post-hearing briefs and a written
opinion setting forth findings of fact and conclusions of law will be made
available to the Parties within that time period. The decision of the majority
of the arbitrators regarding the matter submitted will be final and binding upon
the Parties. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
Each Party will pay for the services and expenses of the arbitrator
appointed by it, its witnesses and attorneys, and all other costs incurred in
connection with the arbitration (including, without limitation, the cost of the
services and expenses of the arbitrator appointed by the two arbitrators
appointed by the Parties) will be paid in equal part by the Parties, unless the
award will specify a different division of the costs. Unless otherwise
specifically stated in this Contract, during the pendency of any arbitration
proceedings, the Parties agree to continue to perform their obligations
hereunder in the same manner as prior to the institution of arbitration
proceedings.
23.3 Third Party Engineer. Disputes arising under subsections 2.6, 2.7,
9.5(b), 9.6, 10.1 and 17.4 of this Contract, or as otherwise specifically
provided elsewhere in this Contract, or as otherwise mutually agreed by the
Parties, are to be resolved by the Third Party Engineer in the manner provided
in this subsection 23.3. The Vendor and the Buyer will first attempt to resolve
the dispute through consultation and negotiation in good faith and in a spirit
of mutual cooperation as provided in subsection 23.1 above. If those attempts
fail, then either Party may submit its written notice to the other Party
requesting that the dispute be resolved by the Third Party Engineer, in
accordance with the merits of the dispute. If, within ten (10) Business Days
after the receipt of such notice by the notified Party, the dispute is not
resolved, the Owner will select one of the Third Party Engineers listed on
Schedule 14 to render decision in the dispute. The Third Party Engineer will
issue a written decision containing an explanation of how and why the decision
was reached. The Third Party Engineer's decision will be final and binding,
except with respect to any opinion that over the Term of the Contract will
impact the losing Party in the amount of one million dollars ($1,000,000) or
more. If within ten (10) Business Days following the issuance of any such
opinion the Parties have not agreed to implement the terms of any such opinion
that is not final, either Party may seek arbitration pursuant to the provisions
of subsection 23.2 above. In such arbitration, either Party may introduce into
evidence the opinion of the Third Party Engineer, but the arbitrator(s) must
rule on all issues of the dispute on a de novo basis, except as to any facts or
other matters set forth in the opinion and stipulated by both of the Parties. If
none of the listed Third Party Engineers is available or if none accepts the
assignment and the Parties cannot otherwise mutually agree to another Third
Party Engineer, an experienced and reputable engineer (who is not employed by
either Party or any of their Affiliates or affiliates) will be chosen by the
then President of the Institute of Electrical and Electronic Engineers (or the
Vice President, if the President is a present or former employee of any such
entities) to serve as the Third Party Engineer for the purposes of resolving the
dispute. Unless otherwise mutually agreed by the Parties, any Person who is an
officer or employee, agent, Subcontractor or subcontractor of, or a technical
consultant to, either Party will be automatically ineligible to be the Third
Party Engineer. The costs of utilizing a Third Party Engineer to resolve
disputes under this subsection 23.3 will be shared equally by both Parties.
23.4 Other Remedies. Notwithstanding anything to the contrary herein
contained, each Party will be entitled to pursue any equitable rights and
remedies that are available at law or in equity without complying with
subsection 23.2 or 23.3.
23.5 Tolling. All applicable statutes of limitation will be tolled to
the extent permitted by Applicable Law while the dispute resolution procedures
specified in this Section 23 are pending, and nothing herein will be deemed to
bar any Party from taking such action as the Party may reasonably deem to be
required to effectuate such tolling.
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause. (a) The Owner may, at its sole option,
terminate this Contract, in its entirety, for convenience upon ninety (90) days'
prior written notice at any time; provided that prior to any such termination
pursuant to this subsection 24.1 the Minimum Commitment will have been fulfilled
by the Owner in accordance with the terms of this Contract.
(b) Any orders for Vendor Work within any PCS System and/or PCS
Sub-System within the System made by the Owner pursuant to and in accordance
with the terms of this Contract and the program management procedures of the
Owner prior to any such termination described in clause (a) above, other than
the Initial Commitment, will remain in effect and will be fulfilled to the
extent that such orders are outstanding as of the date of such termination. For
the purposes of this subsection 24.1(b) an "order" will not include the Initial
Commitment or any order for a full PCS System or PCS Sub-System within the
Initial System or the System.
24.2 Termination for Cause. The Owner also has the right to terminate
this Contract in its entirety (except as otherwise set forth in clause (l)
below) without any penalty or payment obligation upon the occurrence of any
Vendor event of default (each a "Vendor Event of Default") as set forth below.
The occurrence of any of the following will constitute a Vendor Event of
Default:
(a) the Vendor (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment; or
(b) the Vendor commences any proceeding for relief from its creditors
in any court under any state insolvency statutes; or
(c) the Vendor materially disregards or materially violates material
Applicable Laws or material Applicable Permits; or
(d) the Vendor persistently and materially allows Defects and Defi-
ciencies to exist; or
(e) the Vendor fails to fulfill its obligations with respect to the
satisfaction, discharge or bonding of liens as set forth in subsection 2.36
hereof; or
(f) the Vendor abandons or ceases for a period in excess of thirty (30)
days its performance of the Work (except as a result of a casualty which is
fully covered by insurance or as to which other provisions reasonably acceptable
to the Owner are being diligently pursued) or fails to begin the Work within
thirty (30) days after the Notice to Proceed Date; or
(g) the Vendor assigns or subcontracts Work other than as provided for
in this Contract; or
(h) the Vendor fails to materially comply with any Change Order; or
(i) the Vendor fails to perform this Contract (including, without
limitation, any action the Vendor may take on any Vendor-Controlled Site) and
thereby prejudices in any way deemed material by the parties providing financing
in connection with the build-out of the Nationwide Network and/or the Owner in
their reasonable opinion the Owner's efforts to obtain financing for the System
and/or the Nationwide System; or
(j) the Vendor fails to pay to the Owner any material amount due to
the Owner by the date required for such payment; or
(k) the Vendor fails to comply with subsection 27.22;
(l) the Vendor misses any Interim Milestone within any given PCS System
or PCS Sub-System by a period in excess of thirty (30) days and such failure to
achieve such Interim Milestone was not caused by (i) a Force Majeure event
and/or (ii) any act or omission of the Owner; provided that in such case the
Owner will have the right, but not the obligation, to terminate this Contract
with respect to only that PCS System or PCS Sub-System in which such interim
delay occurred unless such interim delay relates to Milestone 4 (as set forth on
Exhibit A1) in which case the Owner will have the right, but not the obligation,
to terminate this Contract in its entirety as otherwise set forth in this
subsection 24.2; or
(m) the Vendor otherwise materially breaches any provision of this
Contract.
24.3 Remedies. (a) If any of the Vendor Events of Default exists, the
Owner may, without prejudice to any other rights or remedies of the Owner in
this Contract or at law or in equity, terminate this Contract upon written
notice to the Vendor; provided, however, that the Owner will have first provided
to the Vendor the following periods of notice and opportunity to cure:
(i) in the case of an Event of Default specified in the
foregoing clauses (e) and (k), the Owner will have provided seven (7)
days' prior written notice to the Vendor, and the Vendor will have
failed to remedy such breach entirely by the end of such seven (7) day
period;
(ii) in the case of an Event of Default specified in the
foregoing clauses (a) or (b), no notice or opportunity to cure will be
required from the Owner; and
(iii) in the case of any other Event of Default by the Vendor,
the Owner will have provided forty-five (45) days' prior written
notice, and the Vendor will have failed (i) to commence to cure the
default within five (5) days of delivery of such notice, and (ii) to
diligently pursue such cure and remedy the breach entirely by the end
of said forty-five (45) day notice period.
(b) If the Owner elects to terminate this Contract, the Owner may,
without prejudice to any other rights or remedies of the Owner in this Contract
or of law or in equity, do one or more of the following:
(i) Take possession of all Engineering and design data,
procurement data, manufacturing data, construction and erection data,
start-up and testing data, materials, and Products that will become
part of the System and/or the specified PCS Systems and/or the
specified PCS Sub-Systems, or the Work, whether any of the same is in a
partial state of completion or completed condition, and title to any of
said items vests in the Owner (if not already vested by the provisions
of this Contract);
(ii) Take temporary possession and control of all of the
Vendor's installation equipment, machinery, and the Vendor's materials,
supplies, Software and any and all tools (including, but not limited
to, any and all RF Engineering tools and/or software) at any project
site, including but not limited to any System Element Location, within
the System and/or the specified PCS Systems and/or the specified PCS
Sub-Systems which in the Owner's opinion are necessary to finish the
Work;
(iii) Direct that the Vendor assign its Subcontractor
agreements to the Owner without any change of price or conditions
therein or penalty or payment therefor; or
(iv) Take over and finish the Work by whatever reasonable
methods the Owner may deem expedient;
provided, that, nothing contained in paragraphs (a) through (d) above will
require the Vendor to relinquish to the Owner any of its manufacturing
facilities, specific Product designs (other than such designs previously
provided to the Owner pursuant to the terms of this Contract), Software Source
Codes, trade secrets or proprietary information not previously provided or made
available to the Owner, the System or any part thereof or any materials,
supplies, inventories, tools, software, engineering and/or designs that are not
integral or relevant to the completion of the Work.
24.4 Discontinuance of Work. Upon such notification of termination, the
Vendor must immediately discontinue all of the Work (unless such notice of
termination directs otherwise), and, as more fully set forth in subsection
24.3(b) clauses (i) through (iv), deliver to the Owner copies of all data,
drawings, specifications, reports, estimates, summaries, and such other
information, and materials as may have been accumulated by the Vendor in
performing the Work, whether completed or in process. Furthermore, the Vendor
must assign, assemble and deliver to the Owner all purchase orders and
Subcontractor agreements requested by the Owner.
24.5 Payments. When the Owner terminates this Contract for cause
pursuant to subsection 24.2, the Vendor will not be entitled to receive further
payment other than payments due and payable under this Contract and not subject
to dispute prior to such termination (provided that any such disputed amounts
will be paid by the Owner when and if such dispute is in fact resolved).
Notwithstanding anything herein to the contrary, the Owner may withhold
payments, if any, to the Vendor for the purposes of offset of amounts owed to
the Owner pursuant to the terms of this Contract until such time as the exact
amount of damages due the Owner from the Vendor is fully determined.
24.6 Costs. In the event of a termination due to a Vendor Event of
Default, the Owner will be entitled to the costs in connection with finishing
the Work (exclusive of any Liquidated Damages already paid and/or owing to the
Owner upon termination of this Contract), and if such costs exceed the unpaid
balance of the Contract Price, the Vendor will be liable to pay such excess to
the Owner. The amount to be paid by the Vendor pursuant to this subsection 24.6
will survive termination of this Contract and will be subject to the limitations
of liability in this Contract.
24.7 Continuing Obligations. Termination of this Contract for any
reason (i) will not relieve either Party of its obligations with respect to the
confidentiality of the Proprietary Information as set forth in subsection 27.19,
(ii) will not relieve either Party of any obligation which applies to it and
which expressly or by implication survives termination, and (iii) except as
otherwise provided in any provision of this Contract expressly limiting the
liability of either Party, will not relieve either Party of any obligations or
liabilities for loss or damage to the other Party arising out of or caused by
acts or omissions of such Party prior to the effectiveness of such termination
or arising out of its obligations as to portions of the Work already performed
or of obligations assumed by the Vendor prior to the date of such termination.
24.8 Vendor's Right to Terminate. The Vendor will have the option to
terminate this Contract without any penalty or payment obligations, other than
undisputed payment obligations outstanding as of the date of any such
termination pursuant to the terms of this Contract if:
(a) the Owner (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment, and any such
filing, proceeding, adjudication or assignment as described herein above will
otherwise materially impair the Owner's ability to perform its obligations under
this Contract;
(b) the Owner commences any proceeding for relief in any court under
any state insolvency statutes;
(c) the Owner fails to make payments of undisputed amounts due to the
Vendor pursuant to the terms of this Contract which are more than sixty (60)
days overdue, provided that such failure has continued for at least thirty (30)
days after the Vendor has notified the Owner of its right and intent to so
terminate on account of such overdue amount;
(d) the Owner persistently and materially breaches subsection 11.1 or
subsection 27.19 notwithstanding the fact that the Vendor will have provided the
Owner with prior written notice describing the alleged material breaches and
will have given the Owner a reasonable time (not less than thirty (30) days) to
cure any such breaches; or
(e) except as otherwise provided in subsection 24.1 the Owner fails to
fulfill its Initial Commitment within five (5) years of the Effective Date for
whatever reason other than (i) any act or omission of the Vendor, (ii) failure
or inability to successfully complete Microwave Relocation in any PCS System
and/or PCS Sub-System, (iii) failure or inability to successfully attain Site
Acquisition Substantial Completion in any given PCS System and/or PCS Sub-System
or (iv) any event otherwise constituting a Force Majeure hereunder.
24.9 Special Termination Events. (a) In the event that financing for
the Owner's build-out of the initial phase of the Nationwide Network has not
been finalized with the Vendor and the Other Vendors on terms and conditions
reasonably satisfactory to the Owner, on or before one hundred and eighty (180)
days after January 31, 1996, the Owner will have the right, but not the
obligation, to terminate this Contract in its entirety without charge or penalty
of any kind. In the event of a termination of this Contract pursuant to this
subsection 24.9(a) the Owner will remain liable for amounts due to the Vendor
for all Work performed or Products delivered by the Vendor or any of its
Subcontractors pursuant to the specific terms of this Contract which had been
directly delivered to or performed for the Owner and/or any of its facilities or
sites in accordance with the terms of this Contract including, but not limited
to, the Project Milestones. Any amounts owed by the Owner for Work done or
Products delivered by the Vendor during such interim one hundred and eighty
(180) day period (the "Financing Interim Period") not otherwise invoiced to the
Owner by the Vendor prior to the termination of such Financing Interim Period,
will be invoiced to the Owner by the Vendor within thirty (30) days (but failure
to so invoice will not excuse the Owner's obligation to otherwise pay the Vendor
pursuant to the terms of this subsection 24.9(a)) of such termination pursuant
to this subsection 24.9(a) and will be payable to the extent not otherwise in
dispute by the Owner within thirty (30) days of receipt of such invoice;
provided that in no event will the Owner be liable to the Vendor due to a
termination of this Contract pursuant to this subsection 24.9(a) for any of the
Vendor's direct or indirect costs or expenses incurred in connection with any
supplies or equipment ordered by the Vendor or agreements entered into by the
Vendor in order to enable it to fulfill its obligations hereunder or in
connection with the establishment of and/or upgrade to its manufacturing,
personnel, engineering, administrative or other capacities and/or resources in
contemplation of or pursuant to its performance in accordance with the terms of
this Contract and any amounts due to the Vendor pursuant to this subsection
24.9(a) will be limited in all cases to Work actually done or Products or
Services actually delivered to the Owner, its sites or its facilities.
(b) If at any time after the Effective Date any material change will
have occurred in any Applicable Law or in the interpretation thereof by any
Governmental Entity, or there will be rendered any decision in any judicial or
administrative case, in either case which, in the reasonable opinion of the
Owner, would make the Owner's use of any part of any PCS System illegal or would
subject the Owner or any of its Affiliates to any material penalty, other
material liability or onerous condition or to any burdensome regulation by any
Governmental Entity or otherwise render the use of such PCS System and/or PCS
Sub-System economically nonviable, then, with respect to such PCS System and/or
PCS Sub-System, or affected part thereof, or with respect to the entire System
if so affected, the Owner may terminate this Contract without charge or penalty
of any kind; provided that (i) the Owner gives the Vendor prior written notice
of any such change or decision; (ii) that the Owner uses its reasonable efforts
for a reasonable time to reverse or ameliorate such change or decision to the
extent possible or practical prior to declaring such termination and (iii) the
Owner, at the Vendor's request, gives the Vendor a legal opinion from a
reputable law firm with experience in the area confirming the Owner's reasonable
opinion as set forth above. In the event of a termination pursuant to this
subsection 24.9(b), payment obligations incurred by the Owner for Work actually
done or Products or Services actually delivered by the Vendor prior to such
termination pursuant to this Contract will be payable by the Owner to the Vendor
on the same terms and subject to the limitations set forth in subsection 24.9(a)
above.
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work. The Owner may, at any time and upon
reasonable notice to the Vendor, order the Vendor, in writing, to suspend all or
any part of the Work for such reasonable period of time as the Owner may
reasonably determine to be appropriate for its convenience. Any request by the
Vendor for a change in the Specifications caused by the Owner's suspension of
the Work pursuant to this subsection 25.1 will be subject to the review and
reasonable acceptance of the Owner. No modification to the Specifications will
be made to the extent that performance is, was or would have been suspended,
delayed or interrupted for any other cause due to the Vendor's fault or if the
suspension had no effect on agreed upon performance deadlines and/or Project
Milestones set forth in this Contract. In the event of any such suspension, the
Vendor will be compensated for any actual and reasonable loss, actual and
reasonable damages or actual and reasonable expenses arising directly from such
delay, including but not limited to payments contractually required under any
Subcontractor agreements and reimbursement of reasonable expenses associated
with the necessary re-deployment of the Vendor's resources; provided that the
Vendor will in such event use reasonable efforts to estimate and report to the
Owner any such costs or expenses prior to the commencement of any such Owner
suspension pursuant to this subsection 25.1.
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status. (a) With respect to the deployment
of the Initial System (including any Expansions or additions to the Initial
System within the context of the Initial System pursuant to the terms of this
Contract), the Owner will be deemed one of the Vendor's most important and
favored Customers and will always receive priority in terms of availability and
quantity of Products, Engineering and Services no less favorable than any other
Customer of the Vendor and in any event always in accordance with the terms of
this Contract, including, but not limited to, Exhibit A2. At any time during the
Term, the Owner will receive PCS Products, Engineering and Services at prices
and on payment terms and all other contract terms, including financing terms, no
less favorable to the Owner (when viewed collectively) than those offered or
available to any other Customer (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) of the Vendor for use of such
Items within the United States who are involved in transactions and/or
arrangements of similar or lesser volumes (for the purposes hereof, the Owner's
volume will always be deemed to be at least the level of the Initial Commitment
plus any more PCS Products, Services and/or Engineering ordered at such time
during the Term of this Contract).
(b) On an annual basis throughout the Term of this Contract commencing
on the Effective Date the Vendor will be required to audit its offering of all
CDMA PCS Products, engineering and services provided to the then-existing ten
(10) largest of its Customers (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) (based on volume purchased or
to be purchased) in the preceding calendar year and certify to the Owner in a
certificate executed by a duly authorized officer of the Vendor (the "MFC
Certificate") that the Owner has in fact received the prices, payment and other
contract terms, availability and quantity of and on Products, Engineering and
Services in accordance with the terms of clause (a) above.
(c) To the extent the Owner determines pursuant to clause (b) above, or
otherwise, that the Vendor has not in fact complied with the terms of clause (a)
above the Owner will have thirty (30) Business Days from receipt of the MFC
Certificate to provide the Vendor with a written claim for Product and/or
Engineering and/or Service pricing rebates on future purchases under this
Contract based upon the Owner's reasonable calculation of the impact on the
Owner of the Vendor's failure to comply with clause (a) of this subsection 26.1.
The Owner's written claim will specify the reasoning underlying its claim. To
the extent the Vendor disagrees with any such claim for such pricing rebates
made by the Owner pursuant to this clause (c) the Vendor will have the right
within ten (10) Business Days of receiving the Owner's written rebate claim to
request management escalation of the matter as provided in subsection 23.1. In
the event that the Parties have not resolved the matter within ten (10) Business
Days after commencement of such escalation, either Party will have the right to
submit the Owner's claim and the Vendor's written response thereto to an
Independent Auditor who will have the authority only to determine whether the
Vendor is in non-compliance with the terms of clause (a) above and whether the
Owner's calculation of the claimed pricing rebate is fair and reasonable in
light of the Vendor's non-compliance with the terms of clause (a) above. Any
such independent determination will be made upon specific procedures and a set
of factors mutually agreed by the Parties. The Vendor will provide to the
Independent Auditor records and summaries of its agreements with such ten (10)
largest Customers pursuant to and in accordance with the terms of this
subsection 26.1. The Independent Auditor's determination must be made and
delivered to both the Vendor and the Owner within ten (10) Business Days of
receiving the request from the Vendor. The report of the Independent Auditor
will not be determinative of the Owner's right to pricing rebates under this
clause, and any dispute between the Vendor and the Owner as to such matter after
the Independent Auditor has rendered its opinion may be referred to arbitration
as provided in subsection 23.2; provided that the report of such Independent
Auditor will be admissible as evidence in any such arbitration. The Party
requesting a determination by an Independent Auditor will bear the cost of the
auditor, provided that, if the other Party's position is not supported by the
Independent Auditor, such other Party will bear any such cost.
SECTION 27 MISCELLANEOUS
27.1 Amendments. The terms and conditions of this Contract, including
the provisions of Exhibits and Schedules hereto, may only be amended by mutually
agreed contract amendments. Each amendment must be in writing and will identify
the provisions to be changed and the changes to be made. Contract amendments
must be signed by duly authorized representatives of each of the Vendor and the
Owner.
27.2 Owner Liabilities. The Parties understand and agree that none of
the Partners, nor any of their Affiliates, will guarantee or otherwise be in any
way liable with respect to any obligations or liabilities of the Owner or any of
its subsidiaries pursuant to this Contract. The Parties further understand and
agree that neither the Owner nor any of its subsidiaries will guarantee or
otherwise be in any way liable for any obligations or liabilities of any of the
Partners or any Affiliate of the Owner pursuant to this Contract unless, and
only to the extent, (i) the Owner or any one of its subsidiaries in accordance
with the Owner's direction expressly agrees in writing to guarantee or otherwise
be liable for such liability, or (ii) in the case of an Affiliate, such
Affiliate orders Products and/or Services through the Owner pursuant to the
terms of this Contact.
27.3 Offset. The Vendor hereby waives any right of offset of amounts
owed by the Owner to the Vendor pursuant to the terms of this Contract.
27.4 Assignment. Except as otherwise permitted herein, neither this
Contract nor any portion hereof may be assigned by either Party without the
express prior written consent of the other Party provided that such consent will
not otherwise be unreasonably withheld (provided further that the Owner's
reasonable concern about an assignee's ability to perform the obligations and/or
the Work of the Vendor pursuant to and in accordance with the terms of this
Contract will be deemed to be reasonable grounds for the Owner withholding any
such consent). The Owner may, without the consent of the Vendor, collaterally
assign its rights hereunder (including, but not limited to, all licenses with
respect to the Software) to any or all parties providing financing for any part
of the Nationwide Network under a collateral trust for the benefit of the Vendor
and one or more other entities providing financing for any part of the
Nationwide Network or similar arrangement for the benefit of the Vendor and one
or more other entities providing for the financing for any part of the
Nationwide Network, in either case, which collateral trust or similar
arrangement, as the case may be, is reasonably acceptable to the Vendor in
accordance with the terms of the financing documents. If requested by the Owner,
the Vendor will within seven (7) days of such request provide a written consent
to any such assignment; provided that such consent will permit reassignment if
the financing parties exercise their remedies under the documents for such
financing subject to reasonable standards as to (i) the creditworthiness of the
assignee and (ii) the fact that the assignee is not at such time a competitor of
the Vendor. The foregoing rights and obligations are in addition to those set
forth in subsection 27.21. Any attempted assignment in violation of the terms of
this Contract will be null and void.
27.5 Enforcement. The Parties agree that either Party may enforce the
provisions of subsections 11.4 and 27.4 regarding assignment by an action for
injunction or other equitable remedies.
27.6 Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder will be effective only if it is in
writing and personally delivered by hand or by overnight courier or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Owner:
Sprint Spectrum Equipment Company, L.P.
c/o Sprint Spectrum L.P.
4900 Main
Kansas City, Missouri 64112
Attention: Director, Program Management
If to the Vendor:
Lucent Technologies Inc.
111 Madison Avenue
Morristown, New Jersey 07962-1970
Attention: William K. Nelson
With a copy to;
Lucent Technologies Inc.
Law Department
475 South Street
Morristown, New Jersey 07962
Attention: General Counsel
Written notice given pursuant to this subsection 27.6 will be delivered in
accordance with this subsection 27.6 in writing and when so delivered will be
deemed to have been fully served and delivered. By written notice provided
pursuant to this subsection 27.6, either Party may change its designated
addressee for purposes of giving notices under this Contract.
27.7 GOVERNING LAW AND FORUMS. THIS CONTRACT IS GOVERNED BY THE LAWS
AND STATUTES OF THE STATE OF NEW YORK, EXCLUSIVE OF NEW YORK'S CONFLICT OF LAWS
RULES. THIS CONTRACT AND THE WORK WILL BE DEEMED TO BE MADE, EXECUTED AND
PERFORMED IN THE STATE OF NEW YORK. IF ONE PARTY COMMENCES A LAWSUIT IN RELATION
TO THIS CONTRACT AGAINST THE OTHER PARTY, SUCH LAWSUIT CAN ONLY BE BROUGHT IN
THE STATE OF MISSOURI OR DELAWARE. THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN
ANY SUCH LAWSUIT. THE VENDOR AND THE OWNER EACH HEREBY IRREVOCABLY (A) AGREES
THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS CONTRACT WILL BE BROUGHT IN THE FEDERAL DISTRICT COURT FOR THE WESTERN
DISTRICT OF MISSOURI, OR IN THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF
DELAWARE, WHICH COURTS WILL HAVE EXCLUSIVE JURISDICTION OVER ANY CONTROVERSY
ARISING OUT OF THIS CONTRACT, (B) CONSENTS TO THE JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING AND (C) WAIVES ANY OBJECTION WHICH IT MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN SUCH
COURTS AND CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING MAY BE
MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE OWNER OR THE VENDOR,
AS THE CASE MAY BE, AT THE ADDRESSES INDICATED IN SUBSECTION 27.6 HEREOF AND IN
THE MANNER SET FORTH IN SUCH SUBSECTION 27.6. NOTHING IN THIS SUBSECTION 27.7
WILL AFFECT THE RIGHT OF THE OWNER OR THE VENDOR TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
27.8 Compliance with Law. The Owner and the Vendor will (a) comply with
all Applicable Laws in the performance of this Contract, including, without
limitation, the laws and regulations of the United States Department of Commerce
and State Department and any other applicable agency or department of the United
States regarding the import, re-import, export or re-export of products or
technology; and (b) indemnify each other for any loss, liability or expense
incurred as the result of breach of this subsection 27.8.
27.9 Independent Contractor. All work performed by any Party under this
Contract will be performed as an independent contractor and not as an agent of
the other and no Persons furnished by the performing Party will be considered
the employees or agents of the other. The performing Party will be responsible
for its employees' compliance with all laws, rules, and regulations while
performing all work under this Contract.
27.10 Headings. The headings given to the Sections and subsections
herein are inserted only for convenience and are in no way to be construed as
part of this Contract or as a limitation of the scope of the particular Section
or subsection to which the title refers.
27.11 Severability. Whenever possible, each provision of this Contract
will be interpreted in such a manner as to be effective and valid under such
applicable law, but, if any provision of this Contract will be held to be
prohibited or invalid in any jurisdiction, the remaining provisions of this
Contract will remain in full force and effect and such prohibited or invalid
provision will remain in effect in any jurisdiction in which it is not
prohibited or invalid.
27.12 Waiver. Unless otherwise specifically provided by the terms of
this Contract, no delay or failure to exercise a right resulting from any breach
of this Contract will impair such right or will be construed to be a waiver
thereof, but such right may be exercised from time to time as may be deemed
expedient. If any representation, warranty or covenant contained in this
Contract is breached by either Party and thereafter waived by the other Party,
such waiver will be limited to the particular breach so waived and not be deemed
to waive any other breach under this Contract.
27.13 Public Statements and Advertising. (a) Neither Party nor its
Subcontractors will issue any public statement (or any private statement unless
required in the performance of the Work), except as stated below, relating to or
in any way disclosing any aspect of the Work, the System, any PCS System or any
PCS Sub-System including the scope, the specific terms of this Contract, extent
or value of the Work and/or the System or any PCS System or any PCS Sub-System.
Express written consent of the other Party is required prior to the invitation
of or permission to any reporter or journalist to enter upon the System or any
part thereof. The Vendor agrees not to use for publicity purposes any
photographs, drawings and/or materials describing the System, any PCS System or
any PCS Sub-System without obtaining the prior written consent of the Owner,
which consent will not be unreasonably withheld. This subsection 27.13(a) is not
intended to exclude the provision of necessary information to prospective
Subcontractors and the Vendor's or the Owner's personnel, agents or consultants.
All other such public disclosures by a Party require the written consent of the
other Party. The obligations of the Parties under this subsection 27.13(a) are
in addition to their respective obligations pursuant to subsection 27.19. This
subsection 27.13(a) will in no way limit either Party from responding to
customary press inquiries or otherwise making public or private statements not
otherwise disclosing Proprietary Information or the specific terms of this
Contract in the normal course of its business and/or in connection with the Work
hereunder.
(b) Subject to the last sentence of subsection 27.13(a), each Party
will submit to the other proposed copies of all advertising (other than public
statements or press releases) wherein the name, trademark or service mark of the
other Party or its Affiliates or affiliates is mentioned; and neither Party will
publish or use such advertising without the other Party's prior written
approval. Such approval will be granted as promptly as possible and will not be
unreasonably withheld. The Parties acknowledge that the obtaining of prior
written approval for each such use pursuant to this subsection 27.13(b) may be
an administrative burden. At the request of either Party, the Owner and the
Vendor will establish mutually acceptable guidelines that will constitute
pre-authorization for the uses specified therein. Such guidelines will be
subject to change from time to time at the reasonable request of either Party.
27.14 Records and Communications. To the extent not already
established, promptly after the Work begins, procedures for keeping and
distributing orderly and complete records of the Work and its progress will be
established. The procedures so established will be followed throughout the
course of the Work unless the Owner and the Vendor mutually agree in advance in
writing to revise the procedures. Furthermore, immediately after the Notice to
Proceed is issued, complete procedures for communications among the Owner and
the Vendor will be established. The procedures so established will be followed
throughout the course of the Work unless the Owner and the Vendor mutually agree
in advance and in writing to revise such procedure.
27.15 Ownership of Specifications. Neither the Vendor nor any
Subcontractor, nor any other Person performing or furnishing the Work, whether
or not under a direct or indirect contract with the Owner, will have or acquire
any title to or ownership rights in any of the Specifications, or in any other
part or portion of this Contract (or copies of any of the Specifications or this
Contract); and no such Person will reuse any of the Specifications on and/or
with respect to any other project without the prior written consent of the
Owner. The Specifications and this Contract (and any and all copies thereof),
are owned by and title resides in the Owner, unless otherwise agreed between the
Owner and any other Person. Notwithstanding anything contained herein to the
contrary, the Owner will not acquire any patent, copyright or trade secret
rights as a result of this Contract, except with respect to copyright and trade
secret rights pursuant to licenses and other approvals provided in connection
with the performance of the Work and except to the extent that a non-exclusive
license of any of the Vendor's copyright or trade secret rights is required to
perform the Work.
27.16 Financing Parties Requirements. The Vendor acknowledges that the
Owner represents that attainment of financing for construction of the Nationwide
Network may be subject to conditions that are customary and appropriate for the
providers of such financing. Therefore, the Vendor agrees to execute promptly
any reasonable amendment to or modification or assignment of this Contract
required by such providers (including, without limitation, any pertinent
industrial development authority or other similar governmental agency issuing
bonds for financing of the System) which do not materially modify the scope of
the Vendor's Work in order to obtain such financing. In the event that any such
amendment or modification materially increases the Vendor's risk or costs
hereunder, the Owner and the Vendor will negotiate in good faith to adjust the
Contract Price, and to equitably adjust such other provisions of this Contract,
if any, which may be affected thereby, to the extent necessary to reflect such
increased risk or costs. In no event will the Vendor be required to accept any
modification or amendment pursuant to this subsection 27.16 which places
material increased risk on the Vendor or otherwise materially modifies the scope
of the Vendor's Work, if, in the Vendor's reasonable opinion, such materially
increased risk or material modification in the Work is not otherwise adequately
addressed by the Owner or otherwise. The Vendor will be responsible for and pay
all costs as a result of the Vendor's unreasonable refusal to promptly comply
with the request for any such modification or amendment made by any provider of
financing described in this subsection 27.16.
27.17 Owner Review, Comment and Approval. To the extent that various
provisions of this Contract provide for the Owner's review, comment, inspection,
evaluation, recommendation or approval, the Owner may at its option do so in
conjunction and/or consultation with the Vendor. To the extent that this
Contract requires the Owner to submit, furnish, provide or deliver to the Vendor
any report, notice, Change Order, request or other items, the Owner may at its
option and upon written notice to the Vendor designate the Engineer to submit,
furnish, provide or deliver such items as the Owner's agent therefor. To the
extent that various provisions of this Contract provide that the Owner may
order, direct or make requests with respect to performance of the Work or is
provided access to the System sites or any other site, the Owner may at its
option and upon written notice to the Vendor authorize the Engineer to act as
the Owner's agent therefor. Upon receipt of such notice, the Vendor will be
entitled to rely upon such authorization until a superseding written notice from
the Owner is received by the Vendor.
27.18 Specifications. The Owner acknowledges that parts of the
Specifications are comprised of Specifications prepared by the Vendor and that
the Vendor contributed significantly to many other portions thereof. The Owner
also acknowledges that, during the normal design, evolution and development
process, portions of the Specifications may appear in design and procurement
documents prepared by the Vendor in its normal course of business; provided,
however, that the Owner will have no liability for any third party infringement
claims arising from such Specifications prepared by the Vendor and the Vendor
will hold the Owner harmless from any such third party claims as provided in
subsection 14.2.
27.19 Confidentiality. (a) All information, including without
limitation all oral and written information (including, but not limited to,
determinations or reports by arbitrators or the Third Party Engineer pursuant to
the terms of this Contract), disclosed to the other Party is deemed to be
confidential, restricted and proprietary to the disclosing Party (hereinafter
referred to as "Proprietary Information"). Each Party agrees to use the
Proprietary Information received from the other Party only for the purpose of
this Contract. Except as specified in this Contract, no other rights, and
particularly licenses, to trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under this Contract or
by the conveying of Proprietary Information between the Parties. Proprietary
Information supplied is not to be reproduced in any form except as required to
accomplish the intent of, and in accordance with the terms of, this Contract.
The receiving Party must provide the same care to avoid disclosure or
unauthorized use of Proprietary Information as it provides to protect its own
similar proprietary information but in no event will the receiving Party fail to
use reasonable care under the circumstances to avoid disclosure or unauthorized
use of Proprietary Information. All Proprietary Information must be retained by
the receiving Party in a secure place with access limited to only such of the
receiving Party's employees, subcontractors or agents who need to know such
information for purposes of this Contract and to such third parties as the
disclosing Party has consented to by prior written approval. All Proprietary
Information, unless otherwise specified in writing (i) remains the property of
the disclosing Party, (ii) must be used by the receiving Party only for the
purpose for which it was intended, and (iii) such Proprietary Information,
including all copies of such information, must be returned to the disclosing
Party or destroyed after the receiving Party's need for it has expired or upon
request of the disclosing Party, and, in any event, upon termination of this
Contract. At the request of the disclosing Party, the receiving Party will
furnish a certificate of an officer of the receiving Party certifying that
Proprietary Information not returned to disclosing Party has been destroyed. For
the purposes hereof, Proprietary Information does not include information which:
(i) is published or is otherwise in the
public domain through no fault of the receiving Party
at the time of any claimed disclosure or unauthorized
use by the receiving Party;
(ii) prior to disclosure pursuant to this
Contract is properly within the legitimate possession
of the receiving Party as evidenced by reasonable
documentation to the extent applicable;
(iii) subsequent to disclosure pursuant to
this Contract is lawfully received from a third party
having rights in the information without restriction
of the third party's right to disseminate the
information and without notice of any restriction
against its further disclosure;
(iv) is independently developed by the
receiving Party or is otherwise received through
parties who have not had, either directly or
indirectly, access to or knowledge of such
Proprietary Information;
(v) is transmitted to the receiving Party
after the disclosing Party has received written
notice from the receiving Party after termination or
expiration of this Contract that it does not desire
to receive further Proprietary Information;
(vi) is obligated to be produced under order
of a court of competent jurisdiction or other similar
requirement of a Governmental Entity, so long as the
Party required to disclose the information provides
the other Party with prior notice of such order or
requirement and its cooperation to the extent
reasonable in preserving its confidentiality; or
(vii) the disclosing Party agrees in writ-
ing is free of such restrictions.
(b) Because damages may be difficult to ascertain, the Parties agree,
without limiting any other rights and remedies specified herein, an injunction
may be sought against the Party who has breached or threatened to breach this
subsection 27.19. Each Party represents and warrants that it has the right to
disclose all Proprietary Information which it has disclosed to the other Party
pursuant to this Contract, and each Party agrees to indemnify and hold harmless
the other from all claims by a third party related to the wrongful disclosure of
such third party's proprietary information. Otherwise, neither Party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information.
27.20 Entirety of Contract; No Oral Change. This Contract and the
Exhibits and Schedules referenced herein constitute the entire contract between
the Parties with respect to the subject matter hereof, and supersede all
proposals, oral or written, all previous negotiations, and all other
communications between the Parties with respect to the subject matter hereof. No
modifications, alterations or waivers of any provisions herein contained will be
binding on the Parties hereto unless evidenced in writing signed by duly
authorized representatives of both Parties as set forth in subsection 27.1. Any
representations by the Vendor in any RFP response and/or any documentation
otherwise provided to the Owner in connection with the Vendor's solicitation of
the business granted pursuant hereto prior to the execution hereof will also be
deemed to be incorporated into and otherwise made a part of this Contract;
provided that any such information will in no way be deemed to modify the
Specifications unless otherwise specifically mutually agreed by the Parties.
27.21 Successors and Assigns. This Contract will bind and inure to the
benefit of the Parties to this Contract, their successors and permitted assigns.
27.22 Change of Control of the Vendor. The Vendor will not consolidate
with or merge into any other Person or convey, transfer or lease all or
substantially all of its assets to any Person, nor will any Person or group (as
such term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) own or acquire fifty percent (50%) of the value of the Vendor's
equity where such Person or group did not own as of the Effective Date in excess
of ten percent (10%) of such equity (any such Person or group will be referred
to as the "Vendor's Succeeding Entity"), unless:
(i) the Vendor's Succeeding Entity will
agree to assume the obligations of the Vendor under
this Contract; and
(ii) the Owner will have approved the
transaction, based solely on (i) the creditworthiness
of the Vendor's Succeeding Entity, (ii) whether the
Vendor's Succeeding Entity is a competitor of the
Owner and (iii) whether in the Owner's reasonable
judgment the Vendor's Succeeding Entity will be able
to fulfill the obligations for present and future
orders under this Contract.
27.23 Change of Control of the Owner. Except as otherwise (i) provided
below, (ii) permitted under the documents relating to the financing of the
Nationwide Network or (iii) pursuant to internal reorganizations of the Owner,
the Owner will not consolidate with or merge into any other business entity or
convey, transfer or lease all or substantially all of its assets to any Person,
nor will any Person or group (as such term is defined in the Exchange Act) own
or acquire fifty percent (50%) of the value of the Owner's limited partnership
interests or general partnership interests where such Person or group did not
own as of the Effective Date in excess of ten percent (10%) of either of such
partnership interests (any such Person or group will be referred to as the
"Owner's Succeeding Entity"), unless:
(a) the Owner's Succeeding Entity will agree to assume the obligations
of the Owner under this Contract; and
(b) the Vendor will have approved the transaction, based solely on (i)
the creditworthiness of the Owner's Succeeding Entity and (ii) whether the
Owner's Succeeding Entity is a competitor of the Vendor.
Notwithstanding anything stated in this subsection 27.23 to the
contrary a "Permitted Transaction" or a series of Permitted Transactions by any
Partner or Partners (or any affiliate, parent or subsidiary thereof) will not be
subject to or in any way in violation of this subsection 27.23. For the purposes
hereof, a "Permitted Transaction" means with respect to any Partner (or
affiliate, parent or subsidiary thereof) a transaction or series of related
transactions in which (i) such Partner ceases to be a subsidiary of its parent
or such parent transfers its interests in such Partner to a Person that is not
an affiliate of such Partner and (ii) the new parent of such Partner (or such
Partner if it is its own parent) or the parent of the transferee of such
interests after giving effect to such transaction, or the last transaction in a
series of related transactions, owns, directly and indirectly through its
affiliates, all or a "Substantial Portion" of the cable television system assets
(in the case of a Partner in the cable business (a "Cable Partner")) or long
distance telecommunications business assets (in the case of Sprint) owned by the
parent of such Partners, directly and indirectly through its affiliates,
immediately prior to the commencement of such transaction or series of
transactions. As used herein, "Substantial Portion" means (x) in the case of a
Cable Partner, cable television systems serving seventy five percent (75%) or
more of the aggregate number of basic subscribers served by cable television
systems in the United States (including its territories and possessions other
than Puerto Rico) owned by the parent of such Cable Partner, directly and
indirectly through its affiliates, and (y) in the case of Sprint, long distance
telecommunications business assets serving seventy five percent (75%) or more of
the aggregate number of customers served by the long distance telecommunications
business in the United States (including its territories and possessions other
than Puerto Rico) owned by Sprint and/or its parent, directly and indirectly
through its affiliates.
27.24 Relationship of the Parties. Pursuant to subsection 27.9, nothing
in this Contract will be deemed to constitute either Party a partner, agent or
legal representative of the other Party, or to create any fiduciary relationship
between the Parties. The Vendor is and will remain an independent contractor in
the performance of this Contract, maintaining complete control of its personnel,
workers, Subcontractors and operations required for performance of the Work.
This Contract will not be construed to create any relationship, contractual or
otherwise, between the Owner and any Subcontractor.
27.25 Discretion. Notwithstanding anything contained herein to the
contrary, to the extent that various provisions of this Contract call for an
exercise of discretion in making decisions or granting approvals or consents,
the Parties will be required to exercise such discretion, decision or approvals
in accordance with accepted PCS industry practices and in good faith.
27.26 Non-Recourse. No past, present or future limited or general
partner in or of the Owner, no parent or other affiliate of any company
comprising the Owner, and no officer, employee, servant, executive, director,
agent or authorized representative of any of them (each, an "Operative") will be
liable by virtue of the direct or indirect ownership interest of such Operative
in the Owner for payments due under this Contract or for the performance of any
obligation, or breach of any representation or warranty made by the Owner
hereunder. The sole recourse of the Vendor for satisfaction of the obligations
of the Owner under this Contract will be against the Owner and the Owner's
assets and not against any Operative or any assets or property of any such
Operative. In the event that a default occurs in connection with such
obligations, no action will be brought against any such Operative by virtue of
its direct or indirect ownership interest in the Owner. The foregoing provisions
of this subsection 27.26 will not in any way limit or restrict any right or
remedy of the Vendor with respect to, and the Operatives will remain fully
liable for, any fraud perpetuated by such Operatives.
27.27 Improvements, Inventions and Innovations. All rights in any
improvements, inventions, and innovations made by the Owner will vest in the
Owner, and the Owner and its affiliates will have the right to exploit such
improvements, inventions, and innovations. All rights in any improvements,
inventions and innovations made by the Vendor will vest in the Vendor, and the
Vendor and its affiliates will have the right to exploit such improvements,
inventions and innovations; provided, however, that subject to and in accordance
with subsection 11.9 the Owner and its affiliates may be granted certain rights
to improvements, inventions or innovations made in connection with the System
pursuant to subsection 11.9 by the Vendor (but not by any Subcontractor) in the
course and as a result of performing the Work and in which the Vendor owns or
possesses any proprietary interest (provided that the immediately preceding
proviso of this last sentence of this subsection 27.27 is not subject to
subsection 23.2).
27.28 Attachments and Incorporations. All Schedules and Exhibits
attached hereto, are hereby incorporated by reference herein and made a part of
this Contract with the same force and effect as though set forth in their
entirety herein.
27.29 Conflicts. In the event of any conflict or inconsistency among
the provisions of this Contract and the documents attached hereto and
incorporated herein, such conflict or inconsistency will be resolved by giving
precedence to this Contract and thereafter to the Exhibits, Schedules and
Specifications.
27.30 Counterparts. This Contract may be executed by one or more of the
Parties to this Contract on any number of separate counterparts, and all of said
counterparts taken together will be deemed to constitute one and the same
instrument.
* * *
<PAGE>
THE OWNER AND THE VENDOR HAVE READ THIS CONTRACT INCLUDING ALL
SCHEDULES, EXHIBITS AND APPENDICES HERETO AND AGREE TO BE BOUND BY ALL THE TERMS
AND CONDITIONS HEREOF AND THEREOF.
IN WITNESS WHEREOF, the Parties have executed this Contract as
of the date first above written.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P., as the Owner
By:/s/ ANDREW W. SUKAWATY
Name: Andrew W. Sukawaty
Title: CEO
LUCENT TECHNOLOGIES INC., as the
Vendor
By:/s/ WILLIAM K. NELSON
Name: William K. Nelson
Title: Vice President
Sprint Spectrum Account
<PAGE>
Schedule 1
Preliminary RF Design
The preliminary RF Design will also be based on the following items as listed in
the Contract:
1) Design grid of all coverage areas
2) Signal level plot(s) including:
- Plot scales appropriate to review complete system and site-
to-site interaction.
- Latitude, longitude, radiation center, omni/sector and power
of each site as set forth in tabular form.
- Cell count by land classifications:
- Within the applicable arbitron area;
- For the entire System Area; and
- For launch (if different from the Arbitron count).
- System performance criteria as specified in Exhibit F.
3) Prequalified site overlay.
4) Estimated number of voice channels (4.7% penetration, 260 min-
utes of use/month/per sub).
5) Average tower heights by land classification based on FAA in-
formation and preliminary site zoning information.
<PAGE>
Schedule 2
Product Prices
[12 pages were omitted pursuant to the Registrant's request for
confidential treatment.]
<PAGE>
Schedule 3
Services Prices
[1 page was omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
Schedule 4
Allocated System Areas and Allocated System Sub-Areas
PCS SYSTEM AND PCS SUBSYSTEMS
REGION PCS SYSTEM AND PCS SUBSYSTEMS
East Albany
Boston/South
Buffalo
Hartford
New Hampshire/Maine
New York City (including Manhattan, Brooklyn, Queens,
Bronx, Staten Island)
New York - Metro Area
Pittsburgh
Providence
Rochester
Syracuse
Central Detroit
Toledo
Milwaukee
West Denver
Fresno
Phoenix - Metro
Phoenix - Tucson
Portland
Salt Lake City
Sacramento
S.F. North/Oakland
S.F. South
Seattle
Spokane
[15 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
Schedule 5
Initial Affiliates
1. Each of the Partners and their operating subsidiaries.
2. APC and its operating subsidiaries.
3. PhillieCo and its operating subsidiaries.
4. Continental and its operating subsidiaries.
5. TCG and its operating subsidiaries.
6. NewTelCo. and its operating subsidiaries.
<PAGE>
Schedule 6
Insurance
The Vendor will procure and maintain, during the Term of this Contract,
insurance with financially sound and reputable insurance companies in not less
than the following amounts:
(a) Workers' compensation insurance in accordance with the provisions
of the applicable Worker's Compensation or similar law of each state or other
political subdivision with jurisdiction applicable to the Vendor's personnel;
(b) Commercial general liability, including contractual liability
insurance with a coverage limit of not less than five million dollars
($5,000,000) combined single limit per occurrence of bodily injury or property
damage liability. To the extent reasonably requested by the Owner and not unduly
burdensome to the Vendor and to the extent otherwise applicable, such policy or
policies will name the Owner as an additional insured and will contain a
provision waiving the insurer's right of subrogation against the Owner and its
employees, agents, officers and directors; and
(c) If the use of any vehicle is required by the Vendor or any employee
of the Vendor in the performance of this Contract, the Vendor will also obtain
and maintain business vehicle liability insurance for the operation of all
owned, non-owned and hired vehicles with a coverage limit of not less than one
million dollars ($1,000,000) per accident for bodily injury and not less than
three hundred thousand dollars ($300,000) per accident for property damage
liability.
The Vendor reserves the right to self-retain any or all coverage
described above in this Schedule 6 and upon the Effective Date, does retain some
of such coverage. The Vendor upon the written request of the Owner will deliver
to the Owner certificates of commercial insurance satisfactory in form and
content to the Owner evidencing that all of the insurance required by this
Contract is in force, and that no policy may be canceled or materially altered
without first giving the Owner at least thirty (30) days' written notice.
Nothing herein is intended to imply that the Vendor's liability to the
Owner is limited to the amount of insurance carried.
<PAGE>
Schedule 7
Products
See Schedules 2 and 3 for a list of the Vendor's Products.
<PAGE>
Schedule 8
Vendor's Repair Facilities
Lucent Technologies
Repair Services & Returns Org.
6200 East Broad Street
Columbus, Ohio 43213-1569
Telephone: 1-800-349-4810
<PAGE>
Schedule 9
[Form of Notice to Proceed]
NOTICE TO PROCEED
____________ ___, 199__
[Name of Contractor]
[Address]
Attention: [Contractor Representative]
Re: Sprint Spectrum L.P.
Lucent Technologies Inc.
Vendor Procurement Contract
Dear Sirs:
This Notice to Proceed is hereby delivered to you pursuant to the
Procurement and Services Contract for Sprint Spectrum L.P., dated as of
_________, 1996 (the "Contract"), between Sprint Spectrum Equipment Company,
L.P. (the "Owner") and Lucent Technologies Inc. (the "Vendor"). The Owner hereby
instructs the Vendor to commence performance of the Work under the Contract as
of the date hereof.
Sincerely,
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.
By:__________________________
Name:
Title:
<PAGE>
Schedule 10
[Intentionally Omitted]
<PAGE>
Schedule 11
Order Cancellation Charges
Without charge and/or penalty, the Owner may cancel any Order for Products no
later than ninety (90) days prior to the earliest date scheduled for shipment of
such Product; or
If the Owner cancels an Order less than ninety (90) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of ten percent (10%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than sixty (60) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of fifteen percent (15%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than thirty (30) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of twenty percent (20%) of the price for such Product as
determined pursuant to the Contract.
The Owner may not cancel an Order after the applicable date scheduled for
shipment of such Product. The payment of such charges will be the Vendor's sole
remedy and the Owner's sole obligation for such canceled Order. Any changes
requested by the Owner that involve the return or exchange of Non-Essential
Equipment will be subject to the standard policies of the applicable
Non-Essential Equipment supplier unless such policies are otherwise set out in
the applicable agreement between such Non-Essential Equipment supplier and the
Vendor, in which case the Owner will be entitled to cancel any such Order for
Non-Essential Equipment in accordance with the terms of such agreement. For the
purposes of this Schedule 11, the term "Order" will not include the Minimum
Commitment or the Initial Commitment.
Nothing herein will be deemed to bar the Vendor's right to invoice the Owner for
all Services actually performed prior to the date of such performance by the
Vendor in respect of such Products in accordance with the provisions of this
Contract.
<PAGE>
Schedules 12 A and 12B
Base Station Spares
[2 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
Schedule 13
Foreign Affiliates
Each entity referred to in subsection 2.2(c) is the Vendor's primary
subsidiary offering PCS Products and Services in the country or territory
involved on the Effective Date, or its successor. As of the Effective Date,
these entities are for Canada, AT&T Canada Inc., and for Mexico, AT&T de Mexico
SA de CV. This list includes any other foreign or other Vendor affiliate
otherwise designated.
<PAGE>
Schedule 14
Third Party Engineers
Moffitt Larson & Johnson
LCC L.L.C.
Mobile System International, Inc.
<PAGE>
Schedule 15
Independent Auditors
Ernst & Young LLP
Arthur Andersen & Co. LLP
Price Waterhouse LLP
Deloitte & Touche LLP
KPMG Peat Marwick LLP
This list will at all times throughout the Term of this Contract specifically
exclude the then current auditor of either the Vendor and the Owner.
<PAGE>
Exhibit A1
Project Milestones
[1 page was omitted pursuant to the Registrant's request for confidential treat-
ment.]
<PAGE>
Exhibit A2
2) PCS Product Availability 1996
1Q 2Q 3Q 4Q
BTS [
MSCs ]
1) BTS availability is based on current ordering expectations. Above quantities
require a 12 week order interval. Additional quantities up to [ ] could be
ordered with additional lead time.
2) MSCs are assumed available on regular order interval. Additional capacity
could be provided with longer intervals.
<PAGE>
EXHIBIT B1 (A)
AT&T RF Design and Acceptance Process
[32 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT C (A)
Owner Required Wireless Features and Functions
[11 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT D
AT&T System Elements
[66 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT E (A)
Construction Management Criteria
[12 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT F (A)
RF Performance Criteria
[6 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT G (A)
AT&T BTS/BSC - MSC Interoperability
[3 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT H (A)
Handsets
[46 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT I (A)
Technology Integration Laboratory Requirements
[1 page was omitted pursuant to the Registrant's request for confidential treat-
ment.]
<PAGE>
APPENDIX A
AM/HLR Description and Specifications
[53 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX B
SCP/HLR Description and Specifications
[27 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX C
[Intentionally Omitted]
<PAGE>
APPENDIX D1
Lucent/Nortel License Agreement - HLR
[8 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX D2
Lucent/Nortel License Agreement - OAM&P
[9 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX E
HLR Statement of Work
[37 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX F
SCP/HLR Prices
[5 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX G
AS/OAM&P Statement of Work
[79 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX H
[Intentionally Omitted]
<PAGE>
APPENDIX I
AS/OAM&P Prices
[7 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX J
[Intentionally Omitted]
<PAGE>
APPENDIX K
Application Software Products Acceptance Procedures and Criteria
APPLICATION SOFTWARE ACCEPTANCE:
To be delivered pursuant to mutual agreement of the Parties pursuant to
the terms of Amendment No. 2.
<PAGE>
APPENDIX L
Application Software Products Maintenance and Support Services
[11 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX M
OTAF Statement of Work
[38 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX N
[Intentionally Omitted]
<PAGE>
APPENDIX O
OTAF Prices
[1 page was omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX P
OTAF Acceptance Procedures and Criteria
To be mutually agreed by the Parties no later than October 23, 1996.
<PAGE>
APPENDIX Q
[Intentionally Omitted]
<PAGE>
APPENDIX R
[Intentionally Omitted]
<PAGE>
APPENDIX S
Actiview Acceptance Procedures and Criteria
For each applicable Actiview Software release, the Acceptance Procedures for
such release are to be mutually agreed between the Parties no later than one (1)
week prior to the delivery by the Vendor of any such release. Failure of the
Parties to so mutually agree at such time will in no way modify the Vendor's
obligation to timely deliver any such Actiview Software release pursuant to and
in accordance with the Actiview Statement of Work.
<PAGE>
APPENDIX T
Actiview Prices
[5 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX U
Actiview Statement of Work
[24 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS
1.1 Definitions................................................ 2
1.2 Other Definitional Provisions.............................. 32
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
MILESTONES
2.1 Scope of Work.............................................. 32
2.2 Additional Coverage........................................ 33
2.2.1 AS Products and AS Services Additional Coverage............ 34
2.3 Handsets................................................... 34
2.4 Initial PCS System......................................... 35
2.5 System Element Verification; Test-bed Laboratory........... 35
2.6 RF Engineering; Site Acquisition and MSC Installation...... 36
2.7 Facilities Preparation Services and Installation........... 38
2.8 Site Acquisition Modifications............................. 39
2.9 Design/System Architecture and Engineering................. 39
2.10 Certification.............................................. 41
2.11 Notice of Developments..................................... 41
2.11.1 Vendor Developments........................................ 41
2.11.2 Participation in Testing................................... 41
2.12 Safety..................................................... 42
2.13 Emergencies................................................ 42
2.14 Right of Inspection........................................ 43
2.15 Transportation............................................. 43
2.16 Security................................................... 44
2.17 Materials and Equipment.................................... 44
2.18 Equipment and Data......................................... 44
2.19 References to Certain Sources.............................. 45
2.20 Operating Manuals.......................................... 45
2.20.1 AS Products and Services Operating Manuals................. 45
2.20.2 OTAF Products and Services Operating Manuals............... 45
2.20.3 Actiview Products and Services Operating Manuals........... 46
2.21 Maintenance and Instruction Manuals........................ 46
2.22 Standards for Manuals...................................... 46
2.23 Training................................................... 47
2.23.1 [INTENTIONALLY OMITTED].................................... 49
2.23.2 Actiview Training.......................................... 49
2.24 Manuals and Training....................................... 49
2.25 Spare Parts................................................ 50
2.26 System Support Services.................................... 50
2.26.1 Vendor Assistance.......................................... 50
2.26.2 Trouble Reports............................................ 51
2.26.3 Emergency Technical Assistance............................. 52
2.26.4 ETA and CSR................................................ 56
2.27 Supply of Additional Products.............................. 57
2.28 Review of Contract......................................... 57
2.29 Licenses, Permits and Approvals............................ 57
2.30 Eligibility under Applicable Laws and Applicable Permits... 57
2.31 Customs Approvals.......................................... 58
2.32 Owner Participation........................................ 58
2.33 New Development Advisory Board............................. 58
2.34 Market Development Manager................................. 58
2.35 Further Assurances......................................... 59
2.36 Liens and Other Encumbrances............................... 59
2.37 Forecasting and Ordering................................... 60
2.38 Microwave Relocation; Network Interconnection.............. 60
2.39 Vendor To Inform Itself Fully; Waiver of Defense........... 61
2.40 CMI/HIC.................................................... 61
2.41 Site Acquisition Delay Testing............................. 61
SECTION 3 AFFILIATES
3.1 Additional Affiliates...................................... 62
3.2 Agreements with Initial Affiliates......................... 63
3.3 Agreements with Additional Affiliates...................... 63
3.4 Affiliate Rights........................................... 63
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors............................................. 64
4.2 The Vendor's Liability..................................... 64
4.3 No Effect of Inconsistent Terms in Subcontracts............ 64
4.4 Assignability of Subcontracts to Owner..................... 64
4.5 Removal of Subcontractor or Subcontractor's Personnel...... 64
4.6 Subcontractor Insurance.................................... 65
4.7 Review and Approval not Relief of Vendor Liability......... 65
4.8 Vendor Warranties.......................................... 65
4.9 Payment of Subcontractors.................................. 65
SECTION 5 TERM OF CONTRACT
5.1 Initial Term............................................... 66
5.2 Renewal.................................................... 66
SECTION 6 PRICES AND PAYMENT
6.1 Prices..................................................... 66
6.2 Price Reduction............................................ 67
6.2.1 TCU Payments............................................... 67
6.3 Payments................................................... 68
6.3.1 Additional Products not in Initial System or Otherwise
Provided for in Section 2.2.............................. 69
6.3.2 SCP/HLR Payments........................................... 70
6.3.3. AS Products Payments....................................... 70
6.3.4 OTAF Payments.............................................. 70
6.3.5 Actiview Payments.......................................... 71
6.4 Payments for Facilities Preparation Services............... 71
6.5 Monthly Forecasts.......................................... 72
6.6 No Payment in Event of Material Breach..................... 73
6.7 Microwave Relocation Delay Partial Payments................ 73
6.8 In Revenue Payments........................................ 73
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment......................................... 74
7.2 Change Orders.............................................. 74
7.3 Cancellation............................................... 75
SECTION 8 INSTALLATION
8.1 Installation............................................... 75
8.2 No Interference............................................ 75
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing......................................... 76
9.2 Costs and Expenses......................................... 76
9.3 Notification............................................... 76
9.4 Presence at Acceptance Tests............................... 76
9.5 Correction of Defects...................................... 76
9.6 Acceptance Certificate..................................... 77
9.7 AS Acceptance Testing and Acceptance....................... 77
9.8 Actiview Acceptance Testing and Acceptance................. 78
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation.................................. 79
10.2 Discontinuation During Warranty Period..................... 80
10.3 Discontinuation After Warranty Period...................... 80
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License................................................ 81
11.2 Owner's Obligations........................................ 81
11.3 Backwards Compatibility.................................... 82
11.4 Transfer and Relocation.................................... 82
11.5 Survival................................................... 83
11.6 Access to Source Codes..................................... 83
11.7 Escrow Agreement........................................... 83
11.8 Software Maintenance....................................... 84
11.9 Custom Development......................................... 84
11.9.1 Request for Custom Material................................ 84
11.9.2 Vendor Response............................................ 85
11.9.3 Ownership of Intellectual Property......................... 85
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees............................ 85
12.2 Notice..................................................... 85
12.3 Installation, Testing and Maintenance...................... 85
12.4 Software Fixes............................................. 86
12.5 Right to Modify SCP/HLR Software........................... 86
12.6 Right to Modify AS Software and Actiview Software.......... 87
12.7 Right to Modify OTAF Software.............................. 87
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades......................................... 89
13.2 Notice..................................................... 90
13.3 Installation, Testing and Acceptance....................... 91
13.4 Equipment Fixes............................................ 91
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property...................................... 91
14.2 Infringement............................................... 91
14.3 Vendor's Obligation to Cure................................ 92
14.4 Vendor's Obligations....................................... 93
14.5 License to Use Vendor Patents.............................. 93
SECTION 15 DELAY
15.1 Liquidated Damages......................................... 94
15.2 Interim Delay.............................................. 94
15.3 Completion Delay........................................... 94
15.4 SCP/HLR Delay.............................................. 96
15.5 AM/HLR Interim Solution.................................... 96
15.6 AM/HLR Redeployment........................................ 96
15.7 SCP/HLR Delay Termination.................................. 96
15.8 AS Software Delay.......................................... 97
15.9 OTAF and/or Actiview Delay Termination..................... 97
15.10 OTAF and/or Actiview Delay................................. 98
SECTION 16 FORCE MAJEURE
16.1 Force Majeure.............................................. 99
SECTION 17 WARRANTIES
17.1 Product Warranty...........................................100
17.1.1 AS Products Warranty.......................................100
17.1.2 OTAF Products Warranty.....................................101
17.1.3 Actiview Products Warranty.................................101
17.2 Services Warranty..........................................102
17.3 System Warranty............................................102
17.4 Breach of Warranties.......................................103
17.5 Repair and Return..........................................105
17.6 Technical Assistance Center................................107
17.7 Scope of Warranties........................................108
17.8 Expenses...................................................108
17.9 Third Party Warranties.....................................109
17.10 Additional System Element Locations........................109
17.11 EXCLUSIVE REMEDIES.........................................109
SECTION 18 INSURANCE
18.1 Insurance..................................................109
SECTION 19 TAXES
19.1 Taxes......................................................109
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity...........................................110
20.2 LIMITATION ON LIABILITY....................................111
20.3 Damages for Fraud or Willful Misconduct....................111
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor...............111
21.1.1 Due Organization of the Vendor.............................111
21.1.2 Due Authorization of the Vendor; Binding Obligation........111
21.1.3 Non-Contravention..........................................112
21.1.4 Regulatory Approvals.......................................112
21.1.5 Non-Infringement...........................................112
21.1.6 Scope 112
21.1.7 Requisite Knowledge........................................112
21.1.8 Financial Capacity.........................................112
21.2 Representations and Warranties of the Owner................112
21.2.1 Due Organization of the Owner..............................112
21.2.2 Due Authorization of the Owner; Binding Obligation.........113
21.2.3 Non-Contravention..........................................113
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title......................................................113
22.2 Risk of Loss...............................................113
22.3 AS Products Risk of Loss...................................114
22.4 OTAF and Actiview Products Risk of Loss....................114
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution.........................................114
23.2 Arbitration................................................115
23.3 Third Party Engineer.......................................116
23.4 Other Remedies.............................................116
23.5 Tolling....................................................116
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause .................................117
24.2 Termination for Cause......................................117
24.3 Remedies...................................................118
24.4 Discontinuance of Work.....................................119
24.5 Payments...................................................120
24.6 Costs......................................................120
24.7 Continuing Obligations.....................................120
24.8 Vendor's Right to Terminate................................120
24.9 Special Termination Events.................................121
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work..............................122
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status...............................123
SECTION 27 MISCELLANEOUS
27.1 Amendments.................................................124
27.2 Owner Liabilities..........................................124
27.3 Offset.....................................................124
27.4 Assignment.................................................125
27.5 Enforcement................................................125
27.6 Notices....................................................125
27.7 GOVERNING LAW AND FORUMS...................................126
27.8 Compliance with Law........................................127
27.9 Independent Contractor.....................................127
27.10 Headings...................................................127
27.11 Severability...............................................127
27.12 Waiver.....................................................127
27.13 Public Statements and Advertising..........................127
27.14 Records and Communications.................................128
27.15 Ownership of Specifications................................128
27.16 Financing Parties Requirements.............................129
27.17 Owner Review, Comment and Approval.........................129
27.18 Specifications.............................................129
27.19 Confidentiality............................................130
27.20 Entirety of Contract; No Oral Change.......................131
27.21 Successors and Assigns.....................................132
27.22 Change of Control of the Vendor............................132
27.23 Change of Control of the Owner.............................132
27.24 Relationship of the Parties................................133
27.25 Discretion.................................................133
27.26 Non-Recourse...............................................133
27.27 Improvements, Inventions and Innovations...................134
27.28 Attachments and Incorporations.............................134
27.29 Conflicts..................................................134
27.30 Counterparts...............................................134
<PAGE>
EXHIBITS
Exhibit A1 - Project Milestones
Exhibit A2 - PCS Product Availability
Exhibit B1 - RF Design and Acceptance Process
Exhibit B2 - Acceptance Process for Completion of System Element
Facilities
Exhibit B3 - Validation and Acceptance Testing
Exhibit C - Owner Required Wireless Features and Functions
Exhibit D - System Elements
Exhibit E - Construction Management Criteria
Exhibit F - RF Performance Criteria
Exhibit G - BTS/BSC - MSC Interoperability
Exhibit H - Handsets
Exhibit I - Technology Integration Laboratory Requirements
SCHEDULES
Schedule 1 - Preliminary RF Design
Schedule 2 - Product Prices
Schedule 3 - Services Prices
Schedule 4 - Allocated System Areas and System Sub-Areas
Schedule 5 - Initial Affiliates
Schedule 6 - Insurance Provisions
Schedule 7 - Products
Schedule 8 - Vendor's Repair Facilities
Schedule 9 - Form of Notice to Proceed
Schedule 10 - [Intentionally Omitted]
Schedule 11 - Order Cancellation Charges
Schedule 12A - Spare Parts Requirements
Schedule 12B - Spare Parts Prices
Schedule 13 - Foreign Subsidiaries and Affiliates
Schedule 14 - Third Party Engineers
Schedule 15 - Independent Auditors
APPENDICES
Appendix A - AM/HLR Description and Specifications
Appendix B - SCP/HLR Description and Specifications
Appendix C - [Intentionally Omitted]
Appendix D1 - Lucent/Nortel License Agreement - HLR
Appendix D2 - Lucent/Nortel License Agreement - OAM&P
Appendix E - HLR Statement of Work
Appendix F - SCP/HLR Prices
Appendix G - AS/OAM&P Statement of Work
Appendix H - [Intentionally Omitted]
Appendix I - AS/OAM&P Prices
Appendix J - [Intentionally Omitted]
Appendix K - Application Software Products Acceptance Procedures and
Criteria
Appendix L - Application Software Products Maintenance and Support
Services
Appendix M - OTAF Statement of Work
Appendix N - [Intentionally Omitted]
Appendix O - OTAF Prices
Appendix P - OTAF Acceptance Procedures and Criteria
Appendix Q - [Intentionally Omitted]
Appendix R - [Intentionally Omitted]
Appendix S - Actiview Acceptance Procedures and Criteria
Appendix T - Actiview Prices
Appendix U - Actiview Statement of Work
Exhibit 10.23
The omitted portions indicated by brackets have been separately filed
with the Securities and Exchange Commission pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
AMENDMENT NO. 1 ("Amendment") dated as of October 24, 1996 to the
Purchase and Supply Agreement dated as of June 21, 1996, among Sprint Spectrum
L.P., a Delaware limited partnership (the "Owner"), QUALCOMM Personal
Electronics, a California general partnership (the "Vendor"), QUALCOMM
Incorporated, a Delaware corporation, as a guarantor and Sony Electronics Inc.,
a Delaware corporation, as a guarantor (each guarantor together with the Owner
and the Vendor, the "Parties").
RECITALS:
WHEREAS, the Owner, the Vendor and the guarantors are parties to a
certain Purchase and Supply Agreement dated as of June 21, 1996 (the
"Contract"), and
WHEREAS, the Parties desire to amend the Contract.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, the Parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, all capitalized terms used in
this Amendment will have the meaning given to such terms in the Contract.
References to "Specifications" include the modifications to the Specifications
set forth in the Consent to Specification Deviation executed by the Parties and
dated September 24, 1996.
2. Agreements.
(a) The Owner hereby waives its rights to [___________]. Nothing
contained in this clause (a) shall in any way amend, waive or otherwise modify
the Owner's rights under the Contract as amended hereby in the event of any
Vendor delivery delay after the date hereof; provided, however, any delivery
delays that occurred prior to the date hereof shall not be taken into
consideration with respect to any future application of subsection 4.2(e) of the
Contract.
(b) Notwithstanding the terms of the Contract and any Purchase Orders
delivered to the Vendor prior to the date hereof, the Vendor shall have and hold
specifically for the Owner the following quantities of Specification compliant
Subscriber Units (and their Material Accessories) at its manufacturing facility
in San Diego, California no later than the dates set forth below:
Date Amount
[ ]
It is agreed by the Parties that the quantities and dates set forth
above are firm and that no grace periods (including, but not limited to, the
Delay Grace Period) will apply to these dates and/or quantities. To the extent
the quantities of Products set forth above are manufactured and held as set
forth in this clause (b) and clause (c) below by the dates set forth above, the
Vendor may invoice the Owner for such manufactured, held and verified
Specification compliant Products at the prices set forth on Appendix 1 as
amended hereby. The [_______] Subscriber Units to be manufactured and held on
[_______________], as set forth above, will be divided between [_________]
Subscriber Units and [__________] Subscriber Units and the Owner and the Vendor
will work together in good faith to promptly agree and establish color samples
for such colored Subscriber Units; provided, however, in the event the Parties
fail to promptly reach such agreement, then the color of such Subscriber Units
shall be as set forth in Exhibit A1 and their price shall not include the price
increase set forth in "Note 3" to Appendix 1. It is expressly understood and
agreed by the Parties that in the event the Vendor shall for any reason (other
than an event constituting a Force Majeure pursuant to subsection 11.17 of the
Contract in which case the terms of subsection 11.17 shall apply) fail to comply
with any of the specific dates, quantities and other requirements set forth in
this clause (b) by not having and holding such quantities of Specification
compliant Subscriber Units (and their Material Accessories) specifically for the
Owner (as verified in accordance with clause (c) below) at the Vendor's
manufacturing facility in San Diego, California, then, notwithstanding anything
in the Contract to the contrary, the Owner will have the right, based upon the
Owner's needs and requirements, as determined in the Owner's sole and absolute
discretion and upon giving the Vendor written notice, within three (3) Business
Days following such failure or notice of failure by the Vendor, of the Owner's
election to proceed under either subclause (i) or (ii) below, to:
(i) if the Owner [_______]; provided, that in such event the Owner will have the
right and the Vendor will be obligated to [__________]; or
(ii) if the Owner [________________]; provided, that the price of any such late
Products will be [______________]. In the event such late Products are in excess
of [___________], the Owner will again have the right to [-----------].
(c) Any Products manufactured and held pursuant to clause (b) above
will be held by the Vendor in separately identifiable inventory, in individual
boxes or bulk storage boxes, at the Vendor's manufacturing facility in San
Diego, California specifically for the Owner and any such held quantities will,
on or before the delivery dates set forth above, be verified by the Vendor in
writing to the Owner identifying the quantity, location, model and serial
numbers of the Products so held and further identifying such Products as being
held for the Owner pursuant to the Contract (provided that the Vendor's
verification of the first thirty thousand (30,000) Subscriber Units to be
available on October 27, 1996, will be dated November 4, 1996). The Vendor will
provide the Owner and its personnel reasonable access to its facilities to
physically verify the availability and continued maintenance of delivered
Products held for the Owner; provided, that the Owner will exercise its rights
(to the extent not previously exercised) to physically verify the availability
and continued maintenance of any such Products already verified by the Vendor to
the Owner pursuant to and in accordance with the first sentence of clause (c)
within five (5) days after receipt of any such written verification from the
Vendor and provided further that nothing herein will prevent the Vendor from
sending an invoice to the Owner for any Vendor verified Products at any time (i)
after the Owner shall have notified the Vendor in writing of its intent not to
physically verify the availability and continued maintenance of such Products or
(ii) after expiration of such five day period if the Owner neither physically
verifies nor provides notice of the Owner's intention not to physically verify
(in which event the Owner shall be deemed to have verified for purposes of the
third sentence of clause 2(b) above). The Vendor will hold all such Products
until such time as the Owner provides written notice to the Vendor that it
desires to have all or any portion of such held Products delivered to the FOB
point for shipment; provided, that the Owner will provide the Vendor with three
(3) days prior written notice to individually box any Products held by the
Vendor in bulk storage based upon a Vendor individual box packaging ability of
five thousand (5,000) Subscriber Units (and their Material Accessories) per day.
If for any reason the Vendor shall not, on the date(s) scheduled for the
delivery thereof, deliver to the FOB point any Products held for the Owner which
have been paid for by the Owner, then (notwithstanding subsection 11.17 of the
Contract), the Owner will have the absolute right to the immediate refund of any
monies paid to the Vendor for any such held but undelivered Products, and such
right will be in addition to any and all rights (subject to subsection 11.17 of
the Contract) the Owner may otherwise have in Contract or in law in any such
event.
(d) The Vendor will have a release of software ready for conducting
phase 2 NSOTASP interoperability testing with the Owner's infrastructure vendors
on November 15, 1996. This release of Software is intended to have and this
phase of testing is intended to verify the following NSOTASP functionality: (a)
default factory configuration complies to section 3.1 of IS-683; (b) an NSOTASP
call can be successfully completed; (c) a PCS call can be originated using the
newly programmed mobile; (d) a PCS voice call can be terminated by the newly
programmed mobile; (e) programming lock works properly; (f) the parameters of an
activated mobile can be modified by an NSOTASP call; (g) no permanent data is
changed if the call is terminated before the "Commit;" (h) verify the PRL is
stored properly; and (i) mobile functions properly after downloading a list with
PRL with a size exceeding MAX_PR_LIST_SIZE. Following successful passing of all
these phase 2 tests, the Vendor will, within four weeks, be in a position to
conduct CDG testing with the Owner's infrastructure vendors. Any and all
Subscriber Units held at the Vendor's facilities will be promptly upgraded by
the Vendor to have such NSOTASP Software upon availability of NSOTASP Software
and within the time for implementing such feature, in each instance in
accordance with and pursuant to the terms and conditions of Section 4.5 of
Exhibit A-1 of the Contract. The Vendor may invoice the Owner and the Owner will
pay to the Vendor $3.85 for the upgrading of each such satisfactorily
OTASP-upgraded Subscriber Unit.
(e) The liquidated damages provisions of subsection 4.2(a) of the
Contract shall not apply to those 1996 forecasted Products which are
specifically subject to liquidated damages, price reduction and/or cancellation
pursuant to the provisions of subsection 2(b)(i) or 2(b)(ii) of this Amendment.
3. Amendment to Subsection 3.2(a). Subsection 3.2(a) of the Contract is
hereby amended by deleting the seventh sentence thereof commencing "For each of
the Initial Subscriber Units ..." in its entirety.
4. Amendment to Subsection 3.2(b). Subsection 3.2(b) of the Contract is
hereby amended by (i) changing the definition of "Total Minimum Commitment" in
the first sentence thereof from [__________] Subscriber Units to "[_________]
Subscriber Units" and (ii) changing the definition of "First Annual Minimum
Commitment" in the second sentence thereof from [___________] Subscriber Units
to "[___________] Subscriber Units".
5. Amendment to Subsection 5.1. Subsection 5.1 of the Contract is hereby amended
by adding a new subsection 5.1(d) immediately after subsection 5.1(c) as
follows:
"(d) Notwithstanding anything stated herein (including, but
not limited to, Schedule 8 hereto) to the contrary, to the extent the
Owner shall have forecasted for the delivery of any Accessories, the
Owner may reduce the aggregate Accessory deliveries forecasted for the
first three (3) months of 1997, by an amount equal to no more than
[______] percent of the amount of Accessories purchased by the Owner
from the Vendor in 1996 (over and above any quantity reductions
available to the Owner for the first three (3) months of 1997 pursuant
to subsection 5.1); provided, that any such reduction shall be
distributed evenly over the first three (3) months of 1997."
6. Amendment to Subsection 5.2. Subsection 5.2 of the Contract is hereby amended
by adding a new subsection 5.2(g) immediately after subsection 5.2(f) as
follows:
"(g) Notwithstanding anything stated herein to the contrary,
at any time throughout the Initial Term the Owner may in its sole and
absolute discretion choose to order up to [_____________] additional
Specification compliant Subscriber Units (and their Material
Accessories) above the Total Minimum Commitment. If the Owner should
order any such additional Subscriber Units (and their Material
Accessories) for delivery at any time in 1996, any such order for such
additional Products will be deemed an Excess Purchase Order and to the
extent fulfilled by the Vendor, will be fulfilled at a price not in
excess of [_____________] percent less than the 1996 price set forth on
Appendix 1. If the Owner desires to order any such additional
Subscriber Units (and their Material Accessories) for delivery in 1997
or 1998 then, the Owner shall include such additional Subscriber Units
in the subject Forecast pursuant to the provisions of subsection 5.1 of
the Contract and the Vendor will be obligated to deliver such Products
to the Owner in accordance with the terms of the Contract (including
subsection 5.2 of the Contract) and at the prices as set forth on
Appendix 1."
7. Amendment to Schedules and Appendices. The Schedules and Appendices
to the Contract are hereby amended by (i) deleting the first page of Schedule 8
in its entirety and replacing in lieu thereof the revised page 1 of Schedule 8
attached hereto as Attachment 1 and (ii) deleting Appendix 1 in its entirety and
replacing in lieu thereof the revised Appendix 1 attached hereto as Attachment
2.
8. NO OTHER AMENDMENTS. EXCEPT AS EXPRESSLY AMENDED, MODIFIED AND SUPPLEMENTED
HEREBY, THE PROVISIONS OF THE CONTRACT ARE AND WILL REMAIN IN FULL FORCE AND
EFFECT AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, NOTHING IN THIS AMENDMENT WILL
BE CONSTRUED AS A WAIVER OF ANY OF THE RIGHTS OR OBLIGATIONS OF THE PARTIES
UNDER THE CONTRACT.
9. GOVERNING LAW. THIS AMENDMENT WILL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE LAWS AND
PRINCIPLES THEREOF WHICH WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
10. Descriptive Headings. Descriptive headings are for convenience only and will
not control or affect the meaning or construction of any provisions of this
Amendment.
11. Counterparts. This Amendment may be executed in any number of identical
counterparts, each of which will constitute an original but all of which when
taken together will constitute but one instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
signed by their duly authorized representatives on the date first above written.
SPRINT SPECTRUM L.P.,
as Owner
By: /s/Bernie Bianchino
Name: Bernie Bianchino
Title: Chief Business Development
Officer
QUALCOMM Personal Electronics,
as Vendor
By: /s/Stephen Burke
Name: Stephen Burke
Title: Vice President and General
Manager Sony/QUALCOMM
CDMA Sales
QUALCOMM Incorporated,
as Guarantor
By: /s/Paul E. Jacobs
Name: Paul E. Jacobs
Title: Senior Vice President and
General Manager Subscriber
Products
SONY ELECTRONICS INC.,
as Guarantor
By: /s/Yutaka Sato
Name: Yutaka Sato
Title: President, Sony WTC
<PAGE>
ATTACHMENT 1
SCHEDULE 8
First Forecast
Owner Product Requirements for Vendor Subscriber Units
with Accompanying Material Accessories
---------- --------------- --------------- ----------------
1st Supply 2nd Annual 3rd Annual
(6 mos) Supply Period Supply Period
1996 1997 1998
---------- --------------- --------------- ----------------
Jan [
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct 27
Nov 10
Dec 1
Dec 5
Dec 10
---------- --------------- --------------- ----------------
TOTAL
========== =============== =============== ================
GRAND TOTAL ]
========== =============== =============== ================
<PAGE>
ATTACHMENT 2
APPENDIX 1
Pricing
Subscriber Units With Accompanying Material Accessories
- -------------------- ------------------------ -------------------------------
1996 1997 1998
- -------------------- ------------------------ -------------------------------
$[
- -------------------- ------------------------ -------------------------------
]
- -----------------------------------------------------------------------------
Additional Accessories
- ------------------------------------- ------------- ----------------------------
Extra Non-Accompanying Accessories(1) Price Per
Accessory Available no later than
- ------------------------------------- ------------- ----------------------------
Desktop Charger (w/AC Adapter) [
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
Hands Free Car Kit
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
Travel Charger
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
Cigarette Lighter Adapter
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- -------------- ---------------------------
Data Adapter Cable
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
Standard Batter (Li-Ion)
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
Leather Case
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
PCMCIA Data Adapter
- ------------------------------------- ------------- ----------------------------
- ------------------------------------- ------------- ----------------------------
Mock Up Unit ]
- ------------------------------------- --------------- --------------------------
(1)The Accessories and the prices and dates therefore as set forth in this table
do not relate to Material Accessories which accompany Subscriber Units.
Exhibit 10.28
The omitted portions indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
CREDIT AGREEMENT, dated as of October 2, 1996, among SPRINT
SPECTRUM L.P., a limited partnership organized under the laws of the State of
Delaware (the "Borrower"), NORTHERN TELECOM INC. (the "Vendor"), the several
banks and other financial institutions and entities from time to time parties to
this Agreement (together with the Vendor, the "Lenders") and the Vendor, as
agent for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower and its Subsidiaries (as defined below)
intend to construct and operate a nationwide wireless telecommunications system,
and the Vendor has entered into the Vendor Procurement Contract (as defined
below) with the Borrower pursuant to which, among other things, the Vendor has
agreed to supply to the Borrower and its Subsidiaries certain of the equipment
needed to complete such system and other goods and services related thereto;
WHEREAS, the Vendor has agreed to make available to the
Borrower a credit facility in the aggregate amount of $1,300,000,000 the
proceeds of which shall be used to finance the acquisition of equipment and
services to be supplied pursuant to the Vendor Procurement Contract in
connection with the construction of such system; and
WHEREAS, the Borrower and the Vendor wish to enter into this
Agreement to establish the credit facility described above;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth below, the parties hereto hereby agree as follows:
<PAGE>
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:
"ABR": for any day, a rate per annum equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
ABR due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
"Additional Collateral": as defined in the Trust Agreement.
"Additional Guarantee": as defined in the Trust Agreement.
"Additional Security Document": as defined in the Trust Agree-
ment.
"Adjusted EBITDA": for any fiscal period, the sum of (a)
EBITDA for such period plus (b) the aggregate amount deducted in
determining Net Income or Net Loss for such period in respect of sales,
marketing and advertising expenses and consumer-related equipment
subsidy expenses.
"Affiliate": as to any Person, any other Person (other than,
in the case of the Borrower and any Restricted Subsidiary, any
Restricted Subsidiary) which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
"Agent": the Vendor, as agent for the Lenders under this
Agreement, or any successor thereto appointed pursuant to subsection
8.9 to act as the agent for the Lenders under this Agreement.
"Agent's Account": Account No. 5107520 maintained by the
Agent at the offices of The First National Bank of Chicago located at
Chicago, Illinois, or such other account as may be specified in writing
by the Agent to the Lenders and the Borrower from time to time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": as defined in Section 1 of Schedule I.
"Annualized Adjusted EBITDA": for the period ending on the
last day of any fiscal quarter, the product of (a) Adjusted EBITDA for
the two consecutive fiscal quarters ending on such last day, multiplied
by (b) two.
"Annualized EBITDA": for the period ending on the last day of
any fiscal quarter, the product of (a) EBITDA for the two consecutive
fiscal quarters ending on such last day, multiplied by (b) two.
"APC": American PCS, L.P., a Delaware limited partnership.
"Asset Sale": any sale, transfer or other disposition or
series of related sales, transfers or other dispositions (excluding any
sale and leaseback transaction) by the Borrower or any Restricted
Subsidiary of any property or assets of the Borrower or such Restricted
Subsidiary (including property subject to any Lien under any Security
Document) to a Person other than the Borrower or any Restricted
Subsidiary; provided that any Asset Swap permitted under subsection
6.6(e) shall be deemed an Asset Sale only to the extent provided for in
said subsection.
"Asset Sale Proceeds Sub-Account": as defined in the Trust
Agreement.
"Asset Swap": any exchange, with any other Person, of assets
owned by the Borrower and/or any Restricted Subsidiary comprising one
or more Systems, for assets comprising one or more other Systems
owned by such other Person.
"Assignee": as defined in subsection 9.6(c).
"Available Commitment": at any time, an amount equal to the
excess, if any, of (a) the aggregate amount of the Commitments of all
the Lenders over (b) the aggregate principal amount of all Loans (excl-
uding amounts constituting interest capitalized pursuant to subsection
2.7(d)) theretofore made hereunder.
"Bank Credit Facility": as defined in the Trust Agreement.
"Benefitted Lender": as defined in subsection 9.7(a).
"Bona Fide Commitment": a binding commitment to provide
financing to the Borrower that is (a) in writing and (b) subject only
to the satisfaction of such conditions as the Borrower believes in good
faith can be reasonably expected to be fulfilled during whichever of
the Phase I Commitment Period or the Phase II Commitment Period as to
which the existence of such commitment is relevant to a determination
of whether or not such Commitment Period shall have commenced.
"Borrower": as defined in the Preamble hereto.
"Borrower's Account": Account No. 40672186 maintained by
the Borrower at the offices of Citibank, N.A. located at New York, New
York, or such other account as may be specified in writing by the
Borrower to the Agent from time to time.
"Borrowing Date": any Business Day specified in a notice pur-
suant to subsection 2.2 as a date on which the Borrower requests the
Lenders to make Loans hereunder.
"Borrowing Notice": an irrevocable notice of borrowing, sub-
stantially in the form of Exhibit E, signed by a Responsible Officer.
"Borrowing Year": any one of the five consecutive twelve-
month periods following the Initial Borrowing Date, each of which shall
end on an anniversary of the Initial Borrowing Date.
"BTA": a Basic Trading Area, as defined in 47 C.F.R. ss.
24.202.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Contribution Agreement": the Amended and Restated
Capital Contribution Agreement, dated as of October 2, 1996, among the
Parents and the Borrower, as amended, supplemented or otherwise
modified from time to time.
"Capital Expenditures": for any fiscal period, all
expenditures made by the Borrower and its Restricted Subsidiaries
during such period (a) for the purpose of acquiring, constructing,
expanding or improving fixed assets, real property or equipment or (b)
constituting systems and development expenditures related to the
build-out of the Borrower's national wireless telecommunications
network, all as calculated in accordance with GAAP, provided that
expenditures related to the acquisition of Licenses, capitalized
interest and Investments shall not be considered to be Capital
Expenditures.
"Capital Stock": any and all shares, interests, participa-
tions or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase or subscribe for any of the foregoing.
"Cash Advance": as defined in subsection 2.2(a).
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any commercial bank
satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d)
commercial paper of a domestic issuer rated at least A-1 by S&P or P-1
by Moody's, (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, or by any political
subdivision or taxing authority of any such state, commonwealth or
territory, the securities of which state, commonwealth, territory,
political subdivision or taxing authority (as the case may be) are
rated at least A by S&P or A2 by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition or (g) shares of open end
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition.
"Change in Control": the occurrence of (a) prior to the time
at which the Borrower has attained Investment Grade Status, a reduction
to less than $500,000,000 of the sum of (i) the amount of Contributed
Capital held, directly or indirectly, by Sprint Corporation and (ii)
the portion of the then Committed Capital for which Sprint Corporation
is obligated or (b) prior to the Public Offering Date, a reduction of
the percentage of the aggregate economic or voting equity ownership of
the Borrower that is owned directly or indirectly by Sprint Corporation
to less than 25%.
"Closing Date": the date on which the conditions precedent
set forth in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued
thereunder.
"Collateral": as defined in the Trust Agreement.
"Commission": as defined in subsection 9.15.
"Commitment": as to any Lender, the obligation of such Lender
to make Loans to the Borrower in an aggregate principal amount not to
exceed the product of (a) the Vendor Commitment and (b) the percentage
set forth opposite such Lender's name on Schedule II under the column
captioned "Percentage of Vendor Commitment", as such percentage may be
changed from time to time in accordance with the terms of this
Agreement; and "Commitments" shall mean, collectively, the Commitments
of all of the Lenders.
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Committed Capital": as to any Parent at any time, the aggre-
gate amount of cash contributions then committed and available to be
made by such Parent or its Affiliates to the Borrower pursuant to the
Capital Contribution Agreement.
"Commonly Controlled Entity": an entity, whether or not in-
corporated, which is treated as a single employer with the Borrower un-
der Section 414(b), (c), (m) or (o) of the Code.
"Communications Act": the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of
the FCC thereunder, all as amended and as the same may be in effect
from time to time.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, indenture, in-
strument or other undertaking, to which such Person is a party or by
which it or any of its property is bound.
"Contributed Capital": at any time, the aggregate amount
which shall theretofore have been received by the Borrower as a contri-
bution to its capital or as consideration for the issuance of partner-
ship interests in the Borrower; Contributed Capital shall in any event
exclude the proceeds of any Specified Affiliate Debt.
"Corporate Trustee": as defined in the definition of Trust
Agreement.
"Covered Pops": at any time, the aggregate number of Pops
within each geographic area for which facilities owned by the Borrower
and its Restricted Subsidiaries that provide service to such geographic
area (a) in the case of facilities constructed pursuant to the Vendor
Procurement Contract or the Other Vendor Procurement Contract, either
(i) have achieved "substantial completion" pursuant to the terms of the
Vendor Procurement Contract or the Other Vendor Procurement Contract
(as therein provided) or (ii) have not achieved "substantial
completion" pursuant to the terms of the Vendor Procurement Contract as
a result of a failure by the Vendor to perform its obligations
thereunder and (b) in the case of any other facilities, have achieved
at least the equivalent degree of completion.
"Credit Advance": as defined in subsection 2.2(a).
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Direct-Lien Assets": assets of the Borrower or any Restricted
Subsidiary constituting any of the following: accounts, patents,
trademarks, the rights of the Borrower under the Capital Contribution
Agreement, other general intangibles and other types of Personal
Property Assets on which, under applicable law, a consensual Lien can
be perfected by a limited number of Uniform Commercial Code and/or
Federal filings naming the Borrower or such Restricted Subsidiary, as
the case may be, as debtor or by the delivery of a pledged instrument
to the party secured by such Lien.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": for any fiscal period, the Net Income or Net Loss,
as the case may be, for such fiscal period, after restoring thereto
amounts deducted for, without duplication, (a) Interest Expense, (b)
income tax expense, (c) depreciation and amortization and (d) other
non-cash charges, provided, however, that there shall in any event be
excluded from EBITDA any portion thereof attributable to the income of
any Person (other than a Restricted Subsidiary) in which the Borrower
or any Restricted Subsidiary has any ownership interest except to the
extent that any such income has been actually received by the Borrower
or such Restricted Subsidiary in the form of cash dividends or similar
distributions.
"Eligible Assignee": (a) a commercial bank having total assets
in excess of $250,000,000, an insurance company or other similar
financial institution, (b) any other entity which is (or which is
managed by a manager which manages funds which are) primarily engaged
in making, purchasing or otherwise investing in commercial loans or
extending, or investing in extensions of, credit for its own account in
the ordinary course of its business, which has total assets in excess
of $250,000,000 or (c) any Investment Vehicle principally engaged in
investing in commercial loans; provided that in no event may any Person
which is engaged in, or in the case of any Person described in clause
(b) of this definition, which is an Affiliate of any Person engaged in,
the telecommunications service business in the United States be an
Eligible Assignee, and provided, further, that in no event may any
trust or other Person that is the issuer of direct or indirect
beneficial interests in the Loans (an "Investment Vehicle") become a
Lender unless (i) any rights of the holders of the beneficial interests
issued by such Investment Vehicle in respect of votes, consents and
other actions to be taken by the Lenders under or in connection with
this Agreement and the other Loan Documents shall be limited so that
the percentage of such beneficial interests the holders of which are
required to approve any vote, consent or other action proposed to be
made or taken by such Investment Vehicle in its capacity as a Lender in
connection with this Agreement or any other Loan Document shall be the
same as the percentage of the Loans the holders of which are required
pursuant to subsection 9.1 to approve such vote, consent or other
action and (ii) the only financial statements and other reports that
such Investment Vehicle and holders of beneficial interests shall be
entitled to receive from the Borrower shall be the annual audited and
quarterly unaudited financial statements required to be delivered by
the Borrower pursuant to subsection 5.1(a) and (b) and subsection
5.2(a) and (b) and any other documents delivered by the Borrower
pursuant to subsection 5.1 that contain only publicly available
information.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of or agreements with any Governmental
Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning (a) pollution, protection or clean-up of the environment,
(b) any Releases or (c) human health or safety as relating to the
workplace or the environment, including the exposure of employees and
other personnel to Hazardous Substances, in each case, as now or may at
any time hereafter be in effect.
"Environmental Permit": any permit, approval, authorization,
certificate, license, variance, filing or permission required by or
from any Governmental Authority pursuant to any Environmental Law.
"EquipmentCo": Sprint Spectrum Equipment Company, L.P., a
Delaware limited partnership.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate of interest
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Telerate screen as
of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period. In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such screen), the
"Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be
agreed upon by the Agent and the Borrower or, in the absence of such
agreement, the "Eurodollar Rate" shall instead be the rate per annum
equal to the average (rounded upwards to the nearest 1/100th of 1%) of
the respective rates notified to the Agent by each of the Reference
Lenders as the rate at which such Reference Lender is offered Dollar
deposits in an amount approximately equal to the amount of the
requested Loan at or about 10:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein.
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excluded Assets": at any time, the collective reference to
(a) all assets then subject to a Lien permitted by subsection 6.3(f),
(g), (h), (i), (p), (q) and (r) and (b) any other assets of the
Borrower and its Restricted Subsidiaries (i) which then have a book
value not exceeding $200,000,000 in the aggregate and (ii) none of
which individually then has a book value exceeding $15,000,000.
"Existing Bank Credit Facility": the Credit Agreement, dated
as of October 2, 1996, among the Borrower, the lenders parties thereto
and The Chase Manhattan Bank, as Administrative Agent, as amended,
supplemented or otherwise modified from time to time, or any
refinancing, replacement or refunding thereof.
"FCC": the Federal Communications Commission, or any other
similar or successor agency of the Federal government administering the
Communications Act.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three federal
funds brokers of recognized standing selected by it.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Funding Percentage": as to any Lender at any time, the per-0
centage which such Lender's then Unused Commitment constitutes of the
then Unused Commitments of all the Lenders.
"GAAP": generally accepted accounting principles in the United
States of America used in connection with the preparation of the
consolidated balance sheet and other financial statements described in
subsection 3.1(a) ("Fixed GAAP") or, when such term is used in
subsections 5.1, 5.3, 5.6 and 6.3, generally accepted accounting
principles in the United States of America in effect from time to time
("Floating GAAP").
"Governmental Authority": any nation or government, any
state, agency or other political subdivision thereof and any entity ex-
ercising executive, legislative, judicial, regulatory (including
self-regulatory) or administrative functions of or pertaining to
government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation (the "primary obligations") of any
other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantees": as defined in the Trust Agreement.
"Guarantor": any Person delivering a Guarantee pursuant to
the Trust Agreement.
"Hazardous Substances": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regu-
lated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"High Yield Debt": the collective reference to the Borrower's
11% Senior Notes Due 2006 and 12 1/2% Senior Discount Notes Due 2006
and the respective indentures under which such Notes have been issued.
"Holding": Sprint Spectrum Holding Company, L.P., a Delaware
limited partnership and the general partner of the Borrower.
"Incur": when used with respect to any Indebtedness, Guarantee
Obligation or Lien, to create, incur or assume such Indebtedness,
Guarantee Obligation or Lien, whether directly or indirectly, it being
agreed any Indebtedness or Guarantee Obligation of, or any Lien on any
property or assets owned by, any Person which shall become a Restricted
Subsidiary subsequent to the date hereof (whether through the
acquisition thereof, the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary or otherwise) shall be deemed to be Incurred on
the date such Person shall so become a Restricted Subsidiary.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money (including capitalized
interest) or for the deferred purchase price of property or services
(other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b) any
other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations (absolute or contingent) of
such Person in respect of acceptances issued or created for the account
of such Person and (e) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed
or otherwise become liable for the payment thereof.
"Initial Borrowing Date": the date upon which the initial
Loans are made hereunder.
"Initial Guarantees": as defined in the Trust Agreement.
"Initial Security Documents": as defined in the Trust Agree-
ment.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 3.9.
"Interest Capitalization Period": as defined in subsection
2.7(d).
"Interest Expense": for any fiscal period, the amount of (a)
interest expense of the Borrower and its Restricted Subsidiaries for
such fiscal period determined in accordance with GAAP plus (b) interest
expense in respect of Specified Affiliate Debt for such fiscal period
determined in accordance with GAAP.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of
such Interest Period, (c) as to any Eurodollar Loan having an Interest
Period longer than three months, each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and
the last day of such Interest Period and (d) as to any Eurodollar Loan,
the date of any conversion of such Eurodollar Loan to an ABR Loan in
accordance with subsection 2.6 or repayment or prepayment of such
Eurodollar Loan in accordance with subsection 2.4 or subsection 2.5.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six or, subject to
availability, nine or twelve months thereafter, as selected by
the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto;
and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six or, subject to
availability, nine or twelve months thereafter, as selected by
the Borrower by irrevocable notice to the Agent not less than
three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that all of the foregoing provisions relating to I-
terest Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the date final payment is due on the Loans shall end on
such date of final payment; and
(iii) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Agreement": any interest rate swap or other
interest rate hedge arrangement to or under which the Borrower is a
party or a beneficiary.
"Interest Rate Agreement Obligations": all obligations of the
Borrower to any financial institution under any one or more Interest
Rate Agreements.
"Investment Grade Status": shall exist at any time when the
actual or implied rating of the Borrower's senior long-term unsecured
debt is at or above Baa3 from Moody's or BBB- from S&P; if either of
Moody's or S&P shall change its system of classifications after the
date of this Agreement, Investment Grade Status shall exist at any time
when the rating of the Borrower's senior long-term unsecured debt is at
or above the new rating which most closely corresponds to the
above-specified level under the previous rating system.
"Investments": as defined in subsection 6.8.
"Investment Vehicle": as defined in the definition of Eligi-
ble Assignee in this subsection 1.1.
"Lenders": as defined in the preamble hereto.
"License": any broadband personal communications services li-
cense issued by the FCC in connection with the operation of a System.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge 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 Financing Lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made (including interest capitalized pursu-
ant to subsection 2.7(d)) pursuant to this Agreement.
"Loan Documents": this Agreement, any Notes, the Guarantees,
the Trust Agreement, the Security Documents and the Capital Contribu-
tion Agreement and any of the guarantees, security documents or other
documents delivered by the Borrower or any of its Subsidiaries with or
pursuant to such agreements from time to time.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, results of operations or financial condition of
the Borrower and its Restricted Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform its obligations under the Loan
Documents or (c) the validity or enforceability of this Agreement or
any of the other Loan Documents or the rights or remedies of the Agent,
the Trustees or the Lenders thereunder; provided, however, that no
termination, revocation or non-renewal of any License shall constitute
a Material Adverse Effect unless after giving effect thereto the
aggregate number of Owned Pops is less than 120,000,000.
"MinorCo": MinorCo, L.P., a Delaware limited partnership.
"Moody's": Moody's Investors Service, Inc.
"Mortgaged Property": as defined in subsection 5.9(c).
"MTA": a Major Trading Area as defined in 47 C.F.R. ss.
24.202.
"Multiemployer Plan": a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": of any Asset Sale by any Person, the
aggregate amount of cash and Cash Equivalents received by or on behalf
of such Person in consideration for such Asset Sale or (when and as
received in cash or Cash Equivalents) through payment or disposition of
deferred consideration for such Asset Sale (including by way of
deferred payment of principal pursuant to a note or other security or
installment receivable or purchase price adjustment receivable or
otherwise), after deducting therefrom, as applicable, (a) the amount of
such proceeds required to be applied at the time of such Asset Sale to
repay Indebtedness (other than Secured Obligations) secured by any
asset which is the subject of such Asset Sale, (b) brokerage
commissions and other fees and expenses (including fees and expenses of
legal counsel and investment bankers) payable in connection therewith,
(c) appropriate amounts to be provided by the Borrower or any
Restricted Subsidiary, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset
Sale and retained by the Borrower or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities and liabilities
under any indemnification obligations associated with such Asset Sale
and (d) other out-of-pocket costs incurred in connection therewith; and
adding thereto, as applicable, any reversal of or reduction in any
reserve referred to in clause (c) above.
"Net Income" or "Net Loss": for any fiscal period, the amount
which, in conformity with GAAP, would constitute the net income or net
loss, as the case may be, of the Borrower and its Restricted
Subsidiaries on a consolidated basis for such fiscal period (after
adjustment for minority interests), provided that Net Income or Net
Loss shall exclude extraordinary, unusual or non-recurring gains or
losses.
"New Lending Office": as defined in subsection 2.13(b).
"Non-Excluded Taxes": as defined in subsection 2.13.
"Non-U.S. Lender": as defined in subsection 2.13(a).
"Note": as defined in subsection 2.3(e).
"Notice of Enforcement": as defined in the Trust Agreement.
"Other Vendor": Lucent Technologies Inc.
"Other Vendor Credit Facility": the Credit Agreement, dated as
of October 2, 1996, among the Borrower, the Other Vendor, the several
lenders from time to time parties thereto and the Other Vender, as
agent, as amended, supplemented or otherwise modified from time to
time.
"Other Vendor Procurement Contract": the Procurement and Ser-
vices Contract, dated as of January 31, 1996, between the Borrower
(formerly MajorCo, L.P.) and the Other Vendor, as the same may be
amended, supplemented or otherwise modified from time to time.
"Owned Pops": at any time, the aggregate number of Pops in-
cluded in those MTA's or BTA's for which the Borrower and its Restric-
ed Subsidiaries then own Licenses that are in full force and effect.
"Parents": Sprint Corporation, Tele-Communications, Inc.,
Comcast Corporation and Cox Communications, Inc.
"Participant": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender at any time, the percentage
which the then outstanding principal amount of such Lender's Loans
(other than amounts constituting interest capitalized pursuant to
subsection 2.7(d)) and Unused Commitment, if any, then constitutes of
the then outstanding principal amount of the Loans of all Lenders
(other than amounts constituting interest capitalized pursuant to
subsection 2.7(d)) and Unused Commitments of all Lenders.
"Permanent Reduction": any voluntary reduction by the Borrower
of revolving credit commitments under a Bank Credit Facility to an
aggregate amount which is less than the average daily outstanding
principal amount of revolving credit loans under such Bank Credit
Facility during the six month period preceding the date of such
reduction.
"Permitted Refinancing": (a) a refinancing, replacement or
refunding of the Other Vendor Credit Facility in connection with which
the Lenders are given the option, to be effected in accordance with the
procedures set forth in subsection 2.16, to have their Loans repaid pro
rata with the lenders under the Other Vendor Credit Facility on
substantially equivalent terms and conditions and (b) any refinancing,
replacement or refunding of a Bank Credit Facility.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Personal Property Assets": all personal property of the
Borrower and its Restricted Subsidiaries (other than the Licenses).
"Phase I Commitment Period": as defined in Section 1 of
Schedule I.
"Phase II Commitment Period": as defined in Section 1 of
Schedule I.
"Plan": at a particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or
a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA or may have or incur any
liability.
"Pops": as of any date, with respect to any BTA or MTA, the
population of such BTA or MTA as such number is published in the then
most recently issued Donnelly Marketing Service Population Guide.
"Prepayment Acceptance Amount": with respect to each Lender
receiving a Prepayment Offer Notice, the maximum principal amount of
the Loans of such Lender subject to such Prepayment Offer Notice that
such Lender wishes to be subject to prepayment, as indicated in the
applicable Prepayment Offer Response Notice of such Lender.
"Prepayment Amount": with respect to any Specified Prepayment
to be made on any date, the amount required to be applied toward pre-
payment of the Loans on such date in accordance with the provisions of
subsection 2.16 and the definition of the term Pro Rata Payment Offer.
"Prepayment Offer Notice": a written notice (a) offering to
prepay the Loans on the Specified Prepayment Date designated therein in
an aggregate amount equal to the Prepayment Amount, (b) requesting each
Lender to respond to such offer by delivering to the Agent and the
Borrower a Prepayment Offer Response Notice no later than four Business
Days prior to such Specified Prepayment Date, and (c) informing each
such Lender that the failure by such Lender to deliver a Prepayment
Offer Response Notice on or before the fourth Business Day prior to the
Specified Prepayment Date shall be deemed to be the acceptance of the
full amount of such offer by such Lender.
"Prepayment Offer Response Notice": a written notice to the
Agent and the Borrower in response to a Prepayment Offer Notice,
pursuant to which the Lender delivering such notice states whether such
Lender accepts or rejects the Borrower's offer to prepay Loans
contained in such Prepayment Offer Notice and, if such offer is
accepted, states the maximum principal amount of such Lender's Loan
which such Lender wishes to be subject to prepayment.
"Prepayment Pro Rata Amount": with respect to each Lender in
connection with any Specified Prepayment, the percentage of the associ-
ated Prepayment Amount which such Lender's then outstanding Loans con-
stitutes of all then outstanding Loans.
"Prepayment Share": with respect to each Lender in connection
with any Specified Prepayment, the lesser of its Prepayment Acceptance
Amount and its Prepayment Pro Rata Amount.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by Bank of America National Trust and
Savings Association as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be the lowest
rate of interest charged by Bank of America National Trust and Savings
Association in connection with extensions of credit to debtors).
"Pro Forma Compliance": shall exist at any time when (a) the
Borrower shall be in pro forma compliance with the covenants set forth
in subsections 6.1(a) through (d) (computed on the basis of Total Debt
and Total Capitalization then outstanding and Annualized Adjusted
EBITDA and Annualized EBITDA as projected in good faith by the Borrower
for the period ending at the end of the then current fiscal quarter)
and (b) no Default or Event of Default shall be then in existence.
"Pro Rata Payment Offer": an offer made by the Borrower, to
each holder of Secured Obligations as to which such an offer is
required, pursuant to the Secured Instrument under which such Secured
Obligations are outstanding, to be made, to have such holder's pro rata
share (based on (a) in the case of Secured Obligations referred to in
clause (ii), the then outstanding principal amounts of such Secured
Obligations and amounts of unused commitments to extend credit
constituting Secured Obligations and (b) in the case of Secured
Obligations referred to in clause (i), the then outstanding principal
amounts of such Secured Obligations) of a specified amount (i) in the
case of Secured Obligations other than those referred to in clause
(ii), applied to prepay such Secured Obligations and (ii) in the case
of Secured Obligations under a committed revolving credit facility, to
reduce the commitments under such facility and to prepay any Secured
Obligations outstanding under such facility by the amount such Secured
Obligations exceed such commitments as so reduced.
"Pro Rata Prepayment/Commitment Reduction": any application of
Net Cash Proceeds (a) in accordance with subsection 2.5, to prepay the
Loans and (b) to the extent required by and in accordance with any
mandatory prepayment and/or commitment reduction provisions of, or to
the extent that the Borrower determines to do so under any voluntary
prepayment and/or commitment reduction provisions of, any other Secured
Obligations to prepay the loans and/or reduce the commitments to lend
thereunder, with the portion of such Net Cash Proceeds to be applied to
prepay the Loans being at least equal to a pro rata share thereof
determined on the basis of the respective amounts of the then
outstanding Secured Obligations to which such Net Cash Proceeds will be
applied and, unless the maturity of the Secured Obligations shall have
been accelerated, unused commitments to lend then in effect under the
Secured Instruments relating to such Secured Obligations.
"Public Offering Date": the date on which there shall be
completed an underwritten public offering of shares of Capital Stock of
the Borrower (or of any direct or indirect partner or shareholder of
the Borrower (other than any Parent) having the economic effect of
transferring to the public equity interests in the Borrower) pursuant
to a registration statement filed with, and declared effective by, the
Securities and Exchange Commission (or its successor) in accordance
with the Securities Act.
"Real Estate Assets": all interests in real property of the
Borrower and its Restricted Subsidiaries other than Mortgaged Proper-
ties.
"RealtyCo": Sprint Spectrum Realty Company, L.P., a Delaware
limited partnership.
"Reference Lenders": Bank of America National Trust and
Savings Association, The Chase Manhattan Bank and The Bank of New York
or such other banks as may be agreed by the Borrower and the Agent from
time to time.
"Register": as defined in subsection 9.6(d).
"Release": any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, dispos-
ing, depositing, dispersing, emanating or migrating of any Hazardous
Substances in, into, onto or through the environment.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA or regulations thereunder, other than those events as
to which the thirty day notice period is waived under the regulations
adopted by the PBGC.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any
of its property is subject.
"Requisite Accelerating Creditors": at any time, (a) with re-
spect to any Event of Default specified in Section 7(a) through (c),
the then Requisite Lenders, and (b) with respect to any other Event of
Default, the then Requisite Aggregate Lenders.
"Requisite Aggregate Lenders": at any time, (a) until the
first date upon which the Vendor holds Loans and Unused Commitment in
an aggregate amount less than 50% of the then outstanding Loans and
Unused Commitments and the Other Vendor holds loans and commitment
under the Other Vendor Credit Facility in an aggregate amount less than
50% of the then outstanding loans and commitments thereunder, Lenders
holding a majority of the then outstanding Loans and Unused Commitments
and lenders under the Other Vendor Credit Facility holding a majority
of the then outstanding loans and commitments under the Other Vendor
Credit Facility and (b) thereafter, Lenders and/or lenders under the
Other Vendor Credit Facility holding Loans and Unused Commitments and
loans and commitment under the Other Vendor Credit Facility in an
aggregate amount equal to at least a majority of the then aggregate
outstanding amount of loans and commitments under both Vendor Credit
Facilities.
"Requisite Lenders": at any time, Lenders the Percentages of
which aggregate more than 50%.
"Responsible Officer": any of the president, chief financial
officer, treasurer, assistant treasurer, director - corporate finance
or controller of the Borrower.
"Restricted Payments": as defined in subsection 6.7.
"Restricted Subsidiary": at any time, any Subsidiary of the
Borrower that is not an Unrestricted Subsidiary and including the
Special Purpose Subsidiaries.
"S&P": Standard and Poor's Ratings Services.
"Secured Instruments": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Security Documents": as defined in the Trust Agreement.
"Securities Act": as defined in subsection 9.15.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Special Payment Condition": shall be satisfied when, after
giving effect to any Restricted Payment described in subsection 6.7(a)
or (c) or any Investment described in subsection 6.8(c) or (d), the
ratio of the then outstanding Total Debt to Annualized EBITDA for the
period ended on the last day of the then most recently ended fiscal
quarter for which financial statements shall have been delivered to the
Lenders pursuant to subsection 5.1 is not greater than 5.0 to 1 and the
ratio of Annualized EBITDA for the period ended on such last day to
Interest Expense for the period of four consecutive fiscal quarters
ended on such last day is not less than 2.5 to 1.
"Special Purpose Subsidiary": each of EquipmentCo, RealtyCo
and WirelessCo.
"Specified Affiliate Debt": Indebtedness of an Affiliate of
the Borrower incurred in an arm's length transaction (other than
Indebtedness used to fund capital contributions required to be made by
such Affiliate (or an Affiliate thereof) under the Capital Contribution
Agreement or the partnership agreement of Holding) all of the proceeds
of which shall have been contributed to the capital of the Borrower or
used to purchase Capital Stock of the Borrower and which shall have
been designated in a written notice from the Borrower to the Agent as
Specified Affiliate Debt.
"Specified Loan": as defined in subsection 2.7(d).
"Specified Prepayment": any prepayment to which the provi-
sions of subsection 2.16 are applicable.
"Specified Prepayment Date": as defined in subsection 2.16.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"System": as to any Person, assets constituting a radio comm-
unications system authorized under the rules for wireless communica-
tions services (including the licenses, network, marketing, distribu-
tion, sales, customer interface and operations functions relating
thereto) owned and operated by such Person.
"Tax Credit": as defined in subsection 2.13(d).
"Termination Date": the earliest of (a) the date the Avail-
able Commitment is reduced to zero; (b) the date the Commitments of all
Lenders are terminated as provided in this Agreement; (c) December 31,
2000; and (d) March 31, 1997 if the Initial Borrowing Date has not
occurred prior to such date.
"Total Capitalization": at any date, the sum of (a) Total Debt
outstanding on such date plus (b) Contributed Capital on such date plus
(c) Committed Capital on such date minus (d) the amount of Restricted
Payments made by the Borrower or any Restricted Subsidiary (other than
Restricted Payments which are permitted to be made pursuant to
subsection 6.7(a) or (b)), directly or indirectly to any Person other
than the Borrower or any Restricted Subsidiary through such date.
"Total Debt": at any time, the sum of (a) the aggregate amount
of consolidated Indebtedness of the Borrower and its Restricted
Subsidiaries then outstanding (including capitalized and accreted
interest) determined in accordance with GAAP plus (b) the aggregate
amount of Guarantee Obligations of the Borrower and its Restricted
Subsidiaries then outstanding in respect of Indebtedness of Persons
other than the Borrower and its Restricted Subsidiaries plus (c) the
aggregate amount of Specified Affiliate Debt then outstanding
(including capitalized and accreted interest) minus (d) the aggregate
amount of cash and Cash Equivalents then owned by the Borrower and its
Restricted Subsidiaries.
"Trademark License Agreement": the Amended and Restated
Sprint Trademark License Agreement, dated as of January 31, 1996, by
and between Sprint Communications Company, L.P. and the Borrower
(formerly MajorCo, L.P.), as the same may have been amended, supple-
mented or otherwise modified prior to the date of this Agreement.
"Transferee": as defined in subsection 9.6(f).
"Trust Agreement": the Trust Agreement, dated as of October 2,
1996, among the Borrower, First Union National Bank, a national banking
association, as corporate trustee (the "Corporate Trustee"), and
Kenneth D. Benton, as individual trustee (together with the Corporate
Trustee, the "Trustees"), as amended, supplemented or otherwise
modified from time to time.
"Trustees": as defined in the definition of Trust Agreement.
"Type": as to any Loan, its nature as an ABR Loan or a Euro-
dollar Loan.
"Unused Commitment": at any time as to any Lender, an amount
equal to the excess, if any, of (a) the amount of the Commitment of
such Lender over (b) the aggregate principal amount of Loans made by
such Lender, including any Loans made by the Vendor on such Lender's
behalf pursuant to subsection 2.1(b), and in each case excluding
amounts constituting interest capitalized pursuant to subsection
2.7(d).
"Unrestricted Subsidiary": APC and any other Subsidiary of the
Borrower (other than any Special Purpose Subsidiary) that the Borrower
designates as an Unrestricted Subsidiary in accordance with subsection
6.8(c) or (d), provided, however, that the Borrower may, so long as no
Default or Event of Default would result therefrom, cause any
Unrestricted Subsidiary to become a Restricted Subsidiary by so
notifying the Agent in a written instrument executed by a Responsible
Officer.
"Vendor": as defined in the Preamble hereto.
"Vendor Commitment": as defined in Schedule I.
"Vendor Credit Facilities": the collective reference to this
Agreement and the Other Vendor Credit Facility.
"Vendor Procurement Contract": the Procurement and Services
Contract, dated as of January 31, 1996, between the Borrower (formerly
MajorCo, L.P.) and the Vendor, as amended, supplemented or otherwise
modified from time to time.
"Vendor's Account": Account No. 5107520 maintained by the
Vendor at the offices of The First National Bank of Chicago located at
Chicago, Illinois, or such other account as may be specified in
writing by the Vendor to the Borrower and the Agent from time to time.
"Weighted Average Interest Amount": as defined in subsection
2.2(e).
"Wholly Owned": any Subsidiary of the Borrower or any
Restricted Subsidiary shall be deemed to be Wholly Owned if at least
99% of the voting and economic equity interest in such Subsidiary is
owned by the Borrower or such Restricted Subsidiary and the remainder
of the voting and economic equity interest in such Subsidiary is owned
by MinorCo.
"WirelessCo": WirelessCo, L.P., a Delaware limited partner-
ship.
"Wireless Service": the provision of broadband personal comm-
unications services in one or more Systems.
"Wireless Subscribers": at any time, all customers then re-
ceiving Wireless Services from the Borrower or any of its Restricted
Subsidiaries.
"Year": any one of the consecutive twelve-month periods
following the Initial Borrowing Date each of which shall end on an
anniversary of the Initial Borrowing Date.
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant
hereto.
(b) As used herein, and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Borrower and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under Fixed GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) Terms defined in Article 9 of the Uniform Commercial Code
of the State of New York and not defined herein shall have the respective
meanings given to them in such Article 9.
(f) The words "include", "includes" and "including" when used
herein shall be deemed to be followed by the phrase "without limitation".
(g) Unless otherwise expressly provided herein, any reference
in this Agreement to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time.
(h) Any reference herein to a fiscal year or a fiscal quarter
shall be deemed a reference to such fiscal year or such fiscal quarter of the
Borrower.
1.3 Schedules. The terms and conditions of the Schedules shall
be deemed to be a part of this Agreement and incorporated herein by reference as
fully as if they were set forth in full herein.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments. (a) Subject to the terms and conditions
hereof, each Lender agrees, severally and not jointly, to make Loans to the
Borrower pursuant to this subsection from time to time during the Commitment
Period in an aggregate principal amount (excluding amounts constituting interest
capitalized pursuant to subsection 2.7(d)) not to exceed the amount of such
Lender's Commitment. The Loans may from time to time be (a) Eurodollar Loans,
(b) ABR Loans or (c) a combination thereof, as determined by the Borrower and
notified to the Agent in accordance with subsections 2.2 and 2.6.
(b) If on any Borrowing Date any Lender (other than the
Vendor) defaults in its obligation to make Loans to the Borrower, the Vendor
shall be unconditionally obligated to make such Loans on such Borrowing Date. To
the extent that the Vendor makes Loans on behalf of a defaulting Lender, the
Vendor shall be subrogated to the rights of the Borrower against such defaulting
Lender with respect to such Loans. If a defaulting Lender purchases from the
Vendor any Loans made by the Vendor on behalf of such defaulting Lender, then
from and after that date the defaulting Lender shall be deemed to be the Lender
with respect to such Loans for all purposes under this Agreement.
2.2 Borrowing Procedure. (a) The Borrower may borrow under the
Commitment during the Commitment Period on any Business Day, provided that no
more than one borrowing may be made hereunder during any of the successive
one-month periods following the Initial Borrowing Date (other than the first
such one-month period, during which up to two borrowings may be made hereunder).
Borrowings hereunder on any Borrowing Date may be made (i) in cash in accordance
with the provisions of subsection 2.2(b) (a "Cash Advance") and/or (ii) by means
of a credit against amounts due to the Vendor under the Vendor Procurement
Contract in accordance with the provisions of subsection 2.2(c) (a "Credit
Advance"). The Borrower shall deliver to the Agent a Borrowing Notice which must
be received by the Agent prior to 1:00 P.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
Loans requested to be made on any Borrowing Date are to be initially Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, otherwise,
and which must specify (i) the requested Borrowing Date, (ii) the amount to be
borrowed, (iii) whether the borrowing is to be by means of a Cash Advance, a
Credit Advance or a combination thereof and, if a combination thereof, the
respective amounts of each, (iv) whether the borrowing is to be of Eurodollar
Loans, ABR Loans or a combination thereof and, if a combination thereof, the
respective amounts of each and (v) if the borrowing is to be entirely or partly
of Eurodollar Loans, the amounts of such Type of Loan and the respective lengths
of the initial Interest Periods therefor.
(b) If any Borrowing Notice indicates that a Cash Advance is
to be made on the Borrowing Date specified therein to finance amounts
theretofore paid by the Borrower (other than with the proceeds of Credit
Advances) under invoices submitted to the Borrower by the Vendor pursuant to the
Vendor Procurement Contract, such Borrowing Notice shall identify such invoices
and the amount theretofore paid thereunder (which shall equal the amount of such
Cash Advance), and, in accordance with subsection 2.2(d), each Lender will make
the amount of its respective Funding Percentage of such Cash Advance available
to the Agent, which shall then make such amounts available to the Borrower at
the Borrower's Account prior to 11:00 A.M., New York City time, on such
Borrowing Date in funds immediately available to the Borrower.
(c) If any Borrowing Notice requests that a Credit Advance be
made on the Borrowing Date specified therein to finance amounts then due under
invoices submitted to the Borrower by the Vendor pursuant to the Vendor
Procurement Contract, such Borrowing Notice shall identify such invoices and the
amounts being paid thereunder pursuant to such Credit Advance, and, in
accordance with subsection 2.2(d), each Lender (other than the Vendor) will make
the amount of its respective Funding Percentage of such Credit Advance available
to the Agent at the Agent's Account, and the Agent shall then make the aggregate
of such amounts available to the Vendor at the Vendor's Account and the Vendor
shall credit the entire amount of such Credit Advance against the amounts due to
it by the Borrower under such invoices.
(d) No later than 11:00 a.m., New York City time, on the
Borrowing Date of any Loan, each of the Lenders (in the case of a Credit
Advance, other than the Vendor) will make available to the Agent, at the Agent's
Account, in immediately available funds, the amount of such Lender's Funding
Percentage of the amount of the requested Loan. Upon receipt from each Lender of
such amount, and satisfaction by the Borrower of all conditions to making the
requested Loan, the Agent will make available to, in the case of a Cash Advance,
the Borrower, and in the case of a Credit Advance, the Vendor, the aggregate
amount of such Loan made available to the Agent by the Lenders, it being
understood that the Vendor shall have no obligation to make available to the
Agent any funds for any Loan in respect of a Credit Advance. In the case of a
Credit Advance, the Vendor will credit the amount of (i) the Vendor's Funding
Percentage of such Credit Advance plus (ii) the aggregate required to be amount
made available to the Agent by the Lenders on such Borrowing Date (whether or
not any Lender shall have defaulted in its obligation to make available to the
Agent any portion of its Funding Percentage of the requested Loan on such
Borrowing Date) against the amounts due it from the Borrower under the invoices
identified in the Borrowing Notice requesting such Credit Advance. The failure
or refusal of any Lender to make available to the Agent at the aforesaid time
and place on any Borrowing Date the amount of its Funding Percentage of the
requested Loans shall not relieve any other Lender from its several obligation
hereunder to make available to the Agent the amount of such other Lender's
Funding Percentage of any requested Loans.
(e) The Agent may, unless notified to the contrary by any
Lender prior to a Borrowing Date, assume that such Lender has made available to
the Agent on such Borrowing Date the amount of such Lender's Funding Percentage
of the Loans to be made on such Borrowing Date, and the Agent may (but it shall
not be required to), in reliance upon such assumption, make available to the
Vendor or the Borrower, as the case may be, a corresponding amount. If any
Lender makes available to the Agent such amount on a date after such Borrowing
Date, such Lender shall pay to the Agent on demand an amount (the "Weighted
Average Interest Amount") equal to the product of (i) the average computed for a
period referred to in clause (iii) below, of the weighted average interest rate
paid by the Agent for funds acquired by the Agent during each day included in
such period, times (ii) the amount of such Lender's Funding Percentage of such
Loans, times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Borrowing Date to the date on which the amount of
such Lender's Funding Percentage of such Loans shall become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to such Lender with respect to any amounts owing under this
subsection shall be prima facie evidence of the amount owing to the Agent by
such Lender. If the Agent has made available to the Vendor or the Borrower, as
the case may be, the amount of a Lender's Funding Percentage of such Loans and
such Lender has failed to make available to the Agent such amount within three
Business Days following such Borrowing Date, the Agent shall be entitled to
recover such amount, plus the Weighted Average Interest Amount, from the Vendor
on demand as provided in subsection 2.2(b).
2.3 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Agent for the account of each
Lender the principal amount of the Loans of such Lender made during any
Borrowing Year in twenty consecutive quarterly installments, commencing on the
date which is thirty-nine months after the last day of such Borrowing Year and
ending on the date which is eight years after such last day, in an aggregate
amount for each Year set forth below equal to the percentage set forth opposite
such Year multiplied by the aggregate principal amount of the Loans made by such
Lender during such Borrowing Year (with the quarterly installments during each
such Year being equal in amount):
Year Percentage
4 10%
5 15
6 20
7 25
8 30
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsection 2.7.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 9.6(e), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder (including the amount of any capitalized interest under subsection
2.7(d)) and (iii) both the amount of any sum received by the Agent hereunder
from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.3(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans of such Lender in
accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by
any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower dated the Closing Date evidencing the Loans of such Lender,
substantially in the form of Exhibit A with appropriate insertions as to date
and principal amount (each, a "Note"). Thereafter, the Loans evidenced by any
such Note and interest thereon shall at all times (including after assignment
pursuant to subsection 9.6) be represented by one or more promissory notes in
such form payable to the order of the payee named therein and its registered
assigns.
2.4 Optional Prepayments. The Borrower may prepay the Loans,
in whole or in part, without premium or penalty, upon giving irrevocable notice
to the Agent (which notice must be received by the Agent prior to 1:00 P.M., New
York City time, (a) three Business Days prior to the date of prepayment, if all
or any part of the Loans to be prepaid are Eurodollar Loans, or (b) one Business
Day prior to the date of prepayment, otherwise), specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.14, accrued interest to such date on
the amount prepaid. Partial prepayments of the Loans shall be applied to the
then remaining installments of principal thereof pro rata according to the
respective amounts thereof. Amounts prepaid on account of the Loans may not be
reborrowed. Partial prepayments pursuant to this subsection shall be in an
aggregate principal amount of at least $10,000,000 and increments of $1,000,000
in excess thereof.
2.5 Mandatory Prepayments. (a) The Borrower shall prepay the Loans with the
Net Cash Proceeds of Asset Sales to the extent required by subsections
6.6(c) and (d).
(b) If at any time the Borrower shall make a voluntary
prepayment of loans under the Other Vendor Credit Facility or shall voluntarily
make a prepayment of term loans, or a Permanent Reduction, under the Existing
Bank Credit Facility and such prepayment or Permanent Reduction is not made in
connection with a Permitted Refinancing, the Borrower shall, subject to the
provisions of subsection 2.16, prepay the Loans in an amount equal to the
product of (i) the then outstanding principal amount of the Loans multiplied by
(ii) a fraction (A) the numerator of which is the amount of the loans so
voluntarily prepaid under the Other Vendor Credit Facility or the Existing Bank
Credit Facility or the amount of the Permanent Reduction, as the case may be,
and (B) the denominator of which is the aggregate then outstanding principal
amount of loans under the Other Vendor Credit Facility or the Existing Bank
Credit Facility (in the case of prepayment of term loans) or the aggregate
amount of revolving credit commitments under the Existing Bank Credit Facility,
(in the case of a Permanent Reduction) as the case may be, in any case, before
giving effect to any such voluntary prepayment of loans or Permanent Reduction.
(c) Partial prepayments of the Loans pursuant to this
subsection shall be applied to the then remaining installments of principal
thereof pro rata according to the respective amounts thereof. Each such
prepayment shall be made together with any amounts payable pursuant to
subsection 2.14 and accrued interest to such date on the amount prepaid. Amounts
prepaid on account of the Loans may not be reborrowed.
2.6 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Agent at least one Business Days' prior irrevocable notice of such election,
provided that if any such conversion of Eurodollar Loans is made on a day which
is not the last day of an Interest Period with respect thereto such conversion
shall be accompanied by payment of any amounts payable pursuant to subsection
2.14. The Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice the Agent shall promptly
notify each Lender thereof. Accrued interest on a Eurodollar Loan (or portion
thereof) being converted to an ABR Loan shall be paid by the Borrower at the
time of conversion. All or any part of outstanding Eurodollar Loans and ABR
Loans may be converted as provided herein, provided that no Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
scheduled payment date of the final installment of principal of such Loan or at
any time when any principal or interest in respect of such Loan is overdue.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided that
no Eurodollar Loan may be continued as such after the date that is one month
prior to the scheduled payment date of the final installment of principal of the
Loans or at any time when any principal or interest in respect of such Loan is
overdue and provided, further, that if the Borrower shall fail to give such
notice or if such continuation is not permitted pursuant to the immediately
preceding proviso such Loans shall be automatically converted to ABR Loans on
the last day of such then expiring Interest Period.
(c) Each conversion or continuation shall be made pro rata
among the Lenders in accordance with their respective principal amounts of the
Loans comprising the converted or continued Loans.
(d) All borrowings and conversions shall be in such amounts so
that, after giving effect thereto, not more than twenty separate Eurodollar
Loans of any Lender being outstanding hereunder at any one time. For purposes of
the foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans.
2.7 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest during each Interest Period with respect thereto, payable in
arrears on each Interest Payment Date, at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for each day, payable in
arrears on each Interest Payment Date, at a rate per annum equal to the ABR in
effect on such day plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon or (iii) any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue principal, interest or other amount shall bear interest
at a rate per annum which is (A) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (B) in the case of any such overdue interest or other
amount, the rate described in paragraph (b) of this subsection plus 2%, in each
case from the date of such non-payment until such overdue principal, interest or
other amount is paid in full (as well after as before judgment).
(d) Anything in this Agreement to the contrary
notwithstanding, and unless the Borrower shall notify the Agent that this
paragraph (d) shall not be applicable to any interest accruing with respect to
Loans, (i) (A) the interest on outstanding Loans (each, a "Specified Loan") made
during any Borrowing Year shall accrue during the period from the day each such
Specified Loan is made until the first anniversary of the last day of such
Borrowing Year (the "Interest Capitalization Period" for such Borrowing Year)
and (B) such accrued interest shall not be required to be paid in cash on any
Interest Payment Date occurring during the Interest Capitalization Period for
such Borrowing Year and (ii) on the last day of each successive three-month
period following the first day of such Borrowing Year, such accrued interest
shall be capitalized and added to the principal amount of the Specified Loan on
which such capitalized interest shall have accrued. All interest accruing during
any Interest Capitalization Period that is not paid during such Interest
Capitalization Period and not capitalized pursuant to this paragraph (d) shall
be payable in full in cash on the first Interest Payment Date occurring after
the last day of such Interest Capitalization Period.
2.8 Computation of Interest and Fees. (a) Commitment fees and,
whenever it is calculated on the basis of the ABR, interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the actual
number of days elapsed; otherwise, interest shall be calculated on the basis of
a 360-day year for the actual number of days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR shall become effective as of the opening of business on the
day on which such change becomes effective, and the Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be prima facie evidence of the
accuracy of such determination. The Agent shall, at the request of the Borrower
or any Lender, deliver to the Borrower or such Lender a statement showing the
quotations used by the Agent in determining any interest rate based upon
quotations from Reference Lenders pursuant to subsection 2.7(a).
2.9 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period (a) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period or (b)
the Agent shall have received notice from the Requisite Lenders that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period, the Agent shall give telecopy or telephonic notice thereof
to the Borrower and the Lenders as soon as practicable thereafter. If such
notice is given, (i) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (ii) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (iii) any outstanding Eurodollar Loans shall
be converted, on the first day of such Interest Period, to ABR Loans. So long as
such notice shall not have been withdrawn, the Agent shall use reasonable
efforts to determine whether or not the circumstances which shall have caused
such notice to be given continue to exist, and, if the Agent shall at any time
determine that such circumstances no longer exist, it shall, as soon as
practicable thereafter, notify the Lenders and the Borrower that the Agent is
withdrawing such notice. Until such notice has been withdrawn by the Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans. Each determination
by the Agent hereunder shall be conclusive absent manifest error.
2.10 Pro Rata Treatment and Payments. Except as provided in
subsection 2.11, 2.15(b) or 2.16, each payment (including each prepayment) by
the Borrower on account of principal of and interest on the Loans shall be made
pro rata according to the respective outstanding principal amounts of the Loans
then held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest or otherwise,
shall be made without set off or counterclaim (including, without limitation,
against any amounts claimed from or owing by the Vendor under the Vendor
Procurement Contract) and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Agent, for the account of the Lenders, at the
Agent's Account, in Dollars and in immediately available funds. The Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
2.11 Illegality. Notwithstanding any other provision herein,
if the adoption after the date hereof of or any change after the date hereof in
any Requirement of Law or in the interpretation or application thereof shall
make it unlawful or impossible for any Lender to make, maintain or fund
Eurodollar Loans as contemplated by this Agreement, then by written notice by
such Lender to the Borrower and to the Agent, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.14.
2.12 Requirements of Law. (a) If the adoption after the date
hereof of or any change after the date hereof in any Requirement of Law or in
the interpretation or application thereof by any Governmental Authority or
compliance by any Lender with any applicable requirement, request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall or will subject any Lender to any tax or other
payment of any kind whatsoever with respect to, or any amount payable
under, this Agreement or any Eurodollar Loan or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 2.13 and taxes imposed on the
net income of such Lender); or
(ii) shall or will impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall or will impose on any Lender or the Agent any
other conditions or requirements affecting this Agreement or Eurodollar
Loans held by such Lender;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable.
(b) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower
(through the Agent) of the event by reason of which it has become so entitled,
provided, however, that in no event shall such Lender be entitled to claim any
additional amount pursuant to this subsection with respect to any period that is
more than three months prior to the date upon which it shall give such notice. A
certificate as to any additional amounts payable pursuant to this subsection,
accompanied by reasonably detailed information reasonably required with respect
to the method of calculating such additional amounts, submitted by such Lender
to the Borrower through the Agent shall be prima facie evidence of the accuracy
of the information set forth therein. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.13 Taxes. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding taxes imposed on the Agent or any Lender (or
Transferee) as a result of a present or former connection between the Agent or
such Lender (or Transferee) and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Agent or such
Lender (or Transferee) having executed, delivered or performed to its
obligations or received a payment under, or enforced, this Agreement or any Note
or any other Loan Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Agent or any Lender (or
Transferee) hereunder or under any Note, (i) the Borrower will pay such
Non-Excluded Taxes to the relevant Governmental Authority or political
subdivision imposing such tax and (ii) the amounts so payable to the Agent or
such Lender (or Transferee) shall be increased to the extent necessary to yield
to the Agent or such Lender (or Transferee) (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender that is
not organized under the laws of the United States of America or a state thereof
(a "Non-U.S. Lender") if such Lender fails to comply with the requirements of
paragraph (b) or (c) of this subsection. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Lender (or
Transferee), as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the Agent or
any Lender (or Transferee) as a result of any such failure. The Borrower shall
indemnify each Lender (or Transferee) and the Agent for the amount of
Non-Excluded Taxes paid by such Lender (or Transferee) or the Agent, as the case
may be, and any penalties, interest and expenses arising therefrom or with
respect thereto. The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder; provided, however, that the Borrower shall not be required to
indemnify any Non-U.S. Lender that fails to comply with the requirements of
paragraph (b) or (c) of this subsection to the extent such amounts would not be
payable had such Lender so complied.
(b) Each Non-U.S. Lender shall:
(i) in the case of a Lender (or Transferee) that is a "bank" under Section
881(c)(3)(A) of the Code;
(A) on or before the date on which the first
payment becomes payable to it hereunder or under any
Note (or, in the case of a Participant, on or before
the date such Participant becomes a Participant
hereunder) and on or before the date, if any, such
Lender (or Transferee) changes its applicable lending
office by designating a different lending office (a
"New Lending Office") deliver to the Borrower and the
Agent (y) two properly completed and duly executed
copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the
case may be, and (z) an Internal Revenue Service Form
W-8 or W-9, or successor applicable form, as the case
may be;
(B) deliver to the Borrower and the Agent
two further properly completed and duly executed
copies of any such form or certification on or before
the date that any such form or certification expires
or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form
previously delivered by it to the Borrower or upon
the request of the Borrower or the Agent; and
(C) obtain such extensions of time for
filing and completing such forms or certifications as
may reasonably be requested by the Borrower;
(ii) in the case of a Lender or a Transferee that is not a "bank" under
Section 881(c)(3)(A) of the Code:
(A) on or before the date on which the first
payment becomes payable to it hereunder or under any
Note (or, in the case of a Participant, on or before
the date such Participant becomes a Participant
hereunder) deliver to the Borrower and the Agent (I)
a statement under penalties of perjury that such
Lender (x) is not a "bank" under Section 881(c)(3)(A)
of the Code, is not subject to regulatory or other
legal requirements as a bank in any jurisdiction, and
has not been treated as a bank for purposes of any
tax, securities law or other filing or submission
made to any Governmental Authority, any application
made to a rating agency or qualification for any
exemption from tax, securities law or other legal
requirements, (y) is not a 10-percent shareholder of
the Borrower within the meaning of Section
881(c)(3)(B) of the Code and (z) is not a controlled
foreign corporation receiving interest from a related
person within the meaning of Section 881(c)(3)(C) of
the Code and (II) a properly completed and duly
executed Internal Revenue Service Form W-8 or
applicable successor form;
(B) deliver to the Borrower and the Agent
two further properly completed and duly executed
copies of said Form W-8, or any successor applicable
form on or before the date that any such Form W-8
expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent
form previously delivered by it to the Borrower or
upon the request of the Borrower; and
(C) obtain such extensions of time for
filing and completing such forms or certifications as
may be reasonably requested by the Borrower or the
Agent;
unless in any such case any change in treaty, law or regulation has occurred
subsequent to the date such Lender (or Transferee) became a party to this
Agreement (or in the case of a Participant, the date such Participant became a
Participant hereunder) which renders all such forms inapplicable or which would
prevent such Lender from properly completing and executing any such form with
respect to it and such Lender so advises the Borrower and the Agent in writing
no later than 15 calendar days before any payment hereunder or under any Note is
due. Each such Lender (and each Transferee) shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9 delivered pursuant to subsection
2.13(b)(i), that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, provide all of the forms and statements required pursuant to this
subsection, provided that, in the case of a Participant, such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(c) Each Lender (and the Agent with respect to payments to the
Agent for its own account) agrees that it will (i) take all reasonable actions
by all usual means to maintain all exemptions, if any, available to it from
United States withholding taxes (whether available by treaty, existing
administrative waiver, by virtue of the location of any Lender's applicable
lending office or otherwise) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this subsection provided such
measures or actions would not, in such Lender's determination, cause such Lender
to suffer any material economic, legal or regulatory disadvantage.
(d) If any Lender shall receive a credit or refund from a
taxing authority with respect to, and actually resulting from, an amount of
Non-Excluded Taxes actually paid to or on behalf of such Lender by the Borrower
including any interest received thereon (a "Tax Credit"), such Lender shall
promptly notify the Borrower of such Tax Credit. If such Tax Credit is received
by such Lender in the form of cash, such Lender shall promptly pay to the
Borrower the amount so received with respect to the Tax Credit. If such Tax
Credit is not received by such Lender in the form of cash, such Lender shall pay
the amount of such Tax Credit not later than the time prescribed by applicable
law for filing the return (including extensions of time) for such Lender's
taxable period which includes the period in which such Lender receives the
economic benefit of such Tax Credit. In any event, the amount of any Tax Credit
payable by a Lender to the Borrower pursuant to this paragraph shall not exceed
the actual amount of cash refunded to, or credits received and usable by, such
Lender from a taxing authority. Furthermore, any amount of any Tax Credit
payable by a Lender to the Borrower shall be paid only to the extent that it can
do so without prejudice to the retention of the amount of such credit or refund.
In determining the amount of any Tax Credit, a Lender may use such apportionment
and attribution rules as such Lender customarily employs in allocating taxes
among its various operations and income sources, and such determination shall be
conclusive. Nothing in this subsection 2.13(d) shall be construed as requiring
any Lender to conduct its business or to arrange or alter in any respect its tax
or financial affairs so that it is entitled to receive any such Tax Credit if to
do so would, in the Lender's determination, cause such Lender to suffer any
material economic, legal or regulatory disadvantage. The Borrower further agrees
promptly to return to a Lender the amount paid to the Borrower with respect to a
Tax Credit by such Lender if such Lender is required to repay, or is determined
to be ineligible for, a Tax Credit for such amount.
2.14 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of or conversion from Eurodollar Loans on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be in
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid or converted, or not so borrowed,
converted or continued, for the period from the date of such prepayment or
conversion or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.15 Change of Lending Office; Mandatory Assignment or
Prepayment. (a) Each Lender agrees that if it makes any demand for payment under
subsection 2.12 or 2.13(a), or if any adoption or change of the type described
in subsection 2.11 shall occur with respect to it, it will use reasonable
efforts (consistent with its legal and regulatory restrictions and so long as
such efforts would not be materially disadvantageous to it) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.12 or
2.13(a) or would eliminate or reduce the effect of any adoption or change
described in subsection 2.11; provided such measures or actions would not, in
the Lender's determination, cause such Lender to suffer any material economic,
legal or regulatory disadvantage.
(b) If the Borrower shall be required to pay any additional
amounts or other payments in accordance with subsection 2.12 or 2.13(a) or if
any Lender shall, in accordance with subsection 2.11, no longer be obligated to
make or maintain Eurodollar Loans hereunder, the Borrower may, at its own
expense and in its sole discretion, (i) require such Lender to transfer or
assign, in whole or in part, without recourse (in accordance with subsection
9.6), all or part of its interests, rights and obligations under this Agreement
to another Person (provided that the Borrower, with the full cooperation of such
Lender, can identify a Person which is ready, willing and able to be an Assignee
with respect to thereto) which shall assume such assigned obligations and is
reasonably satisfactory to the Agent (which Assignee may be another Lender, if
such Assignee Lender accepts such assignment) or (ii) so long as no Event of
Default shall have occurred and be continuing, terminate the Commitment, if any,
of such Lender and prepay all outstanding Loans of such Lender; provided that
(A) the Assignee or the Borrower, as the case may be, shall have paid to such
Lender in immediately available funds the principal of and interest accrued to
the date of such payment on the Loans made by it hereunder and all other amounts
owed to it hereunder, including, without limitation, any amounts owing pursuant
to subsection 2.14 and, in the case of any such assignment, any amounts that
would be owing under said subsection if such Loans were prepaid on the date of
such assignment, (B) such assignment or termination of the Commitment, if any,
of such Lender and prepayment of Loans does not conflict with any law, rule or
regulation or order of any Governmental Authority and (C) such Lender shall be
indemnified by the Borrower for any cost, expense, or other liabilities incurred
as a result of any action taken pursuant to this subsection 2.15(b).
2.16 Treatment of Certain Prepayments. Notwithstanding
anything to the contrary in this Agreement, in the event that (a) the Borrower
shall be required pursuant to the provisions of a Bank Credit Facility, the
Other Vendor Credit Facility or any instruments governing any other Indebtedness
of the Borrower to offer to apply any amount toward the prepayment of the Loans
or (b) the Borrower is required to make any mandatory prepayment pursuant to
subsection 2.5, the Borrower may, at its option, either apply such amount toward
prepayment of the Loans pro rata or follow the procedures set forth in this
subsection. Not less than 10 nor more than 20 Business Days prior to the date (a
"Specified Prepayment Date") on which any such prepayment is scheduled to be
made, the Borrower shall deliver a Prepayment Offer Notice to the Agent, which
shall promptly thereafter deliver a copy thereof to each Lender. Each Lender
receiving such Prepayment Offer Notice shall indicate its acceptance or
rejection of such offer (and, in the case of its acceptance, its Prepayment
Acceptance Amount) by delivering a Prepayment Offer Response Notice to the Agent
and the Borrower no later than four Business Days prior to the Specified
Prepayment Date set forth in the applicable Prepayment Offer Notice. On such
Specified Offered Prepayment Date, the Borrower shall prepay each Lender's Loans
in a principal amount equal to such Lender's Prepayment Share. The Agent shall
calculate the amounts of the prepayments payable to the respective Lenders
required by this subsection.
2.17 Use of Proceeds. The proceeds of the Loans shall be used
for the purposes described in Section 2 of Schedule I. The proceeds of Cash
Advances may be used only to refinance amounts paid on account of invoices
submitted to the Borrower by the Vendor pursuant to the Vendor Procurement
Contract and paid by the Borrower other than with Credit Advances.
2.18 Fees. The Borrower agrees to pay the fees described
in Section 3 of Schedule I.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make
the Loans, the Borrower hereby represents and warrants to each Lender that:
3.1 Financial Condition. (a) The audited consolidated balance
sheet and consolidated statements of operating changes in partners' capital and
cash flows of the Borrower and its consolidated Subsidiaries as at and for the
year ended December 31, 1995 and the unaudited balance sheet and consolidated
statements of operating changes in partners' capital and cash flows of the
Borrower and its consolidated Subsidiaries as at and for the six-month period
ended June 30, 1996, copies of which have heretofore been furnished to the
Vendor, were prepared in accordance with GAAP and present fairly the
consolidated financial condition and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as at such dates and for the
respective periods then ended.
(b) The detailed projections contained in Exhibit B to the
Borrower's Business Plan Overview dated March 1996 were prepared in good faith
on the basis of the assumptions described in such Business Plan Overview, which
assumptions were believed by the Borrower in good faith to be reasonable in
light of conditions existing at the time of preparation thereof, and the
Borrower has no knowledge of any event or circumstance that would cause it to
change any such assumptions in any material respect as of the date hereof, it
being understood by the Agent and the Lenders that actual results may vary from
the projected results contained therein, and, as of the date of this Agreement,
there are no facts or circumstances known to the Borrower that would make the
projections materially inaccurate, incomplete or misleading.
(c) The balance sheet and other financial statements required
to be furnished to the Agent subsequent to the Closing Date pursuant to
subsection 5.1 will present fairly the consolidated financial position and
results of operations and cash flows of the Borrower and its Restricted
Subsidiaries in accordance with GAAP as at the end of and for the fiscal periods
set forth therein.
(d) Each budget required to be furnished to the Agent
subsequent to the Closing Date pursuant to subsection 5.2(c) will have been
approved by the Partnership Board of Holding, and any projections delivered in
connection therewith will have been prepared in good faith on the basis of
assumptions reasonably believed by the Borrower in good faith to be reasonable
in light of conditions existing at the time of preparation thereof, it being
understood by the Agent and the Lenders that actual results may vary from the
projected results contained therein, and there will be, at the time of
preparation thereof, no facts or circumstances known to the Borrower that are
not reflected in such projections the failure to include which would make the
projections materially inaccurate, incomplete or misleading.
3.2 No Change. Since December 31, 1995, there have been no
developments, events or circumstances that, individually or in the aggregate,
have had or could reasonably be expected to have a Material Adverse Effect,
except for operating losses contemplated by the Borrower's Business Plan
Overview dated March 1996. Since December 31, 1995, neither the Borrower nor any
Restricted Subsidiary has made any Restricted Payments except, after the date
hereof, as permitted hereby.
3.3 Existence; Compliance with Law. Each of the Borrower and
its Restricted Subsidiaries (a) is duly formed, validly existing and in good
standing under the laws of the jurisdiction of its formation, (b) has the power
and authority to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged and to
own and operate Systems in the areas for which it has Licenses, (c) is duly
qualified to do business and in good standing in each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law, including, without limitation, the Communications Act, except to the extent
that the failure of any of the statements set forth in subsections 3.3(c) and
(d) to be true and correct could not reasonably be expected to have a Material
Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. The
Borrower has the power and authority to make, deliver and perform this Agreement
and to borrow hereunder and has taken all necessary partnership action to
authorize the borrowings on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of this Agreement. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority is required of the Borrower in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement and the Loan Documents to which it is a party
other than those required in connection with the perfection of the Liens created
by the Security Documents. This Agreement and the Loan Documents to which it is
a party have been duly executed and delivered on behalf of the Borrower. This
Agreement and the Loan Documents to which it is a party constitute legal, valid
and binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3.5 No Legal Bar. The execution, delivery and performance of
this Agreement, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation of the
Borrower or of any of its Subsidiaries or any License or permit applicable to
the Borrower, its Subsidiaries or any of its or their property and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, License or permit, other than the Liens created by
the Security Documents.
3.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority has been taken
or initiated, is pending or, to the knowledge of the Borrower, threatened by or
against or affecting the Borrower or any of its Restricted Subsidiaries or
against any of its or their respective properties or revenues (a) with respect
to any of the Loan Documents or (b) which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its Restricted
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
Restricted Subsidiaries has good and marketable title in fee simple to, or a
valid leasehold interest in, all its material real property, and good title to,
or a valid leasehold interest in, all its other material property (including,
without limitation, its partnership interests in the Special Purpose
Subsidiaries), and none of such property is subject to any Lien except as
permitted by subsection 6.3.
3.9 Intellectual Property. The Borrower and each of its
Restricted Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, patents, know-how and processes necessary for the
conduct of its business as currently conducted and as currently proposed to be
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim, except for any such claim which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The use of the Intellectual Property by the Borrower and its Restricted
Subsidiaries does not infringe on the rights of any Person, except for such
infringements that could not reasonably be expected to have a Material Adverse
Effect.
3.10 Taxes. Each of the Borrower and its Restricted
Subsidiaries has filed or caused to be filed all tax returns which, to the
knowledge of the Borrower, are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority which have become due and
payable (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Restricted Subsidiaries, as the case may be).
3.11 Federal Regulations. No part of the proceeds of any Loans
will be used in any manner which would result in a violation of Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect.
3.12 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA), whether or not waived, has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Single Employer Plan or is reasonably expected to occur, and each
Single Employer Plan has complied in all respects with the applicable provisions
of ERISA and the Code and the terms of such Plan, except with respect to any
such event or failure to comply where the liability which could reasonably be
expected to be incurred would not have a Material Adverse Effect. No Lien in
favor of the PBGC or a Plan has arisen, and, except with respect to a Single
Employer Plan where the liability which could reasonably be expected to be
incurred would not have a Material Adverse Effect, neither the Borrower nor any
Commonly Controlled Entity has (i) received a notice from the PBGC or a plan
administrator of an intention to terminate any Single Employer Plan or to
appoint a trustee to administer any Single Employer Plan, (ii) filed or provided
a notice of intent to terminate or take any other action that could reasonably
be expect to result in the termination of any Single Employer Plan other than in
a standard termination within the meaning of Section 4041 of ERISA or (iii)
incurred any liability under ERISA with respect to any Single Employer Plan
described in Section 4063 of ERISA during such five-year period, and no such
event, circumstance or condition is reasonably expected to occur. The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by an amount which if such Plan then terminated could reasonably be expected to
have a Material Adverse Effect. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made, which in any event could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Commonly Controlled Entity has
received notice that any such Multiemployer Plan is in Reorganization, is
Insolvent, or is being terminated where the liability resulting therefrom could
reasonably be expected to have a Material Adverse Effect.
3.13 Investment Company and Holding Company Act. The Borrower
is not an "investment company" within the meaning of the Investment Company Act
of 1940, as amended or a "holding company", or a "subsidiary" or "affiliate" of
a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended. Neither the Borrower nor any Subsidiary is subject to
regulation under any Federal or state statute or regulation which limits its
ability to incur Indebtedness.
3.14 Subsidiaries; Parents. (a) The following constitute all
the Subsidiaries of the Borrower as of the date hereof: (a) WirelessCo (the sole
general partner of which is the Borrower and the sole limited partner of which
is MinorCo), (b) EquipmentCo (the sole general partner of which is the Borrower
and the sole limited partner of which is MinorCo), (c) RealtyCo (the sole
general partner of which is the Borrower and the sole limited partner of which
is MinorCo) and (d) Sprint Spectrum Finance Corporation, a Delaware corporation
and a Wholly Owned Subsidiary of the Borrower.
(b) The sole general partner of the Borrower is Holding, and
the sole limited partner of the Borrower is MinorCo. As of the date hereof,
Sprint Enterprises, L.P., TCI Telephony Services, Inc., Comcast Telephony
Services and Cox Telephony Partnership are each general and limited partners of
Holding and MinorCo, and there are no other partners of Holding or MinorCo.
Sprint Enterprises, L.P. is a wholly owned Subsidiary of Sprint Corporation; TCI
Telephony Services, Inc. is a wholly owned Subsidiary of Tele-Communications,
Inc.; Comcast Telephony Services is a wholly owned Subsidiary of Comcast
Corporation; and Cox Telephony Partnership is a wholly owned Subsidiary of Cox
Communications, Inc.
3.15 Absence of Material Obligations. None of WirelessCo,
EquipmentCo and RealtyCo has any material obligations or liabilities other than
in connection with (a) the Guarantees, (b) in the case of RealtyCo, any lease of
real property which RealtyCo has entered into in the ordinary course of business
and other obligations and liabilities incurred in the ordinary course of
business which are incident to being the owner or lessee of real property, (c)
in the case of EquipmentCo, the Vendor Procurement Contract or the Other Vendor
Procurement Contract, the rights and benefits of Holding under which have been
assigned to it or (d) in the case of WirelessCo, its obligations to comply with
the requirements of the Licenses.
3.16 Environmental Matters. (a) In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Restricted Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with Environmental Laws and Environmental Permits, any
related constraints on operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or change in the nature of
operations conducted thereat, any costs or liabilities in connection with
off-site disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, could not reasonably be expected to have a Material
Adverse Effect.
(b) The Borrower and its Restricted Subsidiaries have obtained
all Environmental Permits with respect to the facilities and properties owned,
leased or operated by the Borrower or any of its Restricted Subsidiaries (the
"Properties"), and the Borrower and the Restricted Subsidiaries are in
compliance with all Environmental Laws and all Environmental Permits, except to
the extent that such failure to obtain any Environmental Permits and
noncompliance with Environmental Laws and Environmental Permits could not
reasonably be expected to have a Material Adverse Effect.
(c) There have been no Releases or threatened Releases at,
from, under or proximate to the Properties or otherwise in connection with the
operations of the Borrower or its Restricted Subsidiaries, which Releases or
threatened Releases could reasonably be expected to have a Material Adverse
Effect.
(d) There are no past or present actions, omissions,
activities, events, conditions or circumstances, including the Release,
threatened Release, emission, discharge, generation, treatment, storage or
disposal of Hazardous Substances at, from or under any location, that will give
rise to liability of the Borrower or any of its Restricted Subsidiaries under
any Environmental Law, except to the extent that such liability could not
reasonably be expected to have a Material Adverse Effect.
3.17 Licenses. (a) On the date hereof, (i) the Borrower and
its Restricted Subsidiaries hold all Licenses necessary on the date of this
Agreement to operate a System in each of the MTA's listed on Schedule 3.17(a),
(ii) such Licenses have been duly issued by the FCC, are held by WirelessCo and
are in full force and effect and (iii) the Borrower and its Restricted
Subsidiaries are in compliance in all material respects with all of the
provisions of each such License. As of the date hereof, no License is subject to
any pending or, to the knowledge of the Borrower, threatened revocation or
termination proceeding or action.
(b) The Borrower and its Restricted Subsidiaries hold all
Licenses to operate Systems in MTA's covering at least 120,000,000 Owned Pops,
and such Licenses have been duly issued by the FCC, are held by WirelessCo and
are in full force and effect; and the Borrower and its Restricted Subsidiaries
are in compliance in all material respects with all of the provisions of each
such License.
3.18 Provisions of Other Vendor Credit Facility. The
provisions of Section 1 (but only to the extent the definitions therein are
included in the following subsections and Sections of this Agreement),
subsections 2.4, 2.5, 2.7(d), 2.11, 2.12, 2.13, 2.14 and 2.16, Sections 3, 5, 6
and 7 and subsections 9.1, 9.5 (with respect to the indemnity provisions), 9.6,
9.7, 9.11, 9.12, 9.13, 9.14, 9.15 and 9.17, will, when the Other Vendor Credit
Facility is executed by the parties thereto, be identical in all material
respects to the similar provisions of the Other Vendor Credit Facility (wherever
included and except for differences resulting solely from differences in the
names of the Vendor party thereto), except to the extent subsection 9.6 hereof
or subsection 9.6 of the Other Vendor Credit Facility is modified by Schedule I
hereto or thereto, respectively.
3.19 No Material Misstatement. The information, reports and
schedules furnished by or on behalf of the Borrower or any other Loan Party to
the Agent or any Lender in connection with any Loan Document, taken as a whole,
do not, on the date hereof, contain any material misstatement of fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of the Lenders to make the
initial Loans is subject to the satisfaction, prior to or concurrently with
the making of such Loans, of the following conditions precedent:
(a) Partnership Proceedings of Holding and the Borrower. The
Agent shall have received, with a counterpart for the Vendor, a copy of
the resolutions, in form and substance satisfactory to the Agent and
the Vendor, of the Partnership Board of Holding as the general partner
of the Borrower, authorizing (i) the execution, delivery and
performance of this Agreement and (ii) the borrowings contemplated
hereunder, certified by the Secretary or an Assistant Secretary of
Holding, which certificate shall be in form and substance satisfactory
to the Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(b) Borrower Incumbency Certificate. The Agent shall have
received, with a counterpart for the Vendor, a certificate of the
Borrower, as to the incumbency and signature of the officers of Holding
executing this Agreement satisfactory in form and substance to the
Agent and the Vendor, executed by the Secretary or any Assistant
Secretary of Holding.
(c) Capital Contribution Agreement. The Agent shall have
received, with a counterpart for the Vendor, a certificate of a
Responsible Officer of the Borrower stating that attached thereto is a
fully executed counterpart of the Capital Contribution Agreement and
certifying that such Agreement is in full force and effect without any
term or condition thereof having been amended, modified or waived and
that there is no default thereunder.
(d) Licenses. The Agent shall have received, with a
counterpart for the Vendor, a certificate of a Responsible Officer of
the Borrower attaching a copy of each of the Licenses referred to in
subsection 3.17 and certifying that each (i) such copy is true, correct
and complete and includes all amendments, modifications and waivers
thereto executed prior to the date of such certificate and (ii) such
License is fully paid for.
(e) Partnership Agreements; Trademark License Agreement. The
partnership agreements of the Special Purpose Subsidiaries shall
contain provisions reasonably satisfactory to the Agent and the Vendor
ensuring that any assignee of the partnership interests therein will be
entitled to all rights (including, without limitation, management and
voting rights) of the partners pledging such partnership interests. The
Agent shall have received, with counterparts for the Vendor, conformed
copies of (i) the partnership agreements of the Borrower, WirelessCo,
EquipmentCo, RealtyCo, Holding and MinorCo and (ii) the Trademark
License Agreement, each of which shall be certified by a Responsible
Officer as a true, correct and complete copy thereof and in full force
and effect, and each of which shall be in form and substance
satisfactory to the Agent and the Vendor.
(f) Contributed Capital. The Agent shall have received, with a
counterpart for the Vendor, a certificate of a Responsible Officer of
the Borrower to the effect that the Borrower has received Contributed
Capital in an aggregate amount of at least $2,200,000,000.
(g) Legal Opinions. The Agent shall have received, with a
counterpart for the Vendor, the following executed legal opinions
addressed to the Agent and the Vendor:
(i) the legal opinion of Simpson Thacher & Bartlett, counsel
to the Borrower, substantially in the form of Exhibit B-1;
(ii) the legal opinion of Charles R. Wunsch, Esq., Associate
General Counsel of the Borrower, substantially in the form of
Exhibit B-2; and
(iii) the legal opinion of Morrison & Foerster LLP, special
counsel to the Borrower with respect to FCC matters,
substantially in the form of Exhibit B-3.
(h) Trust Agreement. The Agent shall have received (i) a copy
of the Trust Agreement, duly executed and delivered by the Borrower,
the Corporate Trustee and the Individual Trustee, (ii) evidence, in
form and substance satisfactory to the Agent and the Vendor, that all
documents and other instruments required to be delivered, and all other
actions required to have been taken, pursuant to subsections 4.1,
4.8(a), 4.9(a) and 4.10(a) of the Trust Agreement shall have been so
delivered or taken, as the case may be, (iii) conformed copies or
originals of all such documents and instruments referred to in clause
(ii) immediately preceding (and all such agreements, documents,
instruments and opinions shall be in form and substance reasonably
satisfactory to the Agent and the Vendor), and (iv) such other
certificates and other documents relating to the Trustees and the Trust
Agreement as the Agent shall reasonably request. The Trust Agreement
shall be in full force and effect.
(i) Search Reports. The Agent shall have received, with
counterparts for the Vendor, copies of searches conducted as of a date
acceptable to the Agent of the Uniform Commercial Code records in all
applicable public offices in which filings are required to be made in
accordance with the provisions of subsection 4.9(a) of the Trust
Agreement, and such searches shall reveal no Liens other than those
permitted by subsection 6.3.
(j) Other Credit Facilities. The Agent shall have received
copies of the definitive documentation establishing the Other Vendor
Credit Facility and the Existing Bank Credit Facility; provided that
certain confidential provisions of each such Facility (which in any
event shall not include any of the provisions specified in subsection
3.18) shall not be required to be delivered by the Borrower.
(k) Fees. The Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date.
(l) Business Plan. The Agent shall have received a certified
copy of the Borrower's Business Plan Overview dated March 1996.
4.2 Conditions to Each Loan. The agreement of the
Lenders to make any Loan requested to be made on any date (including,
without limitation, the initial Loans) is subject to the satisfaction
of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and each other Loan
Party in or pursuant to the Loan Documents shall be true and correct in
all material respects on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(c) No Termination of Vendor Procurement Contract. The
Borrower shall not have notified the Vendor of the termination by the
Borrower of the Vendor Procurement Contract unless prior to doing so
the Borrower shall have placed orders thereunder aggregating at least
$500,000,000 (in the case of any such termination during the Phase I
Commitment Period) or $1,000,000,000 (in the case of any such
termination after the commencement of the Phase II Commitment Period).
(d) Borrowing Notice. The Agent shall have received a
Borrowing Notice meeting the requirements of subsection 2.2.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender under the Credit Agreement
or any other Loan Document, the Borrower shall and (except in the case of
delivery of financial information, reports and notices) shall cause each of its
Restricted Subsidiaries to:
5.1 Financial Statements. Furnish to the Agent:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash
flows for such fiscal year, reported on, and accompanied by an opinion
(which shall not be qualified based upon the scope of the audit) by
Deloitte & Touche LLP or other independent certified public accountants
of nationally recognized standing to the effect that such financial
statements fairly present the financial condition and results of
operations and cash flows of the Borrower and its Restricted
Subsidiaries in accordance with GAAP and setting forth in comparative
form the figures for the previous fiscal year (other than in the case
of the 1996 fiscal year); and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its Restricted Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Borrower and its Restricted
Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in comparative form the
figures for the corresponding period of the previous fiscal year (other
than in the case of any such quarter during the 1996 fiscal year) and
the figures for the Borrower's budget for the period covered thereby,
certified by a Responsible Officer as fairly presenting the financial
condition and results of operations and cash flows of the Borrower and
its Restricted Subsidiaries in accordance with GAAP for the date and
periods ending on such date (subject to normal year-end audit
adjustments);
all such financial statements shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein (except as approved by
such accountants or Responsible Officer, as the case may be, and disclosed
therein).
5.2 Certificates; Other Information. Furnish to the
Agent:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor (and without
performing any additional non-customary procedures with respect
thereto) no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and (b), a certificate of a
Responsible Officer (i) stating that, to the best of such Responsible
Officer's knowledge after due inquiry, each of the Borrower and the
Restricted Subsidiaries during such period has observed or performed
all of its covenants (including, without limitation, the financial
covenants set forth in subsections 6.1(a) through (g)) and other
agreements contained in this Agreement and the other Loan Documents to
be observed or performed by it and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default, except as
specified in such certificate (and if such certificate contains notice
of any Default or Event of Default, setting forth details of the
occurrence referred to therein and stating what action the Borrower has
taken or proposes to take with respect thereto), and (ii) if Floating
GAAP used in the preparation of any such financial statements shall be
different from Fixed GAAP, describing such differences and reconciling
any differences in calculation of compliance with the covenants set
forth in subsection 6.1 which may result from such differences in GAAP;
(c) as soon as available, the annual budget prepared pursuant
to Holding's partnership agreement and approved by Partnership Board of
Holding for each fiscal year of the Borrower (which shall be presented
on a quarterly basis for such fiscal year), commencing with its 1997
fiscal year and any financial projections for a period of greater than
one year, to the extent such projections were requested by and approved
by the Partnership Board of Holding;
(d) promptly after the filing thereof, copies of all proxy
statements, all registration statements under the Securities Act of
1933, as amended (other than those on Form 5-8 relating to any Plan),
and all reports on Forms 10-K, 10-Q and 8-K filed with the Securities
and Exchange Commission by the Borrower; and
(e) promptly, such additional information regarding the
operation and financial condition as the Agent may from time to time
reasonably request for itself or on behalf of any Lender.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Restricted Subsidiaries, as the case may be.
5.4 Conduct of Business; Maintenance of Existence; Compliance
with Laws. Preserve, renew and keep in full force and effect its existence and
take all reasonable action to maintain all permits, rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to subsection 6.5; comply with all of its
Contractual Obligations (including, without limitation, obligations under any
License) and Requirements of Law, including, without limitation, the
Communications Act, except to the extent that failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all property
useful or necessary in its business in good working order and condition, except
where the failure to do so would not be reasonably expected to have a Material
Adverse Effect; maintain with financially sound and reputable insurance
companies insurance on all its property and its business in at least such
amounts and against at least such risks as are usually insured against by
companies engaged in the same or a similar business in similar geographic areas.
5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which entries in conformity with
GAAP and all Requirements of Law applicable to it shall be made of all dealings
and transactions in relation to its business and activities; permit
representatives of any Lender to visit and inspect any of its properties, and
make copies of and extracts from, and/or to examine its books, records and
accounts, at any reasonable time (upon reasonable advance notice) and as often
as may be reasonable and to discuss with officers and employees of the Borrower
and its Restricted Subsidiaries the business, assets and financial condition of
the Borrower and its Restricted Subsidiaries and, in particular, the annual
budget delivered pursuant to subsection 5.2(c); provided, that except during the
continuance of an Event of Default, such visits by the Lenders shall be
coordinated by the Agent so that such visits shall take place no more than once
per fiscal quarter. During the continuance of an Event of Default, the Borrower
authorizes the Agent and the Lenders, upon reasonable notice to the Borrower and
if accompanied by the Borrower, to communicate directly with the Borrower's
independent certified public accountants to discuss the financial condition of
the Borrower and its Restricted Subsidiaries.
5.7 Notices. Promptly after any Responsible Officer has
knowledge thereof, give notice to the Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any default or event of default under any Contractual
Obligation of the Borrower or any of its Restricted Subsidiaries which
could, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Restricted Subsidiaries which, individually or in the aggregate,
if adversely determined could reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any event
within (i) 30 days after the Borrower knows thereof: the occurrence or
expected occurrence of any Reportable Event with respect to any Plan or
any withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan, and (ii) ten Business Days after the
occurrence thereof: a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan, which, in
connection with any of the foregoing, the liability which could
reasonably be expected to occur would have a Material Adverse Effect;
(e) the termination (other than as permitted herein) or
revocation of any of the Bona Fide Commitments that are conditions
precedent to the continued availability of the Vendor Commitment as set
forth in Schedule I;
(f) any change in the ownership of the Borrower or any of it
Restricted Subsidiaries;
(g) any notice of termination of either the Vendor Procure-
ment Contract or the Other Vendor Procurement Contract; and
(h) any other development (including any Release or any
noncompliance with any Environmental Law or Environmental Permit) that
has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a certificate of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.8 Environmental Laws. (a) Comply with all applicable
Environmental Laws and obtain and comply in all material respects with and main-
tain any and all Environmental Permits, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions, required under
Environmental Laws, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and promptly comply in
all material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the pendency of
such proceedings could not reasonably be expected to have a Material Adverse
Effect.
5.9 After-Acquired Assets. (a) Promptly (i) transfer to
WirelessCo any License held by the Borrower or any Restricted Subsidiary (other
than WirelessCo) and (ii) at the option of the Borrower, either (A) transfer (I)
to EquipmentCo any Personal Property Assets (other than Direct-Lien Assets)
hereafter acquired by the Borrower or any Restricted Subsidiary and any such
Personal Property Assets of any Person that becomes a Restricted Subsidiary or
is merged with or into or consolidated with the Borrower or any Restricted
Subsidiary (in each case other than any such Personal Property Assets
constituting Excluded Assets), (II) to RealtyCo any Real Estate Assets hereafter
acquired by the Borrower or any Restricted Subsidiary and any Real Estate Assets
of any Person that becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Borrower or any Restricted Subsidiary (in each case other
than any such Real Estate Assets constituting Excluded Assets) and (III) to the
Borrower any Direct-Lien Assets hereafter acquired by the Borrower or any
Restricted Subsidiary and any Direct-Lien Assets of any Person that becomes a
Restricted Subsidiary or is merged with or into or consolidated with the
Borrower or any Restricted Subsidiary (in each case other than any Direct-Lien
Assets constituting Excluded Assets) or (B) create on terms reasonably
acceptable to the Agent a perfected first priority security interest (subject to
any Liens permitted by subsection 6.3 (other than those referred to in the
definition of the term "Excluded Assets")) in favor of the Trustees for the
benefit of the Secured Parties in such Personal Property Assets, Real Estate
Assets or Direct-Lien Assets.
(b) Promptly create in favor of the Trustees for the benefit
of the Secured Parties in accordance with the terms of the Security Documents a
first priority perfected security interest (subject to any Liens permitted by
subsection 6.3) in any Direct-Lien Assets of the Borrower or any Restricted
Subsidiary (other than Excluded Assets) that are not subject to such a security
interest, including with respect to Direct-Lien Assets that are acquired by the
Borrower or any Restricted Subsidiary after the date hereof and Direct-Lien
Assets of any Person that becomes a Restricted Subsidiary or is merged with or
into or consolidated with the Borrower or any Restricted Subsidiary.
(c) Promptly create a mortgage on terms reasonably acceptable
to the Agent in favor of the Trustees for the benefit of the holders of the
Secured Obligations on any fee simple interests in real property having at the
time of acquisition thereof a purchase price or fair market value greater than
$15,000,000 (a "Mortgaged Property") of the Borrower or any Restricted
Subsidiary (other than Excluded Assets) that are not so mortgaged, including
Mortgaged Properties that are acquired by the Borrower or any Restricted
Subsidiary after the date hereof and Mortgaged Properties of any Person that
becomes a Restricted Subsidiary or is merged with or into or consolidated with
the Borrower or any Restricted Subsidiary.
(d) Promptly cause (i) all Capital Stock of any Restricted
Subsidiary held by the Borrower or any other Subsidiary (including, without
limitation, any Restricted Subsidiary which shall be acquired by the Borrower in
accordance with the provisions of subsection 6.8(c) or (d) or any Unrestricted
Subsidiary which shall hereafter become a Restricted Subsidiary) to become
Additional Collateral under and pursuant to the Trust Agreement and (ii) each
Restricted Subsidiary to execute and deliver an "Additional Guarantee" under and
pursuant to the Trust Agreement.
(e) Promptly execute, acknowledge and deliver any and all
further documents, financing statements, agreements and instruments, and
thereafter register, file or record or take further actions (including filing
Uniform Commercial Code and other financing statements, mortgages and deeds of
trust), in each case at the Borrower's sole expense, that may be required under
applicable law, or that the Requisite Lenders, the Agent or the Trustees may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents and to grant, preserve, protect and perfect the validity and first
priority of the Liens created or intended to be created by the Security
Documents, including such Liens on the Mortgaged Properties, and the Direct-Lien
Assets (other than Excluded Assets) and all the Capital Stock of each Restricted
Subsidiary held by the Borrower or any other Subsidiary.
5.10 Delivery of Certain Amendments. Promptly deliver any
amendments, supplements or other modifications to any of the partnership
agreements of the Borrower, WirelessCo, EquipmentCo, RealtyCo, Holding and
MinorCo, the Trademark License Agreement, the Capital Contribution Agreement, a
Bank Credit Facility, any other facilities or indentures which evidence Secured
Obligations, except in the case of a Bank Credit Facility or any such other
facilities or indentures provisions thereof the disclosure of which would be
prohibited by confidentiality agreements binding upon the Borrower.
<PAGE>
5.11 Use of Proceeds. Use the proceeds of the Loans only
for the purposes set forth in subsection 2.17.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender under this Agreement or
any other Loan Document, the Borrower shall not, and (except with respect to
subsection 6.1(a) through (e)) shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Total Debt to Total Capitalization. Permit the ratio of
(i) Total Debt outstanding on any of the dates set forth below to (ii) Total
Capitalization on such date to exceed the ratio set forth opposite such date:
========================= ===========================
Date Ratio
========================= ===========================
12/31/96 .50 to 1
========================= ===========================
3/31/97 .55 to 1
========================= ===========================
6/30/97 .55 to 1
========================= ===========================
9/30/97 .57 to 1
========================= ===========================
12/31/97 .57 to 1
========================= ===========================
3/31/98 .60 to 1
========================= ===========================
6/30/98 .61 to 1
========================= ===========================
9/30/98 .61 to 1
========================= ===========================
12/31/98 .61 to 1
========================= ===========================
3/31/99 .62 to 1
========================= ===========================
6/30/99 .64 to 1
========================= ===========================
9/30/99 .66 to 1
========================= ===========================
12/31/99 .68 to 1
========================= ===========================
3/31/00 .69 to 1
========================= ===========================
6/30/00 .69 to 1
========================= ===========================
9/30/00 .70 to 1
========================= ===========================
12/31/00 .70 to 1
========================= ===========================
3/31/01 .70 to 1
========================= ===========================
6/30/01 .70 to 1
========================= ===========================
9/30/01 .70 to 1
========================= ===========================
12/31/01 .70 to 1
========================= ===========================
(b) Total Debt to Annualized Adjusted EBITDA. Permit the ratio
of (i) Total Debt outstanding on any of the dates set forth below to (ii)
Annualized Adjusted EBITDA for the period ending on such date to exceed the
ratio set forth opposite such date:
=========================== =========================
Date Ratio
=========================== =========================
12/31/98 23.0 to 1
=========================== =========================
3/31/99 14.0 to 1
=========================== =========================
6/30/99 10.0 to 1
=========================== =========================
9/30/99 8.0 to 1
=========================== =========================
12/31/99 6.0 to 1
=========================== =========================
3/31/00 5.0 to 1
=========================== =========================
6/30/00 4.5 to 1
=========================== =========================
9/30/00 4.0 to 1
=========================== =========================
12/31/00 4.0 to 1
=========================== =========================
(c) Total Debt to Annualized EBITDA. Permit the ratio of (i)
Total Debt outstanding on any of the dates set forth below to (ii) Annualized
EBITDA for the period ending on such date to exceed the ratio set forth opposite
such date:
=========================== =========================
Date Ratio
=========================== =========================
12/31/00 11.0 to 1
=========================== =========================
3/31/01 8.5 to 1
=========================== =========================
6/30/01 7.5 to 1
=========================== =========================
9/30/01 7.0 to 1
=========================== =========================
12/31/01 6.0 to 1
=========================== =========================
The last day of
each fiscal quarter
end thereafter 5.0 to 1
=========================== =========================
(d) Annualized EBITDA to Interest Expense. Permit the ratio of
(i) Annualized EBITDA for the period ending on any of the dates set forth below
to (ii) Interest Expense for the four consecutive fiscal quarters ending on such
date to be less than the ratio set forth opposite such date:
============================= =======================
Date Ratio
============================= =======================
3/31/01 1.25 to 1
============================= =======================
6/30/01 1.25 to 1
============================= =======================
9/30/01 1.50 to 1
============================= =======================
12/31/01 2.00 to 1
============================= =======================
3/31/02 2.25 to 1
============================= =======================
6/30/02 2.25 to 1
============================= =======================
The last day of
each fiscal quarter
end thereafter 2.50 to 1
============================= =======================
(e) Capital Expenditures. Permit Capital Expenditures for
any of the periods set forth below to exceed the amount set forth opposite such
period:
Period Amount
------------------------- ---------------
Date of formation of the
Borrower through 12/31/98 $4,500,000,000
1/1/99 through 12/31/99 1,000,000,000
1/1/00 through 12/31/00 1,000,000,000
1/1/01 through 12/31/01 1,000,000,000;
provided that any permitted amount which is not expended in any of the periods
specified above may be carried over for expenditure in any subsequent period.
(f) Covered Pops. Incur any Indebtedness (other than
Indebtedness permitted by paragraphs (b) and (i) of subsection 6.2) or Guarantee
Obligations in respect of Indebtedness (other than Guarantee Obligations
permitted by paragraph (b) of subsection 6.4) at any time after any of the dates
set forth below if the number of Covered Pops on the last of such dates prior to
the date of such incurrence is less than the number set forth opposite such last
prior date:
Date Number
---------- -------------
12/31/97 80,000,000
12/31/98 95,000,000
12/31/99 105,000,000
12/31/00 110,000,000
(g) Wireless Subscribers. Incur any Indebtedness (other than
Indebtedness permitted by paragraphs (b) and (i) of subsection 6.2) or Guarantee
Obligations in respect of Indebtedness (other than Guarantee Obligations
permitted by paragraph (b) of subsection 6.4) at any time after any of the dates
set forth below if the average of the numbers of Wireless Subscribers in
existence on the last of such dates prior to the date of such incurrence and on
the last day of each of the three previous calendar quarters is less than the
number set forth opposite such last prior date:
Date Number
---------- -------------
12/31/97 450,000
6/30/98 850,000
12/31/98 1,350,000
6/30/99 2,300,000
12/31/99 3,500,000;
provided that so long as the failure of the Vendor to perform its obligations
under the Vendor Procurement Contract shall cause clause (b) of the definition
of the term "Covered Pops" to become operable, each relevant number set forth
above shall be reduced by a proportion equal to the ratio of (i) the number of
Pops described in said clause (b) to (ii) the then aggregate number of Owned
Pops.
6.2 Limitation on Indebtedness. Incur or suffer to exist
any Indebtedness, except (subject to the provisions of subsections 6.1(f) and
(g)):
(a) Indebtedness of the Borrower under this Agreement or any
other Loan Documents;
(b) Indebtedness of the Borrower to any Restricted Subsidiary
(other than any Special Purpose Subsidiary) and of any Restricted
Subsidiary (other than any Special Purpose Subsidiary) to the Borrower
or any other Restricted Subsidiary (other than any Special Purpose
Subsidiary);
(c) (i) Indebtedness of the Borrower and any of its Restricted
Subsidiaries (other than the Special Purpose Subsidiaries) incurred to
finance the acquisition, construction, expansion or improvement of
property or assets, whether pursuant to a loan, a Financing Lease or
otherwise, (ii) Indebtedness constituting obligations of the Borrower
and its Restricted Subsidiaries (other than the Special Purpose
Subsidiaries) under Financing Leases arising out of sale-leaseback
transactions, and (iii) (A) Indebtedness of a Person that is acquired
by the Borrower or a Restricted Subsidiary (other than a Special
Purpose Subsidiary), and which becomes a Restricted Subsidiary, after
the date of this Agreement, (B) Indebtedness of an Unrestricted
Subsidiary which becomes a Restricted Subsidiary after the date of this
Agreement and (C) Indebtedness secured by property or assets acquired
by the Borrower or any Restricted Subsidiary after the date of this
Agreement, provided that such Indebtedness exists at the time such
Person becomes a Restricted Subsidiary or such property or assets are
acquired, as the case may be, and is not created in anticipation
thereof; provided, however, that the aggregate principal amount of
Indebtedness permitted by clauses (i), (ii) and (iii) of this paragraph
at any one time outstanding shall not exceed 5% of then Total
Capitalization;
(d) Indebtedness of the Borrower under a Bank Credit
Facility;
(e) Indebtedness of the Borrower under a "Vendor Credit
Facility" (as defined in the Trust Agreement) established by a vendor
which shall have agreed to supply to the Borrower and its Restricted
Subsidiaries a material amount of equipment (other than handsets) and
services comprising or relating to property or assets to be utilized in
connection with the Borrower's national wireless telecommunications
network;
(f) Indebtedness of the Borrower Incurred to finance the ac-
quisition of handsets;
(g) Indebtedness of the Borrower and its Restricted
Subsidiaries (other than any Special Purpose Subsidiary) in existence
on the date of this Agreement and listed on Schedule 6.2(g);
(h) the High Yield Debt;
(i) Indebtedness of the Borrower and its Restricted
Subsidiaries which is a Permitted Refinancing or refinances, replaces
or refunds Indebtedness permitted pursuant to subsection 6.2(a), (c),
(e) (but only to the extent of Indebtedness other than Indebtedness
incurred under the Other Vendor Credit Facility), (f) through (h), and
(j), provided that the Indebtedness that shall result from such
Permitted Refinancing, refinancing, replacement or refunding does not
increase the outstanding principal amount of the Indebtedness which was
the subject of such Permitted Refinancing, refinancing, replacement or
refunding; and
(j) additional Indebtedness of the Borrower and its Restrict-
ed Subsidiaries (other than any Special Purpose Subsidiary);
provided that neither the Borrower nor any Restricted Subsidiary shall be
permitted to Incur any of the Indebtedness referred to in paragraphs (a), (c)
through (f), (h), (i) and (j) of this subsection unless, after giving effect
thereto, the Borrower would be in Pro Forma Compliance.
6.3 Limitation on Liens. Incur or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired or upon the income or profits therefrom except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Restricted Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other social security legislation and deposits securing
liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the property of
the Borrower and its Restricted Subsidiaries taken as a whole or
materially interfere with the ordinary conduct of the business of the
Borrower and its Restricted Subsidiaries taken as a whole;
(f) Liens (other than Liens on the property of the Special
Purpose Subsidiaries) securing Indebtedness of the Borrower and its
Restricted Subsidiaries permitted by subsection 6.2(c)(i) Incurred with
respect to the property and assets described in said subsection,
provided that (i) such Liens and the Indebtedness secured thereby are
incurred prior to or within 270 days after the acquisition,
construction, expansion or improvement to which such Indebtedness
relates, (ii) the Indebtedness secured by such Liens does not exceed
100% of the cost of the acquisition, construction, expansion or
improvement financed therewith and (iii) such Liens do not at any time
encumber any property or assets other than the property and assets with
respect to which such Indebtedness is Incurred;
(g) Liens (other than Liens on the property of the Special
Purpose Subsidiaries) securing Indebtedness of the Borrower and its
Restricted Subsidiaries (other than the Special Purpose Subsidiaries)
permitted by subsection 6.2(c)(ii), provided that (i) such Liens and
the Indebtedness secured thereby are Incurred within 270 days after the
purchase by the Borrower or such Restricted Subsidiary of the property
or assets which is or are the subject of the sale-leaseback transaction
to which such Indebtedness relates, (ii) the Indebtedness secured by
such Liens does not exceed 100% of the purchase price of such property
or assets and (iii) such Liens do not at any time encumber any property
or assets other than the assets that are the subject of such
sale-leaseback;
(h) Liens on the property or assets of a Person which becomes
a Restricted Subsidiary after the date of this Agreement or on property
or assets acquired by the Borrower or any Restricted Subsidiary after
the date of this Agreement, in each case securing Indebtedness
permitted by subsection 6.2(c)(iii), provided that (i) such Liens exist
at the time such Person becomes a Restricted Subsidiary or such
property or assets are acquired, as the case may be, and are not
created in anticipation thereof and (ii) any such Lien is not extended
to cover any property or assets of such Person or any other property or
assets of the Borrower or such Restricted Subsidiary, as the case may
be, after the time such Person becomes a Restricted Subsidiary or such
property or assets are acquired, as the case may be;
(i) Liens in existence on the date of this Agreement and
securing Indebtedness permitted by subsection 6.2(g), provided that no
such Lien is extended to cover any additional property after the date
of this Agreement and that the amount of Indebtedness secured thereby
is not increased and no such Lien is extended to cover any property or
assets of any Special Purpose Subsidiary;
(j) Liens created pursuant to the Security Documents;
(k) Liens of attachments, judgments or awards against the
Borrower or its Restricted Subsidiaries, as the case may be, with
respect to which an appeal or proceeding for review shall be pending or
a stay of execution shall have been obtained, or which are otherwise
being contested in good faith and by appropriate proceedings diligently
conducted, and in respect of which adequate reserves shall have been
established in accordance with GAAP on the books of the Borrower or
such Restricted Subsidiary;
(l) restrictions on the transfer of assets imposed by any of
the Licenses or by the Communications Act or any other Requirement of
Law;
(m) leases or subleases granted to others not interfering in
any material respect with the business of the Borrower and its
Restricted Subsidiaries taken as a whole and any interest or title of a
lessor under any lease not prohibited by this Agreement;
(n) the filing of financing statements regarding leases not
prohibited by this Agreement;
(o) ground leases in respect of real property on which facil-
ities owned or leased by the Borrower or its Restricted Subsidiaries
are located;
(p) Liens on goods (and the documents of title related
thereto) the purchase price of which is financed by a documentary
letter of credit issued for the account of the Borrower or its
Restricted Subsidiaries (other than any Special Purpose Subsidiary),
provided that such Lien secures only the obligations of the Borrower or
such Restricted Subsidiaries in respect of such letter of credit;
(q) Liens on shares of the Capital Stock of Unrestricted Sub-
sidiaries; and
(r) additional Liens (other than Liens on any property of any
Special Purpose Subsidiary) which secure obligations and liabilities of
the Borrower and its Restricted Subsidiaries (other than with respect
to custom software to the extent the obligations secured by such Lien
exceed $25,000,000) not exceeding $100,000,000 in the aggregate at any
time outstanding.
6.4 Limitation on Guarantee Obligations. Incur or suffer
to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date of this
Agreement and listed on Schedule 6.4(a);
(b) Guarantee Obligations incurred in the ordinary course of
its business by the Borrower and its Restricted Subsidiaries (other
than any Special Purpose Subsidiary) in respect of Indebtedness and
other obligations and liabilities of the Borrower and its Restricted
Subsidiaries (other than any Special Purpose Subsidiary) not prohibited
by this Agreement;
(c) Guarantee Obligations of the Borrower and its Restricted
Subsidiaries (other than any Special Purpose Subsidiary) in respect of
the undrawn portion of the face amount of letters of credit issued for
the account of the Borrower or any Restricted Subsidiary (other than
any Special Purpose Subsidiary) in the ordinary course of business;
(d) the Guarantees; and
(e) additional Guarantee Obligations of the Borrower and its
Restricted Subsidiaries (other than any Special Purpose Subsidiary) not
exceeding $50,000,000 in the aggregate at any time outstanding;
provided that neither the Borrower nor any Restricted Subsidiary shall be
permitted to create, incur or assume any of the Guarantee Obligations referred
to in paragraphs (c) and (e) of this subsection unless, after giving effect
thereto, the Borrower would be in Pro Forma Compliance.
6.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, liquidate or wind up and terminate itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that, so long as, after giving effect thereto, the Borrower would
be in Pro Forma Compliance:
(a) any Restricted Subsidiary (other than any Special Purpose
Subsidiary) may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving
entity) or with or into any one or more other Wholly Owned Restricted
Subsidiaries (other than with or into any Special Purpose Subsidiary)
(provided that the Wholly Owned Restricted Subsidiary or Restricted
Subsidiaries shall be the continuing or surviving entity or entities);
(b) any Wholly Owned Restricted Subsidiary (other than any
Special Purpose Subsidiary) may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any one or more other Wholly Owned
Restricted Subsidiaries;
(c) the Borrower may merge or consolidate with any corporation
with the result that the Borrower shall become a corporation if (i)
after giving effect thereto the Borrower shall be in Pro Forma
Compliance (calculated as if such merger or consolidation had occurred
at the end of the then most recently ended fiscal quarter for which
financial statements shall have been delivered to the Lenders pursuant
to subsection 5.1), (ii) such merger or consolidation could not
reasonably be expected to have a Material Adverse Effect (it being
agreed that the fact that the Borrower would then be subject to the
payment of income taxes as a corporation shall not, in and of itself,
be deemed to constitute a Material Adverse Effect) and (iii) the
following other conditions shall be satisfied: (A) in the case such
merger or consolidation shall occur prior to the Public Offering Date,
the Parents shall have entered into an agreement in favor of the
Trustee pursuant to which they will agree that, until the Public
Offering Date, they will make capital contributions to the Borrower in
amounts equal to the excess, if any, of the amount of income taxes
payable by the Borrower (as a corporation) over the amount of
Restricted Payments that could have been made during the period (the
"Relevant Period") from the date of such merger or consolidation
through the final maturity of the Loans pursuant to subsection 6.7(a)
if the Borrower had remained a partnership during such period, (B) in
the case such merger or consolidation shall occur on or after the
Public Offering Date, the Borrower shall have delivered to the Agent a
certificate executed by a Responsible Officer to the effect that the
amount of Federal, state and local income and franchise taxes based
upon income reasonably projected to be payable by the Borrower as a
corporation after such merger or consolidation will not be materially
greater than the sum of (1) the aggregate amount of Restricted Payments
that could be made during the Relevant Period pursuant to subsection
6.7(a) if the Borrower had remained a partnership during the Relevant
Period (based on reasonable projections but without regard to clause
(ii) of the proviso to subsection 6.7(a)) and (2) the aggregate amount
of taxes based upon income that would have been payable by the Borrower
during the Relevant Period if the Borrower had remained a partnership
during the Relevant Period, (C) any write-offs and other deductions
which shall have been made in connection with any tax returns filed by
the Borrower prior to such merger or consolidation shall have been
consistent with past practice and the Borrower shall have delivered to
the Agent a certificate executed by a Responsible Officer so certifying
and (D) neither the Borrower nor the Parents shall have taken any
unreasonable action with the effect of decreasing the income of the
Borrower prior to such merger or consolidation and increasing the
future income of the Borrower after such merger or consolidation and
the Borrower shall have delivered to the Agent a certificate executed
by a Responsible Officer so certifying; and
(d) the Borrower or any Restricted Subsidiary (other
than a Special Purpose Subsidiary) may effect pursuant to a merger or
consolidation any Investment permitted by subsection 6.8(c) or (d) so
long as the Borrower or such Restricted Subsidiary is the surviving
entity.
6.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Restricted Subsidiary's Capital Stock to any
Person other than any such issue or sale of shares of Capital Stock to the
Borrower or (except in the case of shares of Capital Stock of a Special Purpose
Subsidiary) any Wholly Owned Restricted Subsidiary, except:
(a) the sale or other disposition of inventory or any other
property in the ordinary course of business (provided that no sale of a
License or any System shall be considered to be in the ordinary course
of business);
(b) as permitted by subsection 6.5(b);
(c) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Sale (other than any sale of
receivables permitted by subsection 6.6(f)) the aggregate fair market
value of the property and assets that are the subject of which is equal
to or less than $25,000,000; provided that if the aggregate fair market
value of the property and assets sold or otherwise disposed of pursuant
to this paragraph during any period of two consecutive calendar years
shall exceed $100,000,000, the Net Cash Proceeds of such excess
property and assets, to the extent not applied to purchase other
property or assets to be utilized in connection with the Borrower's
national wireless telecommunications network within 270 days from the
date of the applicable Asset Sale, shall be applied to effect a Pro
Rata Prepayment/Commitment Reduction;
(d) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Sale (other than any sale of
receivables permitted by subsection 6.6(f)) the aggregate fair market
value of the property and assets that are the subject of which are in
excess of $25,000,000, provided that, (i) if such Asset Sale includes
one or more Licenses and, after giving effect thereto, the then
aggregate number of Owned Pops would be less than 120,000,000, such
Asset Sale shall have been approved by the Requisite Aggregate Lenders,
(ii) to the extent the Net Cash Proceeds of such Asset Sale are in
excess of $100,000,000, such excess Net Cash Proceeds shall be
deposited in the Asset Sale Proceeds Sub-Account, from which the
Borrower may withdraw and apply such funds, together with all earnings
thereon, to the purchase, within 270 days from the date of the
applicable Asset Sale, of other property or assets to be utilized in
connection with the Borrower's national wireless telecommunications
network, (iii) the Borrower may apply such Net Cash Proceeds (whether
or not required to be deposited in the Asset Sale Proceeds Sub-Account
as described above) to purchase other property or assets to be utilized
in connection with the Borrower's national wireless telecommunications
network if the Borrower shall (A) notify the Agent reasonably promptly
following the completion of such Asset Sale that it intends to do so
and (B) deliver to the Agent evidence that the Borrower has, within 270
days from the date of such Asset Sale, in fact done so and (iv) if and
to the extent that the aggregate amount of the Net Cash Proceeds of all
such Asset Sales described in this paragraph that are not used as
specified in clause (iii) of this proviso, such amount shall be applied
to effect a Pro Rata Prepayment/Commitment Reduction;
(e) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Swap, provided that, if and to the
extent that the Borrower and its Restricted Subsidiaries receive
consideration for the System or Systems transferred by them in
connection with such Asset Swap that is in addition to the System or
Systems received in exchange therefor, such Asset Swap shall be deemed
to be an Asset Sale and shall be permitted only if the provisions of
subsection 6.6(c) or 6.6(d) (whichever shall be applicable) shall be
complied with in connection therewith;
(f) sales of trade receivables, provided the consideration
received for each such sale shall consist solely of cash and provided,
further, that the Net Cash Proceeds thereof shall be used (i) to effect
a Pro Rata Prepayment/Commitment Reduction, (ii) to prepay Indebtedness
then outstanding under a Bank Credit Facility or (iii) for the general
purposes of the Borrower and its Restricted Subsidiaries;
(g) as permitted by subsection 6.7;
(h) the sale of any shares of the Capital Stock of any Unre-
stricted Subsidiary; and
(i) the sale of any asset in connection with any sale and
leaseback transaction, provided (i) that such sale occurs within 270
days after the purchase by the Borrower or such Restricted Subsidiary
of such asset and (ii) in the case of any such sale and leaseback
transaction pursuant to an operating lease, the asset subject to such
sale and leaseback transaction was not acquired with the Net Cash
Proceeds of any Asset Sale that the Borrower would have been required
to apply to effect a Pro Rata Prepayment/Commitment Reduction if such
Net Cash Proceeds had not been applied to purchase such asset;
provided, that in each case described in paragraphs (c) and (d), and, to the
extent an Asset Sale is involved, (e) of this subsection, the consideration
received by the Borrower or its Restricted Subsidiaries for such Asset Sale
shall be cash, Cash Equivalents, promissory notes, other deferred payment
obligations and property or assets to be utilized in connection with the
Borrower's national wireless telecommunications network, provided, further, that
at least 80% of such consideration shall consist of cash, Cash Equivalents
and/or property or assets to be utilized in connection with the Borrower's
national wireless telecommunications network, and provided, still further, that
the aggregate outstanding principal amount of such promissory notes and other
deferred payment obligations held by the Borrower and its Restricted
Subsidiaries shall not exceed $250,000,000 at any time.
6.7 Limitation on Restricted Payments. Pay any distributions
(other than distributions payable solely in Capital Stock of the Borrower) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Restricted Subsidiary
or any warrants or options to purchase any such Capital Stock, whether now or
hereafter outstanding, either directly or indirectly, whether in cash or
property or in obligations of the Borrower or any Restricted Subsidiary (such
payments, prepayments, distributions, setting apart, purchases, redemptions,
defeasances, retirements and acquisitions and distributions being herein called
"Restricted Payments"), except that (x) the Borrower may make any Restricted
Payment constituting a distribution of any ownership interest it may hold in
APC, (y) any Restricted Subsidiary may make cash distributions to the Borrower
and (z) if, after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing or would result therefrom, the Borrower may make
Restricted Payments:
(a) to the extent of the amount of Federal, state and local
income taxes assumed to be payable by the Borrower in any fiscal year
in respect of the income of the Borrower and its Subsidiaries for such
fiscal year if the Borrower were a corporation subject to taxation as
such for such year (calculated at the maximum applicable Federal
corporate income tax rate plus an assumed state and local tax rate of
5%), provided that (i) nothing in this paragraph shall be deemed to
permit any such Restricted Payment for the purpose of paying any tax
liabilities of the Parents resulting from the conversion of the
Borrower from partnership to corporate form and (ii) no Restricted
Payment shall be permitted under this paragraph (a) unless, after
giving effect thereto, the Special Payment Condition shall be satisfied
and provided, further, that no such Restricted Payment may be made
pursuant to this paragraph with respect to taxes in respect of the
income of any Unrestricted Subsidiaries except to the extent that the
Borrower and/or its Restricted Subsidiaries shall have received cash
distributions from Unrestricted Subsidiaries with respect to such
taxes;
(b) to the extent necessary to provide the issuer of any
Specified Affiliate Debt with amounts sufficient to pay principal,
interest and other amounts then payable in respect of such Specified
Affiliate Debt, if after giving effect to such distribution, the
Borrower is in Pro Forma Compliance; and
(c) to the extent that (i) after giving effect thereto, the
Special Payment Condition shall be satisfied and (ii) the Borrower
shall have made a Pro Rata Payment Offer in an amount equal to such
Restricted Payment.
6.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (such advances,
loans, extensions of credit, capital contributions, purchases and investments
being herein called "Investments"), any Person, except:
(a) extensions of trade credit in the ordinary course of bus-
iness;
(b) Investments in Cash Equivalents;
(c) Investments by the Borrower or any Restricted Subsidiary
(other than a Special Purpose Subsidiary) in Persons engaged in the
telecommunications business or businesses related thereto, provided
that (i) such Person, if it shall be a Subsidiary, shall become a
Restricted Subsidiary unless (A) such Person or assets shall be
acquired with (I) proceeds of capital contributed to the Borrower
expressly for such purpose and/or (II) funds of the Borrower in such
amount that, after giving effect thereto, the Special Payment Condition
shall be satisfied, provided that the Borrower shall have made a Pro
Rata Payment Offer in an amount equal to such Investment and (B) the
Borrower designates such Person, by notice to the Administrative Agent,
as an Unrestricted Subsidiary and (ii) after giving effect to such
Investment, the Borrower is in Pro Forma Compliance; and provided,
further, that the aggregate amount of cash expended, plus the aggregate
book value of any assets transferred, by the Borrower and its
Restricted Subsidiaries in connection with Investments permitted under
this paragraph in Persons that are not Restricted Subsidiaries shall
not exceed $100,000,000;
(d) Investments by the Borrower or any Restricted Subsidiary
(other than a Special Purpose Subsidiary) in Persons not engaged in the
telecommunications business or businesses related thereto if, after
giving effect thereto, the aggregate amount of such Investments then
held by the Borrower and its Restricted Subsidiaries does not exceed 5%
of then Total Capitalization; provided that (i) such Person, or the
Person which shall become the owner of any assets acquired in
connection with such Investment, shall become a Restricted Subsidiary
unless (A) such Person or assets shall be acquired with (I) proceeds of
capital contributed to the Borrower expressly for such purpose and/or
(II) funds of the Borrower in such amount that after giving effect
thereto, the Special Payment Condition shall be satisfied, provided
that the Borrower shall have made a Pro Rata Payment Offer in an amount
equal to such Investment and (B) the Borrower designates such Person,
by notice to the Agent, an Unrestricted Subsidiary and (ii) after
giving effect to such Investment, the Borrower is in Pro Forma
Compliance;
(e) Investments by the Borrower or any Restricted Subsidiary
(other than a Special Purpose Subsidiary) arising from the acquisition
of any System or Systems in connection with any Asset Swap, provided
that, (i) to the extent that the Borrower and its Restricted
Subsidiaries give consideration for the System or Systems acquired by
them in connection with such Asset Swap that is in addition to the
System or Systems transferred by them in exchange therefor, such Asset
Swap shall be deemed to constitute an Investment and shall be permitted
only if the provisions of subsection 6.6(e) and 6.8(c) shall be
complied with in connection therewith and (ii) after giving effect to
such Investment, the Borrower is in Pro Forma Compliance;
(f) loans and advances to employees of the Borrower and its
Restricted Subsidiaries in an aggregate principal amount outstanding
not to exceed $10,000,000 at any one time outstanding;
(g) Investments by the Borrower in its Restricted Subsidiaries
and Investments by any Restricted Subsidiary (other than any Special
Purpose Subsidiary) in the Borrower or by any Restricted Subsidiary
(other than the Special Purpose Subsidiaries) in any other Restricted
Subsidiary; and
(h) promissory notes and other deferred payment obligations
that constitute proceeds of Asset Sales that are permitted by
subsection 6.6.
6.9 Limitation on Transactions with Affiliates. Enter into any
transaction or agreement, or participate in any arrangement, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate unless such transaction, agreement or
arrangement is (a) not prohibited by this Agreement, (b) in the ordinary course
of the Borrower's or such Restricted Subsidiary's business, and (c) upon terms
no less favorable to the Borrower or such Restricted Subsidiary, as the case may
be, than those that could be obtained on an arm's length basis from a Person
which is not an Affiliate.
6.10 Limitation on Lines of Business; Liabilities of
Subsidiaries. (a) Enter into any business, either directly or through any
Restricted Subsidiary, except for the telecommunications business and businesses
which are related thereto and in any business which the Borrower or any
Restricted Subsidiary enters into as a result of an Investment permitted
pursuant to subsection 6.8(d).
(b) Permit WirelessCo to incur any material liabilities (other
than the Guarantee executed by it) or to engage in any business or activities
other than the holding of Licenses.
(c) Permit EquipmentCo to incur any material liabilities
(other than the Guarantee executed by it and liabilities under the Vendor
Procurement Contracts) or to engage in any business or activities other than the
owning of Personal Property Assets and the leasing thereof to the Borrower.
(d) Permit RealtyCo to incur any material liabilities (other
than the Guarantee executed by it and other liabilities incurred in the ordinary
course of business which are incident to being the owner or lessee of real
property) or to engage in any business or activities other than the owning or
leasing, as lessee, of Real Estate Assets and the leasing, as lessor, or, as the
case may be, subleasing, as sublessor, thereof to the Borrower.
6.11 Limitation on Designation of Secured Obligations.
Designate any Indebtedness as Secured Obligations under the Trust Agreement
other than (a) the Loans, (b) any Bank Credit Facility, (c) the Other Vendor
Credit Facility, (d) Interest Rate Agreement Obligations, (e) Indebtedness
permitted to be incurred pursuant to subsections 6.2(e) and (f), provided that
the aggregate amount of Indebtedness permitted pursuant to subsection 6.2(f)
that can be designated as Secured Obligations under the Trust Agreement pursuant
to this subsection 6.11 shall not exceed $500,000,000 and (f) Indebtedness of
the Borrower and its Restricted Subsidiaries which refinances, replaces or
refunds Indebtedness described in the foregoing clauses (a) through (e),
provided that the Indebtedness that shall result from such refinancing,
replacement or refunding does not increase the outstanding principal amount of
the Indebtedness which was the subject of such refinancing, replacement or
refunding. Notwithstanding the foregoing, in no event may the Borrower designate
as Secured Obligations under the Trust Agreement any Indebtedness which is owed
to any of the Parents or any other Affiliate of the Borrower or any Indebtedness
which is guaranteed by any of the Parents or any other Affiliate of the Borrower
or which benefits from any other credit enhancement provided directly or
indirectly by any of the Parents or any Affiliate of the Borrower unless, solely
in the case of any such Indebtedness guaranteed or benefitted, (a) such
Indebtedness refinances, replaces or refunds, or constitutes, Indebtedness
permitted under subsection 6.2(d) or (e), and (b) the Lenders shall have been
given the option to have the Loans and the other obligations and liabilities
owing to them hereunder and under the other Loan Documents receive the benefits
of such a guarantee or other credit enhancement on substantially identical terms
and conditions.
6.12 Limitation on Interest Rate Agreements. Enter into
any Interest Rate Agreement other than to protect against fluctuations in in-
terest rates and not for speculative purposes.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
when such principal becomes due in accordance with the terms hereof,
whether at the stated maturity thereof or as a result of the mandatory
prepayment provisions of subsection 2.5; or the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder,
within five days after any such interest or other amount becomes due in
accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by the
Borrower or any other Loan Party in this Agreement or in any other Loan
Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made and, if capable of remedy the
facts or circumstances resulting in such breach shall not be altered
within a period of 30 days such that such representation or warranty is
no longer incorrect in any material respect; or
(c) the Borrower or any other Loan Party shall default in the
observance or performance of any covenant or agreement contained in
this Agreement or any other Loan Document (other than as provided in
paragraphs (a) and (b) of this Section), and such default shall
continue unremedied for a period of 30 days after the earlier of (i)
the first date on which a Responsible Officer learns of such default
and (ii) receipt by the Borrower of notice thereof from the Agent or
any Lender; or
(d) the Borrower or any Restricted Subsidiary shall (i)
default in any payment of principal of or interest under the Existing
Bank Credit Facility or on any other Indebtedness (other than the
Loans) or Guarantee Obligation in respect of Indebtedness or any
Interest Rate Agreement Obligation beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness,
Guarantee Obligation or Interest Rate Agreement Obligation was created;
or (ii) default in the observance or performance of any other agreement
or condition under the Existing Bank Credit Facility or relating to any
such Indebtedness, or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of
such Indebtedness, Guarantee Obligation or Interest Rate Agreement
Obligation (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such Indebtedness,
Guarantee Obligation or Interest Rate Agreement Obligation to become
due prior to its stated maturity; provided, however, that no Event of
Default shall occur under this paragraph (d) with respect to events
other than events under the Existing Bank Credit Facility unless the
aggregate principal amount of Indebtedness or Guarantee Obligations, or
the aggregate amount of Interest Rate Agreement Obligations, in respect
of which any such default or defaults shall occur is then outstanding
in an aggregate principal amount in excess of the lesser of (A)
$50,000,000 and (B) 10% of the sum of the aggregate then outstanding
principal amount of all Indebtedness and Guarantee Obligations and
aggregate then outstanding Interest Rate Agreement Obligations of the
Borrower and its Restricted Subsidiaries; or
(e) (i) the Borrower, any Restricted Subsidiary or (so long as
the Borrower remains a partnership) Holding shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower,
any Restricted Subsidiary or (so long as the Borrower remains a
partnership) Holding shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower,
any Restricted Subsidiary or (so long as the Borrower remains a
partnership) Holding any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower, any Restricted
Subsidiary or (so long as the Borrower remains a partnership) Holding
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower, any Restricted Subsidiary or (so long as the
Borrower remains a partnership) Holding shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii)
above; or (v) the Borrower, any Restricted Subsidiary or (so long as
the Borrower remains a partnership) Holding shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(f) (i) any Parent shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or any Parent shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Parent any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against any Parent any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv)
any Parent shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii) or (iii) above; or (v) any Parent shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due; provided, however, that no Event of
Default shall occur under this paragraph (f) if (x) all amounts to be
contributed to the capital of the Borrower pursuant to the Capital
Contribution Agreement have been so contributed and have not been
avoided or recaptured under any bankruptcy, insolvency, reorganization
or similar law or (y) within 30 days after an Event of Default would
otherwise occur pursuant to this paragraph (f) as a result of one of
the events enumerated above with respect to any Parent, one or more of
the other Parents shall have assumed all the obligations of such
affected Parent under the Capital Contribution Agreement in writing in
form and substance reasonably satisfactory to the Agent; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA or Section 412 of the Code), whether or
not waived, shall exist with respect to any Single Employer Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Requisite Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA
or (v) the Borrower or any Commonly Controlled Entity shall incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan; and in each case in clauses
(i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have
a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
the Borrower or any Restricted Subsidiary involving in the aggregate a
liability (not paid or fully covered by third party insurance) of an
amount in excess of the lesser of (A) $50,000,000 and (B) 10% of the
aggregate then outstanding principal amount of all Indebtedness of the
Borrower and its Restricted Subsidiaries on a consolidated basis, and
each such judgment or decree shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof;
or
(i) (i) any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrower or any other
Loan Party which is a party to such Security Document shall so assert
in writing or (ii) except in accordance with the terms thereof or of
any other Loan Document, the Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) any Guarantee shall cease, for any reason, to be in full
force and effect or the Guarantor party thereto shall so assert in
writing; or
(k) the Capital Contribution Agreement shall cease, for any
reason, to be in full force and effect prior to the date on which all
amounts required to be contributed thereunder have been contributed to
the Borrower, or any Parent shall so assert in writing; or
(l) the termination of the Borrower's right to use the
"Sprint" trademark pursuant to the Trademark License Agreement, or any
impairment in the ability of the Borrower to use the "Sprint" trademark
that could reasonably be expected to have a Material Adverse Effect; or
(m) any termination, revocation or non-renewal by the FCC of
one or more Licenses of the Borrower or its Restricted Subsidiaries if,
after giving effect thereto, the aggregate number of Owned Pops is less
than 120,000,000; or
(n) the commencement by the Trustee of foreclosure proceed-
ings with respect to any of the Collateral while a Notice of Enforce-
ment is in effect; or
(o) the failure of the full amount of any required capital
contribution to be made under the Capital Contribution Agreement for a
period of more than 30 days after the date when due; or
(p) any Change in Control;
then, and in any such event, (i) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (e) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents, if any, shall immediately
become due and payable, and (ii) if such event is any other Event of Default,
either or both of the following actions may be taken: (A) with the consent of
the Requisite Accelerating Creditors, the Agent may, or upon the request of the
Requisite Accelerating Creditors, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (B) with the consent of the Requisite
Accelerating Creditors, the Agent may, or upon the request of the Requisite
Accelerating Creditors, the Agent shall, by notice to the Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents, if any, to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents and irrevocably authorizes the Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities to any Lender, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities to any Lender
shall be read into this Agreement or otherwise exist against the Agent. The
Borrower agrees to pay the Agent such compensation for services rendered
hereunder as may be separately agreed between the Borrower and the Agent.
8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible to any
Lender for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(a) liable to any Lender for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement, any other Loan Document or any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document for any failure of the Borrower to
perform its obligations or satisfy any condition hereunder or thereunder. The
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Loan as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Requisite Lenders as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request of the Requisite Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
8.5 Notice of Default and Other Notices. The Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. Without limiting the generality of the foregoing or subsection 7.1, the
Agent shall not be required to take any action with respect to any Default or
Event of Default except as expressly provided in Section 7; provided that unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Lenders. The Agent shall, promptly following its
receipt thereof, notify the Lenders as to the substance of any notice received
by the Agent pursuant to subsections 2.2, 2.4, 2.5, 2.6 or 5.7.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Percentages in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Agreement, any other Loan Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder. With respect to the Loans made by it, the Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Lenders. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Requisite Lenders shall appoint
a successor agent for the Lenders, which successor agent (provided that it shall
have been approved by the Borrower which approval shall not be unreasonably
withheld) shall succeed to the rights, powers and duties of the Agent. If no
successor agent shall have been appointed by the Requisite Lenders and no such
new agent shall have been appointed within 30 days after the retiring agent
gives notice of resignation, then the retiring agent may on behalf of the
Lenders appoint a successor agent (provided that it shall have been approved by
the Borrower, which approval shall not be unreasonably withheld). Effective upon
such appointment and approval, the term "Agent" shall mean such successor agent,
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. (a) Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Requisite Lenders may, from time to time, (a) enter into with
the Borrower written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any manner the
rights of the Lenders or of the Borrower hereunder or (b) waive, on such terms
and conditions as the Requisite Lenders may specify in such instrument, any of
the requirements of this Agreement or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Lender's Loans or of any installment thereof, or reduce
the stated rate of any interest or fees payable to such Lender hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiry date of, any Lender's Commitment, in each case without the
consent of such Lender, (ii) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definitions of Requisite
Accelerating Creditors, Requisite Aggregate Lenders or Requisite Lenders, or
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement, in each case without the written consent of
all the Lenders, or (iii) amend, modify or waive any provision of Section 8
without the written consent of the then Agent and provided, further, that,
notwithstanding the foregoing, the provisions of Sections 3, 5, 6 and 7 may be
amended, supplemented or modified with, and only with, the consent of the
Borrower and the Requisite Aggregate Lenders (whether or not the Vendor or any
other Lender shall have consented thereto) and compliance with any of the
requirements of said Sections (or any Default or Event of Default (as such terms
are defined in said Sections) resulting from a failure by the Borrower to comply
with such requirements) may be waived with, and only with, the consent of the
Requisite Aggregate Lenders (whether or not the Vendor or any other Lender shall
have consented thereto). Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Agent and all future holders of the Loans.
In the case of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former positions and rights hereunder, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
(b) The Trust Agreement, any Guarantee and any Security
Document may only be amended, supplemented or otherwise modified, and any
provision thereof may only be waived, in accordance with subsection 9.3 of the
Trust Agreement, provided, however, that in no event shall any Collateral (other
than any Collateral which is the subject of any Asset Sale permitted by
subsection 6.6) or Guarantee be released without the consent of the Lenders
whose Percentages aggregate at least 75% as provided in subsection 9.19, and no
action described in clause (i) of the proviso in subsection 9.3(a) of the Trust
Agreement may be taken without the consent of Lenders whose Percentages
aggregate at least 75%.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by courier, when delivered, (b) in the case of delivery by mail, five days after
being deposited in the mails, first class postage prepaid, or (c) in the case of
delivery by facsimile transmission, when received in legible form, addressed as
follows in the case of the Borrower, the Vendor and the Agent, and in the case
of the other parties hereto, to such other address as may be hereafter notified
by the respective parties hereto:
The Borrower: Sprint Spectrum L.P.
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-1490
with a copy to:
Sprint Spectrum L.P.
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
The Vendor: Northern Telecom Inc.
2221 Lakeside Boulevard
Richardson, Texas 75082
Attention: Vice President, Finance
Wireless Networks
Vice President, Customer
Finance,
North America
Fax: (972) 684-3929
(972) 684-3679
The Agent: Northern Telecom Inc.
2221 Lakeside Boulevard
Richardson, Texas 75082
Attention: Vice President, Finance
Wireless Networks
Vice President, Customer
Finance, North America
Fax: (972) 684-3929
(972) 684-3679
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 2.4, 2.6 or 2.12(b) shall not be effective until
received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall be
considered to have been relied upon by the Lenders, notwithstanding any
investigation made by the Lenders and the Agent, and shall not be prejudiced by
but shall survive the execution and delivery of this Agreement and the making of
the Loans hereunder.
9.5 Payment of Expenses and Taxes; Indemnity. The Vendor and
each other Lender will bear all its respective costs in connection with this
Agreement, except that (a) the Borrower agrees to pay or reimburse the Agent for
all its reasonable costs and expenses incurred by the Agent in connection with
the enforcement of any rights under this Agreement and the other Loan Documents,
including, without limitation, the reasonable fees and disbursements of one, and
only one, counsel to the Agent and the Lenders and (b) the Borrower shall pay or
reimburse the Agent, to the extent agreed by the Borrower and the Agent, for
costs and expenses of the Agent incurred in connection with any amendments,
supplements, modifications or waivers of this Agreement. The Borrower also
agrees (i) to pay, indemnify, and hold each Lender and the Agent harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (ii) to pay, indemnify, and hold
each Lender and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower, any of its Subsidiaries or any of their properties
(all the foregoing in this clause (ii), collectively, the "indemnified
liabilities"), provided that the Borrower shall have no obligation hereunder to
the Agent or any Lender with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Agent or such Lender. The
agreements in this subsection shall survive repayment of the Loans and all other
amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in accordance with applicable law,
including compliance with applicable federal and state securities and "blue sky"
laws and regulations, at any time sell to one or more Eligible Assignees
("Participants") participating interests in any Loan owing to such Lender, the
Commitment of such Lender or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. No Lender shall be entitled to create in favor of any Participant, in
the participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the first proviso to subsection
9.1. The Borrower agrees that if amounts outstanding under this Agreement are
due or unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall, to the
maximum extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in subsection
9.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of subsections 2.11, 2.12,
2.13 and 2.14 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided that, in the case
of subsection 2.13, such Participant shall have complied with the requirements
of said subsection and provided, further, that no Participant shall be entitled
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in accordance with applicable law,
including compliance with applicable federal and state securities and "blue sky"
laws and regulations, at any time and from time to time assign to any other
Lender or to an Eligible Assignee (an "Assignee") all or any part of its Loans
and Commitment pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit C, executed by such Assignee and such assigning Lender and
delivered to the Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an Eligible Assignee, the
sum of the aggregate principal amount of the Loans and the aggregate amount of
Unused Commitment being assigned is not less than $10,000,000 (or such lesser
amount as constitutes the assigning Lender's entire aggregate principal amount
of Loans and Unused Commitment) and, if such assignment is of less than all of
the Loans and Commitment of the assigning Lender, the sum of the aggregate
principal amount of the assigning Lender's remaining Loans and the aggregate
amount of Unused Commitment is not less than $10,000,000 (or such lesser amount
as may be agreed to by the Borrower and the Agent). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (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 thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto but shall be entitled to the benefits of
subsections 2.11, 2.12, 2.13 and 2.14 in respect of the period prior to such
assignment as well as to any fees accrued for its account and not yet paid).
Notwithstanding any provision to the contrary in this paragraph, no assignment
shall be effected pursuant to this paragraph unless the Borrower shall have
received written notice thereof (i) in the case of any assignment to more than
one Person of outstanding Loans and/or Commitments in an aggregate principal
amount in excess of $100,000,000, at least 60 days prior to the date of such
assignment, and (ii) in the case of any other assignment, prior to the date of
such assignment.
(d) The Agent, on behalf of the Borrower, shall maintain at
the address of the Agent referred to in subsection 9.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders, the registered owners of
the Obligations evidenced by the Notes and the principal amount of the Loans
owing to each Lender from time to time. The entries in the Register shall be
prima facie evidence of the accuracy thereof, and the Borrower, the Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of a Loan or Note hereunder as the owner thereof for all purposes of
this Agreement, notwithstanding any notice to the contrary. Any assignment of
any Loan or Note hereunder shall be effective only upon appropriate entries with
respect thereto being made in the Register. Any assignment or transfer of all or
part of any Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of such Note, duly
endorsed by (or accompanied by a written instrument of assignment or transfer
duly executed by) the holder thereof, and thereupon one or more new Note(s) in
the same aggregate principal amount shall be issued to the designated
Assignee(s) and the old Note shall be returned to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender, by the Agent), together with payment by the assignor or
assignee Lender, as agreed between them, to the Agent of a registration and
processing fee of $3,500, the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
and its advisers and agents, any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement or the other
Loan Document or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Subsidiaries prior to becoming a party to this Agreement; provided that (i)
no such disclosure may be made unless such Transferee or prospective Transferee
and its advisers and agents shall have executed and delivered to the Borrower a
Confidentiality Agreement and (ii) disclosures of information to any Transferee
or prospective Transferee that is an Investment Vehicle shall be limited as
provided in the definition of "Eligible Assignee" in subsection 1.1.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan to any Federal Reserve Bank in
accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans, or
interest thereon, (whether voluntarily or involuntarily, by set-off, or
otherwise) in a greater proportion than any such payment to any other Lender, if
any, in respect of such other Lender's Loans, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Loans, as shall be
necessary to cause such Benefitted Lender to share the excess payment ratably
with each of the other Lenders, provided, however, that if all or any portion of
such excess payment is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price returned, to the extent of
such recovery, but without interest and, provided, further, that,
notwithstanding the foregoing, if such Benefitted Lender shall receive such
payment at a time when a Notice of Enforcement shall have been delivered to the
Trustee and be in effect, such Benefitted Lender shall turn over to the Trustee
an amount equal to such payment for deposit in the Collateral Account (as
defined in the Trust Agreement) to be applied in the manner provided for in the
Trust Agreement.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right at any time and from time to
time, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the Agent after
any such set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
9.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Agent.
9.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OB-
LIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND IN-
TERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction. Each of the Borrower,
the Agent, the Vendor and, to the extent not prohibited by applicable law, the
other Lenders hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and
enforcement of any judgement in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of New York, the courts
of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth or referred to in subsection
9.2 or at such other address of which the other parties shall have been
notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.
9.13 Confidentiality. Each of the Agent and the Lenders agrees
to keep confidential any written or oral information (a) provided to it by or on
behalf of the Borrower or any of its Subsidiaries pursuant to or in connection
with this Agreement or (b) obtained by such Lender based on a review of the
books and records of the Borrower or any of its Subsidiaries; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
to the Agent or any other Lender, (ii) to any prospective Transferee which is an
Eligible Lender and which executes and delivers to the Borrower a
confidentiality agreement in substantially the form of Exhibit D, (iii) to its
employees, directors, agents, attorneys, accountants and other professional
advisors who have been made aware of the confidential nature of such information
and have agreed to maintain the confidentiality thereof, (iv) upon the request
or demand of any Governmental Authority having jurisdiction over such Lender and
the authority to make such request or demand, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, provided that prior written notice of such
disclosure is given to the Borrower or (vi) which has been publicly disclosed
other than in breach of this Agreement.
9.14 Non-Recourse. No claim may be made under this Agreement
or any other Loan Document against any of the direct or indirect partners of the
Borrower for the payment of principal of, or interest on, the Loans, or any
expenses or other amounts payable hereunder or under any other Loan Document,
provided, however, that this subsection shall not (a) affect the validity or
enforceability of the obligations of any Partner under the Capital Contribution
Agreement or (b) operate as a waiver of any rights or claims against any Partner
arising out of or resulting from such Partner's misrepresentations or fraud in
or in respect of the Capital Contribution Agreement.
9.15 Securities Act Matters. (a) Each of the Agent and the
Lenders hereby acknowledges and agrees that: the Loans have not been and will
not be registered under the Securities Act of 1933, as amended (the "Securities
Act"), or the securities laws of any state; the Loans are being made in reliance
on exemptions from the registration requirements of the Securities Act and
applicable state securities laws; the Loans have not been approved or
disapproved by the Securities and Exchange Commission (the "Commission"), any
state securities commission or other regulatory authority, nor have any of the
foregoing authorities passed upon or endorsed the merits of the credit facility
established hereby or the accuracy or adequacy of the Summary Business Plan
Overview of the Borrower, dated March 1996, and that any representation to the
contrary is unlawful; the Loans are subject to restrictions on transferability
and resale and may not be transferred or resold except as permitted under the
Securities Act and applicable state securities laws pursuant to registration or
exemption therefrom; any promissory notes evidencing the Loans will bear a
legend referring to the foregoing restrictions; and because of such
restrictions, no secondary trading market for the Loans is expected to develop,
and Lenders must bear the risk of their investment for an indefinite amount of
time.
(b) Each Lender represents that (i) it is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act, (ii) it is making the Loans hereunder for its own
account for investment and not with a view to a public distribution thereof
(within the meaning of the Securities Act and rules and regulations promulgated
thereunder) in contravention of the Securities Act and (iii) it has been
afforded an opportunity to request from the Borrower and to review, and has
received, all information considered by it to be necessary to become a Lender
hereunder.
9.16 Other Agreements. The Vendor, the Borrower and each
other Person that shall subsequently become party to this Agreement agree to the
provisions contained in Schedule I.
9.17 WAIVERS OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT, THE VENDOR AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.18 Interest Rate Limitation. Notwithstanding anything herein
or in any Note to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively, the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable on any Loans owing to such Lender, together with all Charges
payable to such Lender, shall be limited to the Maximum Rate.
9.19 Release of Guarantees and Collateral. If the Borrower
shall wish to effect the release of any Collateral or any Guarantee, it shall
give notice thereof to the Agent. Upon receipt of such notice, the Agent shall
request the Lenders to give notice to the Agent in writing of their approval or
disapproval of the requested release. If Lenders whose Percentages aggregate at
least 75% approve such request, the Agent shall give written notice of such
approval to the Borrower, and such release may thereafter be effected without
violation of this Agreement. For avoidance of doubt, no approval of Lenders
shall be necessary to effect the release of any Collateral which is the subject
of any Asset Sale permitted by subsection 6.6.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
NORTHERN TELECOM INC., as a Lender
and as Agent
By: /s/ Matthew J. Desch
Title: President, Wireless Networks
<PAGE>
MISCELLANEOUS PROVISIONS
1. Certain Definitions.
"Applicable Margin": (a) with respect to the first
$800,000,000 of Loans made hereunder, as such Loans may be continued or
converted from time to time for (i) ABR Loans, 2.00%, and (ii)
Eurodollar Loans, 3.00%, and (b) with respect to all Loans made in
excess of $800,000,000 made hereunder, as such Loans may be continued
or converted from time to time for (i) ABR Loans, 1.50%, and (ii)
Eurodollar Loans, 2.50%.
"Hard Costs": all "Products", "Services" (including project
management services but excluding construction management services),
"Installation" and "Engineering" (as each such term is defined in the
Vendor Procurement Contract) provided, and invoiced, by the Vendor to
the Borrower pursuant to the Vendor Procurement Contract.
"Phase I Commitment Period": the period (a) beginning on the
date on or subsequent to the Closing Date (which shall be no later than
March 31, 1997) on which the Borrower shall have delivered to the Agent
a certificate executed by a Responsible Officer stating that (i) the
Borrower has obtained Bona Fide Commitments and/or funding (other than
funding which is used to acquire or invest in Unrestricted
Subsidiaries) from financing sources (including $800,000,000 of the
Vendor Commitment) in the aggregate amount of at least $4,075,000,000,
(ii) at least $1,000,000,000 of such Bona Fide Commitments and/or
funding has been obtained pursuant to the Other Vendor Credit Facility,
(iii) at least $1,075,000,000 of such Bona Fide Commitments and/or
funding has been obtained pursuant to Bank Credit Facilities and/or the
proceeds of the sale by the Borrower of its public debt and (iv) at
least $1,000,000,000 of such Bona Fide Commitments has been obtained
from the Partners under the Capital Contribution Agreement or in the
form of cash equity contributions to the Borrower (such certificate to
be accompanied by certified copies of any commitment letters or other
documents evidencing the Bona Fide Commitments described in such
certificate) and (b) ending on the earlier of the date on which the
Available Commitment for the Phase I Commitment Period is reduced to
zero or the Termination Date.
"Phase II Commitment Period": the period (a) beginning on the
date on which the Borrower shall have delivered to the Vendor a
certificate executed by a Responsible Officer stating that (i) the
Borrower has obtained Bona Fide Commitments and/or funding (in excess
of the minimum commitments and/or funding described in the definition
of Phase I Commitment Period) from financing sources (including
$500,000,000 of the Vendor Commitment) in the aggregate amount of
$2,300,000,000, (ii) at least $400,000,000 of such Bona Fide
Commitments and/or funding has been obtained in the form of cash equity
contributions and/or subordinated unsecured loans to the Borrower by
the Partners and/or Bona Fide Commitments by the Partners and/or third
parties to make such contributions and/or loans, (iii) at least
$800,000,000 of such Bona Fide Commitments and/or funding has been
obtained pursuant to the Other Vendor Credit Facility, (iv) at least
$750,000,000 of such commitments and/or funding has been obtained from
entities a primary business of which is to extend credit or to invest
in commercial bank loans and/or the proceeds of the sale by the
Borrower (or Holding if such proceeds are made available as cash equity
contributions to the Borrower) of its public debt, (v) the Borrower has
drawn $800,000,000 hereunder and drawn or utilized substantially all of
the Bona Fide Commitments described in the definition of Phase I
Commitment Period (including, in particular, the Other Vendor Credit
Facility but excluding any portion of the Bank Credit Facilities or any
other such Bona Fide Commitments which has not been utilized as a
result of a determination by the Borrower that the actual utilization
of other sources of funding available to the Borrower was in the
Borrower's best interest) and (vi) there are then at least [__________]
Covered POPS and (b) ending on the Termination Date.
"Soft Costs": all goods and services provided by and invoiced
by the Vendor under the Vendor Procurement Contract (including, without
limitation, construction management services) other than Hard Costs;
for greater certainty, Soft Costs do not include any fees payable to
the Vendor or any Lender hereunder.
"Vendor Commitment": the obligation of the Vendor to make (or
cause Lenders to make) Loans to the Borrower under subsection 2.1 in an
aggregate principal amount not to exceed (a) during the Phase I
Commitment Period, $800,000,000 and (b) during the Phase II Commitment
Period, $500,000,000, as such amounts may be modified from time to time
in accordance with the provisions of this Agreement.
2. Use of Proceeds.
The proceeds of the Loans shall be used to finance the purchase price
of goods and services provided by the Vendor under the Vendor
Procurement Contract associated with the build-out of the Borrower's
national wireless telecommunications system; provided that the
aggregate amount of Loans which shall have been made to finance Soft
Costs shall not exceed (a) at any time prior to the commencement of the
Phase II Commitment Period, the sum of $[___________] plus [___]% of
the value of non-cancelable orders placed by the Borrower under the
Vendor Procurement Contract which are associated with a system which
has then achieved [__________] under the Vendor Procurement Contract;
provided that the aggregate amount of Loans made to finance Soft Costs
pursuant to this clause (a) may not exceed $[_____________], and (b)
from and after the commencement of the Phase II Commitment Period, (i)
[____]% of the value of all non-cancelable orders placed by the
Borrower under the Vendor Procurement Contract which (A) have
deliveries required within six months from the date each such order was
placed, (B) have been placed at any time after the commencement of the
Phase II Commitment Period and (C) do not exceed $[__________] in the
aggregate and (ii) after orders meeting the requirements of clause (i)
above have been placed, [____]% of the value of all cumulative
non-cancelable orders placed by the Borrower under the Vendor
Procurement Contract subsequent to the execution thereof which have
deliveries required within 120 days from the date the order was placed;
and provided, further, that in no event shall the aggregate amount of
Loans made to finance Soft Costs exceed $[__________].
3. Fees; Additional Amounts.
(a) The Borrower agrees to pay to the Agent, for the account
of the Lenders pro rata according to their Funding Percentages, a
commitment fee for the period from and including the Closing Date to
and excluding the Termination Date, computed at the rate of
[________________], payable quarterly in arrears on the last day of
each March, June, September and December and on the Termination Date or
such earlier date on which the Commitments shall terminate as provided
in this Agreement, commencing on the first of such dates to occur after
the Closing Date.
(b) The Borrower agrees to pay to the Vendor an origination
fee equal to $[__________], payable on the date the initial Loans are
made under this Agreement.
(c) The Borrower agrees to pay to the Vendor an origination
fee equal to $[__________], payable on the date that the aggregate
principal amount of all Loans (other than Loans made pursuant to
subsection 2.7(d)) exceed $800,000,000.
(d) In addition to, and without duplication of, amounts which
may become payable from time to time pursuant to paragraphs (a) and (b)
of subsection 2.12, the Borrower agrees to pay to each Lender which
requests compensation under this paragraph (d) by notice to the
Borrower, on the last day of each Interest Period with respect to any
Eurodollar Loan made by such Lender, at any time when such Lender shall
be required to maintain reserves against "Eurocurrency liabilities"
under Regulation D of the Board of Governors of the Federal Reserve
System (or, at any time when such Lender may be required by the Board
of Governors of the Federal Reserve System or by any other Governmental
Authority, whether within the United States or in another relevant
jurisdiction, to maintain reserves against any other category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is determined as provided in this Agreement or against
any category of extensions of credit or other assets of such Lender
which includes any such Eurodollar Loans), an additional amount
(determined by such Lender's calculation or, if any accurate
calculation is impracticable, reasonable estimate using such reasonable
means of allocation as such Lender shall determine) equal to the actual
costs, if any, incurred by such Lender during such Interest Period as a
result of the applicability of the foregoing reserves to such
Eurodollar Loans.
4. Assignments.
(a) Notwithstanding any provision to the contrary in
subsection 9.6, prior to March 31, 1997, (i) no Lender may engage in
any selling efforts with respect to, or consummate, any assignment of
any undrawn Commitment of such Lender hereunder and (ii) no lender
under the Other Vendor Credit Facility may engage in selling efforts
with respect to, or consummate, any assignment of any undrawn
commitment of such lender under the Other Vendor Credit Facility.
(b) The restrictions contained in paragraph (a) above and the
restrictions contained in the proviso to the first sentence of
subsection 9.6(c) and the last sentence of subsection 9.6(c) shall not
apply to any sale or assignment by the Vendor to QUALCOMM Incorporated;
and the restrictions contained in paragraph (a) above and the
restrictions contained in the proviso to the first sentence of
subsection 9.6(c) and the last sentence of subsection 9.6(c) shall not
apply to any sale or assignment by the Vendor to (i) a Person, subject
to the consent of the Borrower (which consent shall not be unreasonably
withheld), which is neither a bank, insurance company or mutual fund
nor an entity, Affiliate or Investment Vehicle which is in the
telecommunications business and/or a related business or (ii) any
Affiliate of the Vendor the obligations of which shall have been
guaranteed by the Vendor. It is further agreed that (i) only one
Assignment and Acceptance shall be required to be executed and
delivered by the Vendor and QUALCOMM Incorporated with respect to the
assignment of Loans from time to time by the Vendor to QUALCOMM
Incorporated, (ii) that such Assignment and Acceptance shall include a
schedule to reflect the principal amount of Loans assigned from time to
time and (iii) that the Vendor shall promptly notify the Agent of the
principal amount of each assignment of Loans by the Vendor to QUALCOMM
Incorporated, and upon the Agent's receipt of such notice, the Agent
shall record the information contained therein in the Register and on
the schedule to such Assignment and Acceptance and give notice of such
recordation to the Lenders and the Borrower.
5. Syndication of Loans and Commitment by Vendor.
The Borrower and its Restricted Subsidiaries will cooperate with the
Vendor and its lead agents in each syndication of the Loans and
Commitments undertaken by the Vendor and such lead agents; provided
that the Vendor and its lead agents shall give the Borrower prior
written notice of their intent to commence each such syndication and,
provided, further, that the Borrower and its Restricted Subsidiaries
shall not be required to take the actions described in this paragraph
in connection with more than two such syndication commencement notices
in any twelve-month period and no more than three such syndication
commencement notices during the term of the Credit Facility. Such
cooperation will include (i) making senior officers of the Borrower and
its Restricted Subsidiaries available for a meeting with prospective
Assignees and the Vendor and its lead agents (provided that the
Borrower shall have received at least 60 days' notice of such meeting),
and (ii) providing such other assistance as may be reasonably requested
by the Vendor and such lead agents (including providing information to,
and responding to questions from, prospective Assignees with respect to
the operations, business plans, results and other matters relating to
the Borrower's business on a timely basis and in any manner reasonably
requested by the Vendor or such lead agents).
6. Purchases Under Other Vendor Procurement Contract.
The Borrower agrees that it will not purchase any goods or services
under the Other Vendor Procurement Contract for an aggregate price in
excess of $1,800,000,000 and up to $1,950,000,000 except to the extent
that the Other Vendor provides financing to the Borrower for such
excess under terms no less favorable to the Borrower than those set
forth in the Other Vendor Credit Facility.
7. Provisions of Schedule I of Other Vendor Credit Facility.
The Borrower confirms that the provisions of Schedule I of the Other
Vendor Credit Facility that might be deemed to modify subsection 9.6 of
the Other Vendor Credit Facility are no less restrictive in any
material respect than those set forth in subsection 9.6 of this
Agreement and this Schedule I.
<PAGE>
LENDER COMMITMENTS
Name of Lender Percentage of Vendor Commitment
Northern Telecom Inc. 100%
<PAGE>
SCHEDULE 3.17(A)
THE BORROWER'S MTA'S
Birmingham
Boston-Providence
Buffalo-Rochester
Dallas-Fort Worth
Denver
Des Moines-Quad Cities
Detroit
Indianapolis
Kansas City
Little Rock
Louisville-Lexington-Evansville
Miami-Fort Lauderdale
Milwaukee
Minneapolis-St. Paul
Nashville
New Orleans-Baton Rouge
New York
Oklahoma City
Phoenix
Pittsburgh
Portland
St. Louis
Salt Lake City
San Antonio
San Francisco-Oakland-San Jose
Seattle
Spokane-Billings
Tulsa
Wichita
<PAGE>
SCHEDULE 6.2(g)
EXISTING INDEBTEDNESS
10% Notes Payable - Zimmer Co., due 2006 $757,522.61
<PAGE>
SCHEDULE 6.4(a)
EXISTING GUARANTEE OBLIGATIONS
-None-
<PAGE>
EXHIBIT A
THIS NOTE AND THE LOANS EVIDENCED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES LAWS OF ANY STATE; THE LOANS EVIDENCED HEREBY ARE BEING MADE
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS; THIS NOTE AND THE LOANS EVIDENCED
HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"), ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS NOTE OR THE ACCURACY OR ADEQUACY OF THE SUMMARY
BUSINESS PLAN OF THE BORROWER, DATED MARCH 1996, AND ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL; THIS NOTE AND THE LOANS EVIDENCED HEREBY ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT ABE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT
AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE
REGISTER MAINTAINED BY THE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
FORM OF NOTE
$ ____________ New York, New York
_________ __, ____
FOR VALUE RECEIVED, the undersigned, SPRINT SPECTRUM L.P., a
Delaware limited partnership (the "Borrower"), hereby unconditionally promises
to pay to the order of ____________________ (the "Lender") at the office of
__________________ located at __________________, in lawful money of the United
States of America and in immediately available funds, the lesser of (a) the
principal amount of DOLLARS ($ ) and (b) the aggregate unpaid amount of th
Loans made to the Borrower by the Lender pursuant to the Credit Agreement (as
defined below). The principal amount shall be paid in the amounts and on the
dates specified in subsection 2.3 of the Credit Agreement (as defined below).
The Borrower further agrees to pay interest in like money at such office on
the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in subsections 2.7 and 2.8 of the Credit Agreement
(as defined below).
The Borrower promises to pay interest, on demand, on any
overdue principal and, to the extent permitted by law, overdue interest from
their due dates at the rate or rates provided in the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof, each
conversion of all or a portion thereof to another Type and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto. Each
such endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement shall not affect
the obligations of the Borrower in respect of such Loan.
This Note (a) is one of the Notes referred to in the Credit
Agreement, dated as of October 2, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower,
Northern Telecom Inc., the Lender, the other banks and financial institutions
and entities from time to time parties thereto and Northern Telecom Inc., as
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a description
of the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
No claim may be made under this Note against any of the direct
or indirect partners of the Borrower for the payment of principal of, or
interest on, the Loans, or any other amounts payable under the Credit Agreement
or this Note.
<PAGE>
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By: ______________________
Title:
<PAGE>
Schedule A
to Note
----------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
- ----- ------- ----------- ---------- ------------- --------------- -------------
Amount of Amount of
Amount Principal ABR Loans
Amount Converted of ABR Converted to Unpaid Prin-
of ABR to Loans Eurodollar cipal Balance Notation
Date Loans ABR Loans Repaid Loans of ABR Loans Made By
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
<PAGE>
Schedule B
to Note
----------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ----- -------- --------- ---------- ---------- ----------- ----------- ---------
Interest Amount of Amount of Unpaid
Amount Period & Principal Eurodollar Principal
Amount Converted Eurodollar of Loans Con- Balance
of Euro to Euro- Rate with Eurodollar verted to of Notation
dollar dollar Respect Loans ABR Eurodollar Made
Date Loans Loans Thereto Repaid Loans Loans Eurodollar
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
<PAGE>
EXHIBIT B-1
LEGAL OPINION OF SIMPSON THACHER & BARTLETT
October __, 1996
Northern Telecom Inc., as Lender
and as Agent (the "Agent")
under the Credit Agreement, as
hereinafter defined
Re: Credit Agreement, dated as of October 2, 1996 (the
"Credit Agreement"), among Sprint Spectrum L.P. (the
"Borrower"), the entities from time to time parties
thereto as lenders (the "Lenders") and the Agent
Ladies and Gentlemen:
We have acted as counsel to the Borrower in connection with
the preparation, execution and delivery of the Credit Agreement. Unless
otherwise indicated, capitalized terms used but not defined herein shall have
the respective meanings set forth in the Credit Agreement. This opinion is
furnished to you pursuant to subsection 4.1(g)(i) of the Credit Agreement.
In connection with this opinion, we have examined:
(A) the Credit Agreement; and
(B) the form of the Notes which may be delivered pursuant to
the Credit Agreement after the date hereof.
We also have examined the originals, or certified, conformed or reproduction
copies, of such records, agreements, instruments and other documents and have
made such other investigations as we have deemed relevant and necessary in
connection with the opinions expressed herein. As to questions of fact material
to this opinion, we have relied upon certificates as to matters of fact of
public officials and of officers and representatives of the Loan Parties. In
addition, we have examined, and have relied as to matters of fact upon the
representations made in the Loan Documents.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
As to all matters covered by the opinion letter delivered to
you on the date hereof by Charles R. Wunsch, Associate General Counsel of the
Borrower, we have assumed the accuracy of the legal opinions expressed therein
to the extent relating to the law of the State of Missouri and the State of
Delaware.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
(1) The Credit Agreement constitutes, and each Note, when
executed and delivered by the Borrower in accordance with the Credit Agreement,
will constitute, a valid and legally binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms.
(2) The Borrower is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. The Borrower is not a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935.
(3) No consent, order or authorization of, filing with, notice
to or approval or other act by or in respect of, any United States or State of
New York Governmental Authority is required to be obtained or made by the
Borrower in connection with the borrowings under the Credit Agreement or with
the execution, delivery, performance, validity or enforceability of the Credit
Agreement or any Notes other than those filings required in connection with the
perfection of the Liens created by the Security Documents.
(4) The execution, delivery and performance of the Credit
Agreement and any Notes, the borrowings under the Credit Agreement and the use
of the proceeds thereof will not violate any law, rule or regulation of any
United States or State of New York Governmental Authority applicable to the
Borrower or any of its Subsidiaries.
(5) No registration under the Securities Act of 1933, as
amended, of the Loans or the Notes is required for the borrowing by the Borrower
of the Loans or the issuance by the Borrower of any Notes solely in the manner
contemplated by the Credit Agreement.
Our opinion in paragraph (1) above is subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing.
We express no opinion with respect to:
<PAGE>
(A) any matters subject to the Communications Act of
1934, as amended;
(B) the effect of any provision of the Credit Agreement
insofar as it provides that any Person purchasing a
participation from a Lender may exercise set-off or
similar rights with respect to such participation or
that any Lenders may exercise set-off or similar
rights other than in accordance with applicable law;
(C) the effect of any provision of the Credit Agreement
relating to indemnification or exculpation that is
inconsistent with public policy; and
(D) the effect of the compliance or noncompliance with
any federal or state laws or regulations applicable
to any of the Lenders or their affiliates because of
their legal or regulatory status or the nature of
their businesses.
In addition, we express no opinion as to the enforceability of
any provision of the Credit Agreement whereby the Borrower purports to submit to
the subject matter jurisdiction of the United States District Court for the
Southern District of New York. We note the limitations of 28 U.S.C. ss. 1332 on
federal court jurisdiction where diversity of citizenship is lacking, and we
also note that such submission cannot supersede that court's discretion in
determining whether to transfer an action from one federal court to another
under 28 U.S.C. ss. 1404(a).
We are members of the Bar of the State of New York, and we do
not express any opinion herein concerning any law other than the law of the
State of New York and the federal law of the United States.
This opinion letter is rendered to you in connection with the
above-described transactions. It may not be relied upon by you for any other
purpose, or relied upon by any other Person without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT B-3
FORM OF LEGAL OPINION OF MORRISON & FOERSTER LLP
October __, 1996
Northern Telecom Inc., as Lender
and as Agent (the "Agent")
under the Credit Agreement, as
hereinafter defined
Re: Credit Agreement, dated as of October 2, 1996
(the "Credit Agreement"), among Sprint Spectrum L.P.
(the "Borrower"), the lending institutions identified
in the Credit Agreement (the "Lenders") and the Agent
Ladies and Gentlemen:
We have been requested to provide you with this opinion
pursuant to subsection 4.1(g)(iii) of the Credit Agreement. This opinion
addresses certain licenses listed in Schedule I that are held by WirelessCo,
L.P. ("WirelessCo"), a subsidiary of the Borrower. Except as otherwise provided
herein, capitalized terms used in this opinion shall be defined as set forth in
the Credit Agreement.
This Firm has been engaged as special Federal Communications
Commission ("FCC") counsel to the Borrower in connection with the Credit
Agreement. WirelessCo has been authorized by the FCC to provide Personal
Communications Services ("PCS"). As special FCC counsel, this opinion is limited
to those matters within the jurisdiction of the FCC pertaining to PCS. As to
questions of law, the following opinions are based upon only the Communications
Act of 1934, as amended by the Telecommunications Act of 1996 ("Communications
Act"), and the rules, regulations and published opinions of the FCC relating
thereto. We offer no opinion as to any other federal law or the laws, rules or
regulations of any state or local government or regulatory authority.
In connection with this opinion, we have examined, and relied
upon, the FCC licensing records and copies of documents filed by WirelessCo with
the FCC and have compared these records to the licenses listed in Schedule I
(the "Licenses"). We also have obtained, and relied upon as to matters of fact,
without independent investigation, such certifications from officers of the
Borrower (the "Officers' Certificates") as we have deemed necessary for purposes
of this opinion. We have also examined FCC orders and other records of the FCC's
Wireless Telecommunications Bureau (the "FCC Files") and have made telephone
inquiries to FCC staff in the FCC's Wireless Telecommunications Bureau with
respect to the opinions stated in paragraphs (iii), (iv), (v), and (vi) herein.
We have also examined the Credit Agreement and the form of Notes which may be
delivered pursuant to the Credit Agreement after the date hereof and have
examined such other documents and records and made such other investigations as
we have deemed relevant and necessary in connection with this opinion.
As to matters of fact, we have relied upon and assumed the
accuracy and completeness of the FCC Files, the documents filed by WirelessCo
with the FCC, and the Officers' Certificate(s). In rendering this opinion, we
have not independently investigated, established or verified the factual basis
of any opinion set forth herein, and, unless otherwise indicated herein, have
relied for such matters solely upon the FCC Files, the documents filed by
WirelessCo with the FCC and the Officers' Certificate(s).
We have assumed: (i) the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
any copies thereof submitted to us as certified, conformed or photostatic copies
for our examination; (ii) that the signatures on all documents examined by us
are genuine; (iii) that where any such signature purports to have been made in a
corporate, governmental, fiduciary or other capacity, the person who affixed
such signature to such documents had authority to do so; and (iv) that all
public files, records and certificates of, or furnished by, governmental or
regulatory agencies or authorities are true, correct and complete.
As to all matters covered by the opinion letter delivered to
you on the date hereof by Charles R. Wunsch, Associate General Counsel of the
Borrower, we have relied upon such opinion letter and assumed the accuracy of
the legal opinions expressed therein.
Based upon our examination of the foregoing documents, records
and disclosures and subject to the qualifications, assumptions and limitations
set forth herein, we are of the opinion that:
(i) The execution and delivery of the Loan Documents and the
consummation by the Loan Parties of all of the transactions contemplated thereby
and the performance thereunder will not result in a violation of the
Communications Act or any order, rule or regulation of the FCC.
(ii) No consent, approval, authorization, order, registration,
filing or qualification of or with, or any other act by, any court or
governmental agency or body is required under the Communications Act or the
rules, regulations and published policies of the FCC for the valid execution,
delivery and consummation of and performance under the Loan Documents or the
consummation by the Loan Parties of the transactions contemplated thereby.
(iii) WirelessCo holds and has the right to use all of the
Licenses, without any conflict known to us with the rights of others, except as
such conflict, taken in the aggregate, would not have a Material Adverse Effect.
Such Licenses are in full force and effect and we are not aware of any other
licenses or other approvals or authorizations required by the Borrower or any
Restricted Subsidiary to conduct its business as now operated or as contemplated
to be operated by it.
(iv) To the best of our knowledge, there is no material
respect in which the operation of the Borrower and the Restricted Subsidiaries'
businesses is not in accordance with the Licenses, the Communications Act and
all orders, rules, regulations and published policies of the FCC.
(v) To the best of our knowledge, there are no material
proceedings threatened, pending or contemplated before the FCC against or
involving the properties, businesses or Licenses of the Borrower or any
Restricted Subsidiary.
(vi) To the best of our knowledge, no event has occurred as of
the date hereof that permits, or with notice or lapse of time or both would
permit, the suspension, revocation or termination of any of the Licenses or that
might result in any other material impairment of the rights of the Borrower or
the Restricted Subsidiaries therein.
Whenever our opinion herein with respect to the existence or
absence of facts is indicated to be based on the best of our knowledge or words
to such effect it is intended to signify that, in the course of our
representation of the Borrower in connection with Communications Act and FCC
regulatory matters, none of Cheryl A. Tritt, Joan E. Neal, Joyce H. Jones, Diane
S. Killory, Charles H. Kennedy, Susan H. Crandall, James A. Casey and Stephen J.
Kim (the only attorneys of this Firm with substantive involvement in
representing the Borrower in Communications Act and FCC regulatory matters)
acquired actual knowledge of the existence or absence of any such facts. Except
to the extent expressly stated herein, we have not undertaken any independent
investigation to determine the existence or absence of such facts, and no
inference as to our knowledge of the existence of such facts should be drawn
from the fact of our representation of the Borrower.
The opinion expressed herein is rendered as of the date of
this letter and is specific to the transactions and the documents referred to
herein. This opinion may not be relied upon for any other purpose or by any
other person or entity without our prior written consent. This opinion is
furnished solely for your benefit, and may not be relied upon by any other
person without our prior written consent.
Very truly yours,
Morrison & Foerster LLP
<PAGE>
SCHEDULE I
PCS LICENSES HELD BY WIRELESSCO, L.P.1/
Location Call Sign Market No.
New York KNLF204 M001 B
San Francisco-Oakland- KNLF208 M004 A
San Jose
Detroit KNLF211 M005 B
Dallas-Fort Worth KNKF215 M007 B
Boston-Providence KNLF217 M008 B
Minneapolis-St. Paul KNLF223 M012 A
Miami-Fort Lauderdale KNLF229 M015 A
New Orleans-Baton Rouge KNLF233 M017 A
St. Louis KNLF238 M019 B
Milwaukee KNLF239 M020 A
Pittsburgh KNLF241 M021 A
Denver KNLF243 M022 A
Seattle KNLF248 M024 B
Louisville-Lexington- KNLF252 M026 B
Evansville
Phoenix KNLF254 M027 B
Birmingham KNLF257 M029 A
Portland KNLF260 M030 B
Indianapolis KNLF261 M031 A
Des Moines-Quad Cities KNLF264 M032 B
San Antonio KNLF265 M033 A
Kansas City KNLF267 M034 A
Buffalo-Rochester KNLF269 M035 A
Salt Lake City KNLF272 M036 B
Little Rock KNLF280 M040 B
Oklahoma City KNLF282 M041 B
Spokane-Billings KNLF284 M042 B
Nashville KNLF285 M043 A
Wichita KNLF292 M046 B
Tulsa KNLF296 M048 B
- ----------------
1/ WirelessCo, L.P. PCS licenses were granted by the FCC on June 23, 1995 and
will expire June 23, 2005.
<PAGE>
EXHIBIT B-2
FORM OF LEGAL OPINION OF CHARLES R. WUNSCH, ESQ.
October __, 1996
Northern Telecom Inc., as Lender
and as Agent (the "Agent")
under the Credit Agreement, as
hereinafter defined
Re: Credit Agreement, dated as of October 2, 1996 (the
"Credit Agreement"), between Sprint Spectrum L.P.
(the "Borrower"), the lending institutions identified
in the Credit Agreement (the "Lenders") and the
Agent
Ladies and Gentlemen:
I am the Associate General Counsel of the Borrower and have
acted in such capacity in connection with the preparation, execution and
delivery of the Credit Agreement. Unless otherwise indicated, capitalized terms
used but not defined in this opinion letter shall have the respective meanings
set forth in the Credit Agreement. This opinion is furnished to you pursuant to
subsection 4.1(g)(ii) of the Credit Agreement.
<PAGE>
In connection with this opinion letter, I have examined or had
attorneys on my staff examine:
(A) the Credit Agreement; and
(B) the form of the Notes which may be delivered pursuant to
the Credit Agreement after the date of this opinion letter.
I or attorneys on my staff also have examined the originals, or certified,
conformed or reproduction copies, of such records, agreements, instruments and
other documents and have made such other investigations as I have deemed
relevant and necessary in connection with the opinions expressed in this opinion
letter. As to questions of fact material to this opinion, I have relied upon
certificates as to matters of fact of public officials and of officers and
representatives of the Borrower. In addition, I have examined, and have relied
as to matters of fact upon the representations made in the Loan Documents.
In rendering the opinions set forth below, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth in this opinion letter, I am of the
opinion that:
<PAGE>
(1) Each of the Borrower and its Restricted Subsidiaries (a)
is duly formed, validly existing and in good standing under the laws of
the jurisdiction of the State of Delaware, (b) has the partnership
power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it
is currently engaged and (c) is duly qualified to do business and in
good standing in each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
(2) The Borrower has the power and authority to make, execute,
deliver and perform the Credit Agreement and any Notes and to borrow
under the Credit Agreement and has taken all necessary partnership
action to authorize the borrowings on the terms and conditions of the
Credit Agreement and to authorize the execution, delivery and
performance of the Credit Agreement and any Notes. The Credit Agreement
has been duly executed and delivered on behalf of the Borrower.
(3) No consent, order or authorization of, filing with, notice
to or approval or other act by or in respect of, any United States or
State of Missouri Governmental Authority is required to be obtained or
made by the Borrower in connection with the borrowings under the Credit
Agreement or with the execution, delivery, performance, validity or
enforceability of the Credit Agreement or any Notes other than those
filings required in connection with the perfection of the Liens created
by the Security Documents.
(4) The execution, delivery and performance of the Credit
Agreement and any Notes, the borrowings under the Credit Agreement and
the use of the proceeds thereof will not violate the partnership
agreement of Holding or the Borrower or any of its Subsidiaries or any
law, rule or regulation of any United States or State of Missouri
Governmental Authority applicable to the Borrower or any of its
Subsidiaries, or, to my knowledge, any Contractual Obligation of, or
any determination, judgment, writ, injunction, decree or order of any
arbitrator or court or other United States or State of Missouri
Governmental Authority applicable to, the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Partnership Agreement, law, rule or
regulation or, to my knowledge, any such Contractual Obligation or any
determination, judgment, writ, injunction, decree or order or
Contractual Obligation, other than the Liens created by the Security
Documents.
(5) To my knowledge, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is
pending or threatened by or against the Borrower or any of its
Restricted Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to any of the Loan Documents or
(b) which could reasonably be expected to have a Material Adverse
Effect.
(6) To my knowledge, the following constitute all the
Subsidiaries of the Borrower as of the date of this opinion letter: (a)
WirelessCo, L.P. (the sole general partner of which is the Borrower and
the sole limited partner of which is MinorCo), (b) Sprint Spectrum
Equipment Company, L.P. (the sole general partner of which is the
Borrower and the sole limited partner of which is MinorCo), (c) Sprint
Spectrum Realty Company, L.P. (the sole general partner of which is the
Borrower and the sole limited partner of which is MinorCo) and (d)
Sprint Spectrum Finance Corporation, a Delaware corporation and a
wholly owned Subsidiary of the Borrower.
I express no opinion with respect to any matters subject to
the Communications Act of 1934, as amended.
I am a member of the Bar of the State of Missouri, and I do
not express any opinion herein concerning any law other than the law of the
State of Missouri, the federal law of the United States and the Delaware Revised
Uniform Limited Partnership Act.
This opinion letter is rendered to you in connection with the
above described transactions. It may not be relied upon by you for any other
purpose, or relied upon by any other Person without my prior written consent.
Very truly yours,
Charles R. Wunsch
<PAGE>
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of October
2, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Sprint Spectrum L.P., a Delaware limited partnership
(the "Borrower"), Northern Telecom Inc., the lenders named therein and Northern
Telecom Inc., as agent for the Lenders (in such capacity, the "Agent"). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
<PAGE>
(i) The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest").
(ii) The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that the
Assignor is the legal and beneficial owner of the interests being assigned by it
hereunder and has not created any adverse claim upon the interest being assigned
by it hereunder and that such interest is free and clear of any such adverse
claim; (b) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower, any of its Subsidiaries
or any other obligor or the performance or observance by the Borrower, any of
its Subsidiaries or any other obligor of any of their respective obligations
under the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches any Notes held
by it evidencing the Assigned Interest and (i) requests that the Agent, upon
request by the Assignee, exchange the attached Notes for a new Note or Notes
payable to the Assignee and (ii) if the Assignor has retained any Loans,
requests that the Agent exchange the attached Notes for a new Note or Notes
payable to the Assignor, in each case in amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Effective Date).
(iii) The Assignee (a) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (b) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements and other information delivered pursuant to subsections
5.1(a) and (b) and 5.2(a) and (b) of the Credit Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that, except as may be otherwise expressly agreed in writing between the
Assignee, on the one hand, and the Assignor, the Agent or the Lender, as the
case may be, on the other hand, it will, independently and without reliance upon
the Assignor, the 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 the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; (e) agrees that it
will be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender including, if it is
organized under the laws of a jurisdiction outside the United States, its
obligation pursuant to subsection 2.13(b) of the Credit Agreement; and (f)
confirms and agrees with the provisions of subsection 9.15 of the Credit
Agreement.
(iv) The effective date of this Assignment and Acceptance
shall be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance by it and recording by the Agent
pursuant to the Credit Agreement, effective as of the Effective Date.
(v) Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) [to
the Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date] [to
the Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date]. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Effective Date or with respect to the making of this assignment directly
between themselves.
(vi) From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
(vii) This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
<PAGE>
Schedule 1
to Assignment and Acceptance
Name of Assignor: _____________________________________________________________
Name and address of Assignee: _________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Effective Date of Assignment: _________________________________________________
Principal Amount of Loans Assigned: $______________________
Funding Percentage Assigned**: ___.___%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
Title: Title:
Accepted:
[NAME OF AGENT], as Agent
By:
Title:
- ----------
** Calculate Fundign Percentage that is assigned to at least 15 decimal places
and show as a percentage of the aggregate Unused Commitments of all
Lenders.
<PAGE>
EXHIBIT D
FORM OF
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this "Agreement"), made
effective as of the ____________ day of _________, 199 , by and between Sprint
Spectrum L.P., a Delaware limited partnership ("Sprint Spectrum"), whose address
is 4717 Grand Avenue, 5th Floor, Kansas City, Missouri 64112, and , a , whose
address is , is to assure the protection and preservation of the confidential
and/or proprietary nature of information to be disclosed or made available to
each other pursuant to or in connection with the transactions contemplated by,
the Credit Agreement dated as of October 2, 1996 (the "Credit Agreement"), by
and among Spring Spectrum, the lenders named therein and Northern Telecom Inc.,
as agent.
NOW, THEREFORE, in reliance upon and in consideration of the
following undertakings, the parties, for themselves, or for any corporation,
partnership, association, joint stock company, limited liability company,
limited liability partnership, or trust directly or indirectly controlling,
controlled by or under common control of such party, or a more than 50% owned
subsidiary of such party (its "Affiliates"), agree as follows:
<PAGE>
1. Scope. For purposes of this Agreement, the "Proprietary
Information" of a party disclosing information (the "Discloser") means any and
all information, including, without limitation, all oral, written, graphical,
and electronic information disclosed to the party receiving the information (the
"Recipient") pursuant to, or in connection with the transactions contemplated
by, the Credit Agreement, whether delivered to the Recipient directly by the
Discloser or indirectly through an agent of the Discloser or Recipient.
2. Limitation. The term "Proprietary Information" does not
include information which: (a) has been or may in the future be published or is
now or may in the future be otherwise in the public domain through no fault of
the Recipient; (b) prior to disclosure pursuant to this Agreement is properly
within the legitimate possession of the Recipient; (c) subsequent to disclosure
pursuant to this Agreement, is lawfully received from a third party having
rights in the information without restriction of the third party's right to
disseminate the information and without notice of any restriction against its
further disclosure; (d) is independently developed by the Recipient through
parties who have not had, either directly or indirectly, access to or knowledge
of such Proprietary Information; (e) is approved for disclosure by prior written
permission of an authorized signatory of Discloser; or (f) is obligated to be
produced by law or under order of a court of competent jurisdiction or other
similar requirement of a governmental agency, or is required to be disclosed to,
or is requested by, the Recipient's outside auditors or examiners in connection
with an audit or examination or so long as the party required to disclose the
information provides the other party with prior written notice of any required
disclosure pursuant to such law, order or requirement.
3. Use. Each party agrees to use the Proprietary Information
received from the other party only for the purpose of the servicing or
protection of its interests in respect of the Loans, the Credit Agreement and
the Loan Documents (each as defined in the Credit Agreement). No other rights,
and particularly licenses, trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under the Credit
Agreement or this Agreement or by the conveying of Proprietary Information
between the parties. Each party agrees that the other may disclose Proprietary
Information received by it to its Affiliates, employees not permitted under the
Credit Agreement and agents, subject to the terms of this Agreement.
4. Reproduction. Proprietary Information supplied is not to
be reproduced in any form except as required to accomplish the intent of this
Agreement.
5. Duty of Care. All Proprietary Information must be retained
by the Recipient in accordance with its customary procedures for handling
confidential information of this nature and disclosed only to the Recipient's
Affiliates or employees (or , attorneys, accountants and agents who have a
non-disclosure obligation at least as restrictive as this Agreement) who need to
know such information for purposes of the servicing or protection of its
interest in respect of the Loans, the Credit Agreement and the Loan Documents
(each as defined under the Credit Agreement) and the transactions contemplated
thereby and to such third parties as the Discloser has consented to by prior
written approval. In addition, the Recipient must provide the same care to avoid
disclosure not permitted under the Credit Agreement or unauthorized use of the
Proprietary Information as it provides to protect its own similar proprietary
information.
6. Ownership. All Proprietary Information, unless otherwise
specified in writing, (a) remains the property of the Discloser, and (b) must be
used by the Recipient only for the purpose stated herein. Upon termination of
this Agreement, all copies of written, recorded, graphical or other tangible
Proprietary Information must either be returned to the Discloser, or destroyed
(i) after the Recipient's need for it has expired or (ii) upon the request of
the Discloser. At the request of the Discloser, the Recipient will furnish a
certificate of an officer of the Recipient certifying that any Proprietary
Information not returned to Discloser has been destroyed.
7. Right to Disclose. Each party warrants that it has the
right to disclose all Proprietary Information which it will disclose to the
other party pursuant to this Agreement, and each party agrees to indemnify and
hold harmless the other from all claims by a third party related to the wrongful
disclosure of such third party's information. Otherwise, neither party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information. Neither party is liable for indirect, incidental, consequential, or
punitive damages of any nature or kind resulting from or arising in connection
with this Agreement.
8. Right to Enjoin Disclosure. The parties acknowledge that a
Recipient's unauthorized disclosure or use of Proprietary Information may result
in irreparable harm. Therefore, the parties agree that, in the event of
violation or threatened violation of this Agreement, without limiting any other
rights and remedies of each other, a temporary restraining order and/or an
injunction to enjoin disclosure of Proprietary Information may be sought against
the party who has breached or threatened to breach this Agreement and the party
who has breached or threatened to breach this Agreement will not raise the
defense of an adequate remedy at law.
9. Disclosure to Third Parties. All media releases and pubic
announcements or disclosures by either party relating to this Agreement, its
subject matter or the purpose of this Agreement are to be coordinated with and
consented to by the other party in writing prior to the release or announcement.
10. No Partnership or Joint Venture Formed. The exchange of
any Proprietary Information between the parties is not intended to be
interpreted that the parties have formed or will form a partnership, joint
venture or other relationship. Any business relationship between the parties, if
any, must be governed by separate agreement.
11. General. (a) This Agreement is governed and construed
under the laws of the State of Missouri and there are no understandings,
agreements or representations, express or implied, not specified herein. (b)
Except for subsection 9.13 of the Credit Agreement, this Agreement represents
the entire understanding between the parties with respect to the confidentiality
and disclosure of Proprietary Information, and the terms of this Agreement
supersede the terms of any prior agreements or understandings, written or oral
with respect thereto. (c) This Agreement may not be amended except in a writing
signed by the parties. (d) The provisions of this Agreement are to be considered
as severable, and in the event that any provision is held to be invalid or
unenforceable, the parties intend that the remaining provisions will remain in
full force and effect. (e) Captions in this Agreement are for ease of reference
only and should not be considered in the construction of this Agreement. (f)
There are no third party beneficiaries to this Agreement. (g) Failure by a party
to enforce or exercise any provision, right or option contained in this
Agreement will not be construed as a present or future waiver of such provision,
right or option.
IN WITNESS THEREOF, the parties have executed this Agreement
as of the effective date stated above.
SPRINT SPECTRUM L.P. ______________________________
By: By:
Name: Name:
Title: Title:
<PAGE>
EXHIBIT E
FORM OF
BORROWING NOTICE
[Date]
To: Northern Telecom Inc., as Agent
Re: Sprint Spectrum L.P.
Reference is hereby made to the Credit Agreement, dated as of
October 2, 1996, among Sprint Spectrum L.P., Northern Telecom Inc., the other
lenders from time to time parties thereto and Northern Telecom Inc., as Agent
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.
In accordance with subsection 2.2 of the Credit Agreement, the
Borrower requests Loans be made as follows:
Borrowing Date: _________________
Amount of Loans to be borrowed: $___________
ABR Loans: $___________
Initial
Eurodollar Loans: Amount Interest Period
$________ _____ months
$________ _____ months
Amount of Cash Advance: $___________
Identity of invoices for Cash Advance:
[To be provided]
<PAGE>
Amount of Credit Advance: $___________
Identity of invoices for Credit Advance:
[To be provided]
Very truly yours,
SPRINT SPECTRUM L.P.
By: ____________________________
Title:
<PAGE>
[CONFORMED COPY]
SPRINT SPECTRUM L.P.
-----------------------
$1,300,000,000
CREDIT AGREEMENT
Dated as of October 2, 1996
-----------------------
NORTHERN TELECOM INC.,
as Lender and Agent
<PAGE>
-i-
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 22
1.3 Schedules....................................................... 22
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS........................ 22
2.1 Commitments..................................................... 22
2.2 Borrowing Procedure............................................. 23
2.3 Repayment of Loans; Evidence of Debt............................ 25
2.4 Optional Prepayments............................................ 26
2.5 Mandatory Prepayments........................................... 26
2.6 Conversion and Continuation Options............................. 27
2.7 Interest Rates and Payment Dates................................ 28
2.8 Computation of Interest and Fees................................ 28
2.9 Inability to Determine Interest Rate............................ 29
2.10 Pro Rata Treatment and Payments................................. 29
2.11 Illegality...................................................... 29
2.12 Requirements of Law............................................. 30
2.13 Taxes........................................................... 31
2.14 Indemnity....................................................... 34
2.15 Change of Lending Office; Mandatory Assignment or Prepayment.... 34
2.16 Treatment of Certain Prepayments................................ 35
2.17 Use of Proceeds................................................. 35
2.18 Fees............................................................ 36
SECTION 3. REPRESENTATIONS AND WARRANTIES................................... 36
3.1 Financial Condition............................................. 36
3.2 No Change....................................................... 37
3.3 Existence; Compliance with Law.................................. 37
3.4 Power; Authorization; Enforceable Obligations................... 37
3.5 No Legal Bar.................................................... 37
3.6 No Material Litigation.......................................... 38
3.7 No Default...................................................... 38
3.8 Ownership of Property; Liens.................................... 38
3.9 Intellectual Property........................................... 38
3.10 Taxes........................................................... 38
3.11 Federal Regulations............................................. 39
3.12 ERISA........................................................... 39
3.13 Investment Company and Holding Company Act...................... 39
3.14 Subsidiaries; Parents........................................... 40
3.16 Environmental Matters........................................... 40
3.17 Licenses........................................................ 41
3.18 Provisions of Other Vendor Credit Facility...................... 41
3.19 No Material Misstatements....................................... 41
SECTION 4. CONDITIONS PRECEDENT............................................. 42
4.1 Conditions to Initial Loans..................................... 42
4.2 Conditions to Each Loan......................................... 44
SECTION 5. AFFIRMATIVE COVENANTS............................................ 44
5.1 Financial Statements............................................ 45
5.2 Certificates; Other Information................................. 45
5.3 Payment of Obligations.......................................... 46
5.4 Conduct of Business; Maintenance of Existence; Compliance with
Laws.......................................................... 46
5.5 Maintenance of Property; Insurance.............................. 46
5.6 Inspection of Property; Books and Records; Discussions.......... 47
5.7 Notices......................................................... 47
5.8 Environmental Laws.............................................. 48
5.9 After-Acquired Assets........................................... 48
5.10 Delivery of Certain Amendments.................................. 49
5.11 Use of Proceeds................................................. 50
SECTION 6. NEGATIVE COVENANTS............................................... 50
6.1 Financial Condition Covenants................................... 50
6.2 Limitation on Indebtedness...................................... 53
6.3 Limitation on Liens............................................. 55
6.4 Limitation on Guarantee Obligations............................. 57
6.5 Limitation on Fundamental Changes............................... 57
6.6 Limitation on Sale of Assets.................................... 59
6.7 Limitation on Restricted Payments............................... 61
6.8 Limitation on Investments, Loans and Advances................... 62
6.9 Limitation on Transactions with Affiliates...................... 63
6.10 Limitation on Lines of Business; Liabilities of Subsidiaries.... 63
6.11 Limitation on Designation of Secured Obligations................ 64
6.12 Limitation on Interest Rate Agreements.......................... 64
SECTION 7. EVENTS OF DEFAULT................................................ 64
SECTION 8. THE AGENT........................................................ 68
8.1 Appointment..................................................... 68
8.2 Delegation of Duties............................................ 68
8.3 Exculpatory Provisions.......................................... 69
8.4 Reliance by Agent............................................... 69
8.5 Notice of Default and Other Notices............................. 69
8.6 Non-Reliance on Agent and Other Lenders......................... 70
8.7 Indemnification................................................. 70
8.8 Agent in Its Individual Capacity................................ 70
8.9 Successor Agent................................................. 71
SECTION 9. MISCELLANEOUS.................................................... 71
9.1 Amendments and Waivers.......................................... 71
9.2 Notices......................................................... 72
9.3 No Waiver; Cumulative Remedies.................................. 73
9.4 Survival of Representations and Warranties...................... 73
9.5 Payment of Expenses and Taxes; Indemnity........................ 73
9.6 Successors and Assigns; Participations and Assignments.......... 74
9.7 Adjustments; Set-off............................................ 76
9.8 Counterparts.................................................... 77
9.9 Severability.................................................... 77
9.10 Integration..................................................... 77
9.11 GOVERNING LAW................................................... 77
9.12 Submission To Jurisdiction...................................... 78
9.13 Confidentiality................................................. 78
9.14 Non-Recourse.................................................... 78
9.15 Securities Act Matters.......................................... 79
9.16 Other Agreements................................................ 79
9.17 WAIVERS OF JURY TRIAL........................................... 79
9.18 Interest Rate Limitation........................................ 79
9.19 Release of Guarantees and Collateral............................ 80
<PAGE>
-iv-
SCHEDULES:
Schedule I Miscellaneous Provisions
Schedule II Lender Commitments
Schedule 3.17(a) The Borrower's MTA's
Schedule 6.2(g) Existing Indebtedness
Schedule 6.4(a) Existing Guarantee Obligations
EXHIBITS:
Exhibit A Form of Note
Exhibit B-1 Form of Legal Opinion of Simpson Thacher & Bartlett
Exhibit B-2 Form of Legal Opinion of Charles R. Wunsch, Esq.
Exhibit B-3 Form of Legal Opinion of Morrison & Foerster LLP
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Confidentiality Agreement
Exhibit E Form of Borrowing Notice
Exhibit 10.29
The omitted portions indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
CREDIT AGREEMENT, dated as of October 2, 1996, among SPRINT
SPECTRUM L.P., a limited partnership organized under the laws of the State of
Delaware (the "Borrower"), LUCENT TECHNOLOGIES INC. (the "Vendor"), the several
banks and other financial institutions and entities from time to time parties to
this Agreement (together with the Vendor, the "Lenders") and the Vendor, as
agent for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower and its Subsidiaries (as defined below)
intend to construct and operate a nationwide wireless telecommunications system,
and the Vendor has entered into the Vendor Procurement Contract (as defined
below) with the Borrower pursuant to which, among other things, the Vendor has
agreed to supply to the Borrower and its Subsidiaries certain of the equipment
and related services needed to complete such system and other goods and services
related thereto;
WHEREAS, the Vendor has agreed to make available to the
Borrower a credit facility in the aggregate amount of $1,800,000,000 the
proceeds of which shall be used to finance the acquisition of equipment and
services to be supplied pursuant to the Vendor Procurement Contract in
connection with the construction of such system; and
WHEREAS, the Borrower and the Vendor wish to enter into this
Agreement to establish the credit facility described above;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth below, the parties hereto hereby agree as follows:
<PAGE>
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
ABR due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
"Additional Collateral": as defined in the Trust Agreement.
"Additional Guarantee": as defined in the Trust Agreement.
"Additional Security Document": as defined in the Trust
Agreement.
"Adjusted EBITDA": for any fiscal period, the sum of (a)
EBITDA for such period plus (b) the aggregate amount deducted in
determining Net Income or Net Loss for such period in respect of sales,
marketing and advertising expenses and consumer-related equipment
subsidy expenses.
"Affiliate": as to any Person, any other Person (other than,
in the case of the Borrower and any Restricted Subsidiary, any
Restricted Subsidiary) which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
"Agent": the Vendor, as agent for the Lenders under this
Agreement, or any successor thereto appointed pursuant to subsection
8.9 to act as the agent for the Lenders under this Agreement.
"Agent's Account": such account as may be specified in writ-
ing by the Agent to the Lenders and the Borrower from time to time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": as defined in Section 1 of Schedule I.
"Annualized Adjusted EBITDA": for the period ending on the
last day of any fiscal quarter, the product of (a) Adjusted EBITDA for
the two consecutive fiscal quarters ending on such last day, multiplied
by (b) two.
"Annualized EBITDA": for the period ending on the last day of
any fiscal quarter, the product of (a) EBITDA for the two consecutive
fiscal quarters ending on such last day, multiplied by (b) two.
"APC": American PCS, L.P., a Delaware limited partnership.
"Asset Sale": any sale, transfer or other disposition or
series of related sales, transfers or other dispositions (excluding any
sale and leaseback transaction) by the Borrower or any Restricted
Subsidiary of any property or assets of the Borrower or such Restricted
Subsidiary (including property subject to any Lien under any Security
Document) to a Person other than the Borrower or any Restricted
Subsidiary; provided that any Asset Swap permitted under subsection
6.6(e) shall be deemed an Asset Sale only to the extent provided for in
said subsection.
"Asset Sale Proceeds Sub-Account": as defined in the Trust
Agreement.
"Asset Swap": any exchange, with any other Person, of assets
owned by the Borrower and/or any Restricted Subsidiary comprising one
or more Systems, for assets comprising one or more other Systems owned
by such other Person.
"Assignee": as defined in subsection 9.6(c).
"Available Commitment": at any time, an amount equal to the
excess, if any, of (a) the aggregate amount of the Commitments of all
the Lenders over (b) the aggregate principal amount of all Loans (ex-
cluding amounts constituting interest capitalized pursuant to subsec-
tion 2.7(d)) theretofore made hereunder.
"Bank Credit Facility": as defined in the Trust Agreement.
"Benefitted Lender": as defined in subsection 9.7(a).
"Borrower": as defined in the Preamble hereto.
"Borrower's Account": Account No. 40672186 maintained by the
Borrower at the offices of Citibank, N.A. located at New York, New
York or such other account as may be specified in writing by the
Borrower to the Agent from time to time.
"Borrowing Date": any Business Day specified in a notice pur-
suant to subsection 2.2 as a date on which the Borrower requests the
Lenders to make Loans hereunder.
"Borrowing Notice": an irrevocable notice of borrowing, sub-
stantially in the form of Exhibit E, signed by a Responsible Officer.
"Borrowing Year": any one of the five consecutive
twelve-month periods following the Initial Borrowing Date, each of
which shall end on an anniversary of the Initial Borrowing Date.
"BTA": a Basic Trading Area, as defined in 47 C.F.R. ss. 24.202.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Contribution Agreement": the Amended and Restated
Capital Contribution Agreement, dated as of October 2, 1996, among the
Parents and the Borrower, as amended, supplemented or otherwise
modified from time to time.
"Capital Expenditures": for any fiscal period, all
expenditures made by the Borrower and its Restricted Subsidiaries
during such period (a) for the purpose of acquiring, constructing,
expanding or improving fixed assets, real property or equipment or (b)
constituting systems and development expenditures related to the
build-out of the Borrower's national wireless telecommunications
network, all as calculated in accordance with GAAP, provided that
expenditures related to the acquisition of Licenses, capitalized
interest and Investments shall not be considered to be Capital
Expenditures.
"Capital Stock": any and all shares, interests, participa-
tions or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase or subscribe for any of the foregoing.
"Cash Advance": as defined in subsection 2.2(a).
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any commercial bank
satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d)
commercial paper of a domestic issuer rated at least A-1 by S&P or P-1
by Moody's, (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, or by any political
subdivision or taxing authority of any such state, commonwealth or
territory, the securities of which state, commonwealth, territory,
political subdivision or taxing authority (as the case may be) are
rated at least A by S&P or A2 by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition or (g) shares of open end
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition.
"Change in Control": the occurrence of (a) prior to the time
at which the Borrower has attained Investment Grade Status, a reduction
to less than $500,000,000 of the sum of (i) the amount of Contributed
Capital held, directly or indirectly, by Sprint Corporation and (ii)
the portion of the then Committed Capital for which Sprint Corporation
is obligated or (b) prior to the Public Offering Date, a reduction of
the percentage of the aggregate economic or voting equity ownership of
the Borrower that is owned directly or indirectly by Sprint Corporation
to less than 25%.
"Closing Date": the date on which the conditions precedent
set forth in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued
thereunder.
"Collateral": as defined in the Trust Agreement.
"Commission": as defined in subsection 9.15.
"Commitment": as to any Lender, the obligation of such Lender
to make Loans to the Borrower in an aggregate principal amount not to
exceed the product of (a) the Vendor Commitment and (b) the percentage
set forth opposite such Lender's name on Schedule II under the column
captioned "Percentage of Vendor Commitment", as such percentage may be
changed from time to time in accordance with the terms of this
Agreement; and "Commitments" shall mean, collectively, the Commitments
of all of the Lenders.
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Committed Capital": as to any Parent at any time, the aggre-
gate amount of cash contributions then committed and available to be
made by such Parent or its Affiliates to the Borrower pursuant to the
Capital Contribution Agreement.
"Commonly Controlled Entity": an entity, whether or not in-
corporated, which is treated as a single employer with the Borrower un-
der Section 414(b), (c), (m) or (o) of the Code.
"Communications Act": the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of
the FCC thereunder, all as amended and as the same may be in effect
from time to time.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, indenture, in-
strument or other undertaking, to which such Person is a party or by
which it or any of its property is bound.
"Contributed Capital": at any time, the aggregate amount
which shall theretofore have been received by the Borrower as a contr-
bution to its capital or as consideration for the issuance of
partnership interests in the Borrower; Contributed Capital shall in any
event exclude the proceeds of any Specified Affiliate Debt.
"Corporate Trustee": as defined in the definition of Trust
Agreement.
"Covered Pops": at any time, the aggregate number of Pops
within each geographic area for which facilities owned by the Borrower
and its Restricted Subsidiaries that provide service to such geographic
area (a) in the case of facilities constructed pursuant to the Vendor
Procurement Contract or the Other Vendor Procurement Contract, either
(i) have achieved "substantial completion" pursuant to the terms of the
Vendor Procurement Contract or the Other Vendor Procurement Contract
(as therein provided) or (ii) have not achieved "substantial
completion" pursuant to the terms of the Vendor Procurement Contract as
a result of a failure by the Vendor to perform its obligations
thereunder and (b) in the case of any other facilities, have achieved
at least the equivalent degree of completion.
"Credit Advance": as defined in subsection 2.2(a).
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Direct-Lien Assets": assets of the Borrower or any Restricted
Subsidiary constituting any of the following: accounts, patents,
trademarks, the rights of the Borrower under the Capital Contribution
Agreement, other general intangibles and other types of Personal
Property Assets on which, under applicable law, a consensual Lien can
be perfected by a limited number of Uniform Commercial Code and/or
Federal filings naming the Borrower or such Restricted Subsidiary, as
the case may be, as debtor or by the delivery of a pledged instrument
to the party secured by such Lien.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": for any fiscal period, the Net Income or Net Loss,
as the case may be, for such fiscal period, after restoring thereto
amounts deducted for, without duplication, (a) Interest Expense, (b)
income tax expense, (c) depreciation and amortization and (d) other
non-cash charges, provided, however, that there shall in any event be
excluded from EBITDA any portion thereof attributable to the income of
any Person (other than a Restricted Subsidiary) in which the Borrower
or any Restricted Subsidiary has any ownership interest except to the
extent that any such income has been actually received by the Borrower
or such Restricted Subsidiary in the form of cash dividends or similar
distributions.
"Eligible Assignee": (a) a commercial bank having total assets
in excess of $250,000,000, an insurance company or other similar
financial institution, (b) any other entity which is (or which is
managed by a manager which manages funds which are) primarily engaged
in making, purchasing or otherwise investing in commercial loans or
extending, or investing in extensions of, credit for its own account in
the ordinary course of its business, which has total assets in excess
of $250,000,000 or (c) any Investment Vehicle principally engaged in
investing in commercial loans; provided that in no event may any Person
which is engaged in, or in the case of any Person described in clause
(b) of this definition, which is an Affiliate of any Person engaged in,
the telecommunications service business in the United States be an
Eligible Assignee, and provided, further, that in no event may any
trust or other Person that is the issuer of direct or indirect
beneficial interests in the Loans (an "Investment Vehicle") become a
Lender unless (i) any rights of the holders of the beneficial interests
issued by such Investment Vehicle in respect of votes, consents and
other actions to be taken by the Lenders under or in connection with
this Agreement and the other Loan Documents shall be limited so that
the percentage of such beneficial interests the holders of which are
required to approve any vote, consent or other action proposed to be
made or taken by such Investment Vehicle in its capacity as a Lender in
connection with this Agreement or any other Loan Document shall be the
same as the percentage of the Loans the holders of which are required
pursuant to subsection 9.1 to approve such vote, consent or other
action and (ii) the only financial statements and other reports that
such Investment Vehicle and holders of beneficial interests shall be
entitled to receive from the Borrower shall be the annual audited and
quarterly unaudited financial statements required to be delivered by
the Borrower pursuant to subsection 5.1(a) and (b) and subsection
5.2(a) and (b) and any other documents delivered by the Borrower
pursuant to subsection 5.1 that contain only publicly available
information.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of or agreements with any Governmental
Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning (a) pollution, protection or clean-up of the environment,
(b) any Releases or (c) human health or safety as relating to the
workplace or the environment, including the exposure of employees and
other personnel to Hazardous Substances, in each case, as now or may at
any time hereafter be in effect.
"Environmental Permit": any permit, approval, authorization,
certificate, license, variance, filing or permission required by or
from any Governmental Authority pursuant to any Environmental Law.
"EquipmentCo": Sprint Spectrum Equipment Company, L.P., a
Delaware limited partnership.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate of interest
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Telerate screen as
of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period. In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such screen), the
"Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be
agreed upon by the Agent and the Borrower or, in the absence of such
agreement, the "Eurodollar Rate" shall instead be the rate per annum
equal to the average (rounded upwards to the nearest 1/100th of 1%) of
the respective rates notified to the Agent by each of the Reference
Lenders as the rate at which such Reference Lender is offered Dollar
deposits in an amount approximately equal to the amount of the
requested Loan at or about 10:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein.
"Event of Default": any of the events specified in Section 7
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excluded Assets": at any time, the collective reference to
(a) all assets then subject to a Lien permitted by subsection 6.3(f),
(g), (h), (i), (p), (q) and (r) and (b) any other assets of the
Borrower and its Restricted Subsidiaries (i) which then have a book
value not exceeding $200,000,000 in the aggregate and (ii) none of
which individually then has a book value exceeding $15,000,000.
"Existing Bank Credit Facility": the Credit Agreement, dated
as of October 2, 1996, among the Borrower, the lenders parties thereto
and The Chase Manhattan Bank, as Administrative Agent, as amended,
supplemented or otherwise modified from time to time, or any
refinancing, replacement or refunding thereof.
"FCC": the Federal Communications Commission, or any other
similar or successor agency of the Federal government administering the
Communications Act.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three federal
funds brokers of recognized standing selected by it.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Funding Percentage": as to any Lender at any time, the per-
centage which such Lender's then Unused Commitment constitutes of the
then Unused Commitments of all the Lenders.
"GAAP": generally accepted accounting principles in the United
States of America used in connection with the preparation of the
consolidated balance sheet and other financial statements described in
subsection 3.1(a) ("Fixed GAAP") or, when such term is used in
subsections 5.1, 5.3, 5.6 and 6.3, generally accepted accounting
principles in the United States of America in effect from time to time
("Floating GAAP").
"Governmental Authority": any nation or government, any
state, agency or other political subdivision thereof and any entity ex-
ercising executive, legislative, judicial, regulatory (including
self-regulatory) or administrative functions of or pertaining to
government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation (the "primary obligations") of any
other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantees": as defined in the Trust Agreement.
"Guarantor": any Person delivering a Guarantee pursuant to
the Trust Agreement.
"Hazardous Substances": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazard-
ous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"High Yield Debt": the collective reference to the Borrower's
11% Senior Notes Due 2006 and 12 1/2% Senior Discount Notes Due 2006
and the respective indentures under which such Notes have been issued.
"Holding": Sprint Spectrum Holding Company, L.P., a Delaware
limited partnership and the general partner of the Borrower.
"Incur": when used with respect to any Indebtedness, Guarantee
Obligation or Lien, to create, incur or assume such Indebtedness,
Guarantee Obligation or Lien, whether directly or indirectly, it being
agreed any Indebtedness or Guarantee Obligation of, or any Lien on any
property or assets owned by, any Person which shall become a Restricted
Subsidiary subsequent to the date hereof (whether through the
acquisition thereof, the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary or otherwise) shall be deemed to be Incurred on
the date such Person shall so become a Restricted Subsidiary.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money (including capitalized
interest) or for the deferred purchase price of property or services
(other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b) any
other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations (absolute or contingent) of
such Person in respect of acceptances issued or created for the account
of such Person and (e) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed
or otherwise become liable for the payment thereof.
"Initial Borrowing Date": the date upon which the initial
Loans are made hereunder.
"Initial Guarantees": as defined in the Trust Agreement.
"Initial Security Documents": as defined in the Trust Agree-
ment.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 3.9.
"Interest Capitalization Period": as defined in subsection
2.7(d).
"Interest Expense": for any fiscal period, the amount of (a)
interest expense of the Borrower and its Restricted Subsidiaries for
such fiscal period determined in accordance with GAAP plus (b) interest
expense in respect of Specified Affiliate Debt for such fiscal period
determined in accordance with GAAP.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of
such Interest Period, (c) as to any Eurodollar Loan having an Interest
Period longer than three months, each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and
the last day of such Interest Period and (d) as to any Eurodollar Loan,
the date of any conversion of such Eurodollar Loan to an ABR Loan in
accordance with subsection 2.6 or repayment or prepayment of such
Eurodollar Loan in accordance with subsection 2.4 or subsection 2.5.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six or, subject to
availability, nine or twelve months thereafter, as selected by
the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto;
and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six or, subject to
availability, nine or twelve months thereafter, as selected by
the Borrower by irrevocable notice to the Agent not less than
three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Per-
iods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the date final payment is due on the Loans shall end on
such date of final payment; and
(iii) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Agreement": any interest rate swap or other
interest rate hedge arrangement to or under which the Borrower is a
party or a beneficiary.
"Interest Rate Agreement Obligations": all obligations of the
Borrower to any financial institution under any one or more Interest
Rate Agreements.
"Investment Grade Status": shall exist at any time when the
actual or implied rating of the Borrower's senior long-term unsecured
debt is at or above Baa3 from Moody's or BBB- from S&P; if either of
Moody's or S&P shall change its system of classifications after the
date of this Agreement, Investment Grade Status shall exist at any time
when the rating of the Borrower's senior long-term unsecured debt is at
or above the new rating which most closely corresponds to the
above-specified level under the previous rating system.
"Investments": as defined in subsection 6.8.
"Investment Vehicle": as defined in the definition of Elig-
ible Assignee in this subsection 1.1.
"Lenders": as defined in the preamble hereto.
"License": any broadband personal communications services li-
cense issued by the FCC in connection with the operation of a System.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge 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 Financing Lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made (including interest capitalized pursu-
ant to subsection 2.7(d)) by a Lender pursuant to this Agreement.
"Loan Documents": this Agreement, any Notes, the Guarantees,
the Trust Agreement, the Security Documents and the Capital Contribu-
tion Agreement and any of the guarantees, security documents or other
documents delivered by the Borrower or any of its Subsidiaries with or
pursuant to such agreements from time to time.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, results of operations or financial condition of
the Borrower and its Restricted Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform its obligations under the Loan
Documents or (c) the validity or enforceability of this Agreement or
any of the other Loan Documents or the rights or remedies of the Agent,
the Trustees or the Lenders thereunder; provided, however, that no
termination, revocation or non-renewal of any License shall constitute
a Material Adverse Effect unless after giving effect thereto the
aggregate number of Owned Pops is less than 120,000,000.
"MinorCo": MinorCo, L.P., a Delaware limited partnership.
"Moody's": Moody's Investors Service, Inc.
"Mortgaged Property": as defined in subsection 5.9(c).
"MTA": a Major Trading Area as defined in 47 C.F.R. ss.
24.202.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": of any Asset Sale by any Person, the
aggregate amount of cash and Cash Equivalents received by or on behalf
of such Person in consideration for such Asset Sale or (when and as
received in cash or Cash Equivalents) through payment or disposition of
deferred consideration for such Asset Sale (including by way of
deferred payment of principal pursuant to a note or other security or
installment receivable or purchase price adjustment receivable or
otherwise), after deducting therefrom, as applicable, (a) the amount of
such proceeds required to be applied at the time of such Asset Sale to
repay Indebtedness (other than Secured Obligations) secured by any
asset which is the subject of such Asset Sale, (b) brokerage
commissions and other fees and expenses (including fees and expenses of
legal counsel and investment bankers) payable in connection therewith,
(c) appropriate amounts to be provided by the Borrower or any
Restricted Subsidiary, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset
Sale and retained by the Borrower or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities and liabilities
under any indemnification obligations associated with such Asset Sale
and (d) other out-of-pocket costs incurred in connection therewith; and
adding thereto, as applicable, any reversal of or reduction in any
reserve referred to in clause (c) above.
"Net Income" or "Net Loss": for any fiscal period, the amount
which, in conformity with GAAP, would constitute the net income or net
loss, as the case may be, of the Borrower and its Restricted
Subsidiaries on a consolidated basis for such fiscal period (after
adjustment for minority interests), provided that Net Income or Net
Loss shall exclude extraordinary, unusual or non-recurring gains or
losses.
"New Lending Office": as defined in subsection 2.13(b).
"Non-Excluded Taxes": as defined in subsection 2.13.
"Non-U.S. Lender": as defined in subsection 2.13(a).
"Note": as defined in subsection 2.3(e).
"Notice of Enforcement": as defined in the Trust Agreement.
"Other Vendor": Northern Telecom Inc.
"Other Vendor Credit Facility": the Credit Agreement, dated as
of October 2, 1996, among the Borrower, the Other Vendor, the several
lenders from time to time parties thereto and the Other Vendor, as
agent, as amended, supplemented or otherwise modified from time to
time.
"Other Vendor Procurement Contract": the Procurement and Ser-
vices Contract, dated as of January 31, 1996, between the Borrower
(formerly MajorCo, L.P.) and the Other Vendor, as the same may be
amended, supplemented or otherwise modified from time to time.
"Owned Pops": at any time, the aggregate number of Pops in-
cluded in those MTA's or BTA's for which the Borrower and its
Restricted Subsidiaries then own Licenses that are in full force and
effect.
"Parents": Sprint Corporation, Tele-Communications, Inc.,
Comcast Corporation and Cox Communications, Inc.
"Participant": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender at any time, the percentage
which the then outstanding principal amount of such Lender's Loans
(other than amounts constituting interest capitalized pursuant to
subsection 2.7(d)) and Unused Commitment, if any, then constitutes of
the then outstanding principal amount of the Loans of all Lenders
(other than amounts constituting interest capitalized pursuant to
subsection 2.7(d)) and Unused Commitments of all Lenders.
"Permanent Reduction": any voluntary reduction by the Borrower
of revolving credit commitments under a Bank Credit Facility to an
aggregate amount which is less than the average daily outstanding
principal amount of revolving credit loans under such Bank Credit
Facility during the six month period preceding the date of such
reduction.
"Permitted Refinancing": (a) a refinancing, replacement or
refunding of the Other Vendor Credit Facility in connection with which
the Lenders are given the option, to be effected in accordance with the
procedures set forth in subsection 2.16, to have their Loans repaid pro
rata with the lenders under the Other Vendor Credit Facility on
substantially equivalent terms and conditions and (b) any refinancing,
replacement or refunding of a Bank Credit Facility.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Personal Property Assets": all personal property of the
Borrower and its Restricted Subsidiaries (other than the Licenses).
"Plan": at a particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or
a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA or may have or incur any
liability.
"Pops": as of any date, with respect to any BTA or MTA, the
population of such BTA or MTA as such number is published in the then
most recently issued Donnelly Marketing Service Population Guide.
"Prepayment Acceptance Amount": with respect to each Lender
receiving a Prepayment Offer Notice, the maximum principal amount of
the Loans of such Lender subject to such Prepayment Offer Notice that
such Lender wishes to be subject to prepayment, as indicated in the
applicable Prepayment Offer Response Notice of such Lender.
"Prepayment Amount": with respect to any Specified Prepayment
to be made on any date, the amount required to be applied toward pre-
payment of the Loans on such date in accordance with the provisions of
subsection 2.16 and the definition of the term Pro Rata Payment Offer.
"Prepayment Offer Notice": a written notice (a) offering to
prepay the Loans on the Specified Prepayment Date designated therein in
an aggregate amount equal to the Prepayment Amount, (b) requesting each
Lender to respond to such offer by delivering to the Agent and the
Borrower a Prepayment Offer Response Notice no later than four Business
Days prior to such Specified Prepayment Date, and (c) informing each
such Lender that the failure by such Lender to deliver a Prepayment
Offer Response Notice on or before the fourth Business Day prior to the
Specified Prepayment Date shall be deemed to be the acceptance of the
full amount of such offer by such Lender.
"Prepayment Offer Response Notice": a written notice to the
Agent and the Borrower in response to a Prepayment Offer Notice,
pursuant to which the Lender delivering such notice states whether such
Lender accepts or rejects the Borrower's offer to prepay Loans
contained in such Prepayment Offer Notice and, if such offer is
accepted, states the maximum principal amount of such Lender's Loan
which such Lender wishes to be subject to prepayment.
"Prepayment Pro Rata Amount": with respect to each Lender in
connection with any Specified Prepayment, the percentage of the asso-
ciated Prepayment Amount which such Lender's then outstanding Loans
constitutes of all then outstanding Loans.
"Prepayment Share": with respect to each Lender in connectio
with any Specified Prepayment, the lesser of its Prepayment Acceptance
Amount and its Prepayment Pro Rata Amount.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime
rate in effect at its principal office in New York City (the Prime Rate
not being intended to be the lowest rate of interest charged by The
Chase Manhattan Bank in connection with extensions of credit to
debtors).
"Pro Forma Compliance": shall exist at any time when (a) the
Borrower shall be in pro forma compliance with the covenants set forth
in subsections 6.1(a) through (d) (computed on the basis of Total Debt
and Total Capitalization then outstanding and Annualized Adjusted
EBITDA and Annualized EBITDA as projected in good faith by the Borrower
for the period ending at the end of the then current fiscal quarter)
and (b) no Default or Event of Default shall be then in existence.
"Pro Rata Payment Offer": an offer made by the Borrower, to
each holder of Secured Obligations as to which such an offer is
required, pursuant to the Secured Instrument under which such Secured
Obligations are outstanding, to be made, to have such holder's pro rata
share (based on (a) in the case of Secured Obligations referred to in
clause (ii), the then outstanding principal amounts of such Secured
Obligations and amounts of unused commitments to extend credit
constituting Secured Obligations and (b) in the case of Secured
Obligations referred to in clause (i), the then outstanding principal
amounts of such Secured Obligations) of a specified amount (i) in the
case of Secured Obligations other than those referred to in clause
(ii), applied to prepay such Secured Obligations and (ii) in the case
of Secured Obligations under a committed revolving credit facility, to
reduce the commitments under such facility and to prepay any Secured
Obligations outstanding under such facility by the amount such Secured
Obligations exceed such commitments as so reduced.
"Pro Rata Prepayment/Commitment Reduction": any application of
Net Cash Proceeds (a) in accordance with subsection 2.5, to prepay the
Loans and (b) to the extent required by and in accordance with any
mandatory prepayment and/or commitment reduction provisions of, or to
the extent that the Borrower determines to do so under any voluntary
prepayment and/or commitment reduction provisions of, any other Secured
Obligations to prepay the loans and/or reduce the commitments to lend
thereunder, with the portion of such Net Cash Proceeds to be applied to
prepay the Loans being at least equal to a pro rata share thereof
determined on the basis of the respective amounts of the then
outstanding Secured Obligations to which such Net Cash Proceeds will be
applied and, unless the maturity of the Secured Obligations shall have
been accelerated, unused commitments to lend then in effect under the
Secured Instruments relating to such Secured Obligations.
"Public Offering Date": the date on which there shall be
completed an underwritten public offering of shares of Capital Stock of
the Borrower (or of any direct or indirect partner or shareholder of
the Borrower (other than any Parent) having the economic effect of
transferring to the public equity interests in the Borrower) pursuant
to a registration statement filed with, and declared effective by, the
Securities and Exchange Commission (or its successor) in accordance
with the Securities Act.
"Real Estate Assets": all interests in real property of the
Borrower and its Restricted Subsidiaries other than Mortgaged Proper-
ties.
"RealtyCo": Sprint Spectrum Realty Company, L.P., a Delaware
limited partnership.
"Reference Lenders": The Chase Manhattan Bank, The Bank of
New York and NationsBank of Texas, N.A. or such other banks as may be
agreed by the Borrower and the Agent from time to time.
"Register": as defined in subsection 9.6(d).
"Release": any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, dispos-
ing, depositing, dispersing, emanating or migrating of any
Hazardous Substances in, into, onto or through the environment.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA or regulations thereunder, other than those events as
to which the thirty day notice period is waived under the
regulations adopted by the PBGC.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any
of its property is subject.
"Requisite Accelerating Creditors": at any time, (a) with re-
spect to any Event of Default specified in Section 7(a) through (c),
the then Requisite Lenders, and (b) with respect to any other Event of
Default, the then Requisite Aggregate Lenders.
"Requisite Aggregate Lenders": at any time, (a) until the
first date upon which the Vendor holds Loans and Unused Commitment in
an aggregate amount less than 50% of the then outstanding Loans and
Unused Commitments and the Other Vendor holds loans and commitment
under the Other Vendor Credit Facility in an aggregate amount less than
50% of the then outstanding loans and commitments thereunder, Lenders
holding a majority of the then outstanding Loans and Unused Commitments
and lenders under the Other Vendor Credit Facility holding a majority
of the then outstanding loans and commitments under the Other Vendor
Credit Facility and (b) thereafter, Lenders and/or lenders under the
Other Vendor Credit Facility holding Loans and Unused Commitments and
loans and commitment under the Other Vendor Credit Facility in an
aggregate amount equal to at least a majority of the then aggregate
outstanding amount of loans and commitments under both Vendor Credit
Facilities.
"Requisite Lenders": at any time, Lenders the Percentages of
which aggregate more than 50%.
"Responsible Officer": any of the president, chief financial
officer, treasurer, assistant treasurer, director - corporate finance
or controller of the Borrower.
"Restricted Payments": as defined in subsection 6.7.
"Restricted Subsidiary": at any time, any Subsidiary of the
Borrower that is not an Unrestricted Subsidiary and including the
Special Purpose Subsidiaries.
"S&P": Standard and Poor's Ratings Services.
"Secured Instruments": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Security Documents": as defined in the Trust Agreement.
"Securities Act": as defined in subsection 9.15.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Special Payment Condition": shall be satisfied when, after
giving effect to any Restricted Payment described in subsection 6.7(a)
or (c) or any Investment described in subsection 6.8(c) or (d), the
ratio of the then outstanding Total Debt to Annualized EBITDA for the
period ended on the last day of the then most recently ended fiscal
quarter for which financial statements shall have been delivered to the
Lenders pursuant to subsection 5.1 is not greater than 5.0 to 1 and the
ratio of Annualized EBITDA for the period ended on such last day to
Interest Expense for the period of four consecutive fiscal quarters
ended on such last day is not less than 2.5 to 1.
"Special Purpose Subsidiary": each of EquipmentCo, RealtyCo
and WirelessCo.
"Specified Affiliate Debt": Indebtedness of an Affiliate of
the Borrower incurred in an arm's-length transaction (other than
Indebtedness used to fund capital contributions required to be made by
such Affiliate (or an Affiliate thereof) under the Capital Contribution
Agreement or the partnership agreement of Holding) all of the proceeds
of which shall have been contributed to the capital of the Borrower or
used to purchase Capital Stock of the Borrower and which shall have
been designated in a written notice from the Borrower to the Agent as
Specified Affiliate Debt.
"Specified Loan": as defined in subsection 2.7(d).
"Specified Prepayment": any prepayment to which the provi-
sions of subsection 2.16 are applicable.
"Specified Prepayment Date": as defined in subsection 2.16.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"System": as to any Person, assets constituting a radio comm-
unications system authorized under the rules for wireless communica-
tions services (including the licenses, network, marketing, distribu-
tion, sales, customer interface and operations functions relating
thereto) owned and operated by such Person.
"Tax Credit": as defined in subsection 2.13(d).
"Termination Date": June 30, 2001.
"Total Capitalization": at any date, the sum of (a) Total Debt
outstanding on such date plus (b) Contributed Capital on such date plus
(c) Committed Capital on such date minus (d) the amount of Restricted
Payments made by the Borrower or any Restricted Subsidiary (other than
Restricted Payments which are permitted to be made pursuant to
subsection 6.7(a) or (b)), directly or indirectly to any Person other
than the Borrower or any Restricted Subsidiary through such date.
"Total Debt": at any time, the sum of (a) the aggregate amount
of consolidated Indebtedness of the Borrower and its Restricted
Subsidiaries then outstanding (including capitalized and accreted
interest) determined in accordance with GAAP plus (b) the aggregate
amount of Guarantee Obligations of the Borrower and its Restricted
Subsidiaries then outstanding in respect of Indebtedness of Persons
other than the Borrower and its Restricted Subsidiaries plus (c) the
aggregate amount of Specified Affiliate Debt then outstanding
(including capitalized and accreted interest) minus (d) the aggregate
amount of cash and Cash Equivalents then owned by the Borrower and its
Restricted Subsidiaries.
"Trademark License Agreement": the Amended and Restated
Sprint Trademark License Agreement, dated as of January 31, 1996, by
and between Sprint Communications Company, L.P. and the Borrower
(formerly MajorCo, L.P.), as the same may have been amended,
supplemented or otherwise modified prior to the date of this Agreement.
"Transferee": as defined in subsection 9.6(f).
"Trust Agreement": the Trust Agreement, dated as of October 2,
1996, among the Borrower, First Union National Bank, a national banking
association, as corporate trustee (the "Corporate Trustee"), and
Kenneth D. Benton, as individual trustee (together with the Corporate
Trustee, the "Trustees"), as amended, supplemented or otherwise
modified from time to time.
"Trustees": as defined in the definition of Trust Agreement.
"Type": as to any Loan, its nature as an ABR Loan or a Euro-
dollar Loan.
"Unused Commitment": at any time as to any Lender, an amount
equal to the excess, if any, of (a) the amount of the Commitment of
such Lender over (b) the aggregate principal amount of Loans made by
such Lender, including any Loans made by the Vendor on such Lender's
behalf pursuant to subsection 2.1(b), and in each case excluding
amounts constituting interest capitalized pursuant to subsection
2.7(d).
"Unrestricted Subsidiary": APC and any other Subsidiary of the
Borrower (other than any Special Purpose Subsidiary) that the Borrower
designates as an Unrestricted Subsidiary in accordance with subsection
6.8(c) or (d), provided, however, that the Borrower may, so long as no
Default or Event of Default would result therefrom, cause any
Unrestricted Subsidiary to become a Restricted Subsidiary by so
notifying the Agent in a written instrument executed by a Responsible
Officer.
"Vendor": as defined in the Preamble hereto.
"Vendor Commitment": as defined in Schedule I.
"Vendor Credit Facilities": the collective reference to this
Agreement and the Other Vendor Credit Facility.
"Vendor Procurement Contract": the Procurement and Services
Contract, dated as of January 31, 1996, between the Borrower (formerly
MajorCo, L.P.) and the Vendor, as amended, supplemented or
otherwise modified from time to time.
"Vendor's Account": such account as may be specified in
writing by the Vendor to the Borrower and the Agent from time to time.
"Weighted Average Interest Amount": as defined in subsection
2.2(e).
"Wholly Owned": any Subsidiary of the Borrower or any
Restricted Subsidiary shall be deemed to be Wholly Owned if at least
99% of the voting and economic equity interest in such Subsidiary is
owned by the Borrower or such Restricted Subsidiary and the remainder
of the voting and economic equity interest in such Subsidiary is owned
by MinorCo.
"WirelessCo": WirelessCo, L.P., a Delaware limited partner-
ship.
"Wireless Service": the provision of broadband personal comm-
unications services in one or more Systems.
"Wireless Subscribers": at any time, all customers then re-
ceiving Wireless Services from the Borrower or any of its Restricted
Subsidiaries.
"Year": any one of the consecutive twelve-month periods
following the Initial Borrowing Date each of which shall end on an
anniversary of the Initial Borrowing Date.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto.
(b) As used herein, and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Borrower and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under Fixed GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) Terms defined in Article 9 of the Uniform Commercial Code
of the State of New York and not defined herein shall have the respective
meanings given to them in such Article 9.
(f) The words "include", "includes" and "including" when used
herein shall be deemed to be followed by the phrase "without limitation".
(g) Unless otherwise expressly provided herein, any reference
in this Agreement to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time.
(h) Any reference herein to a fiscal year or a fiscal quarter
shall be deemed a reference to such fiscal year or such fiscal quarter of the
Borrower.
1.3 Schedules. The terms and conditions of the Schedules shall
be deemed to be a part of this Agreement and incorporated herein by reference as
fully as if they were set forth in full herein.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments. (a) Subject to the terms and conditions
hereof, each Lender agrees severally and not jointly, to make Loans to the
Borrower pursuant to this subsection from time to time during the Commitment
Period in an aggregate principal amount (excluding amounts constituting interest
capitalized pursuant to subsection 2.7(d)) not to exceed the amount of such
Lender's Commitment. The Loans may from time to time be (a) Eurodollar Loans,
(b) ABR Loans or (c) a combination thereof, as determined by the Borrower and
notified to the Agent in accordance with subsections 2.2 and 2.6.
(b) If on any Borrowing Date any Lender (other than the
Vendor) defaults in its obligation to make Loans to the Borrower, the Vendor
shall be unconditionally obligated to make such Loans on such Borrowing Date. To
the extent that the Vendor makes Loans on behalf of a defaulting Lender, the
Vendor shall be subrogated to the rights of the Borrower against such defaulting
Lender with respect to such Loans. If a defaulting Lender purchases from the
Vendor any Loans made by the Vendor on behalf of such defaulting Lender, then
from and after that date the defaulting Lender shall be deemed to be the Lender
with respect to such Loans for all purposes under this Agreement.
2.2 Borrowing Procedure. (a) The Borrower may borrow under the
Commitment during the Commitment Period on any Business Day, provided that no
more than one borrowing may be made hereunder during any of the successive
one-month periods following the Initial Borrowing Date (other than the first
such one-month period, during which up to two borrowings may be made hereunder).
Borrowings hereunder on any Borrowing Date may be made (i) in cash in accordance
with the provisions of subsection 2.2(b) (a "Cash Advance") and/or (ii) by means
of a credit against amounts due to the Vendor under the Vendor Procurement
Contract in accordance with the provisions of subsection 2.2(c) (a "Credit
Advance"). The Borrower shall deliver to the Agent a Borrowing Notice, which
must be received by the Agent prior to 1:00 P.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
Loans requested to be made on any Borrowing Date are to be initially Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, otherwise,
and which must specify (i) the requested Borrowing Date, (ii) the amount to be
borrowed, (iii) whether the borrowing is to be by means of a Cash Advance, a
Credit Advance or a combination thereof and, if a combination thereof, the
respective amounts of each, (iv) whether the borrowing is to be of Eurodollar
Loans, ABR Loans or a combination thereof and, if a combination thereof, the
respective amounts of each and (v) if the borrowing is to be entirely or partly
of Eurodollar Loans, the amounts of such Type of Loan and the respective lengths
of the initial Interest Periods therefor; provided, that a Borrowing Notice
requesting a Cash Advance on any Borrowing Date must be received by the Agent at
least (A) three Business Days prior to the requested Borrowing Date, in any case
where the amount of the requested Cash Advance is $50,000,000 or less or (B)
seven Business Days prior to the requested Borrowing Date, in any case where the
amount of the requested Cash Advance is greater than $50,000,000 and provided,
further, that in no amount may the amount of any Cash Advance requested to be
made on any Borrowing Date exceed $500,000,000. Notwithstanding the foregoing,
the Vendor shall have the right, upon giving the Borrower not less than 60 days
prior written notice, to require that the Borrower request Cash Advances to
finance amounts previously paid by the Borrower (other than with the proceeds of
Loans) under invoices submitted to the Borrower by the Vendor pursuant to the
Vendor Procurement Contract.
(b) If any Borrowing Notice indicates that a Cash Advance is
to be made on the Borrowing Date specified therein to finance amounts
theretofore paid by the Borrower (other than with the proceeds of Loans) under
invoices submitted to the Borrower by the Vendor pursuant to the Vendor
Procurement Contract, such Borrowing Notice shall identify such invoices and the
amount theretofore paid thereunder (which shall equal the amount of such Cash
Advance), and, in accordance with subsection 2.2(d), each Lender will make the
amount of its respective Funding Percentage of such Cash Advance available to
the Agent, which shall then make such amounts available to the Borrower at the
Borrower's Account prior to 11:00 A.M., New York City time, on such Borrowing
Date in funds immediately available to the Borrower.
(c) If any Borrowing Notice requests that a Credit Advance be
made on the Borrowing Date specified therein to finance amounts then due under
invoices submitted to the Borrower by the Vendor pursuant to the Vendor
Procurement Contract, such Borrowing Notice shall identify such invoices and the
amounts being paid thereunder pursuant to such Credit Advance, and, in
accordance with subsection 2.2(d), each Lender (other than the Vendor) will make
the amount of its respective Funding Percentage of such Credit Advance available
to the Agent at the Agent's Account, and the Agent shall then make the aggregate
of such amounts available to the Vendor at the Vendor's Account and the Vendor
shall credit the entire amount of such Credit Advance against the amounts due to
it by the Borrower under such invoices.
(d) No later than 11:00 a.m., New York City time, on the
Borrowing Date of any Loan, each of the Lenders (in the case of a Credit
Advance, other than the Vendor) will make available to the Agent, at the Agent's
Account, in immediately available funds, the amount of such Lender's Funding
Percentage of the amount of the requested Loan. Upon receipt from each Lender of
such amount, and satisfaction by the Borrower of all conditions to making the
requested Loan, the Agent will make available to, in the case of a Cash Advance,
the Borrower, and in the case of a Credit Advance, the Vendor, the aggregate
amount of such Loan made available to the Agent by the Lenders, it being
understood that the Vendor shall have no obligation to make available to the
Agent any funds for any Loan in respect of a Credit Advance. In the case of a
Credit Advance, the Vendor will credit the amount of (i) the Vendor's Funding
Percentage of such Credit Advance plus (ii) the aggregate required to be amount
made available to the Agent by the Lenders on such Borrowing Date (whether or
not any Lender shall have defaulted in its obligation to make available to the
Agent any portion of its Funding Percentage of the requested Loan on such
Borrowing Date) against the amounts due it from the Borrower under the invoices
identified in the Borrowing Notice requesting such Credit Advance. The failure
or refusal of any Lender to make available to the Agent at the aforesaid time
and place on any Borrowing Date the amount of its Funding Percentage of the
requested Loans shall not relieve any other Lender from its several obligation
hereunder to make available to the Agent the amount of such other Lender's
Funding Percentage of any requested Loans.
(e) The Agent may, unless notified to the contrary by any
Lender prior to a Borrowing Date, assume that such Lender has made available to
the Agent on such Borrowing Date the amount of such Lender's Funding Percentage
of the Loans to be made on such Borrowing Date, and the Agent may (but it shall
not be required to), in reliance upon such assumption, make available to the
Vendor or the Borrower, as the case may be, a corresponding amount. If any
Lender makes available to the Agent such amount on a date after such Borrowing
Date, such Lender shall pay to the Agent on demand an amount (the "Weighted
Average Interest Amount") equal to the product of (i) the average computed for a
period referred to in clause (iii) below, of the weighted average interest rate
paid by the Agent for funds acquired by the Agent during each day included in
such period, times (ii) the amount of such Lender's Funding Percentage of such
Loans, times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Borrowing Date to the date on which the amount of
such Lender's Funding Percentage of such Loans shall become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to such Lender with respect to any amounts owing under this
subsection shall be prima facie evidence of the amount owing to the Agent by
such Lender. If the Agent has made available to the Vendor or the Borrower, as
the case may be, the amount of a Lender's Funding Percentage of such Loans and
such Lender has failed to make available to the Agent such amount within three
Business Days following such Borrowing Date, the Agent shall be entitled to
recover such amount, plus the Weighted Average Interest Amount, from the Vendor
on demand as provided in subsection 2.2(b).
2.3 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Agent for the account of each
Lender the principal amount of the Loans of such Lender made during any
Borrowing Year in twenty consecutive quarterly installments, commencing on the
date which is thirty-nine months after the last day of such Borrowing Year and
ending on the date which is eight years after such last day, in an aggregate
amount for each Year set forth below equal to the percentage set forth opposite
such Year multiplied by the aggregate principal amount of the Loans made by such
Lender during such Borrowing Year (with the quarterly installments during each
such Year being equal in amount):
Year Percentage
4 10%
5 15
6 20
7 25
8 30
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsection 2.7.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 9.6(e), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder (including the amount of any capitalized interest under subsection
2.7(d)) and (iii) both the amount of any sum received by the Agent hereunder
from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.3(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans of such Lender in
accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by
any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower dated the Closing Date evidencing the Loans of such Lender,
substantially in the form of Exhibit A with appropriate insertions as to date
and principal amount (each, a "Note"). Thereafter, the Loans evidenced by any
such Note and interest thereon shall at all times (including after assignment
pursuant to subsection 9.6) be represented by one or more promissory notes in
such form payable to the order of the payee named therein and its registered
assigns.
2.4 Optional Prepayments. The Borrower may prepay the Loans,
in whole or in part, without premium or penalty, upon giving irrevocable notice
to the Agent (which notice must be received by the Agent prior to 1:00 P.M., New
York City time, (a) three Business Days prior to the date of prepayment, if all
or any part of the Loans to be prepaid are Eurodollar Loans, or (b) one Business
Day prior to the date of prepayment, otherwise), specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.14, accrued interest to such date on
the amount prepaid. Partial prepayments of the Loans shall be applied to the
then remaining installments of principal thereof pro rata according to the
respective amounts thereof. Amounts prepaid on account of the Loans may not be
reborrowed. Partial prepayments pursuant to this subsection shall be in an
aggregate principal amount of at least $10,000,000 and increments of $1,000,000
in excess thereof.
2.5 Mandatory Prepayments. (a) The Borrower shall prepay
the Loans with the Net Cash Proceeds of Asset Sales to the extent required by
subsections 6.6(c) and (d).
(b) If at any time the Borrower shall make a voluntary
prepayment of loans under the Other Vendor Credit Facility or shall voluntarily
make a prepayment of term loans, or a Permanent Reduction, under the Existing
Bank Credit Facility and such prepayment or Permanent Reduction is not made in
connection with a Permitted Refinancing, the Borrower shall, subject to the
provisions of subsection 2.16, prepay the Loans in an amount equal to the
product of (i) the then outstanding principal amount of the Loans multiplied by
(ii) a fraction (A) the numerator of which is the amount of the loans so
voluntarily prepaid under the Other Vendor Credit Facility or the Existing Bank
Credit Facility or the amount of the Permanent Reduction, as the case may be,
and (B) the denominator of which is the aggregate then outstanding principal
amount of loans under the Other Vendor Credit Facility or the Existing Bank
Credit Facility (in the case of prepayment of term loans) or the aggregate
amount of revolving credit commitments under the Existing Bank Credit Facility
(in the case of a Permanent Reduction), as the case may be, in any case, before
giving effect to any such voluntary prepayment of loans or Permanent Reduction.
(c) Partial prepayments of the Loans pursuant to this
subsection shall be applied to the then remaining installments of principal
thereof pro rata according to the respective amounts thereof. Each such
prepayment shall be made together with any amounts payable pursuant to
subsection 2.14 and accrued interest to such date on the amount prepaid. Amounts
prepaid on account of the Loans may not be reborrowed.
2.6 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Agent at least one Business Days' prior irrevocable notice of such election,
provided that if any such conversion of Eurodollar Loans is made on a day which
is not the last day of an Interest Period with respect thereto such conversion
shall be accompanied by payment of any amounts payable pursuant to subsection
2.14. The Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice the Agent shall promptly
notify each Lender thereof. Accrued interest on a Eurodollar Loan (or portion
thereof) being converted to an ABR Loan shall be paid by the Borrower at the
time of conversion. All or any part of outstanding Eurodollar Loans and ABR
Loans may be converted as provided herein, provided that no Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
scheduled payment date of the final installment of principal of such Loan.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided that
no Eurodollar Loan may be continued as such after the date that is one month
prior to the scheduled payment date of the final installment of principal of the
Loans or at any time when any principal or interest in respect of such Loan is
overdue and provided, further, that if the Borrower shall fail to give such
notice or if such continuation is not permitted pursuant to the immediately
preceding proviso such Loans shall be automatically converted to ABR Loans on
the last day of such then expiring Interest Period.
(c) Each conversion or continuation shall be made pro rata
among the Lenders in accordance with their respective principal amounts of the
Loans comprising the converted or continued Loans.
(d) All borrowings and conversions shall be in such amounts so
that, after giving effect thereto, not more than twenty separate Eurodollar
Loans of any Lender being outstanding hereunder at any one time. For purposes of
the foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans.
2.7 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest during each Interest Period with respect thereto, payable in
arrears on each Interest Payment Date, at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for each day, payable in
arrears on each Interest Payment Date, at a rate per annum equal to the ABR in
effect on such day plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon or (iii) any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue principal, interest or other amount shall bear interest
at a rate per annum which is (A) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (B) in the case of any such overdue interest or other
amount, the rate described in paragraph (b) of this subsection plus 2%, in each
case from the date of such non-payment until such overdue principal, interest or
other amount is paid in full (as well after as before judgment).
(d) Anything in this Agreement to the contrary
notwithstanding, and unless the Borrower shall notify the Agent that this
paragraph (d) shall not be applicable to any interest accruing with respect to
Loans, (i) (A) the interest on outstanding Loans (each, a "Specified Loan") made
during any Borrowing Year shall accrue during the period from the day each such
Specified Loan is made until the first anniversary of the last day of such
Borrowing Year (the "Interest Capitalization Period" for such Borrowing Year)
and (B) such accrued interest shall not be required to be paid in cash on any
Interest Payment Date occurring during the Interest Capitalization Period for
such Borrowing Year and (ii) on the last day of each successive three-month
period following the first day of such Borrowing Year, such accrued interest
shall be capitalized and added to the principal amount of the Specified Loan on
which such capitalized interest shall have accrued. All interest accruing during
any Interest Capitalization Period that is not paid during such Interest
Capitalization Period and not capitalized pursuant to this paragraph (d) shall
be payable in full in cash on the first Interest Payment Date occurring after
the last day of such Interest Capitalization Period.
2.8 Computation of Interest and Fees. (a) Facility fees and,
whenever it is calculated on the basis of the ABR, interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the actual
number of days elapsed; otherwise, interest shall be calculated on the basis of
a 360-day year for the actual number of days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR shall become effective as of the opening of business on the
day on which such change becomes effective, and the Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be prima facie evidence of the
accuracy of such determination. The Agent shall, at the request of the Borrower
or any Lender, deliver to the Borrower or such Lender a statement showing the
quotations used by the Agent in determining any interest rate based upon
quotations from Reference Lenders pursuant to subsection 2.7(a).
2.9 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period (a) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period or (b)
the Agent shall have received notice from the Requisite Lenders that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period, the Agent shall give telecopy or telephonic notice thereof
to the Borrower and the Lenders as soon as practicable thereafter. If such
notice is given, (i) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (ii) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (iii) any outstanding Eurodollar Loans shall
be converted, on the first day of such Interest Period, to ABR Loans. So long as
such notice shall not have been withdrawn, the Agent shall use reasonable
efforts to determine whether or not the circumstances which shall have caused
such notice to be given continue to exist, and, if the Agent shall at any time
determine that such circumstances no longer exist, it shall, as soon as
practicable thereafter, notify the Lenders and the Borrower that the Agent is
withdrawing such notice. Until such notice has been withdrawn by the Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans. Each determination
by the Agent hereunder shall be conclusive absent manifest error.
2.10 Pro Rata Treatment and Payments. Except as provided in
subsection 2.11, 2.15(b) or 2.16, each payment (including each prepayment) by
the Borrower on account of principal of and interest on the Loans shall be made
pro rata according to the respective outstanding principal amounts of the Loans
then held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest or otherwise,
shall be made without set off or counterclaim (including, without limitation,
against any amounts claimed from or owing by the Vendor under the Vendor
Procurement Contract) and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Agent, for the account of the Lenders, at the
Agent's Account, in Dollars and in immediately available funds. Any payments
received after such time on any date, may, in the discretion of the Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. The Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
2.11 Illegality. Notwithstanding any other provision herein,
if the adoption after the date hereof of or any change after the date hereof in
any Requirement of Law or in the interpretation or application thereof shall
make it unlawful or impossible for any Lender to make, maintain or fund
Eurodollar Loans as contemplated by this Agreement, then by written notice by
such Lender to the Borrower and to the Agent, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.14.
2.12 Requirements of Law. (a) If the adoption after the date
hereof of or any change after the date hereof in any Requirement of Law or in
the interpretation or application thereof by any Governmental Authority or
compliance by any Lender with any applicable requirement, request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall or will subject any Lender to any tax or other
payment of any kind whatsoever with respect to, or any amount payable
under, this Agreement or any Eurodollar Loan or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 2.13 and taxes imposed on the
net income of such Lender); or
(ii) shall or will impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall or will impose on any Lender or the Agent any
other conditions or requirements affecting this Agreement or Eurodollar
Loans held by such Lender;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable.
(b) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower
(through the Agent) of the event by reason of which it has become so entitled,
provided, however, that in no event shall such Lender be entitled to claim any
additional amount pursuant to this subsection with respect to any period that is
more than three months prior to the date upon which it shall give such notice. A
certificate as to any additional amounts payable pursuant to this subsection,
accompanied by reasonably detailed information reasonably required with respect
to the method of calculating such additional amounts, submitted by such Lender
to the Borrower through the Agent shall be prima facie evidence of the accuracy
of the information set forth therein. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.13 Taxes. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding taxes imposed on the Agent or any Lender (or
Transferee) as a result of a present or former connection between the Agent or
such Lender (or Transferee) and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Agent or such
Lender (or Transferee) having executed, delivered or performed to its
obligations or received a payment under, or enforced, this Agreement or any Note
or any other Loan Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Agent or any Lender (or
Transferee) hereunder or under any Note, (i) the Borrower will pay such
Non-Excluded Taxes to the relevant Governmental Authority or political
subdivision imposing such tax and (ii) the amounts so payable to the Agent or
such Lender (or Transferee) shall be increased to the extent necessary to yield
to the Agent or such Lender (or Transferee) (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender that is
not organized under the laws of the United States of America or a state thereof
(a "Non-U.S. Lender") if such Lender fails to comply with the requirements of
paragraph (b) or (c) of this subsection. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Lender (or
Transferee), as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the Agent or
any Lender (or Transferee) as a result of any such failure. The Borrower shall
indemnify each Lender (or Transferee) and the Agent for the amount of
Non-Excluded Taxes paid by such Lender (or Transferee) or the Agent, as the case
may be, and any penalties, interest and expenses arising therefrom or with
respect thereto. The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder; provided, however, that the Borrower shall not be required to
indemnify any Non-U.S. Lender that fails to comply with the requirements of
paragraph (b) or (c) of this subsection to the extent such amounts would not be
payable had such Lender so complied.
(b) Each Non-U.S. Lender shall:
(i) in the case of a Lender (or Trans-
feree) that is a "bank" under Section 881(c)(3)(A) of the
Code;
(A) on or before the date on which the first
payment becomes payable to it hereunder or under any
Note (or, in the case of a Participant, on or before
the date such Participant becomes a Participant
hereunder) and on or before the date, if any, such
Lender (or Transferee) changes its applicable lending
office by designating a different lending office (a
"New Lending Office") deliver to the Borrower and the
Agent (y) two properly completed and duly executed
copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the
case may be, and (z) an Internal Revenue Service Form
W-8 or W-9, or successor applicable form, as the case
may be;
(B) deliver to the Borrower and the Agent
two further properly completed and duly executed
copies of any such form or certification on or before
the date that any such form or certification expires
or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form
previously delivered by it to the Borrower or upon
the request of the Borrower or the Agent; and
(C) obtain such extensions of time for
filing and completing such forms or certifications as
may reasonably be requested by the Borrower;
(ii) in the case of a Lender or a Trans-
feree that is not a "bank" under Section 881(c)(3)(A) of the
Code:
(A) on or before the date on which the first
payment becomes payable to it hereunder or under any
Note (or, in the case of a Participant, on or before
the date such Participant becomes a Participant
hereunder) deliver to the Borrower and the Agent (I)
a statement under penalties of perjury that such
Lender (x) is not a "bank" under Section 881(c)(3)(A)
of the Code, is not subject to regulatory or other
legal requirements as a bank in any jurisdiction, and
has not been treated as a bank for purposes of any
tax, securities law or other filing or submission
made to any Governmental Authority, any application
made to a rating agency or qualification for any
exemption from tax, securities law or other legal
requirements, (y) is not a 10-percent shareholder of
the Borrower within the meaning of Section
881(c)(3)(B) of the Code and (z) is not a controlled
foreign corporation receiving interest from a related
person within the meaning of Section 881(c)(3)(C) of
the Code and (II) a properly completed and duly
executed Internal Revenue Service Form W-8 or
applicable successor form;
(B) deliver to the Borrower and the Agent
two further properly completed and duly executed
copies of said Form W-8, or any successor applicable
form on or before the date that any such Form W-8
expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent
form previously delivered by it to the Borrower or
upon the request of the Borrower; and
(C) obtain such extensions of time for
filing and completing such forms or certifications as
may be reasonably requested by the Borrower or the
Agent;
unless in any such case any change in treaty, law or regulation has occurred
subsequent to the date such Lender (or Transferee) became a party to this
Agreement (or in the case of a Participant, the date such Participant became a
Participant hereunder) which renders all such forms inapplicable or which would
prevent such Lender from properly completing and executing any such form with
respect to it and such Lender so advises the Borrower and the Agent in writing
no later than 15 calendar days before any payment hereunder or under any Note is
due. Each such Lender (and each Transferee) shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9 delivered pursuant to subsection
2.13(b)(i), that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, provide all of the forms and statements required pursuant to this
subsection, provided that, in the case of a Participant, such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(c) Each Lender (and the Agent with respect to payments to the
Agent for its own account) agrees that it will (i) take all reasonable actions
by all usual means to maintain all exemptions, if any, available to it from
United States withholding taxes (whether available by treaty, existing
administrative waiver, by virtue of the location of any Lender's applicable
lending office or otherwise) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this subsection provided such
measures or actions would not, in such Lender's determination, cause such Lender
to suffer any material economic, legal or regulatory disadvantage.
(d) If any Lender shall receive a credit or refund from a
taxing authority with respect to, and actually resulting from, an amount of
Non-Excluded Taxes actually paid to or on behalf of such Lender by the Borrower
including any interest received thereon (a "Tax Credit"), such Lender shall
promptly notify the Borrower of such Tax Credit. If such Tax Credit is received
by such Lender in the form of cash, such Lender shall promptly pay to the
Borrower the amount so received with respect to the Tax Credit. If such Tax
Credit is not received by such Lender in the form of cash, such Lender shall pay
the amount of such Tax Credit not later than the time prescribed by applicable
law for filing the return (including extensions of time) for such Lender's
taxable period which includes the period in which such Lender receives the
economic benefit of such Tax Credit. In any event, the amount of any Tax Credit
payable by a Lender to the Borrower pursuant to this paragraph shall not exceed
the actual amount of cash refunded to, or credits received and usable by, such
Lender from a taxing authority. Furthermore, any amount of any Tax Credit
payable by a Lender to the Borrower shall be paid only to the extent that it can
do so without prejudice to the retention of the amount of such credit or refund.
In determining the amount of any Tax Credit, a Lender may use such apportionment
and attribution rules as such Lender customarily employs in allocating taxes
among its various operations and income sources, and such determination shall be
conclusive. Nothing in this subsection 2.13(d) shall be construed as requiring
any Lender to conduct its business or to arrange or alter in any respect its tax
or financial affairs so that it is entitled to receive any such Tax Credit if to
do so would, in the Lender's determination, cause such Lender to suffer any
material economic, legal or regulatory disadvantage. The Borrower further agrees
promptly to return to a Lender the amount paid to the Borrower with respect to a
Tax Credit by such Lender if such Lender is required to repay, or is determined
to be ineligible for, a Tax Credit for such amount.
2.14 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of or conversion from Eurodollar Loans on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be in
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid or converted, or not so borrowed,
converted or continued, for the period from the date of such prepayment or
conversion or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.15 Change of Lending Office; Mandatory Assignment or
Prepayment. (a) Each Lender agrees that if it makes any demand for payment under
subsection 2.12 or 2.13(a), or if any adoption or change of the type described
in subsection 2.11 shall occur with respect to it, it will use reasonable
efforts (consistent with its legal and regulatory restrictions and so long as
such efforts would not be materially disadvantageous to it) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.12 or
2.13(a) or would eliminate or reduce the effect of any adoption or change
described in subsection 2.11; provided such measures or actions would not, in
the Lender's determination, cause such Lender to suffer any material economic,
legal or regulatory disadvantage.
(b) If the Borrower shall be required to pay any additional
amounts or other payments in accordance with subsection 2.12 or 2.13(a) or if
any Lender shall, in accordance with subsection 2.11, no longer be obligated to
make or maintain Eurodollar Loans hereunder, the Borrower may, at its own
expense and in its sole discretion, (i) require such Lender to transfer or
assign, in whole or in part, without recourse (in accordance with subsection
9.6), all or part of its interests, rights and obligations under this Agreement
to another Person (provided that the Borrower, with the full cooperation of such
Lender, can identify a Person which is ready, willing and able to be an Assignee
with respect to thereto) which shall assume such assigned obligations and is
reasonably satisfactory to the Agent (which Assignee may be another Lender, if
such Assignee Lender accepts such assignment) or (ii) so long as no Event of
Default shall have occurred and be continuing, terminate the Commitment, if any,
of such Lender and prepay all outstanding Loans of such Lender; provided that
(A) the Assignee or the Borrower, as the case may be, shall have paid to such
Lender in immediately available funds the principal of and interest accrued to
the date of such payment on the Loans made by it hereunder and all other amounts
owed to it hereunder, including, without limitation, any amounts owing pursuant
to subsection 2.14 and, in the case of any such assignment, any amounts that
would be owing under said subsection if such Loans were prepaid on the date of
such assignment, (B) such assignment or termination of the Commitment, if any,
of such Lender and prepayment of Loans does not conflict with any law, rule or
regulation or order of any Governmental Authority and (C) such Lender shall be
indemnified by the Borrower for any cost, expense, or other liabilities incurred
as a result of any action taken pursuant to this subsection 2.15(b).
2.16 Treatment of Certain Prepayments. Notwithstanding
anything to the contrary in this Agreement, in the event that (a) the Borrower
shall be required pursuant to the provisions of a Bank Credit Facility, the
Other Vendor Credit Facility or any instruments governing any other Indebtedness
of the Borrower to offer to apply any amount toward the prepayment of the Loans
or (b) the Borrower is required to make any mandatory prepayment pursuant to
subsection 2.5, the Borrower may, at its option, either apply such amount toward
prepayment of the Loans pro rata or follow the procedures set forth in this
subsection. Not less than 10 nor more than 20 Business Days prior to the date (a
"Specified Prepayment Date") on which any such prepayment is scheduled to be
made, the Borrower shall deliver a Prepayment Offer Notice to the Agent, which
shall promptly thereafter deliver a copy thereof to each Lender. Each Lender
receiving such Prepayment Offer Notice shall indicate its acceptance or
rejection of such offer (and, in the case of its acceptance, its Prepayment
Acceptance Amount) by delivering a Prepayment Offer Response Notice to the Agent
and the Borrower no later than four Business Days prior to the Specified
Prepayment Date set forth in the applicable Prepayment Offer Notice. On such
Specified Offered Prepayment Date, the Borrower shall prepay each Lender's Loans
in a principal amount equal to such Lender's Prepayment Share. The Agent shall
calculate the amounts of the prepayments payable to the respective Lenders
required by this subsection.
2.17 Use of Proceeds. The proceeds of the Loans shall be used
for the purposes described in Section 2 of Schedule I. The proceeds of Cash
Advances may be used only to refinance amounts paid by the Borrower on account
of invoices submitted to the Borrower by the Vendor pursuant to the Vendor
Procurement Contract.
2.18 Fees. The Borrower agrees to pay the fees described in
Section 4 of Schedule I.
----
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make
the Loans, the Borrower hereby represents and warrants to each Lender that:
3.1 Financial Condition. (a) The audited consolidated balance
sheet and consolidated statements of operating changes in partners' capital and
cash flows of the Borrower and its consolidated Subsidiaries as at and for the
year ended December 31, 1995 and the unaudited balance sheet and consolidated
statements of operating changes in partners' capital and cash flows of the
Borrower and its consolidated Subsidiaries as at and for the six-month period
ended June 30, 1996, copies of which have heretofore been furnished to the
Vendor, were prepared in accordance with GAAP and present fairly the
consolidated financial condition and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as at such dates and for the
respective periods then ended.
(b) The detailed projections contained in Exhibit B to the
Borrower's Business Plan Overview dated March 1996 were prepared in good faith
on the basis of the assumptions described in such Business Plan Overview, which
assumptions were believed by the Borrower in good faith to be reasonable in
light of conditions existing at the time of preparation thereof, and the
Borrower has no knowledge of any event or circumstance that would cause it to
change any such assumptions in any material respect as of the date hereof, it
being understood by the Agent and the Lenders that actual results may vary from
the projected results contained therein, and, as of the date of this Agreement,
there are no facts or circumstances known to the Borrower that would make the
projections materially inaccurate, incomplete or misleading.
(c) The balance sheet and other financial statements required
to be furnished to the Agent subsequent to the Closing Date pursuant to
subsection 5.1 will present fairly the consolidated financial position and
results of operations and cash flows of the Borrower and its Restricted
Subsidiaries in accordance with GAAP as at the end of and for the fiscal periods
set forth therein.
(d) Each budget required to be furnished to the Agent
subsequent to the Closing Date pursuant to subsection 5.2(c) will have been
approved by the Partnership Board of Holding, and any projections delivered in
connection therewith will have been prepared in good faith on the basis of
assumptions reasonably believed by the Borrower in good faith to be reasonable
in light of conditions existing at the time of preparation thereof, it being
understood by the Agent and the Lenders that actual results may vary from the
projected results contained therein, and there will be, at the time of
preparation thereof, no facts or circumstances known to the Borrower that are
not reflected in such projections the failure to include which would make the
projections materially inaccurate, incomplete or misleading.
3.2 No Change. Since December 31, 1995, there have been no
developments, events or circumstances that, individually or in the aggregate,
have had or could reasonably be expected to have a Material Adverse Effect,
except for operating losses contemplated by the Borrower's Business Plan
Overview dated March 1996. Since December 31, 1995, neither the Borrower nor any
Restricted Subsidiary has made any Restricted Payments except, after the date
hereof, as permitted hereby.
3.3 Existence; Compliance with Law. Each of the Borrower and
its Restricted Subsidiaries (a) is duly formed, validly existing and in good
standing under the laws of the jurisdiction of its formation, (b) has the power
and authority to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged and to
own and operate Systems in the areas for which it has Licenses, (c) is duly
qualified to do business and in good standing in each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law, including, without limitation, the Communications Act, except to the extent
that the failure of any of the statements set forth in subsections 3.3(c) and
(d) to be true and correct could not reasonably be expected to have a Material
Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. The
Borrower has the power and authority to make, deliver and perform this Agreement
and to borrow hereunder and has taken all necessary partnership action to
authorize the borrowings on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of this Agreement. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority is required of the Borrower in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement and the Loan Documents to which it is a party
other than those required in connection with the perfection of the Liens created
by the Security Documents. This Agreement and the Loan Documents to which it is
a party have been duly executed and delivered on behalf of the Borrower. This
Agreement and the Loan Documents to which it is a party constitute legal, valid
and binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3.5 No Legal Bar. The execution, delivery and performance of
this Agreement, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation of the
Borrower or of any of its Subsidiaries or any License or permit applicable to
the Borrower, its Subsidiaries or any of its or their property and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, License or permit, other than the Liens created by
the Security Documents.
3.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority has been taken
or initiated, is pending or, to the knowledge of the Borrower, threatened by or
against or affecting the Borrower or any of its Restricted Subsidiaries or
against any of its or their respective properties or revenues (a) with respect
to any of the Loan Documents or (b) which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its Restricted
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
Restricted Subsidiaries has good and marketable title in fee simple to, or a
valid leasehold interest in, all its material real property, and good title to,
or a valid leasehold interest in, all its other material property (including,
without limitation, its partnership interests in the Special Purpose
Subsidiaries, and none of such property is subject to any Lien except as
permitted by subsection 6.3.
3.9 Intellectual Property. The Borrower and each of its
Restricted Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, patents, know-how and processes necessary for the
conduct of its business as currently conducted and as currently proposed to be
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim, except for any such claim which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The use of the Intellectual Property by the Borrower and its Restricted
Subsidiaries does not infringe on the rights of any Person, except for such
infringements that could not reasonably be expected to have a Material Adverse
Effect.
3.10 Taxes. Each of the Borrower and its Restricted
Subsidiaries has filed or caused to be filed all tax returns which, to the
knowledge of the Borrower, are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority which have become due and
payable (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Restricted Subsidiaries, as the case may be).
3.11 Federal Regulations. No part of the proceeds of any Loans
will be used in any manner which would result in a violation of Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect.
3.12 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA), whether or not waived, has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Single Employer Plan or is reasonably expected to occur, and each
Single Employer Plan has complied in all respects with the applicable provisions
of ERISA and the Code and the terms of such Plan, except with respect to any
such event or failure to comply where the liability which could reasonably be
expected to be incurred would not have a Material Adverse Effect. No Lien in
favor of the PBGC or a Plan has arisen, and, except with respect to a Single
Employer Plan where the liability which could reasonably be expected to be
incurred would not have a Material Adverse Effect, neither the Borrower nor any
Commonly Controlled Entity has (i) received a notice from the PBGC or a plan
administrator of an intention to terminate any Single Employer Plan or to
appoint a trustee to administer any Single Employer Plan, (ii) filed or provided
a notice of intent to terminate or take any other action that could reasonably
be expect to result in the termination of any Single Employer Plan other than in
a standard termination within the meaning of Section 4041 of ERISA or (iii)
incurred any liability under ERISA with respect to any Single Employer Plan
described in Section 4063 of ERISA during such five-year period, and no such
event, circumstance or condition is reasonably expected to occur. The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by an amount which if such Plan then terminated could reasonably be expected to
have a Material Adverse Effect. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made, which in any event could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Commonly Controlled Entity has
received notice that any such Multiemployer Plan is in Reorganization, is
Insolvent, or is being terminated where the liability resulting therefrom could
reasonably be expected to have a Material Adverse Effect.
3.13 Investment Company and Holding Company Act. The Borrower
is not an "investment company" within the meaning of the Investment Company Act
of 1940, as amended or a "holding company", or a "subsidiary" or "affiliate" of
a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended. Neither the Borrower nor any Subsidiary is subject to
regulation under any Federal or state statute or regulation which limits its
ability to incur Indebtedness.
3.14 Subsidiaries; Parents. (a) The following constitute all
the Subsidiaries of the Borrower as of the date hereof: (a) WirelessCo (the sole
general partner of which is the Borrower and the sole limited partner of which
is MinorCo), (b) EquipmentCo (the sole general partner of which is the Borrower
and the sole limited partner of which is MinorCo), (c) RealtyCo (the sole
general partner of which is the Borrower and the sole limited partner of which
is MinorCo) and (d) Sprint Spectrum Finance Corporation, a Delaware corporation
and a Wholly Owned Subsidiary of the Borrower.
(b) The sole general partner of the Borrower is Holding, and
the sole limited partner of the Borrower is MinorCo. As of the date hereof,
Sprint Enterprises, L.P., TCI Telephony Services, Inc., Comcast Telephony
Services and Cox Telephony Partnership are each general and limited partners of
Holding and MinorCo, and there are no other partners of Holding or MinorCo.
Sprint Enterprises, L.P. is a wholly owned Subsidiary of Sprint Corporation; TCI
Telephony Services, Inc. is a wholly owned Subsidiary of Tele-Communications,
Inc.; Comcast Telephony Services is a wholly owned Subsidiary of Comcast
Corporation; and Cox Telephony Partnership is a wholly owned Subsidiary of Cox
Communications, Inc.
3.15 Absence of Material Obligations. None of WirelessCo,
EquipmentCo and RealtyCo has any material obligations or liabilities other than
in connection with (a) the Guarantees, (b) in the case of RealtyCo, any lease of
real property which RealtyCo has entered into in the ordinary course of business
and other obligations and liabilities incurred in the ordinary course of
business which are incident to being the owner or lessee of real property, (c)
in the case of EquipmentCo, the Vendor Procurement Contract or the Other Vendor
Procurement Contract, the rights and benefits of Holding under which have been
assigned to it or (d) in the case of WirelessCo, its obligations to comply with
the requirements of the Licenses.
3.16 Environmental Matters. (a) In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Restricted Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with Environmental Laws and Environmental Permits, any
related constraints on operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or change in the nature of
operations conducted thereat, any costs or liabilities in connection with
off-site disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, could not reasonably be expected to have a Material
Adverse Effect.
(b) The Borrower and its Restricted Subsidiaries have obtained
all Environmental Permits with respect to the facilities and properties owned,
leased or operated by the Borrower or any of its Restricted Subsidiaries (the
"Properties"), and the Borrower and the Restricted Subsidiaries are in
compliance with all Environmental Laws and all Environmental Permits, except to
the extent that such failure to obtain any Environmental Permits and
noncompliance with Environmental Laws and Environmental Permits could not
reasonably be expected to have a Material Adverse Effect.
(c) There have been no Releases or threatened Releases at,
from, under or proximate to the Properties or otherwise in connection with the
operations of the Borrower or its Restricted Subsidiaries, which Releases or
threatened Releases could reasonably be expected to have a Material Adverse
Effect.
(d) There are no past or present actions, omissions,
activities, events, conditions or circumstances, including the Release,
threatened Release, emission, discharge, generation, treatment, storage or
disposal of Hazardous Substances at, from or under any location, that will give
rise to liability of the Borrower or any of its Restricted Subsidiaries under
any Environmental Law, except to the extent that such liability could not
reasonably be expected to have a Material Adverse Effect.
3.17 Licenses. (a) On the date hereof, (i) the Borrower and
its Restricted Subsidiaries hold all Licenses necessary on the date of this
Agreement to operate a System in each of the MTA's listed on Schedule 3.17(a),
(ii) such Licenses have been duly issued by the FCC, are held by WirelessCo and
are in full force and effect and (iii) the Borrower and its Restricted
Subsidiaries are in compliance in all material respects with all of the
provisions of each such License. As of the date hereof, no License is subject to
any pending or, to the knowledge of the Borrower, threatened revocation or
termination proceeding or action.
(b) The Borrower and its Restricted Subsidiaries hold all
Licenses to operate Systems in MTA's covering at least 120,000,000 Owned Pops,
and such Licenses have been duly issued by the FCC, are held by WirelessCo and
are in full force and effect; and the Borrower and its Restricted Subsidiaries
are in compliance in all material respects with all of the provisions of each
such License.
3.18 Provisions of Other Vendor Credit Facility. The
provisions of Section 1 (but only to the extent the definitions therein are
included in the following subsections and Sections of this Agreement),
subsections 2.4, 2.5, 2.7(d), 2.11, 2.12, 2.13, 2.14 and 2.16, Sections 3, 5, 6
and 7 and subsections 9.1, 9.5 (with respect to the indemnity provisions), 9.6,
9.7, 9.11, 9.12, 9.13, 9.14, 9.15 and 9.17, are identical in all material
respects to the similar provisions of the Other Vendor Credit Facility (wherever
included and except for differences resulting solely from differences in the
names of the Vendor party thereto), except to the extent subsection 9.6 hereof
or subsection 9.6 of the Other Vendor Credit Facility is modified by Schedule I
hereto or thereto, respectively.
3.19 No Material Misstatements. The information, reports and
schedules furnished by or on behalf of the Borrower or any other Loan Party to
the Agent or any Lender in connection with any Loan Document, taken as a whole,
do not, on the date hereof, contain any material misstatement of fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of the Lenders
to make the initial Loans is subject to the satisfaction, prior to or
concurrently with the making of such Loans, of the following conditions
precedent:
(a) Partnership Proceedings of Holding and the Borrower. The
Agent shall have received, with a counterpart for the Vendor, a copy of
the resolutions, in form and substance satisfactory to the Agent, of
the Partnership Board of Holding as the general partner of the
Borrower, authorizing (i) the execution, delivery and performance of
this Agreement and (ii) the borrowings contemplated hereunder,
certified by the Secretary or an Assistant Secretary of Holding, which
certificate shall be in form and substance satisfactory to the Agent
and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(b) Borrower Incumbency Certificate. The Agent shall have
received, with a counterpart for the Vendor, a certificate of the
Borrower, as to the incumbency and signature of the officers of Holding
executing this Agreement satisfactory in form and substance to the
Agent, executed by the Secretary or any Assistant Secretary of Holding.
(c) Capital Contribution Agreement. The Agent shall have
received, with a counterpart for the Vendor, a certificate of a
Responsible Officer of the Borrower stating that attached thereto is a
fully executed counterpart of the Capital Contribution Agreement and
certifying that such Agreement is in full force and effect without any
term or condition thereof having been amended, modified or waived and
that there is no default thereunder.
(d) Licenses. The Agent shall have received, with a
counterpart for the Vendor, a certificate of a Responsible Officer of
the Borrower attaching a copy of each of the Licenses referred to in
subsection 3.17 and certifying that each (i) such copy is true, correct
and complete and includes all amendments, modifications and waivers
thereto executed prior to the date of such certificate and (ii) such
License is fully paid for.
(e) Partnership Agreements; Trademark License Agreement. The
partnership agreements of the Special Purpose Subsidiaries shall
contain provisions reasonably satisfactory to the Agent and the Vendor
ensuring that any assignee of the partnership interests therein will be
entitled to all rights (including, without limitation, management and
voting rights) of the partners pledging such partnership interests. The
Agent shall have received, with counterparts for the Vendor, conformed
copies of (i) the partnership agreements of the Borrower, WirelessCo,
EquipmentCo, RealtyCo, Holding and MinorCo and (ii) the Trademark
License Agreement, each of which shall be certified by a Responsible
Officer as a true, correct and complete copy thereof and in full force
and effect, and each of which shall be in form and substance
satisfactory to the Agent.
(f) Contributed Capital. The Agent shall have received, with a
counterpart for the Vendor, a certificate of a Responsible Officer of
the Borrower to the effect that the Borrower has received Contributed
Capital in an aggregate amount of at least $2,200,000,000.
(g) Legal Opinions. The Agent shall have received, with a
counterpart for the Vendor, the following executed legal opinions
addressed to the Agent and the Vendor:
(i) the legal opinion of Simpson
Thacher & Bartlett, counsel to the Borrower, substantially in
the form of Exhibit B-1;
(ii) the legal opinion of Charles R.
Wunsch, Esq., Associate General Counsel of the Borrower, sub-
stantially in the form of Exhibit B-2; and
(iii) the legal opinion of Morrison & Foerster
LLP, special counsel to the Borrower with respect to FCC
matters, substantially in the form of Exhibit B-3.
(h) Trust Agreement. The Agent shall have received (i) a
copy of the Trust Agreement, duly executed and delivered by the
Borrower, the Corporate Trustee and the Individual Trustee, (ii) evi-
dence, in form and substance satisfactory to the Agent, that all docu-
ments and other instruments required to be delivered, and all other
actions required to have been taken, pursuant to subsections 4.1,
4.8(a), 4.9(a) and 4.10(a) of the Trust Agreement shall have been so
delivered or taken, as the case may be, (iii) conformed copies or ori-
ginals of all such documents and instruments referred to in clause (ii)
immediately preceding (and all such agreements, documents, instruments
and opinions shall be in form and substance reasonably satisfactory to
the Agent), and (iv) such other certificates and other documents re-
lating to the Trustees and the Trust Agreement as the Agent shall
reasonably request. The Trust Agreement shall be in full force and
effect.
(i) Search Reports. The Agent shall have received, with
counterparts for the Vendor, copies of searches conducted as of a date
acceptable to the Agent of the Uniform Commercial Code records in all
applicable public offices in which filings are required to be made in
accordance with the provisions of subsection 4.9(a) of the Trust
Agreement, and such searches shall reveal no Liens other than those
permitted by subsection 6.3.
(j) Other Credit Facilities. The Agent shall have received
copies of the definitive documentation establishing the Other Vendor
Credit Facility and the Existing Bank Credit Facility; provided that
certain confidential provisions of each such Facility (which in any
event shall not include any of the provisions specified in subsection
3.18) shall not be required to be delivered by the Borrower.
(k) Fees. The Agent shall have received all fees and other
amounts due and payable to it on or prior to the Closing Date,
including any fees payable pursuant to Schedule I on or prior to the
Closing Date.
(l) Business Plan. The Agent shall have received a certified
copy of the Borrower's Business Plan Overview dated March 1996.
4.2 Conditions to Each Loan. The agreement of the Lenders to
make any Loan requested to be made by it on any date (including, without
limitation, the initial Loans) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and each other Loan
Party in or pursuant to the Loan Documents shall be true and correct in
all material respects on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(c) No Termination of Vendor Procurement Contract. The
Borrower shall not have notified the Vendor of the termination by the
Borrower of the Vendor Procurement Contract unless prior to doing so
the Borrower shall have placed orders thereunder aggregating at least
the amount of the Initial Commitment, as such term is defined in
subsection 7.1 of the Vendor Procurement Contract.
(d) Borrowing Notice. The Agent shall have received a
Borrowing Notice meeting the requirements of subsection 2.2.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender under the Credit Agreement
or any other Loan Document, the Borrower shall and (except in the case of
delivery of financial information, reports and notices) shall cause each of its
Restricted Subsidiaries to:
5.1 Financial Statements. Furnish to the Agent:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash
flows for such fiscal year, reported on, and accompanied by an opinion
(which shall not be qualified based upon the scope of the audit) by
Deloitte & Touche LLP or other independent certified public accountants
of nationally recognized standing to the effect that such financial
statements fairly present the financial condition and results of
operations and cash flows of the Borrower and its Restricted
Subsidiaries in accordance with GAAP and setting forth in comparative
form the figures for the previous fiscal year (other than in the case
of the 1996 fiscal year); and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its Restricted Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Borrower and its Restricted
Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in comparative form the
figures for the corresponding period of the previous fiscal year (other
than in the case of any such quarter during the 1996 fiscal year) and
the figures for the Borrower's budget for the period covered thereby,
certified by a Responsible Officer as fairly presenting the financial
condition and results of operations and cash flows of the Borrower and
its Restricted Subsidiaries in accordance with GAAP for the date and
periods ending on such date (subject to normal year-end audit
adjustments);
all such financial statements shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein (except as approved by
such accountants or Responsible Officer, as the case may be, and disclosed
therein).
5.2 Certificates; Other Information. Furnish to the Agent:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor (and without
performing any additional non-customary procedures with respect
thereto) no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and (b), a certificate of a
Responsible Officer (i) stating that, to the best of such Responsible
Officer's knowledge after due inquiry, each of the Borrower and the
Restricted Subsidiaries during such period has observed or performed
all of its covenants (including, without limitation, the financial
covenants set forth in subsections 6.1(a) through (g)) and other
agreements contained in this Agreement and the other Loan Documents to
be observed or performed by it and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default, except as
specified in such certificate (and if such certificate contains notice
of any Default or Event of Default, setting forth details of the
occurrence referred to therein and stating what action the Borrower has
taken or proposes to take with respect thereto), and (ii) if Floating
GAAP used in the preparation of any such financial statements shall be
different from Fixed GAAP, describing such differences and reconciling
any differences in calculation of compliance with the covenants set
forth in subsection 6.1 which may result from such differences in GAAP;
(c) as soon as available, the annual budget prepared pursuant
to Holding's partnership agreement and approved by Partnership Board of
Holding for each fiscal year of the Borrower (which shall be presented
on a quarterly basis for such fiscal year), commencing with its 1997
fiscal year and any financial projections for a period of greater than
one year, to the extent such projections were requested by and approved
by the Partnership Board of Holding;
(d) promptly after the filing thereof, copies of all proxy
statements, all registration statements under the Securities Act of
1933, as amended (other than those on Form S-8 relating to any Plan),
and all reports on Forms 10-K, 10-Q and 8-K filed with the Securities
and Exchange Commission by the Borrower; and
(e) promptly, such additional information regarding the
operation and financial condition as the Agent may from time to time
reasonably request for itself or on behalf of any Lender.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Restricted Subsidiaries, as the case may be.
5.4 Conduct of Business; Maintenance of Existence; Compliance
with Laws. Preserve, renew and keep in full force and effect its existence and
take all reasonable action to maintain all permits, rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to subsection 6.5; comply with all of its
Contractual Obligations (including, without limitation, obligations under any
License) and Requirements of Law, including, without limitation, the
Communications Act, except to the extent that failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all property
useful or necessary in its business in good working order and condition, except
where the failure to do so would not be reasonably expected to have a Material
Adverse Effect; maintain with financially sound and reputable insurance
companies insurance on all its property and its business in at least such
amounts and against at least such risks as are usually insured against by
companies engaged in the same or a similar business in similar geographic areas.
5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which entries in conformity with
GAAP and all Requirements of Law applicable to it shall be made of all dealings
and transactions in relation to its business and activities; permit
representatives of any Lender to visit and inspect any of its properties, and
make copies of and extracts from, and/or to examine its books, records and
accounts, at any reasonable time (upon reasonable advance notice) and as often
as may be reasonable and to discuss with officers and employees of the Borrower
and its Restricted Subsidiaries the business, assets and financial condition of
the Borrower and its Restricted Subsidiaries and, in particular, the annual
budget delivered pursuant to subsection 5.2(c); provided, that except during the
continuance of an Event of Default, such visits by the Lenders shall be
coordinated by the Agent so that such visits shall take place no more than once
per fiscal quarter. During the continuance of an Event of Default, the Borrower
authorizes the Agent and the Lenders, upon reasonable notice to the Borrower and
if accompanied by the Borrower, to communicate directly with the Borrower's
independent certified public accountants to discuss the financial condition of
the Borrower and its Restricted Subsidiaries.
5.7 Notices. Promptly after any Responsible Officer has
knowledge thereof, give notice to the Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any default or event of default under any Contractual
Obligation of the Borrower or any of its Restricted Subsidiaries which
could, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Restricted Subsidiaries which, individually or in the aggregate,
if adversely determined could reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any event
within (i) 30 days after the Borrower knows thereof: the occurrence or
expected occurrence of any Reportable Event with respect to any Plan or
any withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan, and (ii) ten Business Days after the
occurrence thereof: a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan, which, in
connection with any of the foregoing, the liability which could
reasonably be expected to occur would have a Material Adverse Effect;
(e) any change in the ownership of the Borrower or any of its
Restricted Subsidiaries;
(f) any notice of termination of either the Vendor Procure-
ment Contract or the Other Vendor Procurement Contract; and
(g) any other development (including any Release or any
noncompliance with any Environmental Law or Environmental Permit) that
has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a certificate of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.8 Environmental Laws. (a) Comply with all applicable
Environmental Laws and obtain and comply in all material respects with and
maintain any and all Environmental Permits, except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions, required under
Environmental Laws, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and promptly comply in
all material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the pendency of
such proceedings could not reasonably be expected to have a Material Adverse
Effect.
5.9 After-Acquired Assets. (a) Promptly (i) transfer to
WirelessCo any License held by the Borrower or any Restricted Subsidiary (other
than WirelessCo) and (ii) at the option of the Borrower, either (A) transfer (I)
to EquipmentCo any Personal Property Assets (other than Direct-Lien Assets)
hereafter acquired by the Borrower or any Restricted Subsidiary and any such
Personal Property Assets of any Person that becomes a Restricted Subsidiary or
is merged with or into or consolidated with the Borrower or any Restricted
Subsidiary (in each case other than any such Personal Property Assets
constituting Excluded Assets), (II) to RealtyCo any Real Estate Assets hereafter
acquired by the Borrower or any Restricted Subsidiary and any Real Estate Assets
of any Person that becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Borrower or any Restricted Subsidiary (in each case other
than any such Real Estate Assets constituting Excluded Assets) and (III) to the
Borrower any Direct-Lien Assets hereafter acquired by the Borrower or any
Restricted Subsidiary and any Direct-Lien Assets of any Person that becomes a
Restricted Subsidiary or is merged with or into or consolidated with the
Borrower or any Restricted Subsidiary (in each case other than any Direct-Lien
Assets constituting Excluded Assets) or (B) create on terms reasonably
acceptable to the Agent a perfected first priority security interest (subject to
any Liens permitted by subsection 6.3 (other than those referred to in the
definition of the term "Excluded Assets")) in favor of the Trustees for the
benefit of the Secured Parties in such Personal Property Assets, Real Estate
Assets or Direct-Lien Assets.
(b) Promptly create in favor of the Trustees for the benefit
of the Secured Parties in accordance with the terms of the Security Documents a
first priority perfected security interest (subject to any Liens permitted by
subsection 6.3) in any Direct-Lien Assets of the Borrower or any Restricted
Subsidiary (other than Excluded Assets) that are not subject to such a security
interest, including with respect to Direct-Lien Assets that are acquired by the
Borrower or any Restricted Subsidiary after the date hereof and Direct-Lien
Assets of any Person that becomes a Restricted Subsidiary or is merged with or
into or consolidated with the Borrower or any Restricted Subsidiary.
(c) Promptly create a mortgage on terms reasonably acceptable
to the Agent in favor of the Trustees for the benefit of the holders of the
Secured Obligations on any fee simple interests in real property having at the
time of acquisition thereof a purchase price or fair market value greater than
$15,000,000 (a "Mortgaged Property") of the Borrower or any Restricted
Subsidiary (other than Excluded Assets) that are not so mortgaged, including
Mortgaged Properties that are acquired by the Borrower or any Restricted
Subsidiary after the date hereof and Mortgaged Properties of any Person that
becomes a Restricted Subsidiary or is merged with or into or consolidated with
the Borrower or any Restricted Subsidiary.
(d) Promptly cause (i) all Capital Stock of any Restricted
Subsidiary held by the Borrower or any other Subsidiary (including, without
limitation, any Restricted Subsidiary which shall be acquired by the Borrower in
accordance with the provisions of subsection 6.8(c) or (d) or any Unrestricted
Subsidiary which shall hereafter become a Restricted Subsidiary) to become
Additional Collateral under and pursuant to the Trust Agreement and (ii) each
Restricted Subsidiary to execute and deliver an "Additional Guarantee" under and
pursuant to the Trust Agreement.
(e) Promptly execute, acknowledge and deliver any and all
further documents, financing statements, agreements and instruments, and
thereafter register, file or record or take further actions (including filing
Uniform Commercial Code and other financing statements, mortgages and deeds of
trust), in each case at the Borrower's sole expense, that may be required under
applicable law, or that the Requisite Lenders, the Agent or the Trustees may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents and to grant, preserve, protect and perfect the validity and first
priority of the Liens created or intended to be created by the Security
Documents, including such Liens on the Mortgaged Properties, and the Direct-Lien
Assets (other than Excluded Assets) and all the Capital Stock of each Restricted
Subsidiary held by the Borrower or any other Subsidiary.
5.10 Delivery of Certain Amendments. Promptly deliver any
amendments, supplements or other modifications to any of the partnership
agreements of the Borrower, WirelessCo, EquipmentCo, RealtyCo, Holding and
MinorCo, the Trademark License Agreement, the Capital Contribution Agreement, a
Bank Credit Facility, any other facilities or indentures which evidence Secured
Obligations, except in the case of a Bank Credit Facility or any such other
facilities or indentures provisions thereof the disclosure of which would be
prohibited by confidentiality agreements binding upon the Borrower.
5.11 Use of Proceeds. Use the proceeds of the Loans only for
the purposes set forth in subsection 2.17.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender under this Agreement or
any other Loan Document, the Borrower shall not, and (except with respect to
subsection 6.1(a) through (e)) shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Total Debt to Total Capitalization. Permit the ratio of
(i) Total Debt outstanding on any of the dates set forth below to (ii) Total
Capitalization on such date to exceed the ratio set forth opposite such date:
========================= ===========================
Date Ratio
========================= ===========================
12/31/96 .50 to 1
========================= ===========================
3/31/97 .55 to 1
========================= ===========================
6/30/97 .55 to 1
========================= ===========================
9/30/97 .57 to 1
========================= ===========================
12/31/97 .57 to 1
========================= ===========================
3/31/98 .60 to 1
========================= ===========================
6/30/98 .61 to 1
========================= ===========================
9/30/98 .61 to 1
========================= ===========================
12/31/98 .61 to 1
========================= ===========================
3/31/99 .62 to 1
========================= ===========================
6/30/99 .64 to 1
========================= ===========================
9/30/99 .66 to 1
========================= ===========================
12/31/99 .68 to 1
========================= ===========================
3/31/00 .69 to 1
========================= ===========================
6/30/00 .69 to 1
========================= ===========================
9/30/00 .70 to 1
========================= ===========================
12/31/00 .70 to 1
========================= ===========================
3/31/01 .70 to 1
========================= ===========================
6/30/01 .70 to 1
========================= ===========================
9/30/01 .70 to 1
========================= ===========================
12/31/01 .70 to 1
========================= ===========================
<PAGE>
(b) Total Debt to Annualized Adjusted EBITDA. Permit the ratio
of (i) Total Debt outstanding on any of the dates set forth below to (ii)
Annualized Adjusted EBITDA for the period ending on such date to exceed the
ratio set forth opposite such date:
======================== ============================
Date Ratio
======================== ============================
12/31/98 23.0 to 1
======================== ============================
3/31/99 14.0 to 1
======================== ============================
6/30/99 10.0 to 1
======================== ============================
9/30/99 8.0 to 1
======================== ============================
12/31/99 6.0 to 1
======================== ============================
3/31/00 5.0 to 1
======================== ============================
6/30/00 4.5 to 1
======================== ============================
9/30/00 4.0 to 1
======================== ============================
12/31/00 4.0 to 1
======================== ============================
(c) Total Debt to Annualized EBITDA. Permit the ratio of (i)
Total Debt outstanding on any of the dates set forth below to (ii) Annualized
EBITDA for the period ending on such date to exceed the ratio set forth opposite
such date:
======================== ============================
Date Ratio
======================== ============================
12/31/00 11.0 to 1
======================== ============================
3/31/01 8.5 to 1
======================== ============================
6/30/01 7.5 to 1
======================== ============================
9/30/01 7.0 to 1
======================== ============================
12/31/01 6.0 to 1
======================== ============================
The last day of
each fiscal quarter
end thereafter 5.0 to 1
======================== ============================
(d) Annualized EBITDA to Interest Expense. Permit the ratio of
(i) Annualized EBITDA for the period ending on any of the dates set forth below
to (ii) Interest Expense for the four consecutive fiscal quarters ending on such
date to be less than the ratio set forth opposite such date:
========================== ============================
Date Ratio
========================== ============================
3/31/01 1.25 to 1
========================== ============================
6/30/01 1.25 to 1
========================== ============================
9/30/01 1.50 to 1
========================== ============================
12/31/01 2.00 to 1
========================== ============================
3/31/02 2.25 to 1
========================== ============================
6/30/02 2.25 to 1
========================== ============================
The last day of
each fiscal quarter
end thereafter 2.50 to 1
========================== ============================
(e) Capital Expenditures. Permit Capital Expenditures for
any of the periods set forth below to exceed the amount set forth opposite such
period:
Period Amount
Date of formation of the
Borrower through 12/31/98 $4,500,000,000
1/1/99 through 12/31/99 1,000,000,000
1/1/00 through 12/31/00 1,000,000,000
1/1/01 through 12/31/01 1,000,000,000;
provided that any permitted amount which is not expended in any of the periods
specified above may be carried over for expenditure in any subsequent period.
(f) Covered Pops. Incur any Indebtedness (other than
Indebtedness permitted by paragraphs (b) and (i) of subsection 6.2) or Guarantee
Obligations in respect of Indebtedness (other than Guarantee Obligations
permitted by paragraph (b) of subsection 6.4) at any time after any of the dates
set forth below if the number of Covered Pops on the last of such dates prior to
the date of such incurrence is less than the number set forth opposite such last
prior date:
Date Number
12/31/97 80,000,000
12/31/98 95,000,000
12/31/99 105,000,000
12/31/00 110,000,000
(g) Wireless Subscribers. Incur any Indebtedness (other than
Indebtedness permitted by paragraphs (b) and (i) of subsection 6.2) or Guarantee
Obligations in respect of Indebtedness (other than Guarantee Obligations
permitted by paragraph (b) of subsection 6.4) at any time after any of the dates
set forth below if the average of the numbers of Wireless Subscribers in
existence on the last of such dates prior to the date of such incurrence and on
the last day of each of the three previous calendar quarters is less than the
number set forth opposite such last prior date:
Date Number
12/31/97 450,000
6/30/98 850,000
12/31/98 1,350,000
6/30/99 2,300,000
12/31/99 3,500,000;
provided that so long as the failure of the Vendor to perform its obligations
under the Vendor Procurement Contract shall cause clause (b) of the definition
of the term "Covered Pops" to become operable, each relevant number set forth
above shall be reduced by a proportion equal to the ratio of (i) the number of
Pops described in said clause (b) to (ii) the then aggregate number of Owned
Pops.
6.2 Limitation on Indebtedness. Incur or suffer to exist any
Indebtedness, except (subject to the provisions of subsections 6.1(f) and (g)):
(a) Indebtedness of the Borrower under this Agreement or any
other Loan Documents;
(b) Indebtedness of the Borrower to any Restricted Subsidiary
(other than any Special Purpose Subsidiary) and of any Restricted
Subsidiary (other than any Special Purpose Subsidiary) to the Borrower
or any other Restricted Subsidiary (other than any Special Purpose
Subsidiary);
(c) (i) Indebtedness of the Borrower and any of its Restricted
Subsidiaries (other than the Special Purpose Subsidiaries) incurred to
finance the acquisition, construction, expansion or improvement of
property or assets, whether pursuant to a loan, a Financing Lease or
otherwise, (ii) Indebtedness constituting obligations of the Borrower
and its Restricted Subsidiaries (other than the Special Purpose
Subsidiaries) under Financing Leases arising out of sale-leaseback
transactions, and (iii) (A) Indebtedness of a Person that is acquired
by the Borrower or a Restricted Subsidiary (other than a Special
Purpose Subsidiary), and which becomes a Restricted Subsidiary, after
the date of this Agreement, (B) Indebtedness of an Unrestricted
Subsidiary which becomes a Restricted Subsidiary after the date of this
Agreement and (C) Indebtedness secured by property or assets acquired
by the Borrower or any Restricted Subsidiary after the date of this
Agreement, provided that such Indebtedness exists at the time such
Person becomes a Restricted Subsidiary or such property or assets are
acquired, as the case may be, and is not created in anticipation
thereof; provided, however, that the aggregate principal amount of
Indebtedness permitted by clauses (i), (ii) and (iii) of this paragraph
at any one time outstanding shall not exceed 5% of then Total
Capitalization;
(d) Indebtedness of the Borrower under a Bank Credit Faci-
lity;
(e) Indebtedness of the Borrower under a "Vendor Credit
Facility" (as defined in the Trust Agreement) established by a vendor
which shall have agreed to supply to the Borrower and its Restricted
Subsidiaries a material amount of equipment (other than handsets) and
services comprising or relating to property or assets to be utilized in
connection with the Borrower's national wireless telecommunications
network;
(f) Indebtedness of the Borrower Incurred to finance the ac-
quisition of handsets;
(g) Indebtedness of the Borrower and its Restricted
Subsidiaries (other than any Special Purpose Subsidiary) in existence
on the date of this Agreement and listed on Schedule 6.2(g);
(h) the High Yield Debt;
(i) Indebtedness of the Borrower and its Restricted
Subsidiaries which is a Permitted Refinancing or refinances, replaces
or refunds Indebtedness permitted pursuant to subsection 6.2(a), (c),
(e) (but only to the extent of Indebtedness other than Indebtedness
incurred under the Other Vendor Credit Facility), (f) through (h), and
(j), provided that the Indebtedness that shall result from such
Permitted Refinancing, refinancing, replacement or refunding does not
increase the outstanding principal amount of the Indebtedness which was
the subject of such Permitted Refinancing, refinancing, replacement or
refunding; and
(j) additional Indebtedness of the Borrower and its Re-
stricted Subsidiaries (other than any Special Purpose Subsidiary);
provided that neither the Borrower nor any Restricted Subsidiary shall be
permitted to Incur any of the Indebtedness referred to in paragraphs (a), (c)
through (f), (h), (i) and (j) of this subsection unless, after giving effect
thereto, the Borrower would be in Pro Forma Compliance.
6.3 Limitation on Liens. Incur or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired or upon the income or profits therefrom except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Restricted Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other social security legislation and deposits securing
liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the property of
the Borrower and its Restricted Subsidiaries taken as a whole or
materially interfere with the ordinary conduct of the business of the
Borrower and its Restricted Subsidiaries taken as a whole;
(f) Liens (other than Liens on the property of the Special
Purpose Subsidiaries) securing Indebtedness of the Borrower and its
Restricted Subsidiaries permitted by subsection 6.2(c)(i) Incurred with
respect to the property and assets described in said subsection,
provided that (i) such Liens and the Indebtedness secured thereby are
incurred prior to or within 270 days after the acquisition,
construction, expansion or improvement to which such Indebtedness
relates, (ii) the Indebtedness secured by such Liens does not exceed
100% of the cost of the acquisition, construction, expansion or
improvement financed therewith and (iii) such Liens do not at any time
encumber any property or assets other than the property and assets with
respect to which such Indebtedness is Incurred;
(g) Liens (other than Liens on the property of the Special
Purpose Subsidiaries) securing Indebtedness of the Borrower and its
Restricted Subsidiaries (other than the Special Purpose Subsidiaries)
permitted by subsection 6.2(c)(ii), provided that (i) such Liens and
the Indebtedness secured thereby are Incurred within 270 days after the
purchase by the Borrower or such Restricted Subsidiary of the property
or assets which is or are the subject of the sale-leaseback transaction
to which such Indebtedness relates, (ii) the Indebtedness secured by
such Liens does not exceed 100% of the purchase price of such property
or assets and (iii) such Liens do not at any time encumber any property
or assets other than the assets that are the subject of such
sale-leaseback;
(h) Liens on the property or assets of a Person which becomes
a Restricted Subsidiary after the date of this Agreement or on property
or assets acquired by the Borrower or any Restricted Subsidiary after
the date of this Agreement, in each case securing Indebtedness
permitted by subsection 6.2(c)(iii), provided that (i) such Liens exist
at the time such Person becomes a Restricted Subsidiary or such
property or assets are acquired, as the case may be, and are not
created in anticipation thereof and (ii) any such Lien is not extended
to cover any property or assets of such Person or any other property or
assets of the Borrower or such Restricted Subsidiary, as the case may
be, after the time such Person becomes a Restricted Subsidiary or such
property or assets are acquired, as the case may be;
(i) Liens in existence on the date of this Agreement and
securing Indebtedness permitted by subsection 6.2(g), provided that no
such Lien is extended to cover any additional property after the date
of this Agreement and that the amount of Indebtedness secured thereby
is not increased and no such Lien is extended to cover any property or
assets of any Special Purpose Subsidiary;
(j) Liens created pursuant to the Security Documents;
(k) Liens of attachments, judgments or awards against the
Borrower or its Restricted Subsidiaries, as the case may be, with
respect to which an appeal or proceeding for review shall be pending or
a stay of execution shall have been obtained, or which are otherwise
being contested in good faith and by appropriate proceedings diligently
conducted, and in respect of which adequate reserves shall have been
established in accordance with GAAP on the books of the Borrower or
such Restricted Subsidiary;
(l) restrictions on the transfer of assets imposed by any of
the Licenses or by the Communications Act or any other Requirement of
Law;
(m) leases or subleases granted to others not interfering in
any material respect with the business of the Borrower and its
Restricted Subsidiaries taken as a whole and any interest or title of a
lessor under any lease not prohibited by this Agreement;
(n) the filing of financing statements regarding leases not
prohibited by this Agreement;
(o) ground leases in respect of real property on which facil-
ities owned or leased by the Borrower or its Restricted Subsidiaries
are located;
(p) Liens on goods (and the documents of title related
thereto) the purchase price of which is financed by a documentary
letter of credit issued for the account of the Borrower or its
Restricted Subsidiaries (other than any Special Purpose Subsidiary),
provided that such Lien secures only the obligations of the Borrower or
such Restricted Subsidiaries in respect of such letter of credit;
(q) Liens on shares of the Capital Stock of Unrestricted Sub-
sidiaries; and
(r) additional Liens (other than Liens on any property of any
Special Purpose Subsidiary) which secure obligations and liabilities of
the Borrower and its Restricted Subsidiaries (other than with respect
to custom software to the extent the obligations secured by such Lien
exceed $25,000,000) not exceeding $100,000,000 in the aggregate at any
time outstanding.
6.4 Limitation on Guarantee Obligations. Incur or suffer to
exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date of this
Agreement and listed on Schedule 6.4(a);
(b) Guarantee Obligations incurred in the ordinary course of
its business by the Borrower and its Restricted Subsidiaries (other
than any Special Purpose Subsidiary) in respect of Indebtedness and
other obligations and liabilities of the Borrower and its Restricted
Subsidiaries (other than any Special Purpose Subsidiary) not prohibited
by this Agreement;
(c) Guarantee Obligations of the Borrower and its Restricted
Subsidiaries (other than any Special Purpose Subsidiary) in respect of
the undrawn portion of the face amount of letters of credit issued for
the account of the Borrower or any Restricted Subsidiary (other than
any Special Purpose Subsidiary) in the ordinary course of business;
(d) the Guarantees; and
(e) additional Guarantee Obligations of the Borrower and its
Restricted Subsidiaries (other than any Special Purpose Subsidiary) not
exceeding $50,000,000 in the aggregate at any time outstanding;
provided that neither the Borrower nor any Restricted Subsidiary shall be
permitted to create, incur or assume any of the Guarantee Obligations referred
to in paragraphs (c) and (e) of this subsection unless, after giving effect
thereto, the Borrower would be in Pro Forma Compliance.
6.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, liquidate or wind up and terminate itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that, so long as, after giving effect thereto, the Borrower would
be in Pro Forma Compliance:
(a) any Restricted Subsidiary (other than any Special Purpose
Subsidiary) may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving
entity) or with or into any one or more other Wholly Owned Restricted
Subsidiaries (other than with or into any Special Purpose Subsidiary)
(provided that the Wholly Owned Restricted Subsidiary or Restricted
Subsidiaries shall be the continuing or surviving entity or entities);
(b) any Wholly Owned Restricted Subsidiary (other than any
Special Purpose Subsidiary) may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any one or more other Wholly Owned
Restricted Subsidiaries;
(c) the Borrower may merge or consolidate with any corporation
with the result that the Borrower shall become a corporation if (i)
after giving effect thereto the Borrower shall be in Pro Forma
Compliance (calculated as if such merger or consolidation had occurred
at the end of the then most recently ended fiscal quarter for which
financial statements shall have been delivered to the Lenders pursuant
to subsection 5.1), (ii) such merger or consolidation could not
reasonably be expected to have a Material Adverse Effect (it being
agreed that the fact that the Borrower would then be subject to the
payment of income taxes as a corporation shall not, in and of itself,
be deemed to constitute a Material Adverse Effect) and (iii) the
following other conditions shall be satisfied: (A) in the case such
merger or consolidation shall occur prior to the Public Offering Date,
the Parents shall have entered into an agreement in favor of the
Trustee pursuant to which they will agree that, until the Public
Offering Date, they will make capital contributions to the Borrower in
amounts equal to the excess, if any, of the amount of income taxes
payable by the Borrower (as a corporation) over the amount of
Restricted Payments that could have been made during the period (the
"Relevant Period") from the date of such merger or consolidation
through the final maturity of the Loans pursuant to subsection 6.7(a)
if the Borrower had remained a partnership during such period, (B) in
the case such merger or consolidation shall occur on or after the
Public Offering Date, the Borrower shall have delivered to the Agent a
certificate executed by a Responsible Officer to the effect that the
amount of Federal, state and local income and franchise taxes based
upon income reasonably projected to be payable by the Borrower as a
corporation after such merger or consolidation will not be materially
greater than the sum of (1) the aggregate amount of Restricted Payments
that could be made during the Relevant Period pursuant to subsection
6.7(a) if the Borrower had remained a partnership during the Relevant
Period (based on reasonable projections but without regard to clause
(ii) of the proviso to subsection 6.7(a)) and (2) the aggregate amount
of taxes based upon income that would have been payable by the Borrower
during the Relevant Period if the Borrower had remained a partnership
during the Relevant Period, (C) any write-offs and other deductions
which shall have been made in connection with any tax returns filed by
the Borrower prior to such merger or consolidation shall have been
consistent with past practice and the Borrower shall have delivered to
the Agent a certificate executed by a Responsible Officer so certifying
and (D) neither the Borrower nor the Parents shall have taken any
unreasonable action with the effect of decreasing the income of the
Borrower prior to such merger or consolidation and increasing the
future income of the Borrower after such merger or consolidation and
the Borrower shall have delivered to the Agent a certificate executed
by a Responsible Officer so certifying; and
(d) the Borrower or any Restricted Subsidiary (other than a
Special Purpose Subsidiary) may effect pursuant to a merger or
consolidation any Investment permitted by subsection 6.8(c) or (d) so
long as the Borrower or such Restricted Subsidiary is the surviving
entity.
6.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Restricted Subsidiary's Capital Stock to any
Person other than any such issue or sale of shares of Capital Stock to the
Borrower or (except in the case of shares of Capital Stock of a Special Purpose
Subsidiary) any Wholly Owned Restricted Subsidiary, except:
(a) the sale or other disposition of inventory, or any other
property in the ordinary course of business (provided that no sale of a
License or any System shall be considered to be in the ordinary course
of business);
(b) as permitted by subsection 6.5(b);
(c) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Sale (other than any sale of
receivables permitted by subsection 6.6(f)) the aggregate fair market
value of the property and assets that are the subject of which is equal
to or less than $25,000,000; provided that if the aggregate fair market
value of the property and assets sold or otherwise disposed pursuant to
this paragraph during any period of two consecutive calendar years
shall exceed $100,000,000, the Net Cash Proceeds of such excess
property and assets, to the extent not applied to purchase other
property or assets to be utilized in connection with the Borrower's
national wireless telecommunications network within 270 days from the
date of the applicable Asset Sale, shall be applied to effect a Pro
Rata Prepayment/Commitment Reduction;
(d) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Sale (other than any sale of
receivables permitted by subsection 6.6(f)) the aggregate fair market
value of the property and assets that are the subject of which are in
excess of $25,000,000, provided that, (i) if such Asset Sale includes
one or more Licenses and, after giving effect thereto, the then
aggregate number of Owned Pops would be less than 120,000,000, such
Asset Sale shall have been approved by the Requisite Aggregate Lenders,
(ii) to the extent the Net Cash Proceeds of such Asset Sale are in
excess of $100,000,000, such excess Net Cash Proceeds shall be
deposited in the Asset Sale Proceeds Sub-Account, from which the
Borrower may withdraw and apply such funds, together with all earnings
thereon, to the purchase, within 270 days from the date of the
applicable Asset Sale, of other property or assets to be utilized in
connection with the Borrower's national wireless telecommunications
network, (iii) the Borrower may apply such Net Cash Proceeds (whether
or not required to be deposited in the Asset Sale Proceeds Sub-Account
as described above) to purchase other property or assets to be utilized
in connection with the Borrower's national wireless telecommunications
network if the Borrower shall (A) notify the Agent reasonably promptly
following the completion of such Asset Sale that it intends to do so
and (B) deliver to the Agent evidence that the Borrower has, within 270
days from the date of such Asset Sale, in fact done so and (iv) if and
to the extent that the aggregate amount of the Net Cash Proceeds of all
such Asset Sales described in this paragraph that are not used as
specified in clause (iii) of this proviso, such amount shall be applied
to effect a Pro Rata Prepayment/Commitment Reduction;
(e) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Swap, provided that, if and to the
extent that the Borrower and its Restricted Subsidiaries receive
consideration for the System or Systems transferred by them in
connection with such Asset Swap that is in addition to the System or
Systems received in exchange therefor, such Asset Swap shall be deemed
to be an Asset Sale and shall be permitted only if the provisions of
subsection 6.6(c) or 6.6(d) (whichever shall be applicable) shall be
complied with in connection therewith;
(f) sales of trade receivables, provided the consideration
received for each such sale shall consist solely of cash and provided,
further, that the Net Cash Proceeds thereof shall be used (i) to effect
a Pro Rata Prepayment/Commitment Reduction, (ii) to prepay Indebtedness
then outstanding under a Bank Credit Facility or (iii) for the general
purposes of the Borrower and its Restricted Subsidiaries;
(g) as permitted by subsection 6.7;
(h) the sale of any shares of the Capital Stock of any Unre-
stricted Subsidiary; and
(i) the sale of any asset in connection with any sale and
leaseback transaction, provided (i) that such sale occurs within 270
days after the purchase by the Borrower or such Restricted Subsidiary
of such asset and (ii) in the case of any such sale and leaseback
transaction pursuant to an operating lease, the asset subject to such
sale and leaseback transaction was not acquired with the Net Cash
Proceeds of any Asset Sale that the Borrower would have been required
to apply to effect a Pro Rata Prepayment/Commitment Reduction if such
Net Cash Proceeds had not been applied to purchase such asset;
provided, that in each case described in paragraphs (c) and (d), and, to the
extent an Asset Sale is involved, (e) of this subsection, the consideration
received by the Borrower or its Restricted Subsidiaries for such Asset Sale
shall be cash, Cash Equivalents, promissory notes, other deferred payment
obligations and property or assets to be utilized in connection with the
Borrower's national wireless telecommunications network, provided, further, that
at least 80% of such consideration shall consist of cash, Cash Equivalents
and/or property or assets to be utilized in connection with the Borrower's
national wireless telecommunications network, and provided, still further, that
the aggregate outstanding principal amount of such promissory notes and other
deferred payment obligations held by the Borrower and its Restricted
Subsidiaries shall not exceed $250,000,000 at any time.
6.7 Limitation on Restricted Payments. Pay any distributions
(other than distributions payable solely in Capital Stock of the Borrower) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Restricted Subsidiary
or any warrants or options to purchase any such Capital Stock, whether now or
hereafter outstanding, either directly or indirectly, whether in cash or
property or in obligations of the Borrower or any Restricted Subsidiary (such
payments, prepayments, distributions, setting apart, purchases, redemptions,
defeasances, retirements and acquisitions and distributions being herein called
"Restricted Payments"), except that (x) the Borrower may make any Restricted
Payment constituting a distribution of any ownership interest it may hold in
APC, (y) any Restricted Subsidiary may make cash distributions to the Borrower
and (z) if, after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing or would result therefrom, the Borrower may make
Restricted Payments:
(a) to the extent of the amount of Federal, state and local
income taxes assumed to be payable by the Borrower in any fiscal year
in respect of the income of the Borrower and its Subsidiaries for such
fiscal year if the Borrower were a corporation subject to taxation as
such for such year (calculated at the maximum applicable Federal
corporate income tax rate plus an assumed state and local tax rate of
5%), provided that (i) nothing in this paragraph shall be deemed to
permit any such Restricted Payment for the purpose of paying any tax
liabilities of the Parents resulting from the conversion of the
Borrower from partnership to corporate form and (ii) no Restricted
Payment shall be permitted under this paragraph (a) unless, after
giving effect thereto, the Special Payment Condition shall be satisfied
and provided, further, that no such Restricted Payment may be made
pursuant to this paragraph with respect to taxes in respect of the
income of any Unrestricted Subsidiaries except to the extent that the
Borrower and/or its Restricted Subsidiaries shall have received cash
distributions from Unrestricted Subsidiaries with respect to such
taxes;
(b) to the extent necessary to provide the issuer of any
Specified Affiliate Debt with amounts sufficient to pay principal,
interest and other amounts then payable in respect of such Specified
Affiliate Debt, if, after giving effect to such distribution, the
Borrower is in Pro Forma Compliance; and
(c) to the extent that (i) after giving effect thereto, the
Special Payment Condition shall be satisfied and (ii) the Borrower
shall have made a Pro Rata Payment Offer in an amount equal to such
Restricted Payment.
6.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (such advances,
loans, extensions of credit, capital contributions, purchases and investments
being herein called "Investments"), any Person, except:
(a) extensions of trade credit in the ordinary course of bus-
iness;
(b) Investments in Cash Equivalents;
(c) Investments by the Borrower or any Restricted Subsidiary
(other than a Special Purpose Subsidiary) in Persons engaged in the
telecommunications business or businesses related thereto, provided
that (i) such Person, if it shall be a Subsidiary, shall become a
Restricted Subsidiary unless (A) such Person or assets shall be
acquired with (I) proceeds of capital contributed to the Borrower
expressly for such purpose and/or (II) funds of the Borrower in such
amount that, after giving effect thereto, the Special Payment Condition
shall be satisfied, provided that the Borrower shall have made a Pro
Rata Payment Offer in an amount equal to such Investment and (B) the
Borrower designates such Person, by notice to the Administrative Agent,
as an Unrestricted Subsidiary and (ii) after giving effect to such
Investment, the Borrower is in Pro Forma Compliance; and provided,
further, that the aggregate amount of cash expended, plus the aggregate
book value of any assets transferred, by the Borrower and its
Restricted Subsidiaries in connection with Investments permitted under
this paragraph in Persons that are not Restricted Subsidiaries shall
not exceed $100,000,000;
(d) Investments by the Borrower or any Restricted Subsidiary
(other than a Special Purpose Subsidiary) in Persons not engaged in the
telecommunications business or businesses related thereto if, after
giving effect thereto, the aggregate amount of such Investments then
held by the Borrower and its Restricted Subsidiaries does not exceed 5%
of then Total Capitalization; provided that (i) such Person, or the
Person which shall become the owner of any assets acquired in
connection with such Investment, shall become a Restricted Subsidiary
unless (A) such Person or assets shall be acquired with (I) proceeds of
capital contributed to the Borrower expressly for such purpose and/or
(II) funds of the Borrower in such amount that after giving effect
thereto, the Special Payment Condition shall be satisfied, provided
that the Borrower shall have made a Pro Rata Payment Offer in an amount
equal to such Investment and (B) the Borrower designates such Person,
by notice to the Agent, an Unrestricted Subsidiary and (ii) after
giving effect to such Investment, the Borrower is in Pro Forma
Compliance;
(e) Investments by the Borrower or any Restricted Subsidiary
(other than a Special Purpose Subsidiary) arising from the acquisition
of any System or Systems in connection with any Asset Swap, provided
that, (i) to the extent that the Borrower and its Restricted
Subsidiaries give consideration for the System or Systems acquired by
them in connection with such Asset Swap that is in addition to the
System or Systems transferred by them in exchange therefor, such Asset
Swap shall be deemed to constitute an Investment and shall be permitted
only if the provisions of subsection 6.6(e) and 6.8(c) shall be
complied with in connection therewith and (ii) after giving effect to
such Investment, the Borrower is in Pro Forma Compliance;
(f) loans and advances to employees of the Borrower and its
Restricted Subsidiaries in an aggregate principal amount outstanding
not to exceed $10,000,000 at any one time outstanding;
(g) Investments by the Borrower in its Restricted Subsidiaries
and Investments by any Restricted Subsidiary (other than any Special
Purpose Subsidiary) in the Borrower or by any Restricted Subsidiary
(other than the Special Purpose Subsidiaries) in any other Restricted
Subsidiary; and
(h) promissory notes and other deferred payment obligations
that constitute proceeds of Asset Sales that are permitted by
subsection 6.6.
6.9 Limitation on Transactions with Affiliates. Enter into any
transaction or agreement, or participate in any arrangement, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate unless such transaction, agreement or
arrangement is (a) not prohibited by this Agreement, (b) in the ordinary course
of the Borrower's or such Restricted Subsidiary's business, and (c) upon terms
no less favorable to the Borrower or such Restricted Subsidiary, as the case may
be, than those that could be obtained on an arm's length basis from a Person
which is not an Affiliate.
6.10 Limitation on Lines of Business; Liabilities of
Subsidiaries. (a) Enter into any business, either directly or through any
Restricted Subsidiary, except for the telecommunications business and businesses
which are related thereto and in any business which the Borrower or any
Restricted Subsidiary enters into as a result of an Investment permitted
pursuant to subsection 6.8(d).
(b) Permit WirelessCo to incur any material liabilities (other
than the Guarantee executed by it) or to engage in any business or activities
other than the holding of Licenses.
(c) Permit EquipmentCo to incur any material liabilities
(other than the Guarantee executed by it) and liabilities under the Vendor
Procurement Contracts or to engage in any business or activities other than the
owning of Personal Property Assets and the leasing thereof to the Borrower.
(d) Permit RealtyCo to incur any material liabilities (other
than the Guarantee executed by it and other liabilities incurred in the ordinary
course of business which are incident to being the owner or lessee of real
property) or to engage in any business or activities other than the owning or
leasing, as lessee, of Real Estate Assets and the leasing, as lessor, or, as the
case may be, subleasing, as sublessor, thereof to the Borrower.
6.11 Limitation on Designation of Secured Obligations.
Designate any Indebtedness as Secured Obligations under the Trust Agreement
other than (a) the Loans, (b) any Bank Credit Facility, (c) the Other Vendor
Credit Facility, (d) Interest Rate Agreement Obligations, (e) Indebtedness
permitted to be incurred pursuant to subsections 6.2(e) and (f), provided that
the aggregate amount of Indebtedness permitted pursuant to subsection 6.2(f)
that can be designated as Secured Obligations under the Trust Agreement pursuant
to this subsection 6.11 shall not exceed $500,000,000 and (f) Indebtedness of
the Borrower and its Restricted Subsidiaries which refinances, replaces or
refunds Indebtedness described in the foregoing clauses (a) through (e),
provided that the Indebtedness that shall result from such refinancing,
replacement or refunding does not increase the outstanding principal amount of
the Indebtedness which was the subject of such refinancing, replacement or
refunding. Notwithstanding the foregoing, in no event may the Borrower designate
as Secured Obligations under the Trust Agreement any Indebtedness which is owed
to any of the Parents or any other Affiliate of the Borrower or any Indebtedness
which is guaranteed by any of the Parents or any other Affiliate of the Borrower
or which benefits from any other credit enhancement provided directly or
indirectly by any of the Parents or any Affiliate of the Borrower unless, solely
in the case of any such Indebtedness guaranteed or benefitted, (a) such
Indebtedness refinances, replaces or refunds, or constitutes, Indebtedness
permitted under subsection 6.2(d) or (e), and (b) the Lenders shall have been
given the option to have the Loans and the other obligations and liabilities
owing to them hereunder and under the other Loan Documents receive the benefits
of such a guarantee or other credit enhancement on substantially identical terms
and conditions.
6.12 Limitation on Interest Rate Agreements. Enter into any
Interest Rate Agreement other than to protect against fluctuations in interest
rates and not for speculative purposes.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
when such principal becomes due in accordance with the terms hereof,
whether at the stated maturity thereof or as a result of the mandatory
prepayment provisions of subsection 2.5; or the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder,
within five days after any such interest or other amount becomes due in
accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by the
Borrower or any other Loan Party in this Agreement or in any other Loan
Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made and, if capable of remedy the
facts or circumstances resulting in such breach shall not be altered
within a period of 30 days such that such representation or warranty is
no longer incorrect in any material respect; or
(c) the Borrower or any other Loan Party shall default in the
observance or performance of any covenant or agreement contained in
this Agreement or any other Loan Document (other than as provided in
paragraphs (a) and (b) of this Section), and such default shall
continue unremedied for a period of 30 days after the earlier of (i)
the first date on which a Responsible Officer learns of such default
and (ii) receipt by the Borrower of notice thereof from the Agent or
any Lender; or
(d) the Borrower or any Restricted Subsidiary shall (i)
default in any payment of principal of or interest under the Existing
Bank Credit Facility or on any other Indebtedness (other than the
Loans) or Guarantee Obligation in respect of Indebtedness or any
Interest Rate Agreement Obligation beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness,
Guarantee Obligation or Interest Rate Agreement Obligation was created;
or (ii) default in the observance or performance of any other agreement
or condition under the Existing Bank Credit Facility or relating to any
such Indebtedness, or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of
such Indebtedness, Guarantee Obligation or Interest Rate Agreement
Obligation (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such Indebtedness,
Guarantee Obligation or Interest Rate Agreement Obligation to become
due prior to its stated maturity; provided, however, that no Event of
Default shall occur under this paragraph (d) with respect to events
other than events under the Existing Bank Credit Facility unless the
aggregate principal amount of Indebtedness or Guarantee Obligations, or
the aggregate amount of Interest Rate Agreement Obligations, in respect
of which any such default or defaults shall occur is then outstanding
in an aggregate principal amount in excess of the lesser of (A)
$50,000,000 and (B) 10% of the sum of the aggregate then outstanding
principal amount of all Indebtedness and Guarantee Obligations and
aggregate then outstanding Interest Rate Agreement Obligations of the
Borrower and its Restricted Subsidiaries; or
(e) (i) the Borrower, any Restricted Subsidiary or (so long as
the Borrower remains a partnership) Holding shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower,
any Restricted Subsidiary or (so long as the Borrower remains a
partnership) Holding shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower,
any Restricted Subsidiary or (so long as the Borrower remains a
partnership) Holding any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower, any Restricted
Subsidiary or (so long as the Borrower remains a partnership) Holding
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower, any Restricted Subsidiary or (so long as the
Borrower remains a partnership) Holding shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii)
above; or (v) the Borrower, any Restricted Subsidiary or (so long as
the Borrower remains a partnership) Holding shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(f) (i) any Parent shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or any Parent shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Parent any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against any Parent any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv)
any Parent shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii) or (iii) above; or (v) any Parent shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due; provided, however, that no Event of
Default shall occur under this paragraph (f) if (x) all amounts to be
contributed to the capital of the Borrower pursuant to the Capital
Contribution Agreement have been so contributed and have not been
avoided or recaptured under any bankruptcy, insolvency, reorganization
or similar law or (y) within 30 days after an Event of Default would
otherwise occur pursuant to this paragraph (f) as a result of one of
the events enumerated above with respect to any Parent, one or more of
the other Parents shall have assumed all the obligations of such
affected Parent under the Capital Contribution Agreement in writing in
form and substance reasonably satisfactory to the Agent; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA or Section 412 of the Code), whether or
not waived, shall exist with respect to any Single Employer Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Requisite Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA
or (v) the Borrower or any Commonly Controlled Entity shall incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan; and in each case in clauses
(i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have
a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
the Borrower or any Restricted Subsidiary involving in the aggregate a
liability (not paid or fully covered by third party insurance) of an
amount in excess of the lesser of (A) $50,000,000 and (B) 10% of the
aggregate then outstanding principal amount of all Indebtedness of the
Borrower and its Restricted Subsidiaries on a consolidated basis, and
each such judgment or decree shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof;
or
(i) (i) any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrower or any other
Loan Party which is a party to such Security Document shall so assert
in writing or (ii) except in accordance with the terms thereof or of
any other Loan Document, the Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) any Guarantee shall cease, for any reason, to be in full
force and effect or the Guarantor party thereto shall so assert in
writing; or
(k) the Capital Contribution Agreement shall cease, for any
reason, to be in full force and effect prior to the date on which all
amounts required to be contributed thereunder have been contributed to
the Borrower, or any Parent shall so assert in writing; or
(l) the termination of the Borrower's right to use the
"Sprint" trademark pursuant to the Trademark License Agreement, or any
impairment in the ability of the Borrower to use the "Sprint" trademark
that could reasonably be expected to have a Material Adverse Effect; or
(m) any termination, revocation or non-renewal by the FCC of
one or more Licenses of the Borrower or its Restricted Subsidiaries if,
after giving effect thereto, the aggregate number of Owned Pops is less
than 120,000,000; or
(n) the commencement by the Trustee of foreclosure proceed-
ings with respect to any of the Collateral while a Notice of Enforce-
ment is in effect; or
(o) the failure of the full amount of any required capital
contribution to be made under the Capital Contribution Agreement for a
period of more than 30 days after the date when due; or
(p) any Change in Control;
then, and in any such event, (i) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (e) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents, if any, shall immediately
become due and payable, and (ii) if such event is any other Event of Default,
either or both of the following actions may be taken: (A) with the consent of
the Requisite Accelerating Creditors, the Agent may, or upon the request of the
Requisite Accelerating Creditors, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (B) with the consent of the Requisite
Accelerating Creditors, the Agent may, or upon the request of the Requisite
Accelerating Creditors, the Agent shall, by notice to the Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents, if any, to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents and irrevocably authorizes the Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities to any Lender, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities to any Lender
shall be read into this Agreement or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible to any
Lender for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(a) liable to any Lender for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement, any other Loan Document or any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document for any failure of the Borrower to
perform its obligations or satisfy any condition hereunder or thereunder. The
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Loan as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Requisite Lenders as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request of the Requisite Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
8.5 Notice of Default and Other Notices. The Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. Without limiting the generality of the foregoing or subsection 7.1, the
Agent shall not be required to take any action with respect to any Default or
Event of Default except as expressly provided in Section 7; provided that unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Lenders. The Agent shall, promptly following its
receipt thereof, notify the Lenders as to the substance of any notice received
by the Agent pursuant to subsections 2.4, 2.5 or 5.8.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Percentages in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Agreement, any other Loan Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder. With respect to the Loans made by it, the Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Lenders. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Requisite Lenders shall appoint
a successor agent for the Lenders, which successor agent (provided that it shall
have been approved by the Borrower which approval shall not be unreasonably
withheld) shall succeed to the rights, powers and duties of the Agent. If no
successor agent shall have been appointed by the Requisite Lenders and no such
new agent shall have been appointed within 30 days after the retiring agent
gives notice of resignation, then the retiring agent may on behalf of the
Lenders appoint a successor agent (provided that, if no Event of Default shall
have occurred and be continuing, such successor agent shall have been approved
by the Borrower, which approval shall not be unreasonably withheld). Effective
upon such appointment and approval, the term "Agent" shall mean such successor
agent, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Loans. After
any retiring Agent's resignation as Agent, the provisions of this Section shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. (a) Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Requisite Lenders may, from time to time, (a) enter into with
the Borrower written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any manner the
rights of the Lenders or of the Borrower hereunder or (b) waive, on such terms
and conditions as the Requisite Lenders may specify in such instrument, any of
the requirements of this Agreement or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Lender's Loans or of any installment thereof, or reduce
the stated rate of any interest or fees payable to such Lender hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiry date of, any Lender's Commitment, in each case without the
consent of such Lender, (ii) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definitions of Requisite
Accelerating Creditors, Requisite Aggregate Lenders or Requisite Lenders, or
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement, in each case without the written consent of
all the Lenders, or (iii) amend, modify or waive any provision of Section 8
without the written consent of the then Agent and provided, further, that,
notwithstanding the foregoing, the provisions of Sections 3, 5, 6 and 7 may be
amended, supplemented or modified with, and only with, the consent of the
Borrower and the Requisite Aggregate Lenders (whether or not the Vendor or any
other Lender shall have consented thereto) and compliance with any of the
requirements of said Sections (or any Default or Event of Default (as such terms
are defined in said Sections) resulting from a failure by the Borrower to comply
with such requirements) may be waived with, and only with, the consent of the
Requisite Aggregate Lenders (whether or not the Vendor or any other Lender shall
have consented thereto). Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Agent and all future holders of the Loans.
In the case of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former positions and rights hereunder, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
(b) The Trust Agreement, any Guarantee and any Security
Document may only be amended, supplemented or otherwise modified, and any
provision thereof may only be waived, in accordance with subsection 9.3 of the
Trust Agreement, provided, however, that in no event shall any Collateral (other
than any Collateral which is the subject of any Asset Sale permitted by
subsection 6.6) or Guarantee be released without the consent of the Lenders
whose Percentages aggregate at least 75% as provided in subsection 9.19, and no
action described in clause (i) of the proviso in subsection 9.3(a) of the Trust
Agreement may be taken without the consent of Lenders whose Percentages
aggregate at least 75%.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by courier, when delivered, (b) in the case of delivery by mail, five days after
being deposited in the mails, first class postage prepaid, or (c) in the case of
delivery by facsimile transmission, when received in legible form, addressed as
follows in the case of the Borrower, the Vendor and the Agent, and in the case
of the other parties hereto, to such other address as may be hereafter notified
by the respective parties hereto:
The Borrower: Sprint Spectrum L.P.
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-1490
with a copy to:
Sprint Spectrum L.P.
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
The Vendor: Lucent Technologies Inc.
283 King George Road
Room B4D17
Warren, New Jersey 07059
Attention: Director, Project Finance
Fax: (908) 559-1711
with a copy to:
Lucent Technologies Inc.
600 Mountain Avenue
Murray Hill, New Jersey 07974
Attention: Vice President, Law-Corporate
and Securities
Fax: (908) 582-6130
The Agent: Lucent Technologies Inc.
283 King George Road
Room B4D17
Warren, New Jersey 07059
Attention: Director, Project Finance
Fax: (908) 559-1711
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 2.4, 2.6 or 2.12(b) shall not be effective until
received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall be
considered to have been relied upon by the Lenders, notwithstanding any
investigation made by the Lenders and the Agent, and shall not be prejudiced by
but shall survive the execution and delivery of this Agreement and the making of
the Loans hereunder.
9.5 Payment of Expenses and Taxes; Indemnity. The Vendor and
each other Lender will bear all its respective costs in connection with this
Agreement, except that the Borrower agrees to pay or reimburse the Agent for all
its reasonable costs and expenses incurred in connection with any amendments,
supplements, modifications or waivers of any of the provisions hereof or of the
Loan Documents or incurred by the Agent in connection with the enforcement of
any rights under this Agreement and the other Loan Documents, including, without
limitation, the reasonable fees and disbursements of one, and only one, counsel
to the Agent and the Lenders. The Borrower also agrees (a) to pay, indemnify,
and hold each Lender and the Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (b) to pay, indemnify, and hold each Lender and the Agent
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower, any
of its Subsidiaries or any of their properties (all the foregoing in this clause
(b), collectively, the "indemnified liabilities"), provided that the Borrower
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of the Agent or such Lender. The agreements in this subsection shall survive
repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in accordance with applicable law,
including compliance with applicable federal and state securities and "blue sky"
laws and regulations, at any time sell to one or more Eligible Assignees
("Participants") participating interests in any Loan owing to such Lender, the
Commitment of such Lender or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. No Lender shall be entitled to create in favor of any Participant, in
the participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the first proviso to subsection
9.1. The Borrower agrees that if amounts outstanding under this Agreement are
due or unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall, to the
maximum extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in subsection
9.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of subsections 2.11, 2.12,
2.13 and 2.14 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided that, in the case
of subsection 2.13, such Participant shall have complied with the requirements
of said subsection and provided, further, that no Participant shall be entitled
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in accordance with applicable law,
including compliance with applicable federal and state securities and "blue sky"
laws and regulations, at any time and from time to time assign to any other
Lender or to an Eligible Assignee (an "Assignee") all or any part of its Loans
and Commitment pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit C, executed by such Assignee and such assigning Lender and
delivered to the Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an Eligible Assignee, the
sum of the aggregate principal amount of the Loans and the aggregate amount of
Unused Commitment being assigned is not less than $10,000,000 (or such lesser
amount as constitutes the assigning Lender's entire aggregate principal amount
of Loans and Unused Commitment) and, if such assignment is of less than all of
the Loans and Commitment of the assigning Lender, the sum of the aggregate
principal amount of the assigning Lender's remaining Loans and the aggregate
amount of Unused Commitment is not less than $10,000,000 (or such lesser amount
as may be agreed to by the Borrower and the Agent). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (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 thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto but shall be entitled to the benefits of
subsections 2.11, 2.12, 2.13 and 2.14 in respect of the period prior to such
assignment as well as to any fees accrued for its account and not yet paid).
Notwithstanding any provision to the contrary in this paragraph, no assignment
shall be effected pursuant to this paragraph unless the Borrower shall have
received written notice thereof (i) in the case of any assignment to more than
one Person of outstanding Loans and/or Commitments in an aggregate principal
amount in excess of $100,000,000, at least 30 days prior to the date of such
assignment, and (ii) in the case of any other assignment, prior to the date of
such assignment.
(d) The Agent, on behalf of the Borrower, shall maintain at
the address of the Agent referred to in subsection 9.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders, the registered owners of
the Obligations evidenced by the Notes and the principal amount of the Loans
owing to each Lender from time to time. The entries in the Register shall be
prima facie evidence of the accuracy thereof, and the Borrower, the Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of a Loan or Note hereunder as the owner thereof for all purposes of
this Agreement, notwithstanding any notice to the contrary. Any assignment of
any Loan or Note hereunder shall be effective only upon appropriate entries with
respect thereto being made in the Register. Any assignment or transfer of all or
part of any Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of such Note, duly
endorsed by (or accompanied by a written instrument of assignment or transfer
duly executed by) the holder thereof, and thereupon one or more new Note(s) in
the same aggregate principal amount shall be issued to the designated
Assignee(s) and the old Note shall be returned to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender, by the Agent), together with payment by the assignor or
assignee Lender, as agreed between them, to the Agent of a registration and
processing fee of $3,500, the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
and its advisers and agents, any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement or the other
Loan Document or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Subsidiaries prior to becoming a party to this Agreement; provided that (i)
no such disclosure may be made unless such Transferee or prospective Transferee
and its advisers and agents shall have executed and delivered to the Borrower a
Confidentiality Agreement and (ii) disclosures of information to any Transferee
or prospective Transferee that is an Investment Vehicle shall be limited as
provided in the definition of "Eligible Assignee" in subsection 1.1.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan to any Federal Reserve Bank in
accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans, or
interest thereon, (whether voluntarily or involuntarily, by set-off, or
otherwise) in a greater proportion than any such payment to any other Lender, if
any, in respect of such other Lender's Loans, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Loans, as shall be
necessary to cause such Benefitted Lender to share the excess payment ratably
with each of the other Lenders, provided, however, that if all or any portion of
such excess payment is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price returned, to the extent of
such recovery, but without interest and, provided, further, that,
notwithstanding the foregoing, if such Benefitted Lender shall receive such
payment at a time when a Notice of Enforcement shall have been delivered to the
Trustee and be in effect, such Benefitted Lender shall turn over to the Trustee
an amount equal to such payment for deposit in the Collateral Account (as
defined in the Trust Agreement) to be applied in the manner provided for in the
Trust Agreement.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right at any time and from time to
time, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the Agent after
any such set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
9.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Agent.
9.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction. Each of the Borrower, the
Agent, the Vendor and, to the extent not prohibited by applicable law, the other
Lenders hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and
enforcement of any judgement in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of New York, the courts
of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth or referred to in subsection
9.2 or at such other address of which the other parties shall have been
notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.
9.13 Confidentiality. Each of the Agent and the Lenders agrees
to keep confidential any written or oral information (a) provided to it by or on
behalf of the Borrower or any of its Subsidiaries pursuant to or in connection
with this Agreement or (b) obtained by such Lender based on a review of the
books and records of the Borrower or any of its Subsidiaries; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
to the Agent or any other Lender, (ii) to any prospective Transferee which is an
Eligible Lender and which executes and delivers to the Borrower a
confidentiality agreement in substantially the form of Exhibit D, (iii) to its
employees, directors, agents, attorneys, accountants and other professional
advisors who have been made aware of the confidential nature of such information
and have agreed to maintain the confidentiality thereof, (iv) upon the request
or demand of any Governmental Authority having jurisdiction over such Lender and
the authority to make such request or demand, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, provided that prior written notice of such
disclosure is given to the Borrower or (vi) which has been publicly disclosed
other than in breach of this Agreement.
9.14 Non-Recourse. No claim may be made under this Agreement
or any other Loan Document against any of the direct or indirect partners of the
Borrower for the payment of principal of, or interest on, the Loans, or any
expenses or other amounts payable hereunder or under any other Loan Document,
provided, however, that this subsection shall not (a) affect the validity or
enforceability of the obligations of any Partner under the Capital Contribution
Agreement or (b) operate as a waiver of any rights or claims against any Partner
arising out of or resulting from such Partner's misrepresentations or fraud in
or in respect of the Capital Contribution Agreement.
9.15 Securities Act Matters. (a) Each of the Agent and the
Lenders hereby acknowledges and agrees that: the Loans have not been and will
not be registered under the Securities Act of 1933, as amended (the "Securities
Act"), or the securities laws of any state; the Loans are being made in reliance
on exemptions from the registration requirements of the Securities Act and
applicable state securities laws; the Loans have not been approved or
disapproved by the Securities and Exchange Commission (the "Commission"), any
state securities commission or other regulatory authority, nor have any of the
foregoing authorities passed upon or endorsed the merits of the credit facility
established hereby or the accuracy or adequacy of the Summary Business Plan
Overview of the Borrower, dated March 1996, and that any representation to the
contrary is unlawful; the Loans are subject to restrictions on transferability
and resale and may not be transferred or resold except as permitted under the
Securities Act and applicable state securities laws pursuant to registration or
exemption therefrom; any promissory notes evidencing the Loans will bear a
legend referring to the foregoing restrictions; and because of such
restrictions, no secondary trading market for the Loans is expected to develop,
and Lenders must bear the risk of their investment for an indefinite amount of
time.
(b) Each Lender represents that (i) it is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act, (ii) it is making the Loans hereunder for its own
account for investment and not with a view to a public distribution thereof
(within the meaning of the Securities Act and rules and regulations promulgated
thereunder) in contravention of the Securities Act and (iii) it has been
afforded an opportunity to request from the Borrower and to review, and has
received, all information considered by it to be necessary to become a Lender
hereunder.
9.16 Other Agreements. The Vendor, the Borrower and each other
Person that shall subsequently become party to this Agreement agree to the
provisions contained in Schedule I.
9.17 WAIVERS OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
THE VENDOR AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.18 Interest Rate Limitation. Notwithstanding anything herein
or in any Note to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively, the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable on any Loans owing to such Lender, together with all Charges
payable to such Lender, shall be limited to the Maximum Rate.
9.19 Release of Guarantees and Collateral. If the Borrower
shall wish to effect the release of any Collateral or any Guarantee, it shall
give notice thereof to the Agent. Upon receipt of such notice, the Agent shall
request the Lenders to give notice to the Agent in writing of their approval or
disapproval of the requested release. If Lenders whose Percentages aggregate at
least 75% approve such request, the Agent shall give written notice of such
approval to the Borrower, and such release may thereafter be effected without
violation of this Agreement. For avoidance of doubt, no approval of Lenders
shall be necessary to effect the release of any Collateral which is the subject
of any Asset Sale permitted by subsection 6.6.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By: /s/ Robert E. Sleet, Jr.
Title: Vice President and Treasurer
LUCENT TECHNOLOGIES INC., as a Lender
and as Agent
By: /s/ Donald K. Peterson
Title: Executive Vice President
and Chief Financial Officer
<PAGE>
SCHEDULE I
MISCELLANEOUS PROVISIONS
1. Certain Definitions.
"Applicable Margin": for ABR Loans, 2.00% and for Eurodollar Loans
3.00%.
"Vendor Commitment": the obligation of the Vendor to make Loans to
the Borrower under subsection 2.1 in an aggregate principal amount not
to exceed $1,800,000,000; provided that (i) the aggregate principal
amount of Loans made (excluding amounts constituting interest
capitalized pursuant to subsection 2.7(d)) shall not exceed
$1,000,000,000 through December 31, 1996 or $1,500,000,000 through
December 31, 1997 and (ii) the aggregate principal amount of Loans made
(other than amounts constituting interest capitalized pursuant to
subsection 2.7(d)) shall not exceed $1,000,000,000 if the rating by S&P
in respect of the High Yield Debt is lower than B at any time prior to
January 1, 1997.
2. Use of Proceeds.
The proceeds of the Loans shall be used to finance the purchase price
of goods and services provided by the Vendor under the Vendor
Procurement Contract associated with the build-out of the Borrower's
national wireless network (including goods and services of Persons
other than the Vendor that are invoiced by the Vendor under the Vendor
Procurement Contract).
3. Minimum Order Amounts.
The amount of the Initial Commitment, as such term is defined in
subsection 7.1 of the Vendor Procurement Contract.
4. Fees.
The Borrower agrees to pay to the Agent, for the account of each
Lender, a facility fee equal to [_____________], payable quarterly in
arrears on the last day of each March, June, September and December and
on the date such Loans are paid in full and the Commitments are
terminated.
5. Syndication/Refinancing Provisions.
(a) The Vendor shall notify the Borrower in writing (a "Refinancing
Notice") if (i) the Vendor shall at any time determine to assign any
amount of the Vendor Commitment or the Loans without a full guarantee
from the Vendor or any of its Affiliates and (ii) the Vendor wishes the
Borrower to assist in such transaction in the manner contemplated in
this Section or if the Five-Year No-Call (as defined below) will be
applicable to the Loans being so assigned (a "Syndication Assignment").
A Refinancing Notice must be given at least 60 days prior to the date
of the proposed Syndication Assignment (in the case of any such
transaction for which the Vendor wishes to have the Borrower's
assistance in the manner contemplated in this Section) and at least 30
days prior to the date of the proposed Syndication Assignment
(otherwise). A Syndication Assignment may be effected only pursuant to
a Bank Syndication, a Private Resale or an Offering (as such terms are
defined below), and each Refinancing Notice shall specify whether the
Syndication Assignment contemplated thereby will be effected pursuant
to a Bank Syndication, a Private Resale or an Offering. The Borrower
shall have 30 days from receipt of any such Refinancing Notice that
involves a sale of Loans to notify the Vendor of the Borrower's
intention to provide to the Vendor an alternate Bank Syndication,
Private Resale or Offering in respect of all or a portion of the
affected Loans that will result in such affected Loans being assigned
on market terms (a "Permitted Refinancing Transaction"). If the
Borrower elects to consummate a Permitted Refinancing Transaction in
respect of all or a portion of such Loans, and delivers to the Vendor,
together with the notice referred to in the preceding sentence,
evidence that the Borrower has retained an investment banking firm or
other advisors to assist in such Permitted Refinancing Transaction or
other evidence reasonably satisfactory to the Vendor of the Borrower's
ability to consummate such Permitted Refinancing Transaction, the
Borrower will have 180 days after such delivery to consummate such
Permitted Refinancing Transaction. If (i) the Borrower does not so
notify the Vendor within 30 days from the date of receipt by the
Borrower of the Refinancing Notice or (ii) the Borrower notifies the
Vendor within such 30-day period that the Borrower has decided not to
consummate a Permitted Refinancing Transaction in respect of such
Loans, then, subject to the provisions of paragraph (k)(ii) below, the
Vendor will have 180 days from the earlier of such 30th day and the
date of receipt by the Vendor of the notice referred to in clause (ii)
of this sentence to consummate the Syndication Assignment. If the
Syndication Assignment described in such Refinancing Notice involves
only an assignment of the Vendor Commitment then, subject to the
provisions of paragraph (k)(ii) below, the Vendor will have 180 days
from the date of such Refinancing Notice to consummate such Syndication
Assignment.
(b) If the Borrower fails to consummate a Permitted Refinancing
Transaction in respect of any amount of Loans described in a
Refinancing Notice within 180 days of its notifying the Vendor of its
election to do so, then the Borrower shall not have the right under
paragraph (a) above to consummate a Permitted Refinancing Transaction
in respect of Loans described in any subsequent Refinancing Notices up
to a cumulative amount equal to the amount of Loans with respect to
which the Borrower failed to consummate a Permitted Refinancing
Transaction.
(c) If the Vendor fails to consummate the Syndication Assignment (i)
after delivering a Refinancing Notice with respect thereto in
accordance with paragraph (a) above or (ii) within 180 days after the
Borrower shall have failed to consummate a Permitted Refinancing
Transaction as specified in paragraph (b) above, then, if the Vendor
elects to effect a subsequent Syndication Assignment, the Vendor must
notify the Borrower of its intention to make such subsequent
Syndication Assignment in accordance with the procedures described in
paragraph (a) above, subject to paragraph (b) above, and the Borrower
and the Vendor shall have the rights described in this Section with
respect thereto.
(d) The Borrower and its Restricted Subsidiaries will cooperate with
the Vendor and its lead agents in each Bank Syndication and/or Private
Resale undertaken by the Vendor and such lead agents. Such cooperation
will include, if requested by the Vendor, (i) making senior officers of
the Borrower and its Restricted Subsidiaries available for a meeting
with prospective assignees and the Vendor and its lead agents, and (ii)
providing such other assistance as may be reasonably requested by the
Vendor and such lead agents (including providing information to and
responding to questions from, prospective assignees with respect to the
operations, business plans, results and other matters relating to the
Borrower's business on a timely basis and in any manner reasonably
requested by the Vendor or such lead agents). The Vendor will give the
Borrower at least 60 days prior written notice of actions the Borrower
will be requested to take pursuant to this paragraph.
(e) The Borrower and its Restricted Subsidiaries will cooperate with
the Vendor and its underwriters and agents in each Offering undertaken
by the Vendor. Such cooperation will include, if requested by the
Vendor, (i) the Borrower providing customary information in respect of
the Borrower and its Subsidiaries and making customary representations
and warranties with respect to such information in connection with such
Offering and, if required by the Securities Act, the Borrower acting as
co-registrant (but in any event not as issuer or co-issuer) of such
Offering, (ii) senior officers of the Borrower and its Restricted
Subsidiaries participating in the "road show" for such Offering and/or
(iii) appropriate personnel from the Borrower and its Restricted
Subsidiaries assisting in the drafting of a registration statement or
offering circular used in marketing such Offering. The Vendor will give
the Borrower at least 60 days prior written notice of actions the
Borrower will be requested to take pursuant to this paragraph.
(f) To permit the Vendor to consummate a proposed Syndication
Assignment as promptly as possible after the delivery of a Refinancing
Notice with respect thereto, the Borrower will at any time after
delivery of a Refinancing Notice, upon the request of the Vendor,
direct its counsel to prepare required documentation for Refinancing
Securities (as defined below) and/or any required amendments to this
Agreement to permit a Syndication Assignment, and the Borrower will
work with the Vendor in good faith to agree upon and finalize such
documentation and will provide the Vendor with such assistance in
connection with the preparation of such documentation as the Vendor
shall reasonably request.
(g) In connection with any Syndication Assignment involving a sale of
Loans, the holders of the Loans or Refinancing Securities that are the
subject of such Syndication Assignment shall, if the Vendor so
requests, be granted the right to decline any optional or mandatory
prepayments of such Loans or Refinancing Securities (excluding
regularly scheduled installments of principal) for a period of up to
five years from the date of consummation of such Syndication Assignment
(the "Five-Year No-Call"). In addition, in connection with any
assignment of Loans permitted by subsection 9.6(c), whether or not it
constitutes a Syndication Assignment, consummated prior to December 31,
1998, the holders of the Loans that are the subject of such assignment
shall, if the Vendor so requests, be granted the right to decline any
optional or mandatory prepayment of such Loans (excluding regularly
scheduled installments of principal) for a period of up to two years
from the date of consummation of such assignment (the "Two-Year
No-Call"); provided, that not more than $750,000,000 aggregate
principal amount of Loans may be granted the Two-Year No-Call pursuant
to this sentence. The Borrower and the Vendor shall negotiate in good
faith the terms and conditions of an amendment to this Agreement to be
entered into as soon as practicable following the date hereof that
provides for such modifications to this Agreement as are necessary and
appropriate to implement the matters described in the preceding
sentence.
(h) In consideration for the Borrower's agreements and actions
described above in connection with any Bank Syndication, Private Resale
or Offering, the Vendor will pay all costs and expenses incurred by the
Borrower (including the reasonable fees and disbursements and other
charges of counsel to the Borrower) in connection with or in
anticipation of such Bank Syndication, Private Resale or Offering
(whether or not such Bank Syndication, Private Resale or Offering is
successfully completed) and will rebate to the Borrower, in a manner to
be determined by good faith negotiations between the Borrower and the
Vendor, an amount which reflects the net cumulative benefit to the
Vendor from such transactions and which shall be calculated in a manner
to be determined by good faith negotiations of the Borrower and the
Vendor. Such amount in the case of any such Bank Syndication, Private
Resale or Offering, shall be based upon the sum (the "Benefit Amount"),
if greater than zero, of (i) an amount equal to 3% per annum of the
principal amount of the Loans to be assigned in such Bank Syndication,
Private Resale or Offering, calculated from the borrowing date of the
assigned Loans until the date of such assignment, plus (ii) any premium
over the amount of outstanding Loans to be assigned realized by the
Vendor upon such assignment (exclusive of any premium attributable to
any credit support provided by the Vendor, but including, in the case
of any Offering, any premium realized upon the exchange of the related
Refinancing Securities and the sale of the related securities of the
Investment Vehicle), less (iii) any discount under the amount of
outstanding Loans to be assigned realized by the Vendor upon such
assignment (including, in the case of any Offering, any discount
realized upon the sale of the related Refinancing Securities and the
sale of the related securities of the Investment Vehicle), less (iv)
the Vendor's out-of-pocket expenses related to such Bank Syndication,
Private Resale or Offering (including expenses of the Borrower in
connection with such Bank Syndication, Private Resale or Offering that
are paid by the Vendor as described above) plus (v) in the case of an
Offering, the amount, if any, by which the interest payable on the
securities sold in such Offering is less than the interest payable on
the Refinancing Securities to which such Offering relates. If the
Benefit Amount is a negative amount and if the Loans assigned in a Bank
Syndication or the Refinancing Securities assigned in a Private Resale
or Offering bear interest at a rate lower than the rate of interest
applicable to the Loans prior to such Bank Syndication, Private Resale
or Offering, the Vendor shall recover such negative amount when and to
the extent the Borrower realizes a benefit from such lower interest
rate, such benefit to be the difference between the interest payable on
the Loans at the rate in effect prior to such Bank Syndication, Private
Resale or Offering and the interest payable on such Loans or
Refinancing Securities after such transaction (exclusive of any such
interest rate difference attributable to any credit support provided by
the Vendor).
(i) If (i) the Borrower consummates a Permitted Refinancing Transaction
in respect of all or a portion of the Loans described in a Refinancing
Notice pursuant to the provisions of this Section or (ii) prior to the
date which is five years after the Closing Date, the Borrower
consummates a Permitted Refinancing Transaction in respect of any Loans
that have not been the subject of a Syndication Assignment, the Vendor
shall rebate to the Borrower on the date of consummation of such
Permitted Refinancing Transaction an amount equal to (i) 3% per annum
on the amount of such Loans for the period from the date such Loans
were originally made through the date of consummation of such Permitted
Refinancing Transaction less (ii) any reasonable out-of-pocket expenses
of the Vendor for actions taken by the Vendor at the request of the
Borrower in connection with such Permitted Refinancing Transaction. In
addition, if the Borrower attempts to consummate a Permitted
Refinancing Transaction and fails to consummate such Permitted
Refinancing Transaction, the Borrower will reimburse the Vendor for the
reasonable out-of-pocket expenses of the Vendor for actions taken by
the Vendor at the request of the Borrower in connection with such
failed Permitted Refinancing Transaction.
(j) In connection with any Offering, the Borrower shall have the right
to designate an investment banking firm to act as co-lead manager, and
the Vendor and the lead manager of such Offering shall provide such
co-lead manager, upon reasonable request, access to the syndicate book
during the marketing and pricing process for such Offering; provided
that the unwillingness of any such firm to enter into definitive
documentation in connection with the Offering shall not preclude the
Vendor from carrying out the Offering.
(k) Notwithstanding the foregoing, the rights and obligations of the
Borrower and the Vendor in connection with any Refinancing Notice or
Syndication Assignment are subject to the following restrictions:
(i) The Borrower and its Restricted Subsidiaries will not be
required to cooperate with the Vendor's Bank Syndication-, Private
Resale- and Offering-related activities, as described in the
preceding paragraphs, more than a total of four times, or more than
two times in any calendar year, and the Vendor will coordinate such
activities with the Borrower to avoid materially interfering with
the Borrower's own financing activities.
(ii) The Vendor will advise the Borrower in a Refinancing Notice of
the market in which it intends to assign the Vendor Commitment or
Loans to which such Refinancing Notice relates, and if the Vendor
changes its intention with respect to the market in which it will
assign such Vendor Commitment or Loans it will promptly advise the
Borrower of such change of intention. If, upon receipt by the
Borrower of any such Refinancing Notice or other notice from the
Vendor, the Borrower advises the Vendor that the Borrower is then
engaged, or contemplates being engaged within the succeeding 90
days, in financing activities in the market in which such
Refinancing Notice or other notice states that the Vendor intends to
assign Vendor Commitment or Loans, the Vendor will, during such
90-day period, refrain from Bank Syndication-, Private Resale-or
Offering-related activities in the affected market; provided, that
at the end of such 90-day period the Vendor shall have the 180-day
period specified in the last sentence of paragraph (a) above in
which to consummate the proposed Syndication Assignment.
(iii) The Vendor will not assign Vendor Commitment or Loans (whether
in connection with a Bank Syndication or otherwise) to persons
(including Investment Vehicles) other than commercial banks and
prime rate funds if, after giving effect thereto, the amount of
Loans and Unused Commitments held by such other persons exceeds (A)
prior to the Transition Date (as defined below) the lesser of (x)
49% of the aggregate amount of Loans and Unused Commitments
(excluding from such calculation any Loans that have been exchanged
for Refinancing Securities) and (y) $750,000,000, or (B) after the
Transition Date, $750,000,000.
(l) The Borrower and the Vendor acknowledge that it is the desire of
the Vendor to assign the Loans and/or Vendor Commitment as promptly as
practicable and that it is the desire of the Borrower for such
assignments to be effected in a manner that (i) does not adversely
affect the Borrower's own financing activities, (ii) does not provide
to creditors other than commercial banks, prime rate funds and (subject
to the restrictions set forth in clause (iii) of paragraph (k) above)
other Eligible Assignees, covenants, representations and warranties,
defaults and voting provisions that are more restrictive on the
Borrower than those applicable to the High Yield Debt and (iii) to the
extent consistent with market demands, provides economic benefit to the
Borrower as provided in paragraphs (h) and (i) above. Accordingly, the
Borrower and the Vendor agree to work together in good faith to
accomplish such desires. In this connection, the Vendor shall deliver
to the Borrower at least every six months a description of the Vendor's
then current plans with respect to the sale of the Loans and the Vendor
Commitment. Furthermore, the Vendor agrees that if it assigns Loans
directly to an Investment Vehicle, whether through a Syndication
Assignment or otherwise, (i) the provisions of paragraph (k)(iii) will
apply to such assignment and (ii) only Eligible Assignees will be
holders of the securities issued by such Investment Vehicle.
As used in this Section, the following terms have the following
meanings:
"Bank Syndication": any assignment of Loans and/or Vendor Commitment
to commercial banks, prime rate funds or (subject to the restrictions
set forth in clause (iii) of paragraph (k) above) other Eligible
Assignees pursuant to an Assignment and Acceptance pursuant to
subsection 9.6(c); any such assignment of Loans may, if so determined
by the Vendor and subject to the entering into of any necessary
amendments to the Credit Agreement, be effected under terms providing
that such Loans are being assigned at a discount from or premium over
the principal amount thereof, that such Loans will bear interest at a
lower interest rate margin than the interest rate margin applicable to
such Loans prior such assignment, that such Loans will benefit from the
Five-Year No-Call or the Two-Year No-Call, as the case may be, or that
such Loans will have such other economic terms (to the extent such
variances in terms are permissible under all relevant Contractual
Obligations of the Borrower) as shall be acceptable to the Vendor and
the Borrower.
"Offering": any public offering or private placement of securities
issued by an Investment Vehicle whose assets consist principally of Re-
financing Securities assigned by the Vendor to such Investment
Vehicle.
"Private Resale": any private resale (not in connection with a
public offering, whether or not underwritten, or a private placement
that is underwritten for resale pursuant to Rule 144A, Regulation S or
otherwise under the Securities Act or sold on an agency basis by a
broker-dealer or one of its Affiliates to 10 or more beneficial
holders) of Refinancing Securities.
"Refinancing Securities": securities issued by the Borrower (i)
which are exchanged by the Borrower for Loans held by the Vendor in a
transaction constituting a Permitted Refinancing, (ii) in respect of
which interest and fees are payable at an aggregate margin or rate (as
the case may be) per annum not in excess of that applicable to the
Loans exchanged therefor (unless the Borrower shall otherwise agree),
(iii) the terms relating to payment of principal of which (including
mandatory prepayment) are equivalent to, or more favorable to the
Borrower than, those applicable to the Loans exchanged therefor (except
as modified by the Five-Year No-Call), (iv) are subject to provisions
requiring such Refinancing Securities to be secured by the Collateral
and guaranteed by the Guarantees equally and ratably with the other
Secured Obligations that are Loans being exchanged therefor and (v) are
otherwise subject to terms and conditions substantially identical to
those applicable to the High Yield Debt (but which include mutually
agreeable covenants reflecting the secured nature of such Refinancing
Securities).
"Transition Date": the date on and after which the calculation of
Requisite Aggregate Lenders is made in accordance with clause (b) of
the definition thereof in subsection 1.1 of this Agreement.
6. Certain Restriction on Transfers
Notwithstanding any provision to the contrary in subsection 9.6,
prior to March 31, 1997, (i) the Vendor may not engage in any selling efforts
with respect to, or consummate, any assignment of any undrawn Vendor Commitment
and (ii) except as disclosed to the Vendor prior to the date hereof, no lender
under the Other Vendor Credit Facility may engage in selling efforts with
respect to, or consummate, any assignment of any undrawn commitment of such
lender under the Other Vendor Credit Facility.
<PAGE>
SCHEDULE II
LENDER COMMITMENTS
Name of Lender Percentage of Vendor Commitment
Lucent Technologies Inc. 100%
<PAGE>
SCHEDULE 3.17(A)
THE BORROWER'S MTA'S
Birmingham
Boston-Providence
Buffalo-Rochester
Dallas-Fort Worth
Denver
Des Moines-Quad Cities
Detroit
Indianapolis
Kansas City
Little Rock
Louisville-Lexington-Evansville
Miami-Fort Lauderdale
Milwaukee
Minneapolis-St. Paul
Nashville
New Orleans-Baton Rouge
New York
Oklahoma City
Phoenix
Pittsburgh
Portland
St. Louis
Salt Lake City
San Antonio
San Francisco-Oakland-San Jose
Seattle
Spokane-Billings
Tulsa
Wichita
<PAGE>
SCHEDULE 6.2(G)
EXISTING INDEBTEDNESS
10% Notes Payable-Zimmer Co., due 2006 $757,522.61
<PAGE>
SCHEDULE 6.4(A)
EXISTING GUARANTEE OBLIGATIONS
- None -
<PAGE>
EXHIBIT A
THIS NOTE AND THE LOANS EVIDENCED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES LAWS OF ANY STATE; THE LOANS EVIDENCED HEREBY ARE BEING MADE
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS; THIS NOTE AND THE LOANS EVIDENCED
HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"), ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS NOTE OR THE ACCURACY OR ADEQUACY OF THE SUMMARY
BUSINESS PLAN OF THE BORROWER, DATED MARCH 1996, AND ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL; THIS NOTE AND THE LOANS EVIDENCED HEREBY ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT ABE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT
AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE
REGISTER MAINTAINED BY THE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
FORM OF NOTE
$___________________ New York, New York
_______ ___, _____
FOR VALUE RECEIVED, the undersigned, SPRINT SPECTRUM L.P., a
Delaware limited partnership (the "Borrower"), hereby unconditionally promises
to pay to the order of (the "Lender") at the office of located at , in lawful
money of the United States of America and in immediately available funds, the
lesser of (a) the principal amount of DOLLARS ($ ) and (b) the aggregate unpaid
amount of the Loans made to the Borrower by the Lender pursuant to the Credit
Agreement (as defined below). The principal amount shall be paid in the amounts
and on the dates specified in subsection 2.3 of the Credit Agreement (as defined
below). The Borrower further agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in subsections 2.7 and 2.8 of the Credit Agreement
(as defined below).
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at the rate or rates provided in the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each Loan
made pursuant to the Credit Agreement and the date and amount of each payment or
prepayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period with respect thereto. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.
This Note (a) is one of the Notes referred to in the Credit
Agreement, dated as of October 2, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, Lucent
Technologies Inc., the Lender, the other banks and financial institutions and
entities from time to time parties thereto and Lucent Technologies Inc., as
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a description
of the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
No claim may be made under this Note against any of the direct or
indirect partners of the Borrower for the payment of principal of, or interest
on, the Loans, or any other amounts payable under the Credit Agreement or this
Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By:
Title:
<PAGE>
Schedule A
to Note
----------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
- ----- ------- ----------- ---------- ------------- --------------- -------------
Amount of Amount of
Amount Principal ABR Loans
Amount Converted of ABR Converted to Unpaid Prin-
of ABR to Loans Eurodollar cipal Balance Notation
Date Loans ABR Loans Repaid Loans of ABR Loans Made By
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
<PAGE>
Schedule B
to Note
----------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ----- -------- --------- ---------- ---------- ----------- ----------- ---------
Interest Amount of Amount of Unpaid
Amount Period & Principal Eurodollar Principal
Amount Converted Eurodollar of Loans Con- Balance
of Euro to Euro- Rate with Eurodollar verted to of Notation
dollar dollar Respect Loans ABR Eurodollar Made
Date Loans Loans Thereto Repaid Loans Loans Eurodollar
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
<PAGE>
EXHIBIT B-1
LEGAL OPINION OF SIMPSON THACHER & BARTLETT
October __, 1996
Lucent Technologies Inc., as Lender
and as Agent (the "Agent")
under the Credit Agreement, as
hereinafter defined
Re: Credit Agreement, dated as of October 2, 1996 (the "Credit
Agreement"), among Sprint Spectrum L.P. (the "Borrower"),
the entities from time to time parties thereto as lenders
(the "Lenders") and the Agent
Ladies and Gentlemen:
We have acted as counsel to the Borrower in connection with the
preparation, execution and delivery of the Credit Agreement. Unless otherwise
indicated, capitalized terms used but not defined herein shall have the
respective meanings set forth in the Credit Agreement. This opinion is furnished
to you pursuant to subsection 4.1(g)(i) of the Credit Agreement.
In connection with this opinion, we have examined:
(A) the Credit Agreement; and
(B) the form of the Notes which may be delivered pursuant to the
Credit Agreement after the date hereof.
We also have examined the originals, or certified, conformed or reproduction
copies, of such records, agreements, instruments and other documents and have
made such other investigations as we have deemed relevant and necessary in
connection with the opinions expressed herein. As to questions of fact material
to this opinion, we have relied upon certificates as to matters of fact of
public officials and of officers and representatives of the Loan Parties. In
addition, we have examined, and have relied as to matters of fact upon the
representations made in the Loan Documents.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
As to all matters covered by the opinion letter delivered to you on
the date hereof by Charles R. Wunsch, Associate General Counsel of the Borrower,
we have assumed the accuracy of the legal opinions expressed therein to the
extent relating to the law of the State of Missouri and the State of Delaware.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
(1) The Credit Agreement constitutes, and each Note, when executed
and delivered by the Borrower in accordance with the Credit Agreement, will
constitute, a valid and legally binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms.
(2) The Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended. The Borrower is not a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935.
(3) No consent, order or authorization of, filing with, notice to or
approval or other act by or in respect of, any United States or State of New
York Governmental Authority is required to be obtained or made by the Borrower
in connection with the borrowings under the Credit Agreement or with the
execution, delivery, performance, validity or enforceability of the Credit
Agreement or any Notes other than those filings required in connection with the
perfection of the Liens created by the Security Documents.
(4) The execution, delivery and performance of the Credit Agreement
and any Notes, the borrowings under the Credit Agreement and the use of the
proceeds thereof will not violate any law, rule or regulation of any United
States or State of New York Governmental Authority applicable to the Borrower or
any of its Subsidiaries.
(5) No registration under the Securities Act of 1933, as amended, of
the Loans or the Notes is required for the borrowing by the Borrower of the
Loans or the issuance by the Borrower of any Notes solely in the manner
contemplated by the Credit Agreement.
Our opinion in paragraph (1) above is subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing.
We express no opinion with respect to:
<PAGE>
(A) any matters subject to the Communications Act of 1934, as
amended;
(B) the effect of any provision of the Credit Agreement insofar as
it provides that any Person purchasing a participation from a
Lender may exercise set-off or similar rights with respect to
such participation or that any Lenders may exercise set-off or
similar rights other than in accordance with applicable law;
(C) the effect of any provision of the Credit Agreement relating
to indemnification or exculpation that is inconsistent with
public policy; and
(D) the effect of the compliance or noncompliance with any federal
or state laws or regulations applicable to any of the Lenders
or their affiliates because of their legal or regulatory
status or the nature of their businesses.
In addition, we express no opinion as to the enforceability of any
provision of the Credit Agreement whereby the Borrower purports to submit to the
subject matter jurisdiction of the United States District Court for the Southern
District of New York. We note the limitations of 28 U.S.C. ss. 1332 on federal
court jurisdiction where diversity of citizenship is lacking, and we also note
that such submission cannot supersede that court's discretion in determining
whether to transfer an action from one federal court to another under 28 U.S.C.
ss. 1404(a).
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States.
This opinion letter is rendered to you in connection with the
above-described transactions. It may not be relied upon by you for any other
purpose, or relied upon by any other Person without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT B-2
FORM OF LEGAL OPINION OF CHARLES R. WUNSCH, ESQ.
October __, 1996
Lucent Technologies Inc., as Lender
and as Agent (the "Agent")
under the Credit Agreement, as
hereinafter defined
Re: Credit Agreement, dated as of October 2, 1996 (the "Credit
Agreement"), between Sprint Spectrum L.P. (the "Borrower"),
the lending institutions identified in the Credit Agreement
(the "Lenders") and the Agent
Ladies and Gentlemen:
I am the Associate General Counsel of the Borrower and have acted in
such capacity in connection with the preparation, execution and delivery of the
Credit Agreement. Unless otherwise indicated, capitalized terms used but not
defined in this opinion letter shall have the respective meanings set forth in
the Credit Agreement. This opinion is furnished to you pursuant to subsection
4.1(g)(ii) of the Credit Agreement.
<PAGE>
In connection with this opinion letter, I have examined or had
attorneys on my staff examine:
(A) the Credit Agreement; and
(B) the form of the Notes which may be delivered pursuant to the
Credit Agreement after the date of this opinion letter.
I or attorneys on my staff also have examined the originals, or certified,
conformed or reproduction copies, of such records, agreements, instruments and
other documents and have made such other investigations as I have deemed
relevant and necessary in connection with the opinions expressed in this opinion
letter. As to questions of fact material to this opinion, I have relied upon
certificates as to matters of fact of public officials and of officers and
representatives of the Borrower. In addition, I have examined, and have relied
as to matters of fact upon the representations made in the Loan Documents.
In rendering the opinions set forth below, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth in this opinion letter, I am of the
opinion that:
<PAGE>
(1) Each of the Borrower and its Restricted Subsidiaries (a) is duly
formed, validly existing and in good standing under the laws of the
jurisdiction of the State of Delaware, (b) has the partnership power
and authority to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently
engaged and (c) is duly qualified to do business and in good standing
in each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect.
(2) The Borrower has the power and authority to make, execute,
deliver and perform the Credit Agreement and any Notes and to borrow
under the Credit Agreement and has taken all necessary partnership
action to authorize the borrowings on the terms and conditions of the
Credit Agreement and to authorize the execution, delivery and
performance of the Credit Agreement and any Notes. The Credit Agreement
has been duly executed and delivered on behalf of the Borrower.
(3) No consent, order or authorization of, filing with, notice to or
approval or other act by or in respect of, any United States or State
of Missouri Governmental Authority is required to be obtained or made
by the Borrower in connection with the borrowings under the Credit
Agreement or with the execution, delivery, performance, validity or
enforceability of the Credit Agreement or any Notes other than those
filings required in connection with the perfection of the Liens created
by the Security Documents.
(4) The execution, delivery and performance of the Credit Agreement
and any Notes, the borrowings under the Credit Agreement and the use of
the proceeds thereof will not violate the partnership agreement of
Holding or the Borrower or any of its Subsidiaries or any law, rule or
regulation of any United States or State of Missouri Governmental
Authority applicable to the Borrower or any of its Subsidiaries, or, to
my knowledge, any Contractual Obligation of, or any determination,
judgment, writ, injunction, decree or order of any arbitrator or court
or other United States or State of Missouri Governmental Authority
applicable to, the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of
its or their respective properties or revenues pursuant to any such
Partnership Agreement, law, rule or regulation or, to my knowledge, any
such Contractual Obligation or any determination, judgment, writ,
injunction, decree or order or Contractual Obligation, other than the
Liens created by the Security Documents.
(5) To my knowledge, no litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or
threatened by or against the Borrower or any of its Restricted
Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or (b) which
could reasonably be expected to have a Material Adverse Effect.
(6) To my knowledge, the following constitute all the Subsidiaries
of the Borrower as of the date of this opinion letter: (a) WirelessCo,
L.P. (the sole general partner of which is the Borrower and the sole
limited partner of which is MinorCo), (b) Sprint Spectrum Equipment
Company, L.P. (the sole general partner of which is the Borrower and
the sole limited partner of which is MinorCo), (c) Sprint Spectrum
Realty Company, L.P. (the sole general partner of which is the Borrower
and the sole limited partner of which is MinorCo) and (d) Sprint
Spectrum Finance Corporation, a Delaware corporation and a wholly owned
Subsidiary of the Borrower.
I express no opinion with respect to any matters subject to the
Communications Act of 1934, as amended.
I am a member of the Bar of the State of Missouri, and I do not
express any opinion herein concerning any law other than the law of the State of
Missouri, the federal law of the United States and the Delaware Revised Uniform
Limited Partnership Act.
This opinion letter is rendered to you in connection with the above
described transactions. It may not be relied upon by you for any other purpose,
or relied upon by any other Person without my prior written consent.
Very truly yours,
Charles R. Wunsch
<PAGE>
EXHIBIT B-3
FORM OF LEGAL OPINION OF MORRISON & FOERSTER LLP
October __, 1996
Lucent Technologies Inc., as Lender
and as Agent (the "Agent")
under the Credit Agreement, as
hereinafter defined
Re: Credit Agreement, dated as of October 2, 1996
(the "Credit Agreement"), among Sprint Spectrum L.P.
(the "Borrower"), the lending institutions identified
in the Credit Agreement (the "Lenders") and the Agent
Ladies and Gentlemen:
We have been requested to provide you with this opinion
pursuant to subsection 4.1(g)(iii) of the Credit Agreement. This opinion
addresses certain licenses listed in Schedule I that are held by WirelessCo,
L.P. ("WirelessCo"), a subsidiary of the Borrower. Except as otherwise provided
herein, capitalized terms used in this opinion shall be defined as set forth in
the Credit Agreement.
This Firm has been engaged as special Federal Communications
Commission ("FCC") counsel to the Borrower in connection with the Credit
Agreement. WirelessCo has been authorized by the FCC to provide Personal
Communications Services ("PCS"). As special FCC counsel, this opinion is limited
to those matters within the jurisdiction of the FCC pertaining to PCS. As to
questions of law, the following opinions are based upon only the Communications
Act of 1934, as amended by the Telecommunications Act of 1996 ("Communications
Act"), and the rules, regulations and published opinions of the FCC relating
thereto. We offer no opinion as to any other federal law or the laws, rules or
regulations of any state or local government or regulatory authority.
In connection with this opinion, we have examined, and relied
upon, the FCC licensing records and copies of documents filed by WirelessCo with
the FCC and have compared these records to the licenses listed in Schedule I
(the "Licenses"). We also have obtained, and relied upon as to matters of fact,
without independent investigation, such certifications from officers of the
Borrower (the "Officers' Certificates") as we have deemed necessary for purposes
of this opinion. We have also examined FCC orders and other records of the FCC's
Wireless Telecommunications Bureau (the "FCC Files") and have made telephone
inquiries to FCC staff in the FCC's Wireless Telecommunications Bureau with
respect to the opinions stated in paragraphs (iii), (iv), (v), and (vi) herein.
We have also examined the Credit Agreement and the form of Notes which may be
delivered pursuant to the Credit Agreement after the date hereof and have
examined such other documents and records and made such other investigations as
we have deemed relevant and necessary in connection with this opinion.
As to matters of fact, we have relied upon and assumed the
accuracy and completeness of the FCC Files, the documents filed by WirelessCo
with the FCC, and the Officers' Certificate(s). In rendering this opinion, we
have not independently investigated, established or verified the factual basis
of any opinion set forth herein, and, unless otherwise indicated herein, have
relied for such matters solely upon the FCC Files, the documents filed by
WirelessCo with the FCC and the Officers' Certificate(s).
We have assumed: (i) the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
any copies thereof submitted to us as certified, conformed or photostatic copies
for our examination; (ii) that the signatures on all documents examined by us
are genuine; (iii) that where any such signature purports to have been made in a
corporate, governmental, fiduciary or other capacity, the person who affixed
such signature to such documents had authority to do so; and (iv) that all
public files, records and certificates of, or furnished by, governmental or
regulatory agencies or authorities are true, correct and complete.
As to all matters covered by the opinion letter delivered to
you on the date hereof by Charles R. Wunsch, Associate General Counsel of the
Borrower, we have relied upon such opinion letter and assumed the accuracy of
the legal opinions expressed therein.
Based upon our examination of the foregoing documents, records
and disclosures and subject to the qualifications, assumptions and limitations
set forth herein, we are of the opinion that:
(i) The execution and delivery of the Loan Documents and the
consummation by the Loan Parties of all of the transactions contemplated thereby
and the performance thereunder will not result in a violation of the
Communications Act or any order, rule or regulation of the FCC.
(ii) No consent, approval, authorization, order, registration,
filing or qualification of or with, or any other act by, any court or
governmental agency or body is required under the Communications Act or the
rules, regulations and published policies of the FCC for the valid execution,
delivery and consummation of and performance under the Loan Documents or the
consummation by the Loan Parties of the transactions contemplated thereby.
(iii) WirelessCo holds and has the right to use all of the
Licenses, without any conflict known to us with the rights of others, except as
such conflict, taken in the aggregate, would not have a Material Adverse Effect.
Such Licenses are in full force and effect and we are not aware of any other
licenses or other approvals or authorizations required by the Borrower or any
Restricted Subsidiary to conduct its business as now operated or as contemplated
to be operated by it.
(iv) To the best of our knowledge, there is no material
respect in which the operation of the Borrower and the Restricted Subsidiaries'
businesses is not in accordance with the Licenses, the Communications Act and
all orders, rules, regulations and published policies of the FCC.
(v) To the best of our knowledge, there are no material
proceedings threatened, pending or contemplated before the FCC against or
involving the properties, businesses or Licenses of the Borrower or any
Restricted Subsidiary.
(vi) To the best of our knowledge, no event has occurred as of
the date hereof that permits, or with notice or lapse of time or both would
permit, the suspension, revocation or termination of any of the Licenses or that
might result in any other material impairment of the rights of the Borrower or
the Restricted Subsidiaries therein.
Whenever our opinion herein with respect to the existence or
absence of facts is indicated to be based on the best of our knowledge or words
to such effect it is intended to signify that, in the course of our
representation of the Borrower in connection with Communications Act and FCC
regulatory matters, none of Cheryl A. Tritt, Joan E. Neal, Joyce H. Jones, Diane
S. Killory, Charles H. Kennedy, Susan H. Crandall, James A. Casey and Stephen J.
Kim (the only attorneys of this Firm with substantive involvement in
representing the Borrower in Communications Act and FCC regulatory matters)
acquired actual knowledge of the existence or absence of any such facts. Except
to the extent expressly stated herein, we have not undertaken any independent
investigation to determine the existence or absence of such facts, and no
inference as to our knowledge of the existence of such facts should be drawn
from the fact of our representation of the Borrower.
The opinion expressed herein is rendered as of the date of
this letter and is specific to the transactions and the documents referred to
herein. This opinion may not be relied upon for any other purpose or by any
other person or entity without our prior written consent. This opinion is
furnished solely for your benefit, and may not be relied upon by any other
person without our prior written consent.
Very truly yours,
Morrison & Foerster LLP
<PAGE>
SCHEDULE I
PCS LICENSES HELD BY WIRELESSCO, L.P.1/
Location Call Sign Market No.
New York KNLF204 M001 B
San Francisco-Oakland- KNLF208 M004 A
San Jose
Detroit KNLF211 M005 B
Dallas-Fort Worth KNKF215 M007 B
Boston-Providence KNLF217 M008 B
Minneapolis-St. Paul KNLF223 M012 A
Miami-Fort Lauderdale KNLF229 M015 A
New Orleans-Baton Rouge KNLF233 M017 A
St. Louis KNLF238 M019 B
Milwaukee KNLF239 M020 A
Pittsburgh KNLF241 M021 A
Denver KNLF243 M022 A
Seattle KNLF248 M024 B
Louisville-Lexington- KNLF252 M026 B
Evansville
Phoenix KNLF254 M027 B
Birmingham KNLF257 M029 A
Portland KNLF260 M030 B
Indianapolis KNLF261 M031 A
Des Moines-Quad Cities KNLF264 M032 B
San Antonio KNLF265 M033 A
Kansas City KNLF267 M034 A
Buffalo-Rochester KNLF269 M035 A
Salt Lake City KNLF272 M036 B
Little Rock KNLF280 M040 B
Oklahoma City KNLF282 M041 B
Spokane-Billings KNLF284 M042 B
Nashville KNLF285 M043 A
Wichita KNLF292 M046 B
Tulsa KNLF296 M048 B
1/ WirelessCo, L.P. PCS licenses were graned by the FCC on June 23, 1995 and
will expire June 23, 2005.
<PAGE>
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of October
2, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Sprint Spectrum L.P., a Delaware limited partnership
(the "Borrower"), Lucent Technologies Inc., the lenders named therein and Lucent
Technologies Inc., as agent for the Lenders (in such capacity, the "Agent").
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
<PAGE>
(i) The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest").
(ii) The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that the
Assignor is the legal and beneficial owner of the interests being assigned by it
hereunder and has not created any adverse claim upon the interest being assigned
by it hereunder and that such interest is free and clear of any such adverse
claim; (b) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower, any of its Subsidiaries
or any other obligor or the performance or observance by the Borrower, any of
its Subsidiaries or any other obligor of any of their respective obligations
under the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches any Notes held
by it evidencing the Assigned Interest and (i) requests that the Agent, upon
request by the Assignee, exchange the attached Notes for a new Note or Notes
payable to the Assignee and (ii) if the Assignor has retained any Loans,
requests that the Agent exchange the attached Notes for a new Note or Notes
payable to the Assignor, in each case in amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Effective Date).
(iii) The Assignee (a) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (b) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements and other information delivered pursuant to subsections
5.1(a) and (b) and 5.2(a) and (b) of the Credit Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that, except as may be otherwise expressly agreed in writing between the
Assignee, on the one hand, and the Assignor, the Agent or the Lender, as the
case may be, on the other hand, it will, independently and without reliance upon
the Assignor, the 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 the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; (e) agrees that it
will be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender including, if it is
organized under the laws of a jurisdiction outside the United States, its
obligation pursuant to subsection 2.13(b) of the Credit Agreement; and (f)
confirms and agrees with the provisions of subsection 9.15 of the Credit
Agreement.
(iv) The effective date of this Assignment and Acceptance
shall be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance by it and recording by the Agent
pursuant to the Credit Agreement, effective as of the Effective Date.
(v) Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) [to
the Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date] [to
the Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date]. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Effective Date or with respect to the making of this assignment directly
between themselves.
(vi) From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
(vii) This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
<PAGE>
Schedule 1
to Assignment and Acceptance
Name of Assignor:
Name and address of Assignee:
Effective Date of Assignment:
Principal Amount of Loans Assigned: $
Funding Percentage Assigned: %**/
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
Title: Title:
Accepted:
LUCENT TECHNOLOGIES INC., as Agent
By:
Title:
**/ Calculate Funding Percentage that is assigned to at least 15 decimal places
and show as a percentage of the Aggregate Unused Commitments of all the
Lenders.
<PAGE>
EXHIBIT D
FORM OF
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this "Agreement"), made
effective as of the ____________ day of _________, 199 , by and between Sprint
Spectrum L.P., a Delaware limited partnership ("Sprint Spectrum"), whose address
is 4717 Grand Avenue, 5th Floor, Kansas City, Missouri 64112, and , a , whose
address is , is to assure the protection and preservation of the confidential
and/or proprietary nature of information to be disclosed or made available to
each other pursuant to or in connection with the transactions contemplated by,
the Credit Agreement dated as of October 2, 1996 (the "Credit Agreement"), by
and among Spring Spectrum, the lenders named therein and Lucent Technologies
Inc., as agent.
NOW, THEREFORE, in reliance upon and in consideration of the
following undertakings, the parties, for themselves, or for any corporation,
partnership, association, joint stock company, limited liability company,
limited liability partnership, or trust directly or indirectly controlling,
controlled by or under common control of such party, or a more than 50% owned
subsidiary of such party (its "Affiliates"), agree as follows:
<PAGE>
1. Scope. For purposes of this Agreement, the "Proprietary
Information" of a party disclosing information (the "Discloser") means any and
all information, including, without limitation, all oral, written, graphical,
and electronic information disclosed to the party receiving the information (the
"Recipient") pursuant to, or in connection with the transactions contemplated
by, the Credit Agreement, whether delivered to the Recipient directly by the
Discloser or indirectly through an agent of the Discloser or Recipient.
2. Limitation. The term "Proprietary Information" does not
include information which: (a) has been or may in the future be published or is
now or may in the future be otherwise in the public domain through no fault of
the Recipient; (b) prior to disclosure pursuant to this Agreement is properly
within the legitimate possession of the Recipient; (c) subsequent to disclosure
pursuant to this Agreement, is lawfully received from a third party having
rights in the information without restriction of the third party's right to
disseminate the information and without notice of any restriction against its
further disclosure; (d) is independently developed by the Recipient through
parties who have not had, either directly or indirectly, access to or knowledge
of such Proprietary Information; (e) is approved for disclosure by prior written
permission of an authorized signatory of Discloser; or (f) is obligated to be
produced by law or under order of a court of competent jurisdiction or other
similar requirement of a governmental agency, or is required to be disclosed to,
or is requested by, the Recipient's outside auditors or examiners in connection
with an audit or examination or so long as the party required to disclose the
information provides the other party with prior written notice of any required
disclosure pursuant to such law, order or requirement.
3. Use. Each party agrees to use the Proprietary Information
received from the other party only for the purpose of the servicing or
protection of its interests in respect of the Loans, the Credit Agreement and
the Loan Documents (each as defined in the Credit Agreement). No other rights,
and particularly licenses, trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under the Credit
Agreement or this Agreement or by the conveying of Proprietary Information
between the parties. Each party agrees that the other may disclose Proprietary
Information received by it to its Affiliates, employees not permitted under the
Credit Agreement and agents, subject to the terms of this Agreement.
4. Reproduction. Proprietary Information supplied is not to
be reproduced in any form except as required to accomplish the intent of this
Agreement.
5. Duty of Care. All Proprietary Information must be retained
by the Recipient in accordance with its customary procedures for handling
confidential information of this nature and disclosed only to the Recipient's
Affiliates or employees (or , attorneys, accountants and agents who have a
non-disclosure obligation at least as restrictive as this Agreement) who need to
know such information for purposes of the servicing or protection of its
interest in respect of the Loans, the Credit Agreement and the Loan Documents
(each as defined under the Credit Agreement) and the transactions contemplated
thereby and to such third parties as the Discloser has consented to by prior
written approval. In addition, the Recipient must provide the same care to avoid
disclosure not permitted under the Credit Agreement or unauthorized use of the
Proprietary Information as it provides to protect its own similar proprietary
information.
6. Ownership. All Proprietary Information, unless otherwise
specified in writing, (a) remains the property of the Discloser, and (b) must be
used by the Recipient only for the purpose stated herein. Upon termination of
this Agreement, all copies of written, recorded, graphical or other tangible
Proprietary Information must either be returned to the Discloser, or destroyed
(i) after the Recipient's need for it has expired or (ii) upon the request of
the Discloser. At the request of the Discloser, the Recipient will furnish a
certificate of an officer of the Recipient certifying that any Proprietary
Information not returned to Discloser has been destroyed.
7. Right to Disclose. Each party warrants that it has the
right to disclose all Proprietary Information which it will disclose to the
other party pursuant to this Agreement, and each party agrees to indemnify and
hold harmless the other from all claims by a third party related to the wrongful
disclosure of such third party's information. Otherwise, neither party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information. Neither party is liable for indirect, incidental, consequential, or
punitive damages of any nature or kind resulting from or arising in connection
with this Agreement.
8. Right to Enjoin Disclosure. The parties acknowledge that a
Recipient's unauthorized disclosure or use of Proprietary Information may result
in irreparable harm. Therefore, the parties agree that, in the event of
violation or threatened violation of this Agreement, without limiting any other
rights and remedies of each other, a temporary restraining order and/or an
injunction to enjoin disclosure of Proprietary Information may be sought against
the party who has breached or threatened to breach this Agreement and the party
who has breached or threatened to breach this Agreement will not raise the
defense of an adequate remedy at law.
9. Disclosure to Third Parties. All media releases and pubic
announcements or disclosures by either party relating to this Agreement, its
subject matter or the purpose of this Agreement are to be coordinated with and
consented to by the other party in writing prior to the release or announcement.
10. No Partnership or Joint Venture Formed. The exchange of
any Proprietary Information between the parties is not intended to be
interpreted that the parties have formed or will form a partnership, joint
venture or other relationship. Any business relationship between the parties, if
any, must be governed by separate agreement.
11. General. (a) This Agreement is governed and construed
under the laws of the State of Missouri and there are no understandings,
agreements or representations, express or implied, not specified herein. (b)
Except for subsection 9.13 of the Credit Agreement, this Agreement represents
the entire understanding between the parties with respect to the confidentiality
and disclosure of Proprietary Information, and the terms of this Agreement
supersede the terms of any prior agreements or understandings, written or oral
with respect thereto. (c) This Agreement may not be amended except in a writing
signed by the parties. (d) The provisions of this Agreement are to be considered
as severable, and in the event that any provision is held to be invalid or
unenforceable, the parties intend that the remaining provisions will remain in
full force and effect. (e) Captions in this Agreement are for ease of reference
only and should not be considered in the construction of this Agreement. (f)
There are no third party beneficiaries to this Agreement. (g) Failure by a party
to enforce or exercise any provision, right or option contained in this
Agreement will not be construed as a present or future waiver of such provision,
right or option.
IN WITNESS THEREOF, the parties have executed this Agreement
as of the effective date stated above.
SPRINT SPECTRUM L.P. ___________________________
By: By:
Name: Name:
Title: Title:
<PAGE>
EXHIBIT E
FORM OF
BORROWING NOTICE
[Date]
To: Lucent Technologies Inc., as Agent
Re: Sprint Spectrum L.P.
Reference is hereby made to the Credit Agreement, dated as of
October 2, 1996, among Sprint Spectrum L.P., Lucent Technologies Inc., the other
lenders from time to time parties thereto and Lucent Technologies Inc., as Agent
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.
In accordance with subsection 2.2 of the Credit Agreement, the
Borrower requests Loans be made as follows:
Borrowing Date: _________________
Amount of Loans to be borrowed: $___________
ABR Loans: $___________
Initial
Eurodollar Loans: Amount Interest Period
$________ _____ months
$________ _____ months
Amount of Cash Advance: $___________
Identity of invoices for Cash Advance:
[To be provided]
<PAGE>
Amount of Credit Advance: $___________
Identity of invoices for Credit Advance:
[To be provided]
Very truly yours,
SPRINT SPECTRUM L.P.
By: ____________________________
Title:
<PAGE>
[CONFORMED COPY]
SPRINT SPECTRUM L.P.
----------------------
$1,800,000,000
CREDIT AGREEMENT
Dated as of October 2, 1996
-----------------------
LUCENT TECHNOLOGIES INC.,
as Lender and Agent
<PAGE>
-i-
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...................................................... 1
1.1 Defined Terms....................................................... 1
1.2 Other Definitional Provisions....................................... 21
1.3 Schedules............................................................22
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS........................ 22
2.1 Commitments......................................................... 22
2.2 Borrowing Procedure................................................. 22
2.3 Repayment of Loans; Evidence of Debt................................ 25
2.4 Optional Prepayments................................................ 26
2.5 Mandatory Prepayments............................................... 26
2.6 Conversion and Continuation Options................................. 27
2.7 Interest Rates and Payment Dates.................................... 27
2.8 Computation of Interest and Fees.................................... 28
2.9 Inability to Determine Interest Rate................................ 28
2.10 Pro Rata Treatment and Payments.................................... 29
2.11 Illegality......................................................... 29
2.12 Requirements of Law................................................ 30
2.13 Taxes 31
2.14 Indemnity.......................................................... 34
2.15 Change of Lending Office; Mandatory Assignment or Prepayment....... 34
2.16 Treatment of Certain Prepayments................................... 35
2.17 Use of Proceeds.................................................... 35
2.18 Fees 35
SECTION 3. REPRESENTATIONS AND WARRANTIES................................... 36
3.1 Financial Condition................................................. 36
3.2 No Change........................................................... 36
3.3 Existence; Compliance with Law...................................... 37
3.4 Power; Authorization; Enforceable Obligations....................... 37
3.5 No Legal Bar........................................................ 37
3.6 No Material Litigation.............................................. 37
3.7 No Default.......................................................... 38
3.8 Ownership of Property; Liens........................................ 38
3.9 Intellectual Property............................................... 38
3.10 Taxes 38
3.11 Federal Regulations................................................ 38
3.12 ERISA 38
3.13 Investment Company and Holding Company Act......................... 39
3.14 Subsidiaries; Parents.............................................. 39
3.15 Absence of Material Obligations. ................................. 40
3.16 Environmental Matters. ........................................... 40
3.17 Licenses........................................................... 41
3.18 Provisions of Other Vendor Credit Facility......................... 41
3.19 No Material Misstatements.......................................... 41
SECTION 4. CONDITIONS PRECEDENT............................................. 42
4.1 Conditions to Initial Loans......................................... 42
4.2 Conditions to Each Loan............................................. 44
SECTION 5. AFFIRMATIVE COVENANTS............................................ 44
5.1 Financial Statements................................................ 44
5.2 Certificates; Other Information..................................... 45
5.3 Payment of Obligations.............................................. 46
5.4 Conduct of Business; Maintenance of Existence; Compliance with
Laws............................................................... 46
5.5 Maintenance of Property; Insurance.................................. 46
5.6 Inspection of Property; Books and Records; Discussions.............. 47
5.7 Notices............................................................. 47
5.8 Environmental Laws.................................................. 48
5.9 After-Acquired Assets............................................... 48
5.10 Delivery of Certain Amendments..................................... 49
5.11 Use of Proceeds.................................................... 49
SECTION 6. NEGATIVE COVENANTS............................................... 50
6.1 Financial Condition Covenants....................................... 50
6.2 Limitation on Indebtedness.......................................... 53
6.3 Limitation on Liens................................................. 55
6.4 Limitation on Guarantee Obligations................................. 57
6.5 Limitation on Fundamental Changes................................... 57
6.6 Limitation on Sale of Assets........................................ 59
6.7 Limitation on Restricted Payments................................... 61
6.8 Limitation on Investments, Loans and Advances....................... 62
6.9 Limitation on Transactions with Affiliates.......................... 63
6.10 Limitation on Lines of Business; Liabilities of Subsidiaries........ 63
6.11 Limitation on Designation of Secured Obligations.................... 64
6.12 Limitation on Interest Rate Agreements.............................. 64
SECTION 7. EVENTS OF DEFAULT................................................ 64
SECTION 8. THE AGENT........................................................ 68
8.1 Appointment......................................................... 68
8.2 Delegation of Duties................................................ 68
8.3 Exculpatory Provisions.............................................. 69
8.4 Reliance by Agent................................................... 69
8.5 Notice of Default and Other Notices................................. 69
8.6 Non-Reliance on Agent and Other Lenders............................. 70
8.7 Indemnification..................................................... 70
8.8 Agent in Its Individual Capacity.................................... 70
8.9 Successor Agent..................................................... 71
SECTION 9. MISCELLANEOUS.................................................... 71
9.1 Amendments and Waivers.............................................. 71
9.2 Notices............................................................. 72
9.3 No Waiver; Cumulative Remedies...................................... 73
9.4 Survival of Representations and Warranties.......................... 73
9.5 Payment of Expenses and Taxes; Indemnity............................ 73
9.6 Successors and Assigns; Participations and Assignments.............. 74
9.7 Adjustments; Set-off................................................ 76
9.8 Counterparts........................................................ 77
9.9 Severability........................................................ 77
9.10 Integration......................................................... 77
9.11 GOVERNING LAW....................................................... 78
9.12 Submission To Jurisdiction.......................................... 78
9.13 Confidentiality..................................................... 78
9.14 Non-Recourse........................................................ 79
9.15 Securities Act Matters.............................................. 79
9.16 Other Agreements.................................................... 79
9.17 WAIVERS OF JURY TRIAL............................................... 79
9.18 Interest Rate Limitation............................................ 79
9.19 Release of Guarantees and Collateral................................ 80
<PAGE>
SCHEDULES:
Schedule I Miscellaneous Provisions
Schedule II Commitments
Schedule 3.17(a) The Borrower's MTA's
Schedule 6.2(g) Existing Indebtedness
Schedule 6.4(a) Existing Guarantee Obligations
EXHIBITS:
Exhibit A Form of Note
Exhibit B-1 Form of Legal Opinion of Simpson Thacher & Bartlett
Exhibit B-2 Form of Legal Opinion of Charles R. Wunsch, Esq.
Exhibit B-3 Form of Legal Opinion of Morrison & Foerster LLP
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Confidentiality Agreement
Exhibit E Form of Borrowing Notice
Exhibit 10.30
The omitted portions indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
CREDIT AGREEMENT, dated as of October 2, 1996, among SPRINT
SPECTRUM L.P., a limited partnership organized under the laws of the State of
Delaware (the "Borrower"), the several banks and other financial institutions
and entities from time to time parties to this Agreement (the "Lenders") and THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative agent
for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower intends to develop and operate a
national wireless telecommunications network;
WHEREAS, the Borrower has requested the Lenders to make
available credit facilities to finance working capital needs, subscriber
acquisition costs, capital expenditures and other general partnership purposes
of the Borrower and its Restricted Subsidiaries; and
WHEREAS, the Lenders are willing to make the requested credit
facilities available on and subject to the terms and conditions set forth in
this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereto hereby agree as follows:
<PAGE>
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
ABR due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"ABR Loans": Loans bearing interest based upon the ABR.
"Additional Collateral": as defined in the Trust Agreement.
"Additional Guarantee": as defined in the Trust Agreement.
"Additional Security Document": as defined in the Trust
Agreement.
"Adjusted EBITDA": for any fiscal period, the sum of (a)
EBITDA for such period plus (b) the aggregate amount deducted in
determining Net Income or Net Loss for such period in respect of sales,
marketing and advertising expenses and consumer-related equipment
subsidy expenses.
"Adjustment Date": (a) with respect to any adjustment in the
Pricing Level resulting from a change in the Moody's Bond Rating or the
S&P Bond Rating, as the case may be, the date on which such change is
publicly announced by Moody's or S&P and (b) with respect to any
adjustment in the Pricing Level resulting from the Borrower's financial
results or condition as shown on the Borrower's financial statements
delivered pursuant to subsection 5.1(a) or (b), as the case may be, for
any fiscal period, the first Business Day following the date of receipt
by the Administrative Agent of such financial statements.
"Administrative Agent": Chase, as administrative agent for
the Lenders under this Agreement, or any successor thereto appointed
pursuant to subsection 8.9 to act as the administrative agent for the
Lenders under this Agreement.
"Affiliate": as to any Person, any other Person (other than,
in the case of the Borrower and any Restricted Subsidiary, any
Restricted Subsidiary) which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting interests, by contract or otherwise.
"Aggregate Commitment": with respect to any Lender, the
aggregate amount of such Lender's Term Loan Commitment and Revolving
Credit Commitment.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Annualized Adjusted EBITDA": for the period ending on the
last day of any fiscal quarter, the product of (a) Adjusted EBITDA for
the two consecutive fiscal quarters ending on such last day,
multiplied by (b) two.
"Annualized EBITDA": for the period ending on the last day of
any fiscal quarter, the product of (a) EBITDA for the two consecutive
fiscal quarters ending on such last day, multiplied by (b) two.
"APC": American PCS, L.P., a Delaware limited partnership.
"Applicable Margin": with respect to each Type of Term Loan
and Revolving Credit Loan, for any day, the rate per annum set forth
below, under the column applicable to such Type, opposite the Pricing
Level in effect on such day:
------------------ ---------------------- ---------------------------
Applicable Margin - Applicable Margin -
Term Loans Revolving Credit Loans
------------------ ---------------------- ---------------------------
Pricing ABR Eurodollar ABR Eurodollar
Level Loans Loans Loans Loans
------------------ -------- ------------ --------- ------------------
Level I Pricing [The Applicable Margin on Term Loans ranges from
------------------ -------- ------------ --------- ------------------
Level II Pricing 0.25% to 1.50%. The Applicable Margin on Revolv-
------------------ -------- ------------ --------- ------------------
Level III Pricing ing Credit Loans ranges from 0.4% to 2.5%]
------------------ -------- ------------ --------- ------------------
Level IV Pricing
------------------ -------- ------------ --------- ------------------
Level V Pricing
------------------ -------- ------------ --------- ------------------
Level VI Pricing
------------------ -------- ------------ --------- ------------------
Level VII Pricing
------------------ -------- ------------ --------- ------------------
Level VIII Pricing
------------------ -------- ------------ --------- ------------------
Level IX Pricing
------------------ -------- ------------ --------- ------------------
Level X Pricing
------------------ -------- ------------ ---------- -----------------
"Asset Sale": any sale, transfer or other disposition or
series of related sales, transfers or other dispositions (excluding any
sale and leaseback transaction pursuant to a Financing Lease) by the
Borrower or any Restricted Subsidiary of any property or assets of the
Borrower or such Restricted Subsidiary (including property subject to
any Lien under any Security Document) to a Person other than the
Borrower or any Restricted Subsidiary; provided that any Asset Swap
permitted under subsection 6.6(e) shall be deemed an Asset Sale only to
the extent provided for in said subsection.
"Asset Sale Proceeds Sub-Account": as defined in the Trust
Agreement.
"Asset Swap": any exchange, with any other Person, of assets
owned by the Borrower and/or any Restricted Subsidiary comprising one
or more Systems, for assets comprising one or more other Systems owned
by such other Person.
"Assignee": as defined in subsection 9.6(c).
"Available Commitment": as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Aggregate Commitment over (b) the aggregate principal amount of all
Loans made by such Lender then outstanding.
"Bank Credit Facility": as defined in the Trust Agreement.
"Benefitted Lender": as defined in subsection 9.7(a).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice pur-
suant to subsection 2.2 as a date on which the Borrower requests the
Lenders to make Loans hereunder.
"BTA": a Basic Trading Area, as defined in 47 C.F.R. ss.
24.202.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Contribution Agreement": the Amended and Restated
Capital Contribution Agreement, dated as of October 2, 1996, among the
Parents and the Borrower, as amended, supplemented or otherwise
modified from time to time in accordance with subsection 6.12.
"Capital Expenditures": for any fiscal period, all
expenditures incurred by the Borrower and its Restricted Subsidiaries
during such period (a) for the purpose of acquiring, constructing,
expanding or improving fixed assets, real property or equipment or (b)
constituting systems and development expenditures related to the
build-out of the Borrower's national wireless telecommunications
network, all as calculated in accordance with GAAP; provided that
expenditures related to the acquisition of Licenses, capitalized
interest and Investments permitted by subsection 6.8 shall not be
considered to be Capital Expenditures.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase or subscribe for any of the foregoing, or any warrants,
rights or options to purchase or subscribe for any such warrants,
rights or options.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any commercial bank
satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d)
commercial paper of a domestic issuer rated at least A-1 by S&P or P-1
by Moody's, (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States or by any political
subdivision or taxing authority of any such state, commonwealth or
territory, the securities of which state, commonwealth, territory,
political subdivision or taxing authority (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with maturities
of one year or less from the date of acquisition backed by standby
letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition or (g) shares of open end
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition.
"Change in Control": the occurrence of (a) prior to the time
at which the Borrower has first attained Investment Grade Status, a
reduction to less than $500,000,000 of the sum of (i) the amount of
Contributed Capital held, directly or indirectly, by Sprint Corporation
and (ii) the portion of the then Committed Capital for which Sprint
Corporation is obligated, (b) prior to the Public Offering Date, a
reduction of the percentage of the aggregate economic or voting equity
ownership of the Borrower that is owned directly or indirectly by
Sprint Corporation to less than 25% or (c) at any time, a reduction of
the percentage of the aggregate economic or voting equity ownership of
the Borrower that is owned directly or indirectly by the Parents to a
percentage not greater than 50%.
"Chase": The Chase Manhattan Bank, a New York banking corpor-
ation.
"Closing Date": the date on which the conditions precedent
set forth in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": as defined in the Trust Agreement.
"Commitment Fee Rate": for any day, the rate per annum set
forth below opposite the Pricing Level in effect on such day:
--------------------------- ------------------------------
Pricing Level Commitment Fee Rate
--------------------------- ------------------------------
Level I Pricing [
--------------------------- ------------------------------
Level II Pricing
--------------------------- ------------------------------
Level III Pricing
--------------------------- ------------------------------
Level IV Pricing
--------------------------- ------------------------------
Level V Pricing
--------------------------- ------------------------------
Level VI Pricing
--------------------------- ------------------------------
Level VII Pricing
--------------------------- ------------------------------
Level VIII Pricing
--------------------------- ------------------------------
Level IX Pricing
--------------------------- ------------------------------
Level X Pricing
--------------------------- ------------------------------
"Commitments": the Revolving Credit Commitments and the Term
Loan Commitments.
"Committed Capital": as to any Parent at any time, the aggre-
gate amount of cash contributions then committed and available to be
made by such Parent or its Affiliates pursuant to the Capital Contri-
bution Agreement.
"Commonly Controlled Entity": an entity, whether or not in-
corporated, which is part of a group which includes the Borrower and
which is treated as a single employer under Section 414(b) or (c) of
the Code.
"Communications Act": the Communications Act of 1934, and an
similar or successor federal statute, and the rules and regulations of
the FCC thereunder, all as amended and as the same may be in effect
from time to time.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Contributed Capital": at any time, the aggregate amount which
shall theretofore have been received by the Borrower as a contribution
to its capital or as consideration for the issuance of partnership
interests in the Borrower; Contributed Capital shall in any event
exclude the proceeds of any Specified Affiliate Debt and any Restricted
Equity.
"Corporate Trustee": as defined in the definition of Trust
Agreement.
"Covered Pops": at any time, the aggregate number of Pops
within each geographic area for which facilities owned by the Borrower
and its Restricted Subsidiaries that provide service to such geographic
area have achieved "substantial completion" pursuant to the terms of
the applicable Vendor Procurement Contract or, if not constructed under
a Vendor Procurement Contract, have achieved at least the equivalent
degree of completion.
"Currency Rate Agreement": any foreign currency exchange
agreement or other exchange rate hedging arrangement to or under which
the Borrower or any Restricted Subsidiary (other than a Special Purpose
Subsidiary) is a party or a beneficiary that is designed and entered
into to protect against fluctuations in currency exchange rates and not
for speculative purposes.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Direct-Lien Assets": assets of the Borrower or any Restricted
Subsidiary constituting any of the following: accounts, patents,
trademarks, the rights of the Borrower under the Capital Contribution
Agreement, other general intangibles and other types of Personal
Property Assets on which, under applicable law, a consensual Lien can
be perfected by a limited number of Uniform Commercial Code and/or
Federal filings naming the Borrower or such Restricted Subsidiary, as
the case may be, as debtor or by the delivery of a pledged instrument
to the party secured by such Lien
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": for any fiscal period, the Net Income or Net Loss,
as the case may be, for such fiscal period, after restoring thereto
amounts deducted for, without duplication, (a) Interest Expense, (b)
income tax expense, (c) depreciation and amortization and (d) other
non-cash charges, provided, however, that there shall in any event be
excluded from EBITDA any portion thereof attributable to the income of
any Person (other than a Restricted Subsidiary) in which the Borrower
or any Restricted Subsidiary has any ownership interest except to the
extent that any such income has been actually received by the Borrower
or such Restricted Subsidiary in the form of cash dividends or similar
distributions.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning pollution or
protection of the environment or human health or safety as relating to
the environment, as now or may at any time hereafter be in effect.
"Environmental Permit": any permit, approval, authorization,
certificate, license, variance, filing or permission required by or
from any Governmental Authority pursuant to any Environmental Law.
"EquipmentCo": Sprint Spectrum Equipment Company, L.P., a
Delaware limited partnership.
"ERISA": the Employee Retirement Income Security Act of 1974
as amended from time to time.
"Eurodollar Loans": Loans bearing interest based upon the
Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate of interest
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Telerate screen as
of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period. In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such screen), the
"Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be
agreed upon by the Administrative Agent and the Borrower or, in the
absence of such agreement, the "Eurodollar Rate" shall instead be the
rate per annum equal to the average (rounded to the nearest 1/100th of
1%) of the respective rates notified to the Administrative Agent by
each of the Reference Lenders as the rate at which such Reference
Lender is offered Dollar deposits in the amount of $10,000,000 at or
about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein.
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": for any period, the sum of (a) Net Income
(or Net Loss) for such period plus (b) the aggregate amount of all
non-cash charges deducted in arriving at such Net Income (or Net Loss)
minus (c) the aggregate amount of all scheduled repayments and
voluntary and mandatory prepayments of Indebtedness for borrowed money
of the Borrower and its Restricted Subsidiaries on a consolidated basis
during such period (but only to the extent, in the case of prepayments
of Indebtedness outstanding under a committed revolving credit
facility, that the commitments to extent credit under such committed
revolving credit facility are permanently reduced in connection
therewith) minus (d) the aggregate amount of distributions made by the
Borrower during such period pursuant to subsections 6.7(i) (to the
extent the tax liabilities related to such distributions are not
deducted in arriving at such Net Income (or Net Loss)) and 6.7(ii)
minus (e) the aggregate amount of all cash Capital Expenditures
incurred during such period minus (f) any net increases in Working
Capital during such period plus (f) any net decreases in Working
Capital during such period plus (g) (to the extent excluded in the
calculation of such Net Income (or Net Loss)) the sum of all cash
payments made to the Borrower during such period in connection with the
termination of any Interest Rate Agreement minus (h) (to the extent
excluded in the calculation of such Net Income (or Net Loss)) the sum
of all cash payments made by the Borrower during such period in
connection with the termination of any Interest Rate Agreement.
"Excluded Assets": at any time, the collective reference to
(a) all assets then subject to a Lien permitted by subsection 6.3(f),
(g), (h), (i), (p), (q) and (r), and (b) any other assets of the
Borrower and its Restricted Subsidiaries (i) which then have a book
value not exceeding $200,000,000 in the aggregate and (ii) none of
which individually then has a book value exceeding $15,000,000.
"FCC": the Federal Communications Commission, or any other
similar or successor agency of the Federal government administering the
Communications Act.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"GAAP": generally accepted accounting principles in the United
States of America used in connection with the preparation of the
consolidated balance sheet and other financial statements described in
subsection 3.1(a) ("Fixed GAAP") or, when such term is used in
subsections 5.1, 5.3, 5.6 and 6.3, generally accepted accounting
principles in the United States of America in effect from time to time
("Floating GAAP").
"Governmental Authority": any nation or government, any stat
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness or
other obligation (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or
payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation, as to any Person, shall not include
endorsements by such Person of instruments for deposit or collection in
the ordinary course of business but shall include the obligations of
such Person in respect of the Indebtedness and other obligations of any
partnership of which such Person is a general partner (other than any
such Indebtedness or other obligations with respect to which the payee
thereof has no enforceable right of recourse to such Person for the
payment thereof). The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless
such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantees": as defined in the Trust Agreement.
"Guarantor": any Person delivering a Guarantee pursuant to
the Trust Agreement.
"Hazardous Substances": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regu-
lated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Hedging Agreement Obligations": at any time, the aggregate
amount of all monetary obligations of the Borrower to any financial in-
stitution that are accrued and unpaid at such time under any one or
more Interest Rate Agreements and Currency Rate Agreements.
"High Yield Debt": the collective reference to the Borrower's
11% Senior Notes Due 2006 and 12 1/2% Senior Discount Notes Due 2006
and the respective indentures under which such Notes have been issued.
"Holding": Sprint Spectrum Holding Company, L.P., a Delaware
limited partnership and the general partner of the Borrower.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than trade liabilities
incurred in the ordinary course of business and payable in accordance
with customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under Financing Leases, (d) all
obligations of such Person in respect of acceptances and other similar
obligations issued or created for the account of such Person, (e) all
obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such
Person and (f) all liabilities secured by (or for which the holder of
such liabilities has an existing right, contingent or otherwise, to be
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.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 3.9.
"Interest Expense": for any fiscal period, the amount of (a)
interest expense of the Borrower and its Restricted Subsidiaries for
such fiscal period determined in accordance with GAAP plus (b) interest
expense in respect of Specified Affiliate Debt for such fiscal period
determined in accordance with GAAP.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of
such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three
months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six or, with the
consent of each Lender in its sole discretion, nine or twelve
months thereafter, as selected by the Borrower in its notice
of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six or, with the
consent of each Lender in its sole discretion, nine or twelve
months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Per-
iods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) no Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date shall be selected
by the Borrower in respect of Revolving Credit Loans, and no
Interest Period that would otherwise extend beyond the final
maturity date of the Term Loans shall be selected by the
Borrower in respect of the Term Loans; and
(iii) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Agreement": any interest rate swap or other
interest rate hedge arrangement to or under which the Borrower is a
party or a beneficiary that is designed and entered into to protect
against fluctuations in interest rates and not for speculative pur-
poses.
"Investment Grade Status": shall exist at any time when the
actual or implied rating of the Borrower's senior long-term unsecured
debt is at or above Baa3 from Moody's or BBB- from S&P; if either of
Moody's or S&P shall change its system of classifications after the
date of this Agreement, Investment Grade Status shall exist at any time
when the rating of the Borrower's senior long-term unsecured debt is at
or above the new rating which most closely corresponds to the
above-specified level under the previous rating system.
"Investments": as defined in subsection 6.8.
"Lenders": as defined in the preamble hereto.
"Level I Pricing": applies from (a) (i) the Closing Date and
(ii) any date on which no other Pricing Level is applicable until (b)
the next subsequent Adjustment Date on which another Pricing Level be-
comes applicable.
"Level II Pricing": applies from (a) the Adjustment Date
following a fiscal quarter for which [____________] until (b) the next
subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level III Pricing": applies, subject to clause (b) of the
definition of Pricing Level, from (a) the Adjustment Date following a
fiscal quarter for which [____________] until (b) the next subsequent
Adjustment Date on which another Pricing Level becomes applicable.
"Level IV Pricing": applies, subject to clauses (a), (b) and
(c) of the definition of Pricing Level, (a) from the Adjustment Date
(i) following a fiscal quarter for which [____________] until (b) the
next subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level V Pricing": applies, subject to clauses (a), (b) and
(c) of the definition of Pricing Level, (a) from the Adjustment Date
(i) following a fiscal quarter for which [_____________] until (b) the
next subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level VI Pricing": applies, subject to clauses (a), (b) and
(c) of the definition of Pricing Level, (a) from the Adjustment Date
(i) following a fiscal quarter for which [____________] until the next
subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level VII Pricing": applies, subject to clauses (a), (b) and
(c) of the definition of Pricing Level, (a) from the Adjustment Date
(i) following a fiscal quarter for which [____________] until the next
subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level VIII Pricing": applies, subject to clauses (a), (b) and
(c) of the definition of Pricing Level, (a) from the Adjustment Date
(i) following a fiscal quarter for which [____________] until the next
subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level IX Pricing": applies, subject to clauses (a), (b) and
(c) of the definition of Pricing Level, (a) from the Adjustment Date
(i) following a fiscal quarter for which [____________] until the next
subsequent Adjustment Date on which another Pricing Level becomes
applicable.
"Level X Pricing": applies, subject to clauses (a) and (c) o
the definition of Pricing Level, 9a) from any Adjustment Date on which
[____________] until (b) the next subsequent Adjustment Date on
which another Pricing Level becomes applicable.
"Leverage Ratio": for any fiscal quarter, the ratio of (a)
Total Debt on the last day of such fiscal quarter to (b) Annualized
EBITDA for the period ending on the last day of such fiscal quarter.
"License": any broadband personal communications services li-
cense issued by the FCC in connection with the operation of a System.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest (including, without limitation, any conditional
sale or other title retention agreement and any Financing Lease having
substantially the same economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Guarantees, the Trust
Agreement, the Security Documents and the Capital Contribution Agree-
ment.
"Loan Parties": the Borrower, MinorCo and each Subsidiary of
the Borrower which is a party to a Loan Document.
"Loans": Revolving Credit Loans and Term Loans.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, results of operations or financial condition of
the Borrower and its Restricted Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform its obligations under the Loan
Documents or (c) the validity or enforceability of this Agreement or
any of the other Loan Documents or the rights or remedies of the
Administrative Agent, the Trustees or the Lenders thereunder; provided,
however, that no termination, revocation or non-renewal of any License
shall constitute a Material Adverse Effect unless after giving effect
thereto the aggregate number of Owned Pops is less than 120,000,000.
"Measurement Dates": each January 1 and July 1 (or, in each
case, if such date is not a Business Day, then the first Business Day
after such date) which occurs prior to the fifth anniversary of the
Closing Date, beginning with January 1, 1997.
"MinorCo": MinorCo, L.P., a Delaware limited partnership.
"Moody's": Moody's Investors Service, Inc.
"Moody's Bond Rating": for any day, the actual or implied
rating of the Borrower's senior long-term unsecured debt by Moody's in
effect at 9:00 A.M., New York City time, on such day. If Moody's shall
have changed its system of classifications after the date hereof, the
Moody's Bond Rating shall be considered to be at or above a specified
level if it is at or above the new rating which most closely
corresponds to be specified level under the old rating system.
"Mortgaged Property": as defined in subsection 5.9(c).
"MTA": a Major Trading Area as defined in 47 C.F.R. ss.
24.202.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": of any Asset Sale by any Person, the
aggregate amount of cash and Cash Equivalents received by or on behalf
of such Person in consideration for such Asset Sale or (when and as
received in cash or Cash Equivalents) through payment or disposition of
deferred consideration for such Asset Sale (including by way of
deferred payment of principal pursuant to a note or other security or
installment receivable or purchase price adjustment receivable or
otherwise), after deducting therefrom, as applicable, (a) the amount of
such proceeds required to be applied at the time of such Asset Sale to
repay Indebtedness (other than Secured Obligations) secured by any
asset which is the subject of such Asset Sale, (b) brokerage
commissions and other fees and expenses (including fees and expenses of
legal counsel and investment bankers) payable in connection therewith,
(c) appropriate amounts to be provided by the Borrower or any
Restricted Subsidiary, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset
Sale and retained by the Borrower or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities and liabilities
under any indemnification obligations associated with such Asset Sale
and (d) other out-of-pocket costs incurred in connection therewith; and
adding thereto, as applicable, any reversal of or reduction in any
reserve referred to in clause (c) above.
"Net Income" or "Net Loss": for any fiscal period, the amount
which, in conformity with GAAP, would constitute the net income or net
loss, as the case may be, of the Borrower and its Restricted
Subsidiaries on a consolidated basis for such fiscal period (after
adjustment for minority interests), provided that Net Income or Net
Loss shall exclude extraordinary, unusual or non-recurring gains or
losses.
"New Lending Office": as defined in subsection 2.15(b).
"Non-Excluded Taxes": as defined in subsection 2.15(a).
"Non-U.S. Lender": as defined in subsection 2.15(a).
"Note": as defined in subsection 2.4(e).
"Notice of Enforcement": as defined in the Trust Agreement.
"Owned Pops": at any time, the aggregate number of Pops in-
cluded in those MTA's or BTA's for which the Borrower and its Restrict-
ed Subsidiaries then own Licenses that are in full force and effect.
"Parents": Sprint Corporation, Tele-Communications, Inc.,
Comcast Corporation and Cox Communications, Inc.
"Participant": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender (a) at any time prior to the
making of the initial Loans, the percentage which such Lender's
Aggregate Commitment then constitutes of the Aggregate Commitments of
all the Lenders, (b) at any time after the making of the initial Loans
and prior to the termination or expiration of the Commitments, the
percentage which the sum of such Lender's then outstanding Term Loans,
then unused Term Loan Commitment and then Revolving Credit Commitment
constitutes of the aggregate of the then outstanding Term Loans, then
unused Term Loan Commitments and then Revolving Credit Commitments and
(c) at any time after the Commitments shall have expired or terminated,
the percentage which such Lender's then outstanding Loans constitutes
of the aggregate of the then outstanding Loans).
"Permitted Refinancing Indebtedness": Indebtedness of the
Borrower to the extent the proceeds thereof are used to refinance
existing Indebtedness of the Borrower; provided that (a) after giving
effect to the incurrence of such Indebtedness, the Borrower is in Pro
Forma Compliance, (b) the documents under which such Indebtedness is
incurred are not inconsistent with the Loan Documents, (c) such
Indebtedness, if secured, will not be secured by any assets other than
those securing the Indebtedness being refinanced thereby, (d) the final
maturity of such Indebtedness is no earlier than the final maturity of
the Indebtedness being refinanced thereby and (e) the other terms
(other than provisions regarding interest and fees) of such
Indebtedness and of any agreement entered into and of any instrument
issued in connection therewith (including, without limitation, those
relating to covenant protection) are not, taken as a whole, in the good
faith judgment of the Borrower's management, materially less favorable
to the Borrower than the terms and conditions (other than provisions
regarding interest and fees) of the Indebtedness being refinanced
thereby.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Personal Property Assets": all personal property of the
Borrower and its Restricted Subsidiaries (other than the Licenses).
"Plan": at a particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or
a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Pops": as of any date, with respect to any BTA or MTA, the
population of such BTA or MTA as such number is published in the then
most recently issued Donnelly Marketing Service Population Guide.
"Prepayment Acceptance Amount": with respect to each Lender
receiving a Prepayment/Reduction Offer Notice, the maximum principal
amount of the Term Loans of such Lender subject to such
Prepayment/Reduction Offer Notice that such Lender wishes to be subject
to prepayment, as indicated in the applicable Prepayment/Reduction
Offer Response Notice of such Lender.
"Prepayment Pro Rata Amount": with respect to each Lender in
connection with any Specified Prepayment/Reduction, the product
obtained by multiplying (a) the associated Prepayment/Reduction Amount
by (b) a fraction the numerator of which is such Lender's then
outstanding Term Loans and the denominator of which is the sum of all
then outstanding Term Loans and Revolving Credit Commitments.
"Prepayment/Reduction Amount": with respect to any Specified
Prepayment/Reduction to be made on any date, the amount required to be
applied toward prepayment of the Term Loans and reduction of the
Revolving Credit Commitments on such date in accordance with the
provisions of subsection 2.18 and the definition of the term Pro Rata
Payment Offer.
"Prepayment/Reduction Offer Notice": a written notice (a)
offering to prepay the Term Loans and reduce the Revolving Credit
Commitments, on the Specified Prepayment/Reduction Date designated
therein, in an aggregate amount equal to the Prepayment/Reduction
Amount, (b) requesting each Lender to respond to such offer by
delivering to the Agent and the Borrower a Prepayment/Reduction Offer
Response Notice no later than four Business Days prior to such
Specified Prepayment/ Reduction Date, and (c) informing each such
Lender that the failure by such Lender to deliver a
Prepayment/Reduction Offer Response Notice on or before the fourth
Business Day prior to the Specified Prepayment/Reduction Date shall be
deemed to be the acceptance of the full amount of such offer by such
Lender.
"Prepayment/Reduction Offer Response Notice": a written notice
to the Agent and the Borrower in response to a Prepayment/Reduction
Offer Notice, pursuant to which the Lender delivering such notice
states whether such Lender accepts or rejects the Borrower's offer
contained in such Prepayment/Reduction Offer Notice to prepay Term
Loans and/or reduce such Lender's Revolving Credit Commitment, as
applicable, and, if such offer is accepted, states the maximum
principal amount of such Lender's Term Loans and/or the maximum amount
of such Lender's Revolving Credit Commitment, as applicable, which such
Lender wishes to be subject to prepayment or reduction, as the case may
be.
"Prepayment Share": with respect to each Lender which is the
holder of then outstanding Term Loans in connection with any Specified
Prepayment/Reduction, the lesser of its Prepayment Acceptance Amount
and its Prepayment Pro Rata Amount.
"Pricing Level": as applicable, Level I Pricing, Level II
Pricing, Level III Pricing, Level IV Pricing, Level V Pricing, Level VI
Pricing, Level VII Pricing, Level VIII Pricing, Level IX Pricing or
Level X Pricing; the Pricing Level shall be adjusted on each Adjustment
Date on which there is a change in the Moody's Bond Rating, the S&P
Bond Rating, Adjusted EBITDA or the Leverage Ratio, as the case may be,
that would result in a different Pricing Level being applicable, and,
for purpose of such adjustments, (a) in the event that on any
Adjustment Date the applicable Leverage Ratio, Moody's Bond Rating or
S&P Bond Rating would not result in the same Pricing Level being
applicable, the applicable Pricing Level shall be the lowest Pricing
Level otherwise applicable (Level I Pricing being the highest Pricing
Level and Level X Pricing being the lowest Pricing Level), (b) if more
than one Pricing Level is otherwise applicable under the terms hereof
(including after application of clause (c) below) on any Adjustment
Date, then, notwithstanding anything herein to the contrary, the lowest
of such otherwise applicable Pricing Levels shall be applicable on such
Adjustment Date and no other Pricing Level shall be so applicable, and
(c) notwithstanding anything herein to the contrary, Level IV Pricing
through Level X Pricing shall not be applicable until the first
Adjustment Date after the earlier to occur of (i) the first date on or
after the first anniversary of the Closing Date on which the Borrower
shall have [_______] Wireless Subscribers and (ii) Adjusted EBITDA for
any fiscal quarter theretofore ended being a positive number and the
Borrower having a Moody's Bond Rating or an S&P Bond Rating.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by Chase in connection with
extensions of credit to debtors).
"Pro Forma Compliance": shall exist at any time when the
Borrower shall be in pro forma compliance with the covenants set forth
in subsections 6.1 (computed on the basis of (i) Total Debt, Total
Capitalization and Secured Obligations then outstanding and (ii)
Annualized Adjusted EBITDA and Annualized EBITDA calculated using such
amounts for the most recently ended fiscal quarter for which financial
statements shall have been delivered to the Lenders multiplied by
four), provided that no Default or Event of Default shall have occurred
and be continuing either immediately prior to the event with respect to
which Pro Forma Compliance is being determined or after giving effect
to such event.
"Properties": as defined in subsection 3.16(b).
"Pro Rata Payment Offer": an offer made by the Borrower, to
each holder of Secured Obligations as to which such an offer is
required, pursuant to the Secured Instrument under which such Secured
Obligations are outstanding (including, in certain circumstances, this
Agreement), to be made, to have such holder's pro rata share (based on
(i) in the case of Secured Obligations referred to in clause (y) below,
the then outstanding principal amounts of such Secured Obligations and
amounts of unused commitments to extend credit constituting Secured
Obligations and (ii) in the case of Secured Obligations referred to in
clause (x) below, the then outstanding principal amounts of such
Secured Obligations) of a specified amount (x) in the case of Secured
Obligations (including, without limitation, the Term Loans) other than
those referred to in clause (y), applied to prepay such Secured
Obligations or (y) in the case of Secured Obligations under a committed
revolving credit facility (including, without limitation, the Revolving
Credit Commitments), to reduce the commitments under such facility and
to prepay any Secured Obligations outstanding under such facility by
the amount such Secured Obligations exceed such commitments as so
reduced.
"Pro Rata Prepayment/Commitment Reduction": any application of
Net Cash Proceeds (a) in accordance with subsection 6.6(c), (d) or (f),
to reduce the Revolving Credit Commitments and prepay the Term Loans
and (b) to the extent required by and in accordance with any mandatory
prepayment and/or commitment reduction provisions of, or to the extent
that the Borrower determines to do so under any voluntary prepayment
and/or commitment reduction provisions of, Secured Instruments with
respect to any other Secured Obligations, to prepay the loans and/or
reduce the commitments to lend thereunder, with the portion of such Net
Cash Proceeds to be applied to reduce the Revolving Credit Commitments
and prepay the Term Loans being at least equal to a pro rata share
thereof determined on the basis of the respective amounts of the then
outstanding Secured Obligations to which such Net Cash Proceeds will be
applied and unused commitments to lend then in effect under the Secured
Instruments relating to such Secured Obligations.
"Public Offering Date": the date on which there shall be
completed an underwritten public offering of shares of Capital Stock of
the Borrower (or of any direct or indirect partner or shareholder of
the Borrower (other than any Parent) having the economic effect of
transferring to the public equity interests in the Borrower) pursuant
to a registration statement filed with, and declared effective by, the
Securities and Exchange Commission (or its successor) in accordance
with the Securities Act of 1933, as amended.
"Real Estate Assets": all interests in real property of the
Borrower and its Restricted Subsidiaries other than Mortgaged Proper-
ties.
"RealtyCo": Sprint Spectrum Realty Company, L.P., a Delaware
limited partnership.
"Reduction Acceptance Amount": with respect to each Lender
receiving a Prepayment/Reduction Offer Notice, the maximum amount of
the Revolving Credit Commitment of such Lender subject to such
Prepayment/Reduction Offer Notice that such Lender wishes to be subject
to reduction, as indicated in the applicable Prepayment/Reduction Offer
Response Notice of such Lender.
"Reduction Pro Rata Amount": with respect to each Lender in
connection with any Specified Prepayment/Reduction, the product
obtained by multiplying (a) the associated Prepayment/Reduction Amount
by (b) a fraction the numerator of which is such Lender's Revolving
Credit Commitment and the denominator of which is the sum of all then
outstanding Term Loans and Revolving Credit Commitments.
"Reduction Share": with respect to each Lender in connection
with any Specified Prepayment/Reduction, the lesser of its Reduction
Acceptance Amount and its Reduction Pro Rata Amount.
"Reference Lenders": Chase, The Bank of New York and Nations-
Bank of Texas, N.A.
"Register": as defined in subsection 9.6(d).
"Release": any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, dispos-
ing, depositing, dispersing, emanating or migrating of any Hazardous
Substances in, into, onto or through the environment.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under the regulations adopted by the PBGC.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Requisite Lenders": at any time, Lenders, the Percentages of
which aggregate more than 50%.
"Responsible Officer": any of the president, chief financial
officer, treasurer, assistant treasurer, director-corporate finance or
controller of the Borrower.
"Restricted Equity": equity contributions, the proceeds of
which are used to fund (a) Investments pursuant to clause (i)(A)(I) of
the first proviso contained in subsection 6.8(c) or clause (i)(A)(I) of
the first proviso contained in subsection 6.8(d), or (b) prepayments
pursuant to subsection 6.11(a)(ii)(B).
"Restricted Payments": as defined in subsection 6.7.
"Restricted Subsidiary": any Subsidiary of the Borrower that
is not an Unrestricted Subsidiary.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to the
Borrower in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender's name on
Schedule I under the column captioned "Revolving Credit Commitment", in
each case as such amount may be changed from time to time in accordance
with the terms of this Agreement.
"Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Revolving Credit Commitments of all
the Lenders (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Credit Commitment Period": the period from and in-
cluding the date hereof to but not including the Revolving Credit Ter-
mination Date.
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Termination Date": the date that is 90 days
prior to the ninth anniversary of the Closing Date or such earlier date
on which the Revolving Credit Commitments are terminated pursuant to
this Agreement.
"S&P": Standard and Poor's Ratings Services.
"S&P Bond Rating": for any day, the actual or implied rating
of the Borrower's senior long-term unsecured debt by S&P in effect at
9:00 A.M., New York City time, on such day. If S&P shall have changed
its system of classifications after the date hereof, the S&P Bond
Rating shall be considered to be at or above the new rating which most
closely corresponds to the specified level under the old rating system.
"Secured Instruments": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Security Documents": as defined in the Trust Agreement.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Special Payment Condition": shall be satisfied when, after
giving effect to any Restricted Payment described in subsection 6.7(a)
or (c), any Investment described in subsection 6.8(c) or (d) or any
voluntary prepayment referred to in subsection 6.11 or any other action
which may not be taken under the terms hereof until the Special Payment
Condition is satisfied, the ratio of the then outstanding Total Debt to
Annualized EBITDA for the period ending on the last day of the then
most recently ended fiscal quarter for which financial statements shall
have been delivered to the Lenders pursuant to subsection 5.1 is not
greater than 5.0 to 1 and the ratio of Annualized EBITDA for the period
ending on such last day to Interest Expense for the period of four
consecutive fiscal quarters ended on such last day is not less than 2.5
to 1.
"Special Purpose Subsidiary": each of EquipmentCo, RealtyCo
and WirelessCo.
"Special Purpose Subsidiary Funding Agreement": an agreement
between the Borrower and a Special Purpose Subsidiary whereby (a) such
Special Purpose Subsidiary agrees to provide the Borrower the benefit
of the use of such Special Purpose Subsidiary's assets and (b) the
Borrower agrees to pay to such Special Purpose Subsidiary an amount
equal to all liabilities of such Special Purpose Subsidiary less any
amounts contributed by the Borrower to the equity of such Special
Purpose Subsidiary to fund such liabilities and (c) the Borrower agrees
to cause all Contractual Obligations of such Special Purpose Subsidiary
to be performed and all Requirements of Law of such Special Purpose
Subsidiary to be complied with.
"Specified Affiliate Debt": Indebtedness of an Affiliate of
the Borrower incurred in an arm's length transaction (other than
Indebtedness used to fund capital contributions required to be made by
such Affiliate (or an Affiliate thereof) under the Capital Contribution
Agreement or the partnership agreement of Holding) the proceeds of
which shall have been contributed to the capital of the Borrower or
used to purchase Capital Stock of the Borrower and which shall have
been designated in a written notice from the Borrower to the
Administrative Agent as Specified Affiliate Debt.
"Specified Prepayment/Reduction": any prepayment of Term
Loans and/or reduction of the Revolving Credit Commitments to which the
provisions of subsection 2.18 are applicable.
"Specified Prepayment/Reduction Date": as defined in subsec-
tion 2.18.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"System": as to any Person, assets constituting a radio comm-
unications system authorized under the rules for wireless communica-
tions services (including any license and the network, marketing, dis-
tribution, sales, customer interface and operations functions relating
thereto) owned and operated by such Person.
"Tax Credit": as defined in subsection 2.15(d).
"Term Loan": a Tranche I Term Loan or a Tranche II Term Loan.
"Term Loan Commitments": the Term Loan I Commitments and the
Term Loan II Commitments.
"Term Loan I Commitment": as to any Lender, the obligation of
such Lender to make Tranche I Term Loans to the Borrower in an
aggregate principal amount not to exceed the amount set forth opposite
such Lender's name on Schedule I under the column captioned "Term Loan
I Commitment", in each case as such amount may be changed from time to
time in accordance with the terms of this Agreement.
"Term Loan II Commitment": as to any Lender, the obligation of
such Lender to make Tranche II Term Loans to the Borrower in an
aggregate principal amount not to exceed the amount set forth opposite
such Lender's name on Schedule I under the column captioned "Term Loan
II Commitment", in each case as such amount may be changed from time to
time in accordance with the terms of this Agreement.
"Term Loan Commitment Period": the period from and including
the date hereof to but not including the Term Loan Commitment Termina-
tion Date.
"Term Loan Commitment Termination Date": the date which is
ninety days after the Closing Date or such earlier date on which the
Term Loan Commitments are terminated pursuant to this Agreement.
"Total Capitalization": at any date, the sum of (a) Total Debt
outstanding on such date plus (b) Contributed Capital on such date plus
(c) Committed Capital on such date minus (d) the amount of Restricted
Payments made by the Borrower or any Restricted Subsidiary (other than
Restricted Payments which are permitted to be made pursuant to
subsection 6.7(i) or (ii)), directly or indirectly to any Person other
than the Borrower or any Restricted Subsidiary through such date.
"Total Debt": at any time, the sum of (a) the aggregate amount
of Indebtedness of the Borrower and its Restricted Subsidiaries on a
consolidated basis then outstanding (including capitalized and accreted
interest) plus (b) the aggregate amount of Guarantee Obligations of the
Borrower and its Restricted Subsidiaries then outstanding in respect of
Indebtedness of Persons other than the Borrower and its Restricted
Subsidiaries plus (c) the aggregate amount of Specified Affiliate Debt
then outstanding (including capitalized and accreted interest) minus
(d) the aggregate amount of cash and Cash Equivalents then owned by the
Borrower and its Restricted Subsidiaries.
"Trademark License Agreement": the Amended and Restated
Sprint Trademark License Agreement, dated as of January 31, 1996, by
and between Sprint Communications Company, L.P. and the Borrower
(formerly MajorCo, L.P.), as the same may be amended, supplemented or
otherwise modified from time to time in accordance with subsection
6.12.
"Tranche A Commitment Period": the period (a) beginning on the
later of (i) the Closing Date and (ii) the date on which the Borrower
shall have entered into Vendor Credit Facilities containing commitments
to provide financing to the Borrower in an aggregate amount of at least
$[____________] and (b) ending on the date immediately prior to the
commencement of the Tranche B Commitment Period.
"Tranche B Commitment Period": the period (a) beginning on the
first date on which each of the following shall have occurred: (i) the
Borrower shall have received at least $[____________] in the aggregate
in Contributed Capital in cash subsequent to December 31, 1995, (ii)
the Borrower shall have (A) obtained Additional Financing Commitments
(as defined below) in an aggregate amount of at least $[____________]
and (B) obtained loans or equity contributions (other than Restricted
Equity) in cash under Additional Financing Commitments in an aggregate
amount of at least $[____________], (iii) the Borrower shall have (A)
obtained loans under Vendor Credit Facilities in an aggregate amount of
at least $[____________] and (B) obtained loans and commitments under
Vendor Credit Facilities in an aggregate amount of at least
$[____________], (iv) Systems of the Borrower servicing at least
[____________] Covered Pops shall be performing in accordance with
industry standards and (v) the Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer dated as of
such date stating that each of the conditions specified in clauses (i)
through (iv) above shall have been satisfied as of such date, and (b)
ending on the earlier of (i) the date immediately prior to the
commencement of the Tranche C Commitment Period and (ii) the Revolving
Credit Termination Date. For purposes of this definition, "Additional
Financing Commitments" shall mean commitments to provide debt or cash
equity financing (excluding Restricted Equity but including, without
limitation, any vendor financing not included in calculating clause
(a)(iii)(B) of the definition of Tranche B Commitment Period) to the
Borrower under terms and conditions approved by the Administrative
Agent, acting reasonably.
"Tranche C Commitment Period": the period (a) beginning on
the later of (i) the first day of the Tranche B Commitment Period and
(ii) [____________] and (b) ending on the Revolving Credit Termination
Date.
"Tranche I Term Loans": as defined in subsection 2.1(b).
"Tranche II Term Loans": as defined in subsection 2.1(b).
"Transferee": as defined in subsection 9.6(f).
"Trust Agreement": the Trust Agreement, dated as of October 2,
1996, among the Borrower, First Union National Bank, a national banking
association, as corporate trustee (the "Corporate Trustee"), and
Kenneth D. Benton, as individual trustee (together with the Corporate
Trustee, the "Trustees"), as amended, supplemented or otherwise
modified from time to time.
"Trustees": as defined in the definition of Trust Agreement.
"Type": as to any Loan, its nature as an ABR Loan or a Euro-
dollar Loan.
"Unrestricted Subsidiary": APC and any other Subsidiary of the
Borrower (other than any Special Purpose Subsidiary) that the Borrower
designates as an Unrestricted Subsidiary in accordance with subsection
6.8(c) or (d), provided, however, that the Borrower may, so long as no
Default or Event of Default would result therefrom, cause any
Unrestricted Subsidiary to become a Restricted Subsidiary by so
notifying the Administrative Agent in a written instrument executed by
a Responsible Officer.
"Vendor Credit Facility": as defined in the Trust Agreement.
"Vendor Procurement Contracts": (a) the Procurement and Ser-
vices Contract, dated as of January 31, 1996, between the Borrower
(formerly MajorCo, L.P.) and Lucent Technologies Inc. (formerly AT&T
Corp.) and (b) the Procurement and Services Contract, dated as of Jan-
uary 31, 1996, between the Borrower (formerly MajorCo, L.P.) and Nor-
thern Telecom Inc., in each case, as amended, supplemented or other-
wise modified from time to time in accordance with subsection 6.12.
"Weighted Average Life": when applied to any committed
revolving credit facility or any Indebtedness, at any date, the number
of years obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining scheduled commitment
reduction or, as the case may be, installment, sinking fund or other
scheduled payment of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
reduction or payment, by (b) in the case of the revolving credit
facility under this Agreement, the Revolving Credit Commitments, or, in
the case of any other committed revolving credit facility, the
aggregate maximum commitment to lend then in effect under such
committed revolving credit facility or, in cases other than committed
revolving credit facilities, the then outstanding principal amount of
such Indebtedness.
"Wholly Owned": any Subsidiary of the Borrower or any
Restricted Subsidiary shall be deemed to be Wholly Owned if at least
99% of the voting and economic equity interest in such Subsidiary is
owned by the Borrower or such Restricted Subsidiary and the remainder
of the voting and economic equity interest in such Subsidiary is owned
by MinorCo.
"WirelessCo": WirelessCo, L.P., a Delaware limited partner-
ship.
"Wireless Service": the provision of broadband personal comm-
unications services in one or more Systems.
"Wireless Subscribers": at any time, all customers then re-
ceiving Wireless Services from the Borrower or any of its Restricted
Subsidiaries.
"Working Capital": at any date, the sum of (a) all amounts
(other than cash and Cash Equivalents) which would, in conformity with
GAAP, be included under current assets on a balance sheet of the
Borrower and its Restricted Subsidiaries on a consolidated basis on
such date minus (b) all amounts which would, in conformity with GAAP,
be included under current liabilities on a balance sheet of the
Borrower and its Restricted Subsidiaries on a consolidated basis on
such date.
1.2 Other Definitional Provisions1.2 Other
Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant
hereto.
(b) As used herein, and in any certificate or other
document made or delivered pursuant hereto, accounting terms relating
to the Borrower and its Subsidiaries not defined in subsection 1.1 and
accounting terms partly defined in subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under Fixed
GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such
terms.
(e) The words "include", "includes" and "including"
when used herein shall be deemed to be followed by the phrase "without
limitation".
(f) Unless otherwise expressly provided herein, any
reference in this Agreement to any Loan Document shall mean such
document as amended, restated, supplemented or otherwise modified from
time to time.
(g) Any reference herein to a fiscal year or a fiscal
quarter shall be deemed a reference to such fiscal year or such fiscal
quarter of the Borrower.
(h) Unless otherwise defined herein, any term used
herein that is defined in the Uniform Commercial Code in effect in the
State of New York on the date hereof shall have the meanings given such
term therein.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments. (a) Subject to the terms and
conditions hereof, each Lender having a Revolving Credit Commitment
severally agrees to make revolving credit loans ("Revolving Credit
Loans") to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the amount of such Lender's Revolving Credit
Commitment; provided, that no Lender shall be obligated to make
Revolving Credit Loans to the Borrower hereunder in an aggregate
principal amount at any one time outstanding exceeding (i) during the
Tranche A Commitment Period, such Lender's Revolving Credit Commitment
Percentage of the lesser of (A) $450,000,000 and (B) the aggregate
Revolving Credit Commitments of all Lenders, (ii) during the Tranche B
Commitment Period, such Lender's Revolving Credit Commitment Percentage
of the lesser of (A) $1,200,000,000 and (B) the aggregate Revolving
Credit Commitments of all Lenders and (iii) during the Tranche C
Commitment Period, such Lender's Revolving Credit Commitment Percentage
of the aggregate Revolving Credit Commitments of all Lenders. During
the Revolving Credit Commitment Period the Borrower may use the
Revolving Credit Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) Subject to the terms and conditions hereof, each
Lender having a Term Loan I Commitment severally agrees to make a term
loan (collectively, the "Tranche I Term Loans") to the Borrower in a
principal amount equal to the amount of such Lender's Term Loan I
Commitment, and each Lender having a Term Loan II Commitment severally
agrees to make a term loan (collectively, the "Tranche II Term Loans")
to the Borrower in a principal amount not to exceed the amount of such
Lender's Term Loan II Commitment.
(c) The Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by
the Borrower and notified to the Administrative Agent in accordance
with subsection 2.2.
2.2 Borrowing Procedures. (a) The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 2:00 P.M., New York City
time, (i) three Business Days prior to the requested Borrowing Date, if
all or any part of the requested Revolving Credit Loans are to be
initially Eurodollar Loans, or (ii) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (A) the amount to be
borrowed, (B) the requested Borrowing Date, (C) whether the borrowing
is to be of Eurodollar Loans, ABR Loans or a combination thereof (and,
if a combination, the respective amounts of each Type of Loan) and (D)
if the borrowing is to be entirely or partly of Eurodollar Loans the
respective lengths of the initial Interest Periods therefor. Each
borrowing under the Revolving Credit Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $10,000,000 or a whole multiple
of $1,000,000 in excess thereof (or, if the then unused amount of the
Revolving Credit Commitments is less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $10,000,000 or a whole
multiple of $1,000,000 in excess thereof.
(b) The Borrower may borrow the Tranche I Term Loans
not later than 5 Business Days after the Closing Date and may borrow
the Tranche II Term Loans on any Business Day during the Term Loan
Commitment Period, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 2:00 P.M., New York City time, (i)
three Business Days prior to the requested Borrowing Date, if all or
any part of the requested Term Loans are to be initially Eurodollar
Loans, or (ii) one Business Day prior to the requested Borrowing Date,
otherwise), specifying (A) the amount to be borrowed, (B) the requested
Borrowing Date, (C) whether the borrowing is to be of Eurodollar Loans,
ABR Loans or a combination thereof (and, if a combination, the
respective amounts of each Type of Loan) and (D) if the borrowing is to
be entirely or partly of Eurodollar Loans the respective lengths of the
initial Interest Periods therefor.
(c) Upon receipt of any notice from the Borrower
pursuant to paragraph (a) or (b) above, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make the amount
of its pro rata share of each borrowing available to the Administrative
Agent for the account of the Borrower at the office of the
Administrative Agent specified in subsection 9.2 prior to 11:00 A.M.,
New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Administrative Agent. Such borrowing
will then be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the Administrative Agent
by the Lenders and in like funds as received by the Administrative
Agent.
2.3 Commitment Fee; Other Fees. (a) The Borrower
agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee for the period from and including the first day
of the Revolving Credit Commitment Period to the Revolving Credit
Termination Date, computed at the Commitment Fee Rate on the average
daily amount of the unused Revolving Credit Commitment of such Lender
during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and
on the Revolving Credit Termination Date, commencing on the first of
such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period
from and including the first day of the Term Loan Commitment Period to
the Term Loan Commitment Termination Date, computed at the Commitment
Fee Rate on the average daily amount of the unused Term Loan Commitment
of such Lender during the period for which payment is made, payable in
arrears on the Term Loan Commitment Termination Date.
(c) The Borrower agrees to pay to the Administrative
Agent for the account of the Administrative Agent such fees as have
been or may from time to time be agreed to in writing between the
Borrower and the Administrative Agent.
2.4 Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender the then unpaid principal amount
of all Revolving Credit Loans of such Lender on the Revolving Credit
Termination Date (or on such earlier date on which the Loans become due
and payable pursuant to Section 7). The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each Term Loan of such
Lender in installments on the dates and in the amounts set forth in
subsection 2.7(b) (or on such earlier date on which the Loans become
due and payable pursuant to Section 7). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in
subsection 2.9.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable
and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the
Register pursuant to subsection 9.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder, the Type thereof and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts
of each Lender maintained pursuant to subsection 2.4(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or
any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the
Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and
deliver to such Lender a promissory note of the Borrower dated the
Closing Date evidencing the Loans of such Lender, substantially in the
form of Exhibit A-1 (in the case of Revolving Credit Loans) or A-2 (in
the case of Term Loans) with appropriate insertions as to date and
principal amount (each, a "Note"). Thereafter, the Loans evidenced by
any such Note and interest thereon shall at all times (including after
assignment pursuant to subsection 9.6) be represented by one or more
promissory notes in such form payable to the order of the payee named
therein and its registered assigns.
2.5 Optional Prepayments. (a) The Borrower may prepay
the Revolving Credit Loans, in whole or in part, without premium or
penalty, upon giving irrevocable notice to the Administrative Agent
(which notice must be received by the Administrative Agent prior to
2:00 P.M., New York City time, (i) three Business Days prior to the
date of prepayment, if all or any part of the Revolving Credit Loans to
be prepaid are Eurodollar Loans, or (ii) one Business Day prior to the
date of prepayment, otherwise), specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans
or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on
the date specified therein, together with any amounts payable pursuant
to subsection 2.16 and accrued interest to such date on the amount
prepaid. Partial prepayments pursuant to this subsection shall be in an
aggregate principal amount equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof.
(b) The Borrower may at any time after the date which
is one year after the Closing Date prepay the Term Loans, in whole or
in part, without premium or penalty, upon giving irrevocable notice to
the Administrative Agent (which notice must be received by the
Administrative Agent prior to 2:00 P.M., New York City time, (i) three
Business Days prior to the date of prepayment, if all or any part of
the Term Loans to be prepaid are Eurodollar Loans, or (ii) one Business
Day prior to the date of prepayment, otherwise), specifying the date
and amount of prepayment and whether the prepayment is of Eurodollar
Loans, ABR Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be
due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.16 and accrued interest to
such date on the amount prepaid. Partial prepayments pursuant to this
subsection shall be in an aggregate principal amount equal to
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
Each such prepayment shall be applied ratably to reduce the then
remaining installments described in subsection 2.7(b).
2.6 Optional Termination or Reduction of Commitments.
(a) The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the
amount of the Revolving Credit Commitments. Any such reduction shall be
in an aggregate amount equal to $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall reduce permanently the Revolving
Credit Commitments then in effect; and such reductions shall be applied
ratably to reduce the then remaining installments described in
subsection 2.7(a).
(b) The Borrower shall have the right, upon not less
than three Business Days' notice to the Administrative Agent, to
terminate the Term Loan Commitments or, from time to time, to reduce
the amount of the Term Loan Commitments. Any such reduction shall be in
an amount equal to $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall reduce permanently the Term Loan Commitments
then in effect.
2.7 Automatic Commitment Reductions; Repayment of
Term Loans; Mandatory Prepayments. (a) The Revolving Credit Commitments
shall automatically and permanently reduce in fifteen consecutive
quarterly installments, occurring on the date that is five years and
three months after the Closing Date and on each successive date
thereafter which is three months after the preceding installment date,
in an aggregate amount (which amounts shall be subject to reduction as
provided herein) for each installment equal to the amount set forth
opposite such installment below:
Installment Reduction Amount
1-4 $ 75,000,000
5-8 $ 100,000,000
9-12 $ 150,000,000
13-14 $ 175,000,000
15 $ 50,000,000
(b) The Term Loans shall be repaid in sixteen
consecutively quarterly installments, payable on the date that is five
years and three months after the Closing Date and on each successive
date thereafter which is three months after the preceding installment
date, in an aggregate principal amount of $125,000 for each of the
first fifteen installments (which amounts shall be subject to reduction
as provided herein) and the remaining aggregate outstanding principal
amount of the Term Loans for the last installment.
(c) The Revolving Credit Commitments shall
automatically and permanently reduce and the Term Loans shall be
prepaid on the dates and in the amounts required by subsections 6.6(c)
and (d), 6.7(c), 6.8(c) and (d) and 6.11. Any such reductions and
prepayments required by this paragraph (c) shall be applied ratably to
reduce the then remaining installments described in subsections 2.7(a)
and (b).
(d) The Revolving Credit Commitments shall
automatically and permanently reduce and the Term Loans shall be
prepaid in an aggregate amount equal to 50% of the Excess Cash Flow for
each fiscal year commencing with the fiscal year ending December 31,
2000. The reduction and prepayment required by this paragraph for each
such fiscal year shall occur automatically, and the Borrower shall make
each prepayment required by this paragraph for each such fiscal year,
on the tenth Business Day after the date of delivery of the financial
statements for such fiscal year pursuant to subsection 5.1(a) and shall
be applied ratably to reduce the then remaining installments described
in subsections 2.7(a) and (b).
(e) Any termination or reduction of Commitments
pursuant to subsection 2.6 or this subsection or otherwise shall be
accompanied (i) in the case of the Revolving Credit Commitments, by
prepayment of the Revolving Credit Loans (together in each case with
any additional amounts owing under subsection 2.16), to the extent, if
any, that the amount of the Revolving Credit Loans then outstanding
exceeds the amount of the Revolving Credit Commitments as so reduced
and (ii) in the case of any such Commitments, by payment of any accrued
and unpaid commitment fees on the amount of such Commitments so
terminated or reduced to but excluding the date of such termination or
reduction.
(f) If the Borrower or its Restricted Subsidiaries
shall receive any Net Cash Proceeds from any Asset Sale which are not
required to be deposited in the Asset Sale Proceeds Sub-Account, the
Borrower will prepay the Revolving Credit Loans by the amount of such
Net Cash Proceeds on the first date or dates after the date of such
receipt on which the Borrower may make such prepayment without
incurring an obligation to pay any additional amounts pursuant to
subsection 2.16. Amounts prepaid pursuant to this paragraph (f) may be
reborrowed only for the purpose of purchasing property or assets to be
utilized in connection with the Borrower's national wireless network
or, if not utilized for the foregoing purpose, for the purpose of
providing sufficient funds to effect a Pro Rata Prepayment/ Commitment
Reduction required by subsection 6.6 in connection with such Asset
Sale.
2.8 Conversion and Continuation Options. (a) The
Borrower may elect from time to time to convert Eurodollar Loans to ABR
Loans by giving the Administrative Agent at least one Business Days'
prior irrevocable notice of such election, provided that if any such
conversion of Eurodollar Loans is made on a day which is not the last
day of an Interest Period with respect thereto the Borrower shall pay
to the Administrative Agent on the date of such conversion accrued
interest to the date of such conversion on the principal amount
converted together with any amounts payable pursuant to subsection
2.16. The Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the length of
the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice the Administrative Agent shall promptly notify each
Lender thereof. All or any part of outstanding Eurodollar Loans and ABR
Loans may be converted as provided herein, provided that (i) no Loan
may be converted into a Eurodollar Loan if a Default or Event of
Default has occurred and is continuing and the Administrative Agent or
the Required Lenders have determined that such a conversion is not
appropriate and (ii) no Revolving Credit Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the Revolving
Credit Termination Date, and no Term Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the final
maturity of the Term Loans.
(b) Any Eurodollar Loans may be continued as such
upon the expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period"
set forth in subsection 1.1, of the length of the next Interest Period
to be applicable to such Loans, provided that (i) no Eurodollar Loan
may be continued as such if a Default or Event of Default has occurred
and is continuing and the Administrative Agent or the Required Lenders
have determined that such a continuation is not appropriate and (ii) no
Eurodollar Loan may be continued as such after the date that is one
month prior to (A) the Revolving Credit Termination Date, in the case
of Revolving Credit Loans or (B) the final maturity of the Term Loans,
in the case of Term Loans, and provided, further, that if the Borrower
shall fail to give such notice or if such continuation is not permitted
pursuant to the immediately preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
2.9 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest
Period with respect thereto, payable in arrears on each Interest
Payment Date, at a rate per annum equal to the Eurodollar Rate
determined for such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for each day,
payable in arrears on each Interest Payment Date, at a rate per annum
equal to the ABR in effect on such day plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any
Loan, (ii) any interest payable thereon or (iii) any commitment fee or
other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue
principal, interest, fee or other amount shall bear interest at a rate
per annum which is (A) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of
this subsection plus 2% or (B) in the case of any such overdue
interest, fee or other amount, the rate described in paragraph (b) of
this subsection plus 2%, in each case from the date of such non-payment
until such overdue principal, interest, fee or other amount is paid in
full (as well after as before judgment).
2.10 Computation of Interest and Fees. (a) Commitment
fees and, whenever it is calculated on the basis of the ABR, interest
shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed; otherwise, interest shall be
calculated on the basis of a 360-day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in
the ABR shall become effective as of the opening of business on the day
on which such change becomes effective. The Administrative Agent shall
as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing
the quotations used by the Administrative Agent in determining any
interest rate based upon quotations from Reference Lenders pursuant to
subsection 2.9(a).
(c) If any Reference Lender shall for any reason no
longer have a Commitment or any Loans, such Reference Lender shall
thereupon cease to be a Reference Lender, and if, as a result, there
shall only be one Reference Lender remaining, the Administrative Agent
(after consultation with the Borrower and the Lenders) shall, by notice
to the Borrower and the Lenders, designate another Lender as a
Reference Lender so that there shall at all times be at least two
Reference Lenders.
(d) Each Reference Lender shall use its best efforts
to furnish quotations of rates to the Administrative Agent as
contemplated hereby. If any of the Reference Lenders shall be unable or
shall otherwise fail to supply such rates to the Administrative Agent
upon its request, the rate of interest shall, subject to the provisions
of subsection 2.11, be determined on the basis of the quotations of the
remaining Reference Lenders or Reference Lender.
2.11 Inability to Determine Interest Rate. If prior
to the first day of any Interest Period (a) the Administrative Agent
shall have determined (which determination shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting
the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period or (b) the
Administrative Agent shall have received notice from the Requisite
Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period, then the
Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrower and the Lenders as soon as practicable thereafter. If
such notice is given, (i) any Eurodollar Loans requested to be made on
the first day of such Interest Period shall be made as ABR Loans, (ii)
any Loans that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be continued as ABR Loans and
(iii) any outstanding Eurodollar Loans shall be converted, on the first
day of such Interest Period, to ABR Loans. So long as such notice shall
not have been withdrawn, the Administrative Agent shall use reasonable
efforts to determine whether or not the circumstances which shall have
caused such notice to be given continue to exist, and, if the
Administrative Agent or the Requisite Lenders, as the case may be,
shall at any time determine that such circumstances no longer exist,
the Administrative Agent shall, as soon as practicable thereafter,
notify the Lenders and the Borrower that the Administrative Agent is
withdrawing such notice. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Except as
provided in subsection 2.18, each borrowing by the Borrower and any
reduction of the Revolving Credit Commitments, Term Loan I Commitments
or Term Loan II Commitments of the Lenders shall be made pro rata among
the Lenders based on their respective Revolving Credit Commitments,
Term Loan I Commitments or Term Loan II Commitments, as the case may
be. Each payment by the Borrower on account of any commitment fee
hereunder shall be distributed pro rata among the Lenders based on (i)
their respective Available Commitments for each day during the period
for which such payment is made and (iii) the Commitment Fee Rate in
effect on each such day. Except as provided in subsection 2.17(b) or
2.18, each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans,
Tranche I Term Loans or Tranche II Term Loans shall be made pro rata
among the Lenders according to the respective outstanding principal
amounts of the Revolving Credit Loans, Tranche I Term Loans or Tranche
II Term Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account
of principal, interest or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Administrative Agent, for the account of
the Lenders, at the Administrative Agent's Account, in Dollars and in
immediately available funds. The Administrative Agent shall distribute
such payments to the Lenders promptly upon receipt in like funds as
received. If any payment (including any prepayment) hereunder becomes
due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to
payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender
will not make the amount that would constitute its Percentage of such
borrowing available to the Administrative Agent, the Administrative
Agent may assume that such Lender is making such amount available to
the Administrative Agent, and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender
shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any
amounts owing under this subsection shall be conclusive in the absence
of manifest error. If such Lender's Percentage of such borrowing is not
made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the
rate per annum applicable to ABR Loans hereunder, on demand, from the
Borrower.
2.13 Illegality. Notwithstanding any other provision
herein, if the adoption after the date hereof of or any change after
the date hereof in any Requirement of Law or in the interpretation or
application thereof by any Governmental Authority shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such
and convert ABR Loans to Eurodollar Loans shall forthwith be cancelled
and (b) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.16.
2.14 Requirements of Law. (a) If the adoption after
the date hereof of, or any change after the date hereof in, any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Eurodollar
Loan or change the basis of taxation of payments to such
Lender in respect thereof (except for Non-Excluded Taxes
covered by subsection 2.15 and taxes imposed on the overall
net income of such Lender by the jurisdiction under the laws
of which it is organized or the jurisdiction in which its
principal office is located or in which its lending office
applicable hereto is located); or
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condi-
tion;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or to
reduce any amount receivable hereunder in respect thereof, then, in any
such case, the Borrower shall promptly pay such Lender such additional
amount or amounts as will compensate such Lender for such increased
cost or reduced amount receivable.
(b) If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof by any
Governmental Authority or compliance by such Lender or any Person
controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority, in each case made subsequent to the date hereof, shall have
the effect of reducing the rate of return on such Lender's or such
Person's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such Person could have achieved
but for such adoption, change or compliance (taking into consideration
such Lender's or such Person's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from
time to time, within 10 Business Days after receipt by the Borrower of
such Lender's written demand (with a copy to the Administrative Agent),
the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection 2.14, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled; provided that the
Borrower shall not be required to compensate a Lender pursuant to this
subsection for any additional costs incurred more than three months
prior to the date on which such Lender notifies the Borrower of such
event giving rise to such additional costs and of such Lender's
intention to claim compensation therefor; and provided, further, that,
if any adoption or change of any Requirement in Law or other event
giving rise to such claim for additional compensation is retroactive,
then the three-month period referred to above shall be extended to
include the period of retroactive effect thereof. A certificate as to
any additional amounts payable pursuant to this subsection, accompanied
by reasonably detailed information with respect to the method of
calculating such additional amounts, submitted by such Lender to the
Borrower (with a copy to the Administrative Agent) shall be conclusive
absent manifest error. The agreements in this subsection shall survive
the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.15 Taxes. (a) All payments made by the Borrower
under this Agreement and any Notes shall be made free and clear of, and
without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes imposed in lieu of net
income taxes imposed on the Administrative Agent or any Lender (or
Transferee) as a result of a present or former connection between the
Administrative Agent or such Lender (or Transferee) and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent
or such Lender (or Transferee) having executed, delivered or performed
its obligations or received a payment under, or enforced, this
Agreement or any Note or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Administrative Agent or any Lender (or
Transferee) hereunder or under any Note, (i) the Borrower will pay such
Non-Excluded Taxes to the relevant Governmental Authority or political
subdivision imposing such tax and (ii) the amounts so payable to the
Administrative Agent or such Lender (or Transferee) shall be increased
to the extent necessary to yield to the Administrative Agent or such
Lender (or Transferee) (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to
any Lender that is not organized under the laws of the United States of
America or a state thereof (a "Non-U.S. Lender") if such Lender fails
to comply with the requirements of paragraph (b) or (c) of this
subsection. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of such
Lender (or Transferee), as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due
to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties
that may become payable by the Administrative Agent or any Lender (or
Transferee) as a result of any such failure. The Borrower shall
indemnify each Lender (or Transferee) and the Administrative Agent for
the amount of Non-Excluded Taxes paid by such Lender (or Transferee) or
the Administrative Agent, as the case may be, and any penalties,
interest and expenses arising therefrom or with respect thereto. The
agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder; provided, however, that the Borrower shall not be required
to indemnify any Non-U.S. Lender that fails to comply with the
requirements of paragraph (b) or (c) of this subsection.
(b) Each Non-U.S. Lender shall:
(i) in the case of a Lender (or
Transferee) that is a "bank" under Section 881
(c)(3)(A) of the Code;
(A) on or before the date
on which the first payment becomes payable
to it hereunder or under any Note (or, in
the case of a Participant, on or before the
date such Participant becomes a Participant
hereunder) and on or before the date, if
any, such Lender (or Transferee) changes its
applicable lending office by designating a
different lending office (a "New Lending
Office") deliver to the Borrower and the
Administrative Agent (y) two properly
completed and duly executed copies of United
States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the
case may be, and (z) an Internal Revenue
Service Form W-8 or W-9, or successor
applicable form, as the case may be;
(B) deliver to the Borrower
and the Administrative Agent two further
properly completed and duly executed copies
of any such form or certification on or
before the date that any such form or
certification expires or becomes obsolete
and after the occurrence of any event
requiring a change in the most recent form
previously delivered by it to the Borrower
or upon the reasonable request of the
Borrower or the Administrative Agent; and
(C) obtain such extensions
of time for filing and completing such forms
or certifications as may reasonably be
requested by the Borrower;
(ii) in the case of a Lender or
a Transferee that is not a "bank" under Section
881(c)(3)(A) of the Code:
(A) on or before the date
on which the first payment becomes payable
to it hereunder or under any Note (or, in
the case of a Participant, on or before the
date such Participant becomes a Participant
hereunder) deliver to the Borrower and the
Administrative Agent (I) a statement under
penalties of perjury that such Lender (x) is
not a "bank" under Section 881(c)(3)(A) of
the Code, is not subject to regulatory or
other legal requirements as a bank in any
jurisdiction, and has not been treated as a
bank for purposes of any tax, securities law
or other filing or submission made to any
Governmental Authority, any application made
to a rating agency or qualification for any
exemption from tax, securities law or other
legal requirements, (y) is not a 10-percent
shareholder of the Borrower within the
meaning of Section 881(c)(3)(B) of the Code
and (z) is not a controlled foreign
corporation receiving interest from a
related person within the meaning of Section
881(c)(3)(C) of the Code and (II) a properly
completed and duly executed Internal Revenue
Service Form W-8 or applicable successor
form;
(B) deliver to the Borrower
and the Administrative Agent two further
properly completed and duly executed copies
of said Form W-8, or any successor
applicable form on or before the date that
any such Form W-8 expires or becomes
obsolete or after the occurrence of any
event requiring a change in the most recent
form previously delivered by it to the
Borrower or upon the reasonable request of
the Borrower; and
(C) obtain such extensions
of time for filing and completing such forms
or certifications as may be reasonably
requested by the Borrower or the
Administrative Agent;
unless in any such case any change in treaty, law or regulation has
occurred subsequent to the date such Lender (or Transferee) became a
party to this Agreement (or in the case of a Participant, the date such
Participant became a Participant hereunder) which renders all such
forms inapplicable or which would prevent such Lender from properly
completing and executing any such form with respect to it and such
Lender so advises the Borrower and the Administrative Agent in writing
no later than 15 calendar days before any payment hereunder or under
any Note is due. Each such Lender (and each Transferee) shall certify
(i) in the case of a Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8
or W-9 delivered pursuant to subsection 2.15(b)(i), that it is entitled
to an exemption from United States backup withholding tax. Each Person
that shall become a Lender or a Participant pursuant to subsection 9.6
shall, upon the effectiveness of the related transfer, provide all of
the forms and statements required pursuant to this subsection, provided
that, in the case of a Participant, such Participant shall furnish all
such required forms and statements to the Lender from which the related
participation shall have been purchased.
(c) Each Lender (and the Administrative Agent with
respect to payments to the Administrative Agent for its own account)
agrees that it will (i) take all reasonable actions by all usual means
to maintain all exemptions, if any, available to it from United States
withholding taxes (whether available by treaty, existing administrative
waiver, by virtue of the location of any Lender's applicable lending
office or otherwise) and (ii) otherwise reasonably cooperate with the
Borrower to minimize amounts payable by the Borrower under this
subsection.
(d) If any Lender shall receive a credit or refund
from a taxing authority with respect to, and actually resulting from,
an amount of Non-Excluded Taxes actually paid to or on behalf of such
Lender by the Borrower including any interest received thereon (a "Tax
Credit"), such Lender shall promptly notify the Borrower of such Tax
Credit. If such Tax Credit is received by such Lender in the form of
cash, such Lender shall promptly pay to the Borrower the amount so
received with respect to the Tax Credit. If such Tax Credit is not
received by such Lender in the form of cash, such Lender shall pay the
amount of such Tax Credit not later than the time prescribed by
applicable law for filing the return (including extensions of time) for
such Lender's taxable period which includes the period in which such
Lender receives the economic benefit of such Tax Credit. In any event,
the amount of any Tax Credit payable by a Lender to the Borrower
pursuant to this paragraph shall not exceed the actual amount of cash
refunded to, or credits received and usable by, such Lender from a
taxing authority. In determining the amount of any Tax Credit, a Lender
may use such apportionment and attribution rules as such Lender
customarily employs in allocating taxes among its various operations
and income sources, and such determination shall be presumptively
correct. The Borrower further agrees promptly to return to a Lender the
amount paid to the Borrower with respect to a Tax Credit by such Lender
if such Lender is required to repay, or is determined to be ineligible
for, a Tax Credit for such amount.
2.16 Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense which
such Lender may sustain or incur as a consequence of (a) failure by the
Borrower to make a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the
same in accordance with the provisions of this Agreement, (b) failure
by the Borrower to make any prepayment of Eurodollar Loans after the
Borrower has given a notice thereof in accordance with the provisions
of this Agreement or (c) the making of a prepayment of or conversion
from Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification shall be in an amount
equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid or converted, or not so borrowed,
converted or continued, for the period from the date of such prepayment
or conversion or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the
amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount
on deposit for a comparable period with leading banks in the interbank
eurodollar market. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.17 Change of Lending Office; Mandatory Assignment
or Prepayment. (a) Each Lender agrees that if it makes any demand for
payment under subsection 2.14 or 2.15(a), or if any adoption or change
of the type described in subsection 2.13 shall occur with respect to
it, it will use reasonable efforts (consistent with its generally
applicable internal policy and its legal and regulatory restrictions
and so long as such efforts would not in its reasonable judgment be
materially disadvantageous to it) to designate a different lending
office if the making of such a designation would reduce or obviate the
need for the Borrower to make payments under subsection 2.14 or 2.15(a)
or would eliminate or reduce the effect of any adoption or change
described in subsection 2.13.
(b) If the Borrower shall be required to pay any
additional amounts or other payments to any Lender in accordance with
subsection 2.14 or 2.15(a) or if any Lender shall, in accordance with
subsection 2.13, no longer be obligated to make or maintain Eurodollar
Loans hereunder, the Borrower may, at its own expense and in its sole
discretion, unless such Lender has theretofore removed or cured the
conditions which result in the obligation to pay such additional
amounts or other payments or which result in such illegality, as the
case may be, after reasonable notice to the Administrative Agent and
such Lender, require such Lender to transfer or assign, in whole or in
part, without recourse (in accordance with subsection 9.6), all or part
of its interests, rights and obligations under this Agreement to
another bank or financial institution reasonably acceptable to the
Administrative Agent (provided that the Borrower, with the full
cooperation of such Lender, can identify a bank or financial
institution reasonably acceptable to the Administrative Agent which is
ready, willing and able to be an Assignee with respect to thereto)
which shall assume such assigned obligations (which Assignee may be
another Lender, if such Assignee Lender accepts such assignment);
provided that (A) the Assignee or the Borrower, as the case may be,
shall have paid to such Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the
Loans made by it hereunder and all other amounts owed to it hereunder,
including, without limitation, any amounts owing pursuant to subsection
2.16 and any amounts that would be owing under said subsection if such
Loans were prepaid on the date of such assignment, and (B) such
assignment does not conflict with any law, rule or regulation or order
of any Governmental Authority.
2.18 Treatment of Certain Prepayments. (a)
Notwithstanding anything to the contrary in this Agreement, in the
event that (i) the Borrower shall be required pursuant to the
provisions of a Bank Credit Facility (other than this Agreement), a
Vendor Credit Facility or any instrument governing any other
Indebtedness of the Borrower to offer to apply any specified amount
toward the prepayment of the Term Loans or the reduction of the
Revolving Credit Commitments or (ii) the Borrower is required to make
any Pro Rata Payment Offer in a specified amount pursuant to the
provisions of this Agreement, the Borrower may, at its option, either
apply such specified amount toward prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments pro rata among the
Lenders in accordance with the amounts of their respective Term Loans
and Revolving Credit Commitments or follow the procedures set forth in
this subsection. Not less than 10 nor more than 20 Business Days prior
to the date (a "Specified Prepayment/Reduction Date") on which any such
prepayment or Revolving Credit Commitment reduction is scheduled to be
made, the Borrower shall deliver a Prepayment/Reduction Offer Notice to
the Administrative Agent, which shall promptly thereafter deliver a
copy thereof to each Lender. Each Lender receiving such
Prepayment/Reduction Offer Notice shall indicate its acceptance or
rejection of such offer (and, in the case of its acceptance, its
Prepayment Acceptance Amount and/or its Reduction Acceptance Amount, as
applicable) by delivering a Prepayment/Reduction Offer Response Notice
to the Administrative Agent and the Borrower no later than four
Business Days prior to the Specified Prepayment/Reduction Date set
forth in the applicable Prepayment/Reduction Offer Notice; provided
that the failure by such Lender to deliver a Prepayment/Reduction Offer
Response Notice on or before the fourth Business Day prior to the
Specified Prepayment/Reduction Date shall be deemed to constitute the
acceptance of the full amount of such offer by such Lender. On such
Specified Prepayment/Reduction Date, the Borrower shall prepay each
Lender's Term Loans and/or reduce each Lender's Revolving Credit
Commitment, as applicable, in an amount equal to such Lender's
Prepayment Share and/or its Reduction Share, as applicable. The
Administrative Agent shall calculate the amounts of the Term Loan
prepayments or Revolving Credit Commitment reductions applicable to the
respective Lenders required by this subsection.
(b) If at any time, as a result of the operation of
this subsection, the Revolving Credit Loans shall no longer be held pro
rata among the Lenders in accordance with their then respective
Revolving Credit Commitments, the Borrower will, as soon as practicable
thereafter as will not result in an obligation to pay additional
amounts pursuant to subsection 2.16, make such prepayments and/or
borrowings (which shall, notwithstanding anything in this Agreement to
the contrary, be on a non-pro rata basis) as shall result in all
Revolving Credit Loans, and all Revolving Credit Loans having the same
Interest Period, being held pro rata among the Lenders in accordance
with their respective Revolving Credit Commitments.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to
enter into this Agreement and to make the Loans, the Borrower hereby
represents and warrants to the Administrative Agent and each Lender
that:
3.1 Financial Condition. (a) The audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at
December 31, 1995, copies of which have heretofore been furnished to
the Lenders, was prepared in accordance with GAAP and presents fairly
the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date. Such balance sheet and the
notes thereto disclose all material liabilities of the Borrower and its
consolidated Subsidiaries as at such date.
(b) The detailed projections contained in the
Borrower's Confidential Information Memorandum dated July 1996 (the
"Information Memorandum") were prepared in good faith on the basis of
the assumptions described in the Information Memorandum, which
assumptions were believed by the Borrower in good faith to be
reasonable in light of conditions existing at the time of preparation
thereof, and the Borrower has no knowledge of any event or circumstance
that would cause it to change any such assumptions in any material
respect as of the date hereof, it being understood by the
Administrative Agent and the Lenders that actual results may vary from
the projected results contained therein.
3.2 No Change. Since December 31, 1995, there has
been no development or event, and no change in the business, assets,
results of operations, financial condition or prospects of the Borrower
and the Restricted Subsidiaries, taken as a whole, which has had or
could reasonably be expected to have a Material Adverse Effect, except
for operating losses contemplated by the Borrower's Business Plan
Overview dated March 1996 which has previously been delivered to the
Administrative Agent.
3.3 Existence; Compliance with Law. Each of the
Borrower and its Restricted Subsidiaries (a) is duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
formation, (b) has the power and authority, and has in effect all
permits, approvals and other authorizations from all applicable
Governmental Authorities, necessary to own and operate its property, to
lease the property it operates as lessee and to conduct the business in
which it is currently engaged and to own and operate Systems in the
areas for which it has Licenses, (c) is duly qualified to do business
and in good standing in each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification and (d) is in compliance with all Requirements of Law,
except to the extent that the failure of any of the statements set
forth in subsection 3.3(b), (c) or (d) to be true and correct could not
reasonably be expected to have a Material Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations.
The Borrower has the power to make, deliver and perform this Agreement
and to borrow hereunder and has taken all necessary partnership action
to authorize the borrowings on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of
this Agreement. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental Authority or any
other Person is required of the Borrower in connection with the
borrowings hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement other than those filings
required to be made in connection with the perfection of the Liens
created by the Security Documents. This Agreement has been duly
executed and delivered on behalf of the Borrower. This Agreement
constitutes a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, subject
to the effects of bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
3.5 No Legal Bar. The execution, delivery and
performance of this Agreement, the borrowings hereunder and the use of
the proceeds thereof will not violate, result in a default under, or
give rise to any acceleration, prepayment, repurchase or redemption
obligation of the Borrower or any of its Restricted Subsidiaries as a
result of, any Requirement of Law or Contractual Obligation of the
Borrower or of any of its Restricted Subsidiaries and will not result
in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation, other than the Liens
created by the Security Documents.
3.6 No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority (other than the FCC, matters with respect to which are
covered by subsection 3.22(b)) is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or any of its
Restricted Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to any of the Loan Documents or
(b) which could reasonably be expected to have a Material Adverse
Effect.
3.7 No Default. Neither the Borrower nor any of its
Restricted Subsidiaries is in default under or with respect to any of
its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the
Borrower and its Restricted Subsidiaries has good and marketable title
in fee simple to, or a valid leasehold interest in, all its material
real property, and good title to, or a valid leasehold interest in, all
its other material property (including, without limitation, its
partnership interests in the Special Purpose Subsidiaries), and none of
such property is subject to any Lien except as permitted by subsection
6.3.
3.9 Intellectual Property. The Borrower and each of
its Restricted Subsidiaries owns, or is licensed to use, all patents,
trademarks, tradenames, service marks, copyrights, technology, know-how
and processes used in or necessary for the conduct of its business
except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending
(or, to the knowledge of the Borrower, threatened) by any Person
challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property, nor does the
Borrower know of any valid basis for any such claim, except for any
such claim which could not reasonably be expected to have a Material
Adverse Effect. The use of the Intellectual Property by the Borrower
and its Restricted Subsidiaries does not infringe on the rights of any
Person, except for such infringements that could not reasonably be
expected to have a Material Adverse Effect.
3.10 Taxes. Each of the Borrower and its Restricted
Subsidiaries has filed or caused to be filed all tax returns which, to
the knowledge of the Borrower, are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any
Governmental Authority which have become due and payable (other than
any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
Borrower or its Restricted Subsidiaries, as the case may be).
3.11 Federal Regulations. No part of the proceeds of
any Loans will be used in any manner which would result in a violation
of Regulation G or Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect
or to buy or carry "margin stock" (as defined thereunder) or to
refinance any Indebtedness incurred for such purpose.
3.12 ERISA. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of
the Code or Section 302 of ERISA), whether or not waived, has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single
Employer Plan, and each Single Employer Plan has complied in all
respects with the applicable provisions of ERISA and the Code, except
with respect to any such event or failure to comply where the liability
which could reasonably be expected to be incurred would not have a
Material Adverse Effect. No termination of a Single Employer Plan whose
accrued benefits exceeded the assets thereof has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, and neither the Borrower nor
any Commonly Controlled Entity has received a notice from the PBGC or a
plan administrator of an intention to terminate any Single Employer
Plan or to appoint a trustee to administer any Single Employer Plan,
during such five-year period. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed
the value of the assets of such Plan allocable to such accrued benefits
by an amount which if such Plan then terminated could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal
from any Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or
deemed made, which in any event could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Commonly
Controlled Entity has received notice that any such Multiemployer Plan
is in Reorganization or Insolvent, where the liability resulting
therefrom could reasonably be expected to have a Material Adverse
Effect.
3.13 Investment Company Act; Other Regulations. The
Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935,
as amended. The Borrower is not subject to regulation under any Federal
or state statute or regulation which limits its ability to incur
Indebtedness as contemplated hereby.
3.14 Subsidiaries; Parents. (a) The following
constitute all the Subsidiaries of the Borrower as of the date hereof:
(a) WirelessCo (the sole general partner of which is the Borrower and
the sole limited partner of which is MinorCo), (b) EquipmentCo (the
sole general partner of which is the Borrower and the sole limited
partner of which is MinorCo), (c) RealtyCo (the sole general partner of
which is the Borrower and the sole limited partner of which is MinorCo)
and (d) Sprint Spectrum Finance Corporation, a Delaware corporation and
a Wholly Owned Subsidiary of the Borrower. Sprint Spectrum Finance
Corporation does not own or lease any material assets on the date
hereof.
(b) The sole general partner of the Borrower is
Holding, and the sole limited partner of the Borrower is MinorCo. As of
the date hereof, Sprint Enterprises, L.P. (having a 40% economic
interest in each of Holding and MinorCo), TCI Telephony Services, Inc.
(having a 30% economic interest in each of Holding and MinorCo),
Comcast Telephony Services (having a 15% economic interest in each of
Holding and MinorCo) and Cox Telephony Partnership (having a 15%
economic interest in each of Holding and MinorCo) are each general and
limited partners of Holding and MinorCo, and there are no other
partners of Holding or MinorCo. Sprint Enterprises, L.P. is a wholly
owned Subsidiary of Sprint Corporation; TCI Telephony Services, Inc. is
a wholly owned Subsidiary of Tele-Communications, Inc.; Comcast
Telephony Services is a wholly owned Subsidiary of Comcast Corporation;
and Cox Telephony Partnership is a wholly owned Subsidiary of Cox
Communications, Inc.
(c) As of the date hereof, there is no issued or
outstanding Capital Stock of the Borrower or any of its Subsidiaries
other than the general partnership interests and limited partnership
interests described in subsections 3.14(a) and (b). All outstanding
Capital Stock of each Restricted Subsidiary is, except as described in
subsection 3.14(a), owned by the Borrower and is free and clear of all
Liens whatsoever (other than Liens created by the Security Documents).
All of the Capital Stock of the Borrower is owned by the Persons
described in subsection 3.14(b) and is free and clear of all Liens
whatsoever.
(d) As of the date hereof: (i) all Licenses which are
directly or indirectly owned by the Borrower or any of its Restricted
Subsidiaries are owned, beneficially and of record, by WirelessCo, (ii)
all Real Estate Assets (other than those which constitute Excluded
Assets) which are directly or indirectly held by the Borrower or any of
its Restricted Subsidiaries are directly held by RealtyCo; and (iii)
all Personal Property Assets (other than those which constitute
Collateral under the Security Documents or Excluded Assets) are
directly owned by EquipmentCo.
3.15 Absence of Material Obligations. None of
WirelessCo, RealtyCo and EquipmentCo has any material obligations or
liabilities other than in connection with (a) the Guarantees, (b) any
lease of real property which RealtyCo has entered into in the ordinary
course of business and other obligations and liabilities incurred in
the ordinary course of business which are incident to being the owner
or lessee of real property, (c) in the case of EquipmentCo, obligations
and liabilities under the Vendor Procurement Contracts, the rights and
benefits of Holding under which have been assigned to it or (d) in the
case of Wireless Co, its obligations to comply with the requirements of
the Licenses.
3.16 Environmental Matters. (a) In the ordinary
course of its business, the Borrower conducts an ongoing review of the
effect of Environmental Laws on the business, operations and properties
of the Borrower and its Restricted Subsidiaries, in the course of which
it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or previously
owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by
law or as a condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any costs or
liabilities in connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis
of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance
with Environmental Laws, could not reasonably be expected to have a
Material Adverse Effect.
(b) The Borrower and its Restricted Subsidiaries have
obtained all Environmental Permits with respect to the facilities and
properties owned, leased or operated by the Borrower or any of its
Restricted Subsidiaries (the "Properties"), and the Borrower and the
Restricted Subsidiaries are in compliance with all Environmental Laws
and all Environmental Permits, except to the extent that such failure
to obtain any Environmental Permits and noncompliance with
Environmental Laws and Environmental Permits could not reasonably be
expected to have a Material Adverse Effect.
(c) There have been no Releases or threatened
Releases at, from, under or proximate to the Properties or otherwise in
connection with the operations of the Borrower or its Restricted
Subsidiaries, which Releases or threatened Releases could reasonably be
expected to have a Material Adverse Effect.
(d) There are no past or present actions, omissions,
activities, events, conditions or circumstances, including the Release,
threatened Release, emission, discharge, generation, treatment, storage
or disposal of Hazardous Substances at, from or under any location,
that will give rise to liability of the Borrower or any of its
Restricted Subsidiaries under any Environmental Law, except to the
extent that such liability could not reasonably be expected to have a
Material Adverse Effect.
3.17 Licenses. (a) On the date hereof, (i) the
Borrower and its Restricted Subsidiaries hold all Licenses necessary on
the date of this Agreement to operate a System in each of the MTA's
listed on Schedule II, (ii) such Licenses have been duly issued by the
FCC, are held by WirelessCo and are in full force and effect and (iii)
the Borrower and its Restricted Subsidiaries are in compliance in all
material respects with all of the provisions of each such License.
(b) The Borrower and its Restricted Subsidiaries hold
all Licenses to operate Systems in MTA's covering at least 120,000,000
Owned Pops, and such Licenses have been duly issued by the FCC, are
held by WirelessCo and are in full force and effect; and the Borrower
and its Restricted Subsidiaries are in compliance in all material
respects with all of the provisions of each such License.
3.18 Use of Proceeds. The Borrower will use the
proceeds of the Loans to finance working capital needs, subscriber
acquisition costs, capital expenditures and other general partnership
purposes of the Borrower and its Restricted Subsidiaries.
3.19 No Burdensome Restrictions. No Requirement of
Law or Contractual Obligation (other than, in the case of clause (b)
below, any restriction in any Secured Instrument on the ability of any
Special Purpose Subsidiary to make cash distributions to the Borrower
at any time when any Default or Event of Default or similar event shall
have occurred and be continuing) applicable to the Borrower or any
Restricted Subsidiary could reasonably be expected to (a) have a
Material Adverse Effect or (b) limit the ability of any Restricted
Subsidiary to pay dividends or to make distributions or advances to the
Borrower or any other Restricted Subsidiary.
3.20 Regulation H. To the extent available, the
Borrower has obtained for all Mortgaged Properties which are located in
a "flood hazard area", as designated in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency, flood insurance
in such total amount as the Administrative Agent has from time to time
reasonably required.
3.21 Accuracy of Disclosure. None of (a) the
Information Memorandum or (b) any other information, report, financial
statement or schedule furnished by or on behalf of the Borrower or any
Subsidiary thereof to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included
therein or delivered pursuant to any Loan Document, taken as a whole,
contains as of the date hereof, any material misstatement of fact or,
as of the date hereof, omits to state any material fact necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided that to the extent any such
information, report, financial statement or schedule was based upon or
constitutes a forecast or projection, the Borrower represents only that
it acted in good faith and utilized reasonable assumptions and due care
in the preparation of such information, report, financial statement or
schedule.
3.22 FCC Compliance. (a) The Borrower and WirelessCo
are in compliance with the Communications Act, except to the extent
that the failure to be in compliance could not reasonably be expected
to have a Material Adverse Effect.
(b) The Borrower has no knowledge of any
investigation, notice of apparent liability, violation, forfeiture or
other order or complaint issued by or before the FCC, or of any other
proceedings (other than proceedings relating to the wireless
communications industries generally) of or before the FCC, which could
reasonably be expected to have a Material Adverse Effect.
(c) No event has occurred which (i) results in, or
after notice or lapse of time or both would result in, revocation,
suspension, adverse modifications, non-renewal, impairment, restriction
or termination of, or order of forfeiture with respect to, any License
in any respect that could reasonably be expected to have a Material
Adverse Effect, or (ii) affects or could reasonably be expected in the
future to affect any of the rights of the Borrower or WirelessCo under
any License in any respect that could reasonably be expected to have a
Material Adverse Effect.
(d) The Borrower and WirelessCo have duly filed in a
timely manner all material filings, reports, applications, documents,
instruments and information required to be filed by it under the
Communications Act, and all such filings were when made true, correct
and complete in all material respects, except to the extent that the
failure of any of the statements made in this paragraph to be true and
correct could not reasonably be expected to have a Material Adverse
Effect.
(e) The Borrower has no reason to believe that
Licenses covering at least 120,000,000 Owned Pops will not be renewed
in the ordinary course.
3.23 Collateral. To the extent required by subsection
5.9, the Trustees hold pursuant to the Security Documents for the
ratable benefit of the Secured Parties a legal, valid, enforceable and
fully perfected Lien on all right, title and interest of the Borrower
and each Restricted Subsidiary in any asset (other than Excluded
Assets) and the proceeds thereof, and none of such assets is subject to
any other Lien (except for Liens permitted by subsection 6.3). None of
the assets held by any Special Purpose Subsidiary is subject to any
Lien other than Liens permitted under subsections 6.3(a), (b), (c),
(d), (e), (j), (k), (l), (m), (n) or (o), and none of the assets held
by WirelessCo is subject to any Lien permitted by subsection 6.3(c) or
(d).
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of the
Lenders to make the initial Loans is subject to the satisfaction of the
following conditions precedent (which satisfaction must occur, if at
all, prior to October 15, 1996):
(a) Credit Agreement. The Administrative Agent shall
have received this Agreement executed and delivered by a duly
authorized officer of the Borrower, with a counterpart for
each Lender and the Administrative Agent.
(b) Capital Contribution Agreement. The
Administrative Agent shall have received the Capital
Contribution Agreement, duly executed by the Borrower and each
Parent, and the Capital Contribution Agreement shall be in
full force and effect.
(c) Vendor Procurement Contracts; Vendor Credit
Facilities. The Administrative Agent shall have received from
the Borrower a conformed copy, certified to be true and
complete (in each case described in clauses (i) through (iv)
below excluding (A) with respect to each Vendor Procurement
Contract described in such clauses, certain provisions
containing proprietary pricing and technological information
that is confidential pursuant to agreements between the
Borrower and the party to such Vendor Procurement Contract and
(B) with respect to each Vendor Credit Facility described in
such clauses, fees and restrictions on the use of proceeds
thereunder to finance items other than equipment provided by
the Vendor party thereto that are confidential pursuant to
agreements between the Borrower and the Vendor party to such
Vendor Credit Facility), of (i) the Vendor Procurement
Contract between the Borrower and Lucent Technologies Inc.,
(ii) the Vendor Procurement Contract between the Borrower and
Northern Telecom Inc., (iii) the Vendor Credit Facility
between the Borrower and Lucent Technologies Inc., (iv) the
Vendor Credit Facility between the Borrower and Northern
Telecom Inc., and (v) any other agreement entered into by the
Borrower or any Restricted Subsidiary that either (A) amends,
waives or otherwise modifies in any material respect any of
the material rights or obligations under such Vendor
Procurement Contracts (other than change orders entered into
in the ordinary course of business) or such Vendor Financing
Agreements or (B) contains material Contractual Obligations
(other than Contractual Obligations entered into in the
ordinary course of business) with Lucent Technologies Inc. or
Northern Telecom Inc., or any of their respective affiliates,
or amends, waives or otherwise modifies in any material
respect any of the material rights or obligations under such
Contractual Obligations (other than change orders entered into
in the ordinary course of business); and each of the
agreements referred to in clauses (i) through (iv) above shall
be in full force and effect, and all conditions precedent to
the initial borrowing under each of the Vendor Credit
Facilities referred to in clauses (iii) and (iv) above shall
have been satisfied.
(d) Trust Agreement. The Administrative Agent shall
have received from the Borrower (i) the Trust Agreement, duly
executed and delivered by the Borrower and the Trustee, (ii)
evidence, in form and substance reasonably satisfactory to the
Administrative Agent, that all documents and other instruments
required to be delivered, and all other actions required to
have been taken, pursuant to subsections 4.1, 4.8(a), 4.9(a)
and 4.10(a) of the Trust Agreement shall have been so
delivered or taken, as the case may be, (iii) conformed copies
of all such documents and instruments referred to in clause
(ii) immediately preceding, and (iv) Acknowledgements and
Consents, in the forms specified by the applicable Security
Document and duly executed by each party thereto other than
the Borrower or a Restricted Subsidiary, in respect of the
Vendor Procurement Contracts (to the extent contemplated by
the Vendor Procurement Contracts), the Trademark License
Agreement and the Special Purpose Subsidiary Funding
Agreements.
(e) Licenses. The Administrative Agent shall have
received from the Borrower photocopies, certified to be true
and complete, of the Licenses described in subsection 3.17,
and all of such Licenses shall be fully paid for and shall be
free and clear of all Liens.
(f) Partnership Agreements; Trademark License
Agreement; Special Purpose Subsidiary Funding Agreements. The
Administrative Agent shall have received from the Borrower
conformed copies, certified to be true and complete, of (i)
the partnership agreements of Holding, MinorCo, the Borrower,
WirelessCo, EquipmentCo and RealtyCo, (ii) the Trademark
License Agreement and (iii) the Special Purpose Subsidiary
Funding Agreements, each of which shall be in full force and
effect.
(g) Contributed Capital. The Administrative Agent
shall have received, with a counterpart for each Lender, a
certificate of a Responsible Officer of the Borrower to the
effect that the Borrower and its Restricted Subsidiaries have
received Contributed Capital net of any payments or
distributions made by the Borrower or any Restricted
Subsidiary to any Parent (or any Affiliate thereof) in an
aggregate amount of at least $2,200,000,000.
(h) Partnership Proceedings of the Borrower. The
Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions, in form and
substance reasonably satisfactory to the Administrative Agent,
of the Partnership Board of Holding authorizing (i) the
execution, delivery and performance of this Agreement and the
other Loan Documents, (ii) the borrowings contemplated
hereunder and (iii) the granting of the Liens created pursuant
to the Security Documents, certified by the Secretary or an
Assistant Secretary of Holding as of the Closing Date, which
certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(i) Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a
certificate of Holding, dated the Closing Date, as to the
incumbency and signature of the officers of Holding executing
this Agreement, reasonably satisfactory in form and substance
to the Administrative Agent, executed by the Secretary or any
Assistant Secretary of Holding.
(j) Legal Opinions. The Administrative Agent shall
have received, with a counterpart for each Lender, the follow-
ing executed legal opinions:
(i) the executed legal opi-
nion of Simpson Thacher & Bartlett, counsel to the
Borrower, substantially in the form of Exhibit B-1;
(ii) the executed legal opi-
nion of Charles R. Wunsch, Esq., Associate General
Counsel of the Borrower, substantially in the form of
Exhibit B-2; and
(iii) the executed legal opinion of
Morrison & Foerster LLP, special counsel to the
Borrower with respect to FCC matters, substantially
in the form of Exhibit B-3.
(k) Search Reports. The Administrative Agent shall
have received copies of the results of recent searches by
Persons reasonably satisfactory to the Administrative Agent of
tax liens, judgments and Uniform Commercial Code records in
all offices in which filings are required to be made in
accordance with the provisions of subsection 4.9(a) of the
Trust Agreement, and such searches shall reveal no Liens other
than those permitted by subsection 6.3.
(l) Fees. The Administrative Agent shall have
received all fees and other amounts due and payable by the
Borrower to the Administrative Agent on or prior to the
Closing Date.
(m) Financial Statements; Annual Budget. The
Administrative Agent shall have received from the Borrower (i)
the audited balance sheet referred to in subsection 3.1(a) and
(ii) a certificate dated the Closing Date and duly executed by
a Responsible Officer of the Borrower certifying that attached
thereto is the annual budget of the Borrower for the current
fiscal year, that such annual budget has been approved by the
Partnership Board of Holding and that such annual budget is
consistent in all material respects with the Information
Memorandum and the information and projections contained
therein.
4.2 Conditions to Each Loan. The agreement of the
Lenders to make any Loan requested to be made by it on any date
(including, without limitation, the initial Loan) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and each
other Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of such
date as if made on and as of such date.
(b) No Default. No Default or Event of Default
shall have occurred and be continuing on such date or after
giving effect to the Loans requested to be made on such date.
(c) Borrowing Request. The Administrative Agent
shall have received a notice containing a request for such
Loans if and as required by subsection 2.2.
Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date thereof that
the conditions contained in this subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document,
the Borrower shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its Restricted
Subsidiaries to:
5.1 Financial Statements. Furnish to the Admini-
strative Agent, with a copy for each Lender:
(a) as soon as available, but in any event within 90
days after the end of each fiscal year of the Borrower, a copy
of the consolidated balance sheet of the Borrower and its
consolidated Restricted Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for such fiscal year,
reported on (without a qualification arising out of the scope
of the audit) by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing
and setting forth in comparative form the figures for the
previous fiscal year (provided, that no such comparison shall
be required in respect of the statements of income and
retained earnings and of cash flows for the 1996 fiscal year);
and
(b) as soon as available, but in any event not later
than 45 days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its
consolidated Restricted Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Borrower
and its consolidated Restricted Subsidiaries for such quarter
and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the
figures for the corresponding period of the previous fiscal
year (provided, that no such comparison shall be required in
respect of the statements of income and retained earnings and
of cash flows for any quarter in the 1996 fiscal year) and the
figures for the Borrower's budget for the period covered
thereby delivered pursuant to paragraph 5.2(d), certified by a
Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be prepared in accordance with GAAP
applied consistently throughout the periods reflected therein (except
as approved by such accountants or Responsible Officer, as the case may
be, and disclosed therein).
5.2 Certificates; Other Information. Furnish to th
Administrative Agent, with a copy for each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a), a certificate of
the independent certified public accountants reporting on such
financial statements stating that in making the examination
necessary therefor (and without performing any additional
procedures with respect thereto) no knowledge was obtained of
any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b), a
certificate of a Responsible Officer (i) stating that, to the
best of such Responsible Officer's knowledge, the Borrower
during such period has observed or performed all of its
covenants and other agreements contained in this Agreement and
the other Loan Documents to be observed or performed by it and
that such Responsible Officer has obtained no knowledge of any
Default or Event of Default, except as specified in such
certificate, (ii) setting forth computations in reasonable
detail demonstrating compliance with the covenants contained
in subsections 6.1 and 6.7 and (iii) if Floating GAAP used in
the preparation of any such financial statements shall be
different from Fixed GAAP, describing such differences and
reconciling any differences in calculation of compliance with
the covenants set forth in subsections 6.1 and 6.7 which may
result from such differences in GAAP;
(c) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a) for each fiscal
year commencing subsequent to December 31, 1996, a certificate
of a Responsible Officer comparing (i) the figures in such
financial statements with the corresponding figures in the
Borrower's budget for such fiscal year delivered pursuant to
subsection 5.2(d) and (ii) the figures in such financial
statements for the fourth quarter of the fiscal year covered
thereby with the corresponding figures in the Borrower's
budget for such fiscal quarter delivered pursuant to
subsection 5.2(d);
(d) as soon as possible, the annual budget prepared
pursuant to Holding's partnership agreement and approved by
the Partnership Board of Holding for each fiscal year of the
Borrower (which shall be presented on a quarterly basis for
such fiscal year), commencing with its 1997 fiscal year, such
budget to be accompanied by a certificate of a Responsible
Officer of the Borrower to the effect that such budget has
been prepared using assumptions believed in good faith by the
management of the Borrower to be reasonable at the time of
such preparation;
(e) promptly after the filing thereof, copies of all
proxy statements, all registration statements (other than
those on Form S-8 relating to Plans) under the Securities Act
of 1933, as amended, and all reports on Forms 10-K, 10-Q and
8-K filed with the Securities and Exchange Commission by the
Borrower;
(f) within five Business Days after the same are
sent, a copy of any financial statement, report or notice
which Holding, the Borrower or any Subsidiary of the Borrower
sends to any Person under or pursuant to or in connection with
any Vendor Credit Facility, any Vendor Procurement Contract,
the Capital Contribution Agreement, the Trademark License
Agreement and any indenture or note relating to the High Yield
Debt, in each case if such statement, report or notice relates
to an event that has resulted or could reasonably be expected
to result in an Event of Default or a Material Adverse Effect;
and, within five Business Days after the same are received by
Holding, the Borrower or any Subsidiary of the Borrower,
copies of all notices sent to any such Person under or
pursuant to or in connection with any such agreement or
instrument which notice relates to an event that has resulted
or could reasonably be expected to result in an Event of
Default or a Material Adverse Effect;
(g) within 45 days after the end of each fiscal
quarter, a schedule listing (i) the aggregate number of
Wireless Subscribers at the end of the preceding fiscal
quarter, (ii) the aggregate number of Wireless Subscribers at
the end of such fiscal quarter, (iii) the aggregate number of
Wireless Subscribers whose service terminated during such
fiscal quarter and (iv) the aggregate number of Wireless
Subscribers added during such fiscal quarter; and
(h) promptly, such additional financial and other
information as the Administrative Agent may from time to time
reasonably request for itself or on behalf of any Lender.
5.3 Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of
whatever nature, including all material taxes imposed upon it or upon
its income or profits or in respect of its property, except where the
amount or validity thereof is currently being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or its
Restricted Subsidiaries.
5.4 Conduct of Business; Maintenance of Existence;
Compliance with Laws. Preserve, renew and keep in full force and effect
its existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct
of its business except as otherwise permitted pursuant to subsection
6.5; comply in all material respects with all of its material
Contractual Obligations (including, without limitation, obligations
under any License) and material Requirements of Law, including, without
limitation, the Communications Act; and not take any action, or fail to
take any action, in any case if the result is (i) to subject the
Borrower or any Restricted Subsidiary to any restrictions relating to
FCC oversight that could reasonably be expected to result in a Material
Adverse Effect or (ii) a violation of the foreign ownership provisions
or any other provisions of the Communications Act that could reasonably
be expected to result in a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all
property useful and necessary in its business in good working order and
condition, except where the failure to do so would not be reasonably
expected to have a Material Adverse Effect; maintain with financially
sound and reputable insurance companies insurance on all its property
in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the
same or a similar business, and furnish to the Administrative Agent,
upon written request, full information as to the insurance carried.
5.6 Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which entries
in conformity with GAAP and all Requirements of Law applicable to it
shall be made of all dealings and transactions in relation to its
business and activities; permit representatives of the Administrative
Agent and any Lender to visit and inspect any of its properties at any
reasonable time (upon reasonable advance notice) and as often as may be
reasonably requested and examine and make abstracts from any of its
books and records and to discuss with officers and employees of the
Borrower and its Restricted Subsidiaries the business, assets,
operations and financial condition of the Borrower and its Restricted
Subsidiaries and, in particular, the annual budget delivered pursuant
to subsection 5.2(d).
5.7 Notices. Promptly after any Responsible Officer
has knowledge thereof, give notice to the Administrative Agent of:
(a) the occurrence of any Default or Event of De-
fault;
(b) any default or event of default under any
Contractual Obligation of the Borrower or any of its
Restricted Subsidiaries which could reasonably be expected to
have a Material Adverse Effect;
(c) any litigation or proceeding affecting the
Borrower or any of its Restricted Subsidiaries which if
adversely determined could reasonably be expected to have a
Material Adverse Effect; and
(d) the following events, as soon as possible and in
any event within 30 days after the Borrower knows or has
reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC
or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan, where
such event could reasonably be expected to have a Material
Adverse Effect; and
(e) any other development that has resulted in, or
could reasonably be expected to result in, a Material Adverse
Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower has
taken or proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply with all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain any Environmental Permits, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions,
required under Environmental Laws, except to the extent that the
failure to do so could not reasonably be expected to have a Material
Adverse Effect, and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being
contested in good faith by appropriate proceedings and the pendency of
such proceedings could not reasonably be expected to have a Material
Adverse Effect.
5.9 After-Acquired Assets. (a) Promptly (i) transfer
to WirelessCo any License held by the Borrower or any Restricted
Subsidiary (other than WirelessCo) and (ii) at the option of the
Borrower, either (A) transfer (I) to EquipmentCo any Personal Property
Assets (other than Direct-Lien Assets) hereafter acquired by the
Borrower or any Restricted Subsidiary and any such Personal Property
Assets of any Person that becomes a Restricted Subsidiary or is merged
with or into or consolidated with the Borrower or any Restricted
Subsidiary (in each case other than any such Personal Property Assets
constituting Excluded Assets), (II) to RealtyCo any Real Estate Assets
hereafter acquired by the Borrower or any Restricted Subsidiary and any
Real Estate Assets of any Person that becomes a Restricted Subsidiary
or is merged with or into or consolidated with the Borrower or any
Restricted Subsidiary (in each case other than any such Real Estate
Assets constituting Excluded Assets) and (III) to the Borrower any
Direct-Lien Assets hereafter acquired by the Borrower or any Restricted
Subsidiary and any Direct-Lien Assets of any Person that becomes a
Restricted Subsidiary or is merged with or into or consolidated with
the Borrower or any Restricted Subsidiary (in each case other than any
Direct-Lien Assets constituting Excluded Assets) or (B) create on terms
reasonably acceptable to the Administrative Agent a perfected first
priority security interest (subject to any Liens permitted by
subsection 6.3 (other than those referred to in the definition of the
term "Excluded Assets")) in favor of the Trustees for the benefit of
the Secured Parties in such Personal Property Assets, Real Estate
Assets or Direct-Lien Assets.
(b) Promptly create in favor of the Trustees for the
benefit of the Secured Parties in accordance with the terms of the
Security Documents a first priority perfected security interest
(subject to any Liens permitted by subsection 6.3) in any Direct-Lien
Assets of the Borrower or any Restricted Subsidiary (other than
Excluded Assets) that are not subject to such a security interest,
including with respect to Direct-Lien Assets that are acquired by the
Borrower or any Restricted Subsidiary after the date hereof and
Direct-Lien Assets of any Person that becomes a Restricted Subsidiary
or is merged with or into or consolidated with the Borrower or any
Restricted Subsidiary.
(c) Promptly create a mortgage on terms reasonably
acceptable to the Administrative Agent in favor of the Trustees for the
benefit of the holders of the Secured Obligations on any fee simple
interests in real property having at the time of acquisition thereof a
purchase price or fair market value greater than $15,000,000 (a
"Mortgaged Property") of the Borrower or any Restricted Subsidiary
(other than Excluded Assets) that are not so mortgaged, including
Mortgaged Properties that are acquired by the Borrower or any
Restricted Subsidiary after the date hereof and Mortgaged Properties of
any Person that becomes a Restricted Subsidiary or is merged with or
into or consolidated with the Borrower or any Restricted Subsidiary.
(d) Promptly cause (i) all Capital Stock of any
Restricted Subsidiary (including, without limitation, any Restricted
Subsidiary which shall be acquired by the Borrower in accordance with
the provisions of subsection 6.8(c) or (d) or any Unrestricted
Subsidiary which shall hereafter become a Restricted Subsidiary) to
become Additional Collateral under and pursuant to the Trust Agreement
and (ii) each Restricted Subsidiary to execute and deliver an
"Additional Guarantee" under and pursuant to the Trust Agreement.
(e) Promptly execute, acknowledge and deliver any and
all further documents, financing statements, agreements and
instruments, and thereafter register, file or record or take further
actions (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust), in each case at the
Borrower's sole expense, that may be required under applicable law, or
that the Requisite Lenders, the Administrative Agent or the Trustees
may reasonably request, to effectuate the transactions contemplated by
the Loan Documents and to grant, preserve, protect and perfect the
validity and first priority of the Liens created or intended to be
created by the Security Documents, including such Liens on the
Mortgaged Properties, and the Direct-Lien Assets (other than Excluded
Assets) and all the Capital Stock of each Restricted Subsidiary held by
the Borrower or any other Subsidiary.
5.10 Interest Rate Protection. If on any Measurement
Date the mean average of the six Eurodollar Rates determined for
Interest Periods of one month commencing on such Measurement Date and
on the first day of each of the five months preceding the month in
which such Measurement Date occurs would be greater than 6.50%, (a)
enter into, within 30 days of such Measurement Date, Interest Rate
Agreements the effect of which, when considered together with all other
Interest Rate Agreements then in effect, is to limit to a maximum rate
appropriate in the reasonable judgment of the Borrower consistent with
industry standards for an average weighted period, commencing on the
date that is 30 days after such Measurement Date, of at least three
years (provided that such period shall in no event be required to
extend beyond the date which is the fifth anniversary of the Closing
Date) the interest rate on Indebtedness in an aggregate principal
amount equal to (but only if such amount is a positive number) (i) 40%
of the aggregate amount of Indebtedness of the Borrower and its
Restricted Subsidiaries on a consolidated basis outstanding on such
Measurement Date less (ii) the aggregate amount of Indebtedness of the
Borrower and its Restricted Subsidiaries on a consolidated basis
outstanding on such Measurement Date that bears interest (whether or
not required to be paid in cash) or with respect to which interest
accretes at a fixed rate and either (A) matures after such period
expires or (B) matures before such period expires and is supplemented
by an Interest Rate Agreement which covers at least an equal amount of
Indebtedness and which has a term which commences at or prior to such
maturity and ends after such period expires and (b) deliver evidence of
the execution and delivery of such Interest Rate Agreements to the
Administrative Agent as soon as practicable following such execution
and delivery; provided, however, that the Borrower shall have no
obligations under this subsection after the first day on which the
Special Payment Condition shall have been satisfied.
5.11 Fiscal Year. Cause its respective fiscal year
to end on December 31 and its respective fiscal quarters to end on
March 31, June 30, September 30 and December 31.
5.12 Use of Proceeds. Use the proceeds of the Loans
only for the purposes set forth in subsection 3.18.
5.13 Insurance. Ensure that arrangements are in place
so that the proceeds of any insurance policies with respect to assets
held by any Special Purpose Subsidiary will be owned and paid directly
to such Special Purpose Subsidiary.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document,
the Borrower shall not, and (except with respect to subsection 6.1)
shall not permit any of its Restricted Subsidiaries to, directly or
indirectly:
6.1 Financial Condition Covenants.
(a) Total Debt to Total Capitalization. Permit the
ratio of (i) Total Debt outstanding on any of the dates set forth below
to (ii) Total Capitalization on such date to exceed the ratio set forth
opposite such date:
----------------------- ---------------------------
Date Ratio
----------------------- ---------------------------
12/31/96 .50 to 1
----------------------- ---------------------------
3/31/97 .55 to 1
----------------------- ---------------------------
6/30/97 .55 to 1
----------------------- ---------------------------
9/30/97 .57 to 1
----------------------- ---------------------------
12/31/97 .57 to 1
----------------------- ---------------------------
3/31/98 .60 to 1
----------------------- ---------------------------
6/30/98 .61 to 1
----------------------- ---------------------------
9/30/98 .61 to 1
----------------------- ---------------------------
12/31/98 .61 to 1
----------------------- ---------------------------
3/31/99 .62 to 1
----------------------- ---------------------------
6/30/99 .64 to 1
----------------------- ---------------------------
9/30/99 .66 to 1
----------------------- ---------------------------
12/31/99 .68 to 1
----------------------- ---------------------------
3/31/00 .69 to 1
----------------------- ---------------------------
6/30/00 .69 to 1
----------------------- ---------------------------
9/30/00 .70 to 1
----------------------- ---------------------------
12/31/00 .70 to 1
----------------------- ---------------------------
3/31/01 .70 to 1
----------------------- ---------------------------
6/30/01 .70 to 1
----------------------- ---------------------------
9/30/01 .70 to 1
----------------------- --------------------------
12/31/01 .70 to 1
----------------------- ---------------------------
(b) Total Debt to Annualized Adjusted EBITDA. Permit
the ratio of (i) Total Debt outstanding on any of the dates set forth
below to (ii) Annualized Adjusted EBITDA for the period ending on such
date to exceed the ratio set forth opposite such date:
------------------------- ------------------------------
Date Ratio
------------------------- ------------------------------
12/31/98 23.0 to 1
------------------------- ------------------------------
3/31/99 14.0 to 1
------------------------- ------------------------------
6/30/99 10.0 to 1
------------------------- ------------------------------
9/30/99 8.0 to 1
------------------------- ------------------------------
12/31/99 6.0 to 1
------------------------- ------------------------------
3/31/00 5.0 to 1
------------------------- ------------------------------
6/30/00 4.5 to 1
------------------------- ------------------------------
9/30/00 4.0 to 1
------------------------- ------------------------------
12/31/00 4.0 to 1
------------------------- ------------------------------
(c) Total Debt to Annualized EBITDA. Permit the ratio
of (i) Total Debt outstanding on any of the dates set forth below to
(ii) Annualized EBITDA for the period ending on such date to exceed the
ratio set forth opposite such date:
-------------------------- ------------------------------
Date Ratio
------------------------- -------------------------------
12/31/00 11.0 to 1
------------------------- -------------------------------
3/31/01 8.5 to 1
------------------------- -------------------------------
6/30/01 7.5 to 1
------------------------- -------------------------------
9/30/01 7.0 to 1
------------------------- -------------------------------
12/31/01 6.0 to 1
------------------------- -------------------------------
The last day of
each fiscal quarter
end thereafter 5.0 to 1
------------------------- -------------------------------
(d) Annualized EBITDA to Interest Expense. Permit the
ratio of (i) Annualized EBITDA for the period ending on any of the
dates set forth below to (ii) Interest Expense for the four consecutive
fiscal quarters ending on such date to be less than the ratio set forth
opposite such date:
-------------------------- -----------------------
Date Ratio
-------------------------- -----------------------
3/31/01 1.25 to 1
-------------------------- -----------------------
6/30/01 1.25 to 1
-------------------------- -----------------------
9/30/01 1.50 to 1
-------------------------- -----------------------
12/31/01 2.00 to 1
-------------------------- -----------------------
3/31/02 2.25 to 1
-------------------------- -----------------------
6/30/02 2.25 to 1
-------------------------- -----------------------
The last day of
each fiscal quarter
end thereafter 2.50 to 1
-------------------------- -----------------------
(e) Capital Expenditures. Permit Capital Expendi-
tures for any of the periods set forth below to exceed the amount set
forth opposite such period:
Period Amount
Date of formation of the
Borrower through 12/31/98 $4,500,000,000
1/1/99 through 12/31/99 1,000,000,000
1/1/00 through 12/31/00 1,000,000,000
1/1/01 through 12/31/01 1,000,000,000;
provided that any permitted amount which is not expended in any of the
periods specified above may be carried over for expenditure in any
subsequent period.
(f) Covered Pops. Create, incur or assume any
Indebtedness (other than Indebtedness permitted by paragraphs (b) and
(h) of subsection 6.2) or Guarantee Obligations in respect of
Indebtedness (other than Guarantee Obligations permitted by paragraph
(b) of subsection 6.4) at any time after any of the dates set forth
below if the number of Covered Pops on the last of such dates prior to
the date of such incurrence is less than the number set forth opposite
such last prior date:
Date Number
12/31/97 80,000,000
12/31/98 95,000,000
12/31/99 105,000,000
12/31/00 110,000,000
(g) Wireless Subscribers. Create, incur or assume any
Indebtedness (other than Indebtedness permitted by paragraphs (b) and
(h) of subsection 6.2) or Guarantee Obligations in respect of
Indebtedness (other than Guarantee Obligations permitted by paragraph
(b) of subsection 6.4) at any time after any of the dates set forth
below if the average of the numbers of Wireless Subscribers in
existence on the last of such dates prior to the date of such
incurrence and on the last day of each of the three previous calendar
quarters is less than the number set forth opposite such last prior
date:
Date Number
12/31/97 450,000
6/30/98 850,000
12/31/98 1,350,000
6/30/99 2,300,000
12/31/99 3,500,000
(h) Secured Obligations to Total Capitalization.
Permit the ratio of (i) Secured Obligations on the last day of any
fiscal quarter during any fiscal year set forth below to (ii) Total
Capitalization on such last day to exceed the ratio set forth opposite
such fiscal year:
Fiscal Year Ratio
1996 .45 to 1
1997 .55 to 1
1998 .60 to 1
1999 .65 to 1
2000 .65 to 1
2001 .65 to 1
6.2 Limitation on Indebtedness. Create, incur, assume
or suffer to exist any Indebtedness, except (subject to the provisions
of subsection 6.1(f) and (g)):
(a) Indebtedness of the Borrower under this Agree-
ment;
(b) Indebtedness of the Borrower to any Restricted
Subsidiary (other than any Special Purpose Subsidiary) and of
any Restricted Subsidiary (other than any Special Purpose
Subsidiary) to the Borrower or any other Restricted
Subsidiary;
(c) (i) Indebtedness of the Borrower and any of its
Restricted Subsidiaries (other than the Special Purpose
Subsidiaries) incurred to finance the acquisition,
construction, expansion or improvement of property or assets,
whether pursuant to a loan, a Financing Lease or otherwise,
(ii) Indebtedness constituting obligations of the Borrower and
its Restricted Subsidiaries (other than the Special Purpose
Subsidiaries) under Financing Leases arising out of
sale-leaseback transactions; and (iii) (A) Indebtedness of a
Person that is acquired by the Borrower or a Restricted
Subsidiary (other than a Special Purpose Subsidiary), and
which becomes a Restricted Subsidiary, after the date of this
Agreement, (B) Indebtedness of an Unrestricted Subsidiary
which becomes a Restricted Subsidiary after the date of this
Agreement and (C) Indebtedness secured by property or assets
acquired by the Borrower or any Restricted Subsidiary after
the date of this Agreement, provided that such Indebtedness
exists at the time such Person becomes a Restricted Subsidiary
or such property or assets are acquired, as the case may be,
and is not created in anticipation thereof; provided, however,
that the aggregate principal amount of Indebtedness permitted
by clauses (i), (ii) and (iii) of this paragraph at any one
time outstanding shall not exceed 5% of then Total
Capitalization;
(d) (i) Indebtedness of the Borrower under the Vendor
Credit Facilities described in subsections 4.1(c)(iii) and
(iv), and (ii) Indebtedness of the Borrower under other Vendor
Credit Facilities provided that the aggregate unpaid principal
amount of Indebtedness permitted under this clause (ii) shall
not exceed (x) $250,000,000 at any time prior to the date upon
which the Borrower shall have 80,000,000 Covered Pops or (y)
$500,000,000 at any time thereafter;
(e) Indebtedness of the Borrower incurred to finance
the acquisition of handsets; provided that the aggregate
principal amount of such Indebtedness shall not exceed
$300,000,000 at any time outstanding;
(f) Indebtedness of the Borrower and its Restricted
Subsidiaries (other than the Special Purpose Subsidiaries) in
existence on the date of this Agreement and listed on Schedule
III;
(g) the High Yield Debt;
(h) Permitted Refinancing Indebtedness; and
(i) additional Indebtedness (including Indebtedness
of any type specifically described above in this subsection)
of the Borrower and its Restricted Subsidiaries (other than
the Special Purpose Subsidiaries) provided, that (i) the
Weighted Average Life thereof is not shorter than the Weighted
Average Life of the Commitments, (ii) the terms of such
Indebtedness and of any agreement entered into and of any
instrument issued in connection therewith (including, without
limitation, those relating to collateral (if any) and covenant
protection) are not, taken as a whole, in the good faith
judgment of the Borrower's management, materially less
favorable to the Borrower than the terms and conditions of
this Agreement and (iii) at the time of incurrence of any of
the Indebtedness referred to in this paragraph, both before
and after giving effect thereto, the Borrower shall be in Pro
Forma Compliance; provided, further, that clauses (i) and (ii)
of the preceding proviso shall be inapplicable to Indebtedness
incurred pursuant to this paragraph for general partnership
purposes of the Borrower in an aggregate principal amount at
any time outstanding not exceeding $200,000,000.
6.3 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on
the books of the Borrower or its Restricted Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business for sums which are not overdue for
a period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, do not materially detract
from the value of the property of the Borrower and its
Restricted Subsidiaries taken as a whole or materially
interfere with the ordinary conduct of the business of the
Borrower and its Restricted Subsidiaries taken as a whole;
(f) Liens securing Indebtedness of the Borrower and
its Restricted Subsidiaries (other than the Special Purpose
Subsidiaries) permitted by subsection 6.2(c)(i) incurred with
respect to the property and assets described in said
subsection, provided that (i) such Liens and the Indebtedness
secured thereby are incurred prior to or within 270 days after
the acquisition, construction, expansion or improvement to
which such Indebtedness relates, (ii) the Indebtedness secured
by such Liens does not exceed 100% of the cost of the
acquisition, construction, expansion or improvement financed
therewith and (iii) such Liens do not at any time encumber any
property or assets other than the property and assets with
respect to which such Indebtedness is incurred;
(g) Liens securing Indebtedness of the Borrower and
its Restricted Subsidiaries (other than the Special Purpose
Subsidiaries) permitted by subsection 6.2(c)(ii), provided
that (i) such Liens and the Indebtedness secured thereby are
incurred within 270 days after the purchase by the Borrower or
such Restricted Subsidiary of the property or assets which is
or are the subject of the sale-leaseback transaction to which
such Indebtedness relates, (ii) the Indebtedness secured by
such Liens does not exceed 100% of the purchase price of such
property or assets and (iii) such Liens do not at any time
encumber any property or assets other than the assets that are
the subject of such sale-leaseback;
(h) Liens on the property or assets of a Person which
becomes a Restricted Subsidiary after the date of this
Agreement or on property or assets acquired by the Borrower or
any Restricted Subsidiary after the date of this Agreement, in
each case securing Indebtedness permitted by subsection
6.2(c)(iii), provided that (i) such Liens exist at the time
such Person becomes a Restricted Subsidiary or such property
or assets are acquired, as the case may be, and are not
created in anticipation thereof, (ii) any such Lien is not
extended to cover any property or assets of such Person or any
other property or assets of the Borrower or such Restricted
Subsidiary, as the case may be, after the time such Person
becomes a Restricted Subsidiary or such property or assets are
acquired, as the case may be and (iii) the aggregate book
value of such property or assets securing any such
Indebtedness shall not exceed 200% of the amount of such
Indebtedness;
(i) Liens in existence on the date of this Agreement
and listed on Schedule IV and securing Indebtedness permitted
by subsection 6.2(f), provided that no such Lien is extended
to cover any additional property after the date of this
Agreement and that the amount of Indebtedness secured thereby
is not increased;
(j) Liens created pursuant to the Security Docu-
ments;
(k) Liens of attachments, judgments or awards against
the Borrower or its Restricted Subsidiaries, as the case may
be, with respect to which an appeal or proceeding for review
shall be pending or a stay of execution shall have been
obtained, or which are otherwise being contested in good faith
and by appropriate proceedings diligently conducted, and in
respect of which adequate reserves shall have been established
in accordance with GAAP on the books of the Borrower or such
Restricted Subsidiary;
(l) restrictions on the transfer of assets imposed
by any of the Licenses or by the Communications Act or any
other Requirement of Law;
(m) leases or subleases granted to others not
interfering in any material respect with the business of the
Borrower and its Subsidiaries taken as a whole and any
interest or title of a lessor under any lease not prohibited
by this Agreement;
(n) the filing of financing statements regarding
leases not prohibited by this Agreement;
(o) ground leases in respect of real property on
which facilities owned or leased by the Borrower or its Re-
stricted Subsidiaries are located;
(p) Liens on goods (and the documents of title
related thereto) the purchase price of which is financed by a
documentary letter of credit issued for the account of the
Borrower or its Restricted Subsidiaries (other than the
Special Purpose Subsidiaries) and not prohibited by subsection
6.4, provided that such Lien secures only the obligations of
the Borrower or such Restricted Subsidiaries in respect of
such letter of credit;
(q) Liens on shares of the Capital Stock of Unre-
stricted Subsidiaries; and
(r) additional Liens which secure Indebtedness and
other obligations and liabilities of the Borrower and its
Restricted Subsidiaries not exceeding $100,000,000 in the
aggregate at any time outstanding, provided that the aggregate
book value of the assets that are subject to the Liens
described in this paragraph shall not exceed 150% of the
principal amount of the Indebtedness secured thereby.
6.4 Limitation on Guarantee Obligations. Create,
incur, assume or suffer to exist any Guarantee Obligation ex-
cept (subject to subsection 6.1(f) and (g)):
(a) Guarantee Obligations of the Borrower in exi-
stence on the date of this Agreement and listed on Schedule V;
(b) Guarantee Obligations incurred in the ordinary
course of its business by the Borrower and its Restricted
Subsidiaries (other than the Special Purpose Subsidiaries) in
respect of Indebtedness and other obligations and liabilities
of the Borrower and its Restricted Subsidiaries (other than
any Special Purpose Subsidiary) not prohibited by this
Agreement;
(c) Guarantee Obligations in respect of the undrawn
portion of the face amount of letters of credit issued for the
account of the Borrower or any Restricted Subsidiary (other
than the Special Purpose Subsidiaries) in the ordinary course
of business in respect of obligations that do not constitute
Indebtedness;
(d) the Guarantees; and
(e) additional Guarantee Obligations of the Borrower
and its Restricted Subsidiaries (other than the Special
Purpose Subsidiaries) not exceeding $50,000,000 in the
aggregate at any time outstanding;
provided that neither the Borrower nor any Restricted Subsidiary shall
be permitted to create, incur or assume any of the Guarantee
Obligations referred to in paragraphs (c) and (e) of this subsection
unless, after giving effect thereto, the Borrower would be in Pro Forma
Compliance.
6.5 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, liquidate, dissolve or wind up
and terminate itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, except that, so
long as, after giving effect thereto, the Borrower would be in Pro
Forma Compliance:
(a) any Restricted Subsidiary (other than any Special
Purpose Subsidiary) may be merged or consolidated with or into
the Borrower (provided that the Borrower shall be the
continuing or surviving entity) or with or into any one or
more other Wholly Owned Restricted Subsidiaries (other than,
if such Restricted Subsidiary has any Indebtedness or other
liabilities, with or into any Special Purpose Subsidiary)
(provided that the Wholly Owned Restricted Subsidiary or
Wholly Owned Restricted Subsidiaries shall be the continuing
or surviving entity or entities);
(b) any Wholly Owned Restricted Subsidiary (other
than any Special Purpose Subsidiary) may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any one
or more other Wholly Owned Restricted Subsidiaries; provided
that the liabilities of such selling, leasing, transferring or
disposing Restricted Subsidiary are not transferred to or
assumed by, and do not otherwise become liabilities of, any
Special Purpose Subsidiary;
(c) the Borrower may merge or consolidate with any
corporation with the result that the Borrower shall become a
corporation; provided, that (i) the Borrower shall have
provided to the Administrative Agent written notice of such
merger or consolidation at least 10 Business Days prior to the
consummation thereof, (ii) such corporation to survive such
merger or consolidation shall confirm in writing to the
Administrative Agent its agreement to be bound by the terms of
this Agreement and the other Loan Documents as and to the
extent that the Borrower is so bound, (iii) the Borrower and
such corporation shall promptly take such other actions as the
Administrative Agent shall request as reasonably necessary to
ensure that the rights and benefits of the Lenders under this
Agreement and the other Loan Documents, including with respect
to the Liens created by the Security Documents, are in no way
impaired or diminished and (iv) immediately after giving
effect to such transaction on a pro forma basis (including,
without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in respect of such
transaction) the surviving entity could incur $1.00 of
additional Indebtedness pursuant to the terms of subsection
6.1(f) and (g); and
(d) the Borrower or any Restricted
Subsidiary (other than a Special Purpose Subsidiary) may
effect pursuant to a merger or consolidation any Investment
permitted by subsection 6.8(c) or (d) so long as the Borrower
or such Restricted Subsidiary is the surviving entity.
6.6 Limitation on Sale of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any of its property,
business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in
the case of any Restricted Subsidiary, issue or sell any shares of such
Restricted Subsidiary's Capital Stock to any Person other than the
Borrower or any Wholly Owned Restricted Subsidiary, except:
(a) the sale or other disposition of inventory or any
other property in the ordinary course of business (provided
that no sale of a License or any System shall be considered to
be in the ordinary course of business);
(b) as permitted by subsection 6.5(b);
(c) so long as after giving effect thereto the
Borrower is in Pro Forma Compliance, any Asset Sale (other
than any sale of receivables permitted by subsection 6.6(f))
the aggregate fair market value of the property and assets
that are the subject of which is equal to or less than
$25,000,000; provided that (i) if such Asset Sale includes one
or more Licenses and, after giving effect thereto, the then
aggregate number of Owned Pops would be less than 120,000,000,
such Asset Sale shall have been approved by the Requisite
Lenders and (ii) if the aggregate fair market value of the
property and assets sold or otherwise disposed of pursuant to
this paragraph during any period of two consecutive calendar
years shall exceed $100,000,000, the Net Cash Proceeds of such
excess property and assets, to the extent not applied to
purchase other property or assets to be utilized in connection
with the Borrower's national wireless telecommunications
network within 270 days from the date of the applicable Asset
Sale, shall be applied to effect a Pro Rata
Prepayment/Commitment Reduction;
(d) so long as after giving effect thereto the
Borrower is in Pro Forma Compliance, any Asset Sale (other
than any sale of receivables permitted by subsection 6.6(f))
the aggregate fair market value of the property and assets
that are the subject of which are in excess of $25,000,000,
provided that, (i) if such Asset Sale includes one or more
Licenses and, after giving effect thereto, the then aggregate
number of Owned Pops would be less than 120,000,000, such
Asset Sale shall have been approved by the Requisite Lenders,
(ii) to the extent the Net Cash Proceeds of such Asset Sale
are in excess of $100,000,000, such excess Net Cash Proceeds
shall be deposited in the Asset Sale Proceeds Sub-Account,
from which the Borrower may withdraw and apply such funds,
together with all earnings thereon, to the purchase, within
270 days from the date of the applicable Asset Sale, of other
property or assets to be utilized in connection with the
Borrower's national wireless telecommunications network, (iii)
the Borrower may apply such Net Cash Proceeds (whether or not
required to be deposited in the Asset Sale Proceeds
Sub-Account as described above) to purchase other property or
assets to be utilized in connection with the Borrower's
national wireless telecommunications network if the Borrower
shall (A) notify the Administrative Agent reasonably promptly
following the completion of such Asset Sale that it intends to
do so and (B) deliver to the Administrative Agent evidence
that the Borrower has, within 270 days from the date of such
Asset Sale, in fact done so and (iv) if and to the extent that
the aggregate amount of the Net Cash Proceeds of all such
Asset Sales described in this paragraph that are not used as
specified in clause (iii) of this proviso, such amount shall
be applied to effect a Pro Rata Prepayment/Commitment
Reduction;
(e) so long as after giving effect thereto the
Borrower is in Pro Forma Compliance, any Asset Swap, provided
that, (i) if such Asset Swap includes one or more Licenses
and, after giving effect thereto, the then aggregate number of
Owned Pops would be less than 120,000,000, such Asset Swap
shall have been approved by the Requisite Lenders and (ii) if
and to the extent that the Borrower and its Restricted
Subsidiaries receive consideration for the System or Systems
transferred by them in connection with such Asset Swap that is
in addition to the System or Systems received in exchange
therefor, such Asset Swap shall be deemed to be an Asset Sale
and shall be permitted only if the provisions of subsection
6.6(c) or 6.6(d) (whichever shall be applicable) shall be
complied with in connection therewith;
(f) sales of receivables, provided that (i) in the
case of any such sales completed prior to the date upon which
the Special Payment Condition shall be satisfied, (A) the Net
Cash Proceeds thereof shall be applied to effect a Pro Rata
Prepayment/Commitment Reduction or (B) a Pro Rata Payment
Offer in an amount equal to such Net Cash Proceeds shall be
made to all the Lenders and (ii) in the case of any such sales
completed on or subsequent to the date upon which the Special
Payment Condition shall be satisfied, the Net Cash Proceeds
thereof shall be used (A) to prepay Secured Obligations or (B)
for general purposes of the Borrower and its Restricted
Subsidiaries;
(g) as permitted by subsection 6.7;
(h) the sale of any shares of the Capital Stock of
any Unrestricted Subsidiary; and
(i) the sale of any assets in connection with any
sale and leaseback transaction, provided (i) that such sale
occurs within 270 days after the purchase by the Borrower or
such Restricted Subsidiary of such asset and (ii) in the case
of any such sale and leaseback transaction pursuant to an
operating lease, the asset subject to such sale and leaseback
transaction was not acquired with the Net Cash Proceeds of any
Asset Sale that the Borrower would have been required to apply
to effect a Pro Rata Prepayment/Commitment Reduction if such
Net Cash Proceeds had not been applied to purchase such asset;
provided, that in each case described in paragraphs (c), (d) and (f)
and, to the extent an Asset Sale is involved, (e) of this subsection,
the consideration received by the Borrower or its Restricted
Subsidiaries for such Asset Sale shall be cash, Cash Equivalents,
promissory notes, other deferred payment obligations and property or
assets to be utilized in connection with the Borrower's national
wireless telecommunications network, provided, further, that at least
80% of such consideration shall consist of cash, Cash Equivalents
and/or property or assets to be utilized in connection with the
Borrower's national wireless telecommunications network, and provided,
still further, that the aggregate outstanding principal amount of such
promissory notes and other deferred payment obligations held by the
Borrower and its Restricted Subsidiaries shall not exceed $250,000,000
at any time. Anything in this subsection to the contrary
notwithstanding, in no event may the Borrower or any Restricted
Subsidiary sell, assign or otherwise dispose of any Capital Stock of
any Special Purpose Subsidiary or any rights under either Vendor
Procurement Contract, the Trademark License Agreement, any Special
Purpose Subsidiary Funding Agreement or the Capital Contribution
Agreement.
6.7 Limitation on Restricted Payments. Pay any
distributions (other than distributions payable solely in Capital Stock
of the Borrower) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital
Stock of the Borrower or any Restricted Subsidiary or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Restricted Subsidiary (such
payments, prepayments, distributions, setting apart, purchases,
redemptions, defeasances, retirements and acquisitions and
distributions being herein called "Restricted Payments"), except that
(a) the Borrower may make any Restricted Payment constituting a
distribution of any ownership interest it may hold in APC, (b) any
Restricted Subsidiary may make cash distributions to the Borrower
and/or any Wholly Owned Restricted Subsidiary, provided that no
distribution referred to in this clause (b) shall be permitted to be
made by any Special Purpose Subsidiary if any Default or Event of
Default shall have occurred and be continuing or would result
therefrom, and (c) if no Default or Event of Default shall have
occurred and be continuing or would result, after giving effect
thereto, the Borrower may make Restricted Payments:
(i) so long as the Borrower is a partnership, to the
extent of the amount of Federal, state and local income taxes
assumed to be payable by the Borrower in any fiscal year in
respect of the income of the Borrower and its Subsidiaries for
such fiscal year if the Borrower were a corporation subject to
taxation as such for such fiscal year (calculated at the
maximum applicable Federal corporate income tax rate plus an
assumed state and local tax rate of 5%), provided that (x)
nothing in this paragraph (i) shall be deemed to permit any
such Restricted Payment for the purpose of paying any tax
liabilities of the Parents resulting from the conversion of
the Borrower from partnership to corporate form and (y) no
Restricted Payment shall be permitted under this paragraph (i)
unless after giving effect thereto, the Special Payment
Condition shall be satisfied;
(ii) to the extent necessary to provide the issuer of any
Specified Affiliate Debt with amounts sufficient to pay
principal, interest and other amounts then required to be paid
under the terms of such Specified Affiliate Debt, if at the
time such distribution is made, the Borrower is in Pro Forma
Compliance; and
(iii) to the extent that (x) after giving effect thereto,
the Special Payment Condition shall be satisfied and (y) the
Borrower shall have made a Pro Rata Payment Offer in an amount
equal to such Restricted Payment.
6.8 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit or capital contribution to,
or purchase any stock, bonds, notes, debentures or other securities of
or any assets constituting a business unit of, or make any other
investment in (such advances, loans, extensions of credit, capital
contributions, purchases and investments being herein called
"Investments"), any Person, except:
(a) extensions of trade credit in the ordinary
course of business;
(b) Investments in Cash Equivalents;
(c) any Investment by the Borrower or any Restricted
Subsidiary (other than any Special Purpose Subsidiary) in
Persons engaged in the telecommunications business or
businesses related thereto, provided that (i) such Person, if
it shall be a Subsidiary, shall become a Restricted Subsidiary
unless (A) such Person or assets shall be acquired with (I)
proceeds of capital contributed to the Borrower expressly for
such purpose and/or (II) funds of the Borrower in such amount
that, after giving effect thereto, the Special Payment
Condition shall be satisfied, provided that the Borrower shall
have made a Pro Rata Payment Offer in an amount equal to such
Investment and (B) the Borrower designates such Person, by
notice to the Administrative Agent, as an Unrestricted
Subsidiary and (ii) immediately prior and after giving effect
to such Investment, the Borrower is in Pro Forma Compliance;
(d) any Investment by the Borrower or any Restricted
Subsidiary (other than any Special Purpose Subsidiary) in
Persons not engaged in the telecommunications business or
businesses related thereto if, after giving effect thereto,
the aggregate amount of such Investments then held by the
Borrower and its Restricted Subsidiaries does not exceed (x)
at any time prior to the date on which the Special Payment
Condition shall have occurred, $50,000,000, or (y) thereafter,
5% of then Total Capitalization; provided that (i) such
Person, or the Person which shall become the owner of any
assets acquired in connection with such Investment, shall
become a Restricted Subsidiary unless (A) such Person or
assets shall be acquired with (I) proceeds of capital
contributed to the Borrower expressly for such purpose and/or
(II) funds of the Borrower in such amount that after giving
effect thereto, the Special Payment Condition shall be
satisfied, provided that the Borrower shall have made a Pro
Rata Payment Offer in an amount equal to such Investment and
(B) the Borrower designates such Person, by notice to the
Administrative Agent, an Unrestricted Subsidiary and (ii)
immediately prior and after giving effect to such Investment,
the Borrower is in Pro Forma Compliance;
(e) any Investment arising from the acquisition by
the Borrower and its Restricted Subsidiaries of any System or
Systems in connection with any Asset Swap, provided that (i)
to the extent that the Borrower and its Restricted
Subsidiaries give consideration for the System or Systems
acquired by them in connection with such Asset Swap that is in
addition to the System or Systems transferred by them in
exchange therefor, such Asset Swap shall be deemed to
constitute an Investment and shall be permitted only if the
provisions of subsection 6.6(e) and 6.8(c) shall be complied
with in connection therewith and (ii) immediately prior and
after giving effect to such Investment the Borrower is in Pro
Forma Compliance;
(f) loans and advances to employees of the Borrower
and its Restricted Subsidiaries in an aggregate principal
amount outstanding not to exceed $10,000,000 at any one time
outstanding;
(g) Investments by the Borrower in its Restricted
Subsidiaries and Investments by any Restricted Subsidiary
(other than any Special Purpose Subsidiary) in the Borrower or
by any Restricted Subsidiary (other than any Special Purpose
Subsidiary) in any other Restricted Subsidiary; and
(h) promissory notes and other deferred payment
obligations that constitute proceeds of Asset Sales that are
permitted by subsection 6.6.
6.9 Limitation on Transactions with Affiliates. Enter
into any transaction or agreement, or participate in any arrangement,
including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate unless
such transaction, agreement or arrangement is (a) not prohibited by
this Agreement, (b) in the ordinary course of the Borrower's or such
Restricted Subsidiary's business, and (c) upon terms no less favorable
to the Borrower or such Restricted Subsidiary, as the case may be, than
those that could be obtained on an arm's length basis from a Person
which is not an Affiliate.
6.10 Limitation on Lines of Business; Liabilities of
Subsidiaries. (a) Enter into any business, either directly or through
any Restricted Subsidiary, except for the telecommunications business
and businesses which are related thereto and in any business which the
Borrower or any Restricted Subsidiary enters into as a result of an
Investment permitted pursuant to subsection 6.8(d).
(b) Permit WirelessCo to incur any material
liabilities (other than the Guarantee executed by it) or to engage in
any business or activities other than the holding of Licenses.
(c) Permit EquipmentCo to incur any material
liabilities (other than the Guarantee executed by it and liabilities
under the Vendor Procurement Contracts) or to engage in any business or
activities other than the owning of Personal Property Assets and the
leasing thereof to the Borrower.
(d) Permit RealtyCo to incur any material liabilities
(other than the Guarantee executed by it and other liabilities incurred
in the ordinary course of business which are incident to being the
owner or lessee of real property) or to engage in any business or
activities other than the owning or leasing, as lessee, of Real Estate
Assets and the leasing, as lessor, or, as the case may be, subleasing,
as sublessor, thereof to the Borrower.
6.11 Limitation on Prepayments of Certain Indebted-
ness.
(a) Prepay or set aside any funds as a sinking fund
for the prepayment of, or redeem, defease or acquire, any Indebtedness
permitted by subsections 6.2(d)(i), (f), (g), (h) or (except to the
extent incurred as permitted by the second proviso thereto) (i), except
(i) pursuant to a Pro Rata Payment Offer to all holders of Secured
Obligations or to less than all of such holders (provided that such
lesser group of holders includes all the Lenders) or pursuant to a Pro
Rata Prepayment/Commitment Reduction, (ii) with (A) proceeds of
Permitted Refinancing Indebtedness, (B) proceeds of capital contributed
to the Borrower expressly for such purpose and/or (C) funds of the
Borrower in such amount that after giving effect thereto, the Special
Payment Condition shall be satisfied, provided that, in the case of
this clause (ii)(C), the Borrower shall have made a Pro Rata Payment
Offer in an amount equal to such amount, (iii) a prepayment of any
Indebtedness issued subsequent to the date hereof pursuant to
subsection 6.2(h) or (i) if, had such Indebtedness, when created,
included a scheduled amortization payment on the date of such
prepayment that was in an amount equal to such prepayment, such
Indebtedness would have contained no provisions which would have caused
such Indebtedness not to comply with such subsection or (iv) a
prepayment of any committed revolving credit facility to the extent
that the commitments to lend thereunder are not reduced in connection
therewith.
(b) Enter into any amendment or other Contractual
Obligation (including any mandatory prepayment or similar provision)
that has the effect of shortening the maturity of any Indebtedness
permitted by subsections 6.2(d)(i), (f), (g), (h) or (except to the
extent incurred as permitted by the second proviso thereof) (i);
provided, however, that nothing in this subsection shall be deemed to
limit the ability of the Borrower to amend the terms of, or enter into
any such Contractual Obligation with respect to, any Indebtedness
issued subsequent to the date hereof pursuant to subsection 6.2(h) or
(i) if, after giving effect to such amendment or Contractual
Obligation, such Indebtedness (as modified by such Contractual
Obligation) shall contain no provisions which would have caused such
Indebtedness not to comply with such subsection if such provisions had
been included in the terms and conditions of such Indebtedness when
originally incurred.
6.12 Limitation on Certain Amendments. Amend or
otherwise modify or waive, or permit to be amended, supplemented or
otherwise modified or waived, in any manner that is materially adverse
to the interests of the Lenders, any provision of any of (a) the
Capital Contribution Agreement, (b) the Trademark License Agreement,
(c) the Vendor Procurement Contracts, (d) the partnership agreement of
the Borrower, (e) the Special Purpose Subsidiary Funding Agreements or
(f) the partnership agreement of Holding.
6.13 Limitation on Designation of Secured
Obligations. Designate any Indebtedness as Secured Obligations under
the Trust Agreement other than (a) the Loans, (b) the Vendor Credit
Facilities, (c) Interest Rate Agreement Obligations (i) under any
Interest Rate Agreement to which a Lender or any lender under a Vendor
Credit Facility or other Bank Credit Facility is the counterparty or
(ii) related to Secured Obligations, (d) Permitted Refinancing
Indebtedness or (e) Indebtedness permitted by subsection 6.2(i);
provided that in no event shall any Indebtedness secured by a Lien
permitted under subsection 6.3(f), (g), (h), (i), (p), (q) or (r) be
designated as a Secured Obligation.
6.14 Hedging Arrangements. Enter into any interest
rate swap agreement, foreign currency exchange agreement or other
interest rate or foreign currency hedging arrangement other than an
Interest Rate Agreement or a Currency Rate Agreement.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be
continuing:
(a) the Borrower shall fail to pay any principal of
any Loan when such principal becomes due in accordance with
the terms hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount payable hereunder,
within five days after any such interest or other amount
becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed
made by the Borrower or any other Loan Party in this Agreement
or in any other Loan Document or by any Parent in the Capital
Contribution Agreement or which is contained in any
certificate, document or financial or other statement
furnished by it or on its behalf at any time under or in
connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on
or as of the date made or deemed made, and, if the facts and
circumstances resulting in such breach are capable of being
remedied within 30 days such that the rights and interests of
the Lenders and the creditworthiness of the Borrower reflected
in such representation or warranty would be the same after
giving effect to such remedy as they would have been if such
representation or warranty had originally been true, such
facts and circumstances shall not have been so remedied within
such 30-day period; or
(c) the Borrower shall default in the observance or
performance of any agreement contained in subsection 5.4 (with
respect to the existence of the Borrower and the Special
Purpose Subsidiaries only), 5.7(a) or 5.12 or Section 6; or
(d) the Borrower or any other Loan Party shall
default in the observance or performance of any agreement
contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a), (b) and (c) of this
Section), and such default shall continue unremedied for a
period of 30 days after the earlier of (i) the first date on
which a Responsible Officer of the Borrower first learns of
such default and (ii) receipt by the Borrower of notice
thereof from the Administrative Agent or any Lender; or
(e) the Borrower or any Restricted Subsidiary shall
(i) default in any payment of principal of or interest on any
Indebtedness (other than the Loans), any Guarantee Obligation
in respect of Indebtedness or any Hedging Agreement Obligation
beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness, Guarantee
Obligation or Hedging Agreement Obligation was created; or
(ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness,
Guarantee Obligation or Hedging Agreement Obligation, or any
other event shall occur or condition exist, the effect of
which is to cause, or to permit the holder or holders of such
Indebtedness, Guarantee Obligation or Hedging Agreement
Obligation (or a trustee or agent on behalf of such holder or
holders) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation or Hedging Agreement Obligation to
become payable; provided, however, that no Event of Default
shall occur under this paragraph unless the aggregate
principal amount of Indebtedness or Guarantee Obligations, or
the aggregate amount of Hedging Agreement Obligations, in
respect of which any such default or defaults shall occur is
in excess of the lesser of (A) $50,000,000 and (B) 10% of the
sum of the aggregate then outstanding principal amount of all
Indebtedness and (without duplication of underlying
Indebtedness) Guarantee Obligations and aggregate then
outstanding Hedging Agreement Obligations of the Borrower and
its Restricted Subsidiaries; or
(f) (i) the Borrower, any Restricted Subsidiary,
MinorCo or (so long as the Borrower remains a partnership)
Holding shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its
assets, or the Borrower, any Restricted Subsidiary, MinorCo or
(so long as the Borrower remains a partnership) Holding shall
make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower, any
Restricted Subsidiary, MinorCo or (so long as the Borrower
remains a partnership) Holding any case, proceeding or other
action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower, any Restricted
Subsidiary, MinorCo or (so long as the Borrower remains a
partnership) Holding any case, proceeding or other action
seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower, any Restricted
Subsidiary, MinorCo or (so long as the Borrower remains a
partnership) Holding shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii) or (iii) above;
or (v) the Borrower, any Restricted Subsidiary, MinorCo or (so
long as the Borrower remains a partnership) Holding shall
generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Parent shall commence any case,
proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its
assets, or any Parent shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced
against any Parent any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be
commenced against any Parent any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) any Parent shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii)
or (iii) above; or (v) any Parent shall generally not, or
shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; provided, however, that
no Event of Default shall occur under this paragraph if (x)
all amounts to be contributed to the capital of the Borrower
pursuant to the Capital Contribution Agreement have been so
contributed or (y) within 30 days after an Event of Default
would otherwise occur pursuant to this paragraph (g) as a
result of one of the events enumerated above with respect to
any Parent, one or more of the other Parents shall have
assumed all the obligations of such affected Parent under the
Capital Contribution Agreement in writing in form and
substance reasonably satisfactory to the Administrative Agent;
or
(h) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Single
Employer Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or
a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in
the reasonable opinion of the Requisite Lenders, likely to
result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA or (v) the Borrower or any
Commonly Controlled Entity shall incur any liability in
connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan; and in each case in
clauses (i) through (v) above, such event or condition,
together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse
Effect; or
(i) one or more judgments or decrees shall be entered
against the Borrower or any Restricted Subsidiary involving in
the aggregate a liability (not paid or fully covered by
insurance) of an amount in excess of the lesser of (A)
$50,000,000 and (B) 10% of the aggregate then outstanding
principal amount of all Indebtedness of the Borrower and its
Restricted Subsidiaries on a consolidated basis, and each such
judgment or decree shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry
thereof; or
(j) (i) any of the Security Documents shall cease,
for any reason, to be in full force and effect, or the
Borrower or any other Loan Party which is a party to such
Security Document shall so assert in writing or (ii) except in
accordance with the terms thereof or of any other Loan
Document, the Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(k) any Guarantee shall cease, for any reason, to b
in full force and effect or the Guarantor party thereto shall
so assert in writing; or
(l) the Capital Contribution Agreement shall cease,
for any reason, to be in full force and effect prior to the
date on which all amounts required to be contributed
thereunder have been contributed to the Borrower, or any
Parent shall so assert in writing; or
(m) the Borrower's right to use the "Sprint" trade-
mark pursuant to the Trademark License Agreement shall termi-
nate; or
(n) any termination, revocation or non-renewal by the
FCC of one or more Licenses of the Borrower or its Restricted
Subsidiaries if, after giving effect thereto, the aggregate
number of Owned Pops is less than 120,000,000; or
(o) the commencement by the Trustee of foreclosure
proceedings with respect to any of the Collateral while a No-
tice of Enforcement is in effect; or
(p) the failure of the full amount of any required
capital contribution to be made under the Capital Contribution
Agreement for a period of more than 30 days after the date
when due; or
(q) any Change in Control;
then, and in any such event, (i) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) of this Section 7 with
respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement shall
immediately become due and payable, and (ii) if such event is any other
Event of Default, either or both of the following actions may be taken:
(A) with the consent of the Requisite Lenders, the Administrative Agent
may, or upon the request of the Requisite Lenders, the Administrative
Agent shall, by notice to the Borrower declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately
terminate; and (B) with the consent of the Requisite Lenders, the
Administrative Agent may, or upon the request of the Requisite Lenders,
the Administrative Agent shall, by notice to the Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable. Except as expressly
provided above in this Section 7, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the administrative
agent of such Lender under this Agreement and the other Loan Documents
and irrevocably authorizes the Administrative Agent, in such capacity,
to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities to any Lender, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities to any Lender shall be read into this Agreement or
otherwise exist against the Administrative Agent. Notwithstanding
anything to the contrary contained in this Agreement, the parties
hereto hereby agree that no co-agent shall have any rights, duties or
responsibilities in its capacity as co-agent hereunder and that no
co-agent shall have the authority to take any action hereunder in its
capacity as such.
8.2 Delegation of Duties. The Administrative Agent
may execute any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible to any Lender
for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the
Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable to any
Lender for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or any other
Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties
made by the Borrower or any officer thereof contained in this
Agreement, any other Loan Document or any certificate, report,
statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement
or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any
other Loan Document or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Borrower.
8.4 Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the
Administrative Agent with reasonable care. The Administrative Agent may
deem and treat the payee of any Loan or Note as the owner thereof for
all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent.
The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of
the Requisite Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance
with a request of the Requisite Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
8.5 Notice of Default. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent
has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default
as shall be reasonably directed by the Requisite Lenders; provided that
unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
8.6 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and
made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder and
under the Trust Agreement, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower
which may come into the possession of the Administrative Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification. The Lenders agree to indemnify
the Administrative Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Percentages
in effect on the date on which indemnification is sought (or, if
indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Percentages immediately prior to such
date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Loans) be
imposed on, incurred by or asserted against the Administrative Agent in
any way relating to or arising out of, the Commitments, this Agreement,
any other Loan Document or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or
any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. The agreements in this subsection
shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the
Borrower as though the Administrative Agent were not the Administrative
Agent hereunder or under the other Loan Documents. With respect to the
Loans made by it, the Administrative Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
8.9 Successor Administrative Agent. The
Administrative Agent may resign as Agent upon 30 days' notice to the
Lenders. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the
Requisite Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders, which successor administrative
agent (provided that it shall have been approved by the Borrower, which
approval shall not be unreasonably withheld) shall succeed to the
rights, powers and duties of the Administrative Agent. Effective upon
such appointment and approval, the term "Administrative Agent" shall
mean such successor agent, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. (a) Neither this
Agreement, the other Loan Documents nor any terms hereof or thereof may
be amended, supplemented or otherwise modified or waived except in
accordance with the provisions of this subsection. The Requisite
Lenders may, from time to time, (i) enter into with the Borrower
written amendments, supplements or modifications hereto for the purpose
of adding any provisions to this Agreement or changing in any manner
the rights of the Lenders or of the Borrower hereunder or (ii) waive,
on such terms and conditions as the Requisite Lenders may specify in
such instrument, any of the requirements of this Agreement or any
Default or Event of Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification
shall (A) reduce the amount or extend the scheduled date of maturity of
any installment of any Loan provided for in subsection 2.7(b) or of any
required Commitment reduction provided for in subsection 2.7(a) or
reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount
or extend the expiration date of any Lender's Commitment, in each case
without the consent of such Lender, (B) amend, modify or waive any
provision of this subsection or subsection 9.15 hereof or reduce the
percentage specified in the definition of Requisite Lenders, or consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement, in each case without the written
consent of all the Lenders, or (C) amend, modify or waive any provision
of Section 8 without the written consent of the then Administrative
Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be
binding upon the Borrower, the Lenders, the Administrative Agent and
all future holders of the Loans. In the case of any waiver, the
Borrower, the Lenders and the Administrative Agent shall be restored to
their former positions and rights hereunder, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; no
such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon.
(b) The Trust Agreement, any Guarantee and any
Security Document and any Acknowledgement and Consent referred to in
Section 4.11 of any Security Agreement listed on Schedule III of the
Trust Agreement may only be amended, supplemented or otherwise
modified, and any provision thereof may only be waived, in accordance
with subsection 9.3 of the Trust Agreement, provided, however, that,
until the first date upon which neither Lucent Technologies Inc. nor
Northern Telecom Inc. or their Affiliates holds loans and commitments
under the Vendor Credit Facility referred to in subsection 4.1(c) to
which it is a party which constitute more than 50% of the aggregate
amount of the loans and commitments under such Vendor Credit Facility,
no such amendment, supplement, modification or waiver shall be
effective without the consent of the Requisite Lenders; and provided,
further, that (i) in no event shall any Collateral (other than any
Collateral which is the subject of any Asset Sale permitted by
subsection 6.6) or Guarantee be released without the consent of Lenders
whose Percentages aggregate at least 75%, as provided in subsection
9.15 and (ii) subsection 9.3(a) of the Trust Agreement may not be
amended, nor may any of the amendments referred to in clause (i) (B) of
the proviso to subsection 9.3(a) of the Trust Agreement be made,
without the consent of all the Lenders.
9.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) in
the case of delivery by hand or by courier, when delivered, (b) in the
case of delivery by mail, five days after being deposited in the mails,
postage prepaid, or (c) in the case of delivery by facsimile
transmission, when received in legible form, addressed as follows in
the case of the Borrower, the Vendor and the Administrative Agent, and
in the case of the other parties hereto, to such other address as may
be hereafter notified by the respective parties hereto:
The Borrower: Sprint Spectrum L.P.
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-3550
with a copy to:
Sprint Spectrum L.P.
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
The Administrative
Agent: The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10018
Attention: John Huber
Fax: (212) 552-4266
provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders pursuant to subsection 2.2, 2.6,
2.8 or 2.12(b) shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Administrative
Agent or any Lender, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Administrative Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative
Agent, (b) to pay or reimburse each Lender and the Administrative Agent
for all its reasonable costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the
other Loan Documents and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent; provided that the
Borrower shall only reimburse the reasonable fees, disbursements and
other charges of one counsel to the Administrative Agent and the
Lenders in connection with any amendment, restructuring or work-out of
the Loan Documents, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be
payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold each Lender and the Administrative
Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such
other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of the Borrower, any
of its Subsidiaries or any of their properties (all the foregoing in
this clause (d), collectively, the "indemnified liabilities"), provided
that the Borrower shall have no obligation hereunder to the
Administrative Agent or any Lender with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of
the Administrative Agent or any such Lender. The agreements in this
subsection shall survive repayment of the Loans and all other amounts
payable hereunder.
9.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent and
their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to any
bank, mutual or other investment fund or financial institution or
affiliate thereof (a "Participant") participating interests in any
Tranche I Term Loan, Tranche II Term Loan or Revolving Credit Loan
owing to such Lender, any Term Loan I Commitment, Term Loan II
Commitment or Revolving Credit Commitment of such Lender or any other
interest of such Lender hereunder or under the other Loan Documents in
each case on a pro rata or non-pro rata basis. In the event of any such
sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the
other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. No Lender shall be entitled to
create in favor of any Participant, in the participation agreement
pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any
matter relating to this Agreement or any other Loan Document except for
those specified in clauses (i) and (ii) of the first proviso to
subsection 9.1. The Borrower agrees that if amounts outstanding under
this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default,
each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the
same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds thereof as
provided in subsection 9.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 2.14, 2.15 and 2.16 with
respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in
the case of subsection 2.15, such Participant shall have complied with
the requirements of said subsection and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to
any such subsection than the transferor Lender would have been entitled
to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from
time to time assign to any other Lender or any affiliate of any Lender
or, with the consent of the Borrower and the Administrative Agent
(which in each case shall not be unreasonably withheld), to another
bank, mutual or other investment fund or financial institution or
affiliate thereof (an "Assignee") all or any part of its rights and
obligations under this Agreement (including any Tranche I Term Loan,
Tranche II Term Loan or Revolving Credit Loan or any Term Loan I
Commitment, Term Loan II Commitment or Revolving Credit Commitment, in
each case on a pro rata or non-pro rata basis) and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit C, executed by such Assignee, such assigning Lender
(and, in the case of an Assignee that is not then a Lender, by the
Borrower and the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an additional bank
or financial institution, the sum of the aggregate principal amount of
the Loans and the aggregate amount of unused Commitment being assigned
and, if such assignment is of less than all of the rights and
obligations of the assigning Lender, the sum of the aggregate principal
amount of the assigning Lender's remaining Loans and the aggregate
amount of unused Commitment are each not less than $10,000,000 (or such
lesser amount as may be agreed to by the Borrower and the
Administrative Agent). Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to
such Assignment and Acceptance, (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 with
a Commitment as set forth therein, and (ii) the assigning Lender
thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party
hereto). Notwithstanding any provision of this paragraph (c) and
paragraph (d) or (e) of this subsection, the consent of the Borrower
shall not be required, and, unless requested by the Assignee or the
assigning Lender, new Notes shall not be required to be executed and
delivered by the Borrower, for any assignment that occurs when any of
the events described in Section 7(f) shall have shall have occurred and
be continuing.
(d) The Administrative Agent, on behalf of the
Borrower, shall maintain at the address of the Administrative Agent
referred to in subsection 9.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of
the names and addresses of the Lenders and the registered owners of the
obligations evidenced by the Notes and the principal amount of the
Loans owing to each Lender from time to time. The entries in the
Register shall be conclusive absent manifest error, and the Borrower,
the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of a Loan or Note
hereunder as the owner thereof for all purposes of this Agreement and
the other Loan Documents, notwithstanding any notice to the contrary.
Any assignment of any Loan hereunder (whether or not evidenced by a
Note) or Note shall be effective only upon appropriate entries with
respect thereto being made in the Register. Any assignment or transfer
of all or part of any Loan evidenced by a Note evidencing the same
shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Notes evidencing such
Loans, duly endorsed by (or accompanied by a written instrument of
assignment or transfer duly executed by) the holder thereof, and
thereupon one or more new Note(s) in the same aggregate principal
amount shall be issued to the designated Assignee(s) and the old Note
shall be returned to the Borrower marked "cancelled". The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an
Assignee that is not then a Lender, by the Borrower and the
Administrative Agent), together with payment by the assignor or
assignee Lender, as agreed between them, to the Administrative Agent of
a registration and processing fee of $3,500, the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on
the effective date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose
to any Participant or Assignee (each, a "Transferee") and any
prospective Transferee, any and all information in such Lender's
possession concerning the Borrower and its Subsidiaries which has been
delivered to such Lender by or on behalf of the Borrower pursuant to
this Agreement or which has been delivered to such Lender by or on
behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Subsidiaries prior to becoming a
party to this Agreement.
(g) For avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this subsection concerning
assignments of Loans relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of
any Loan to any Federal Reserve Bank in accordance with applicable law.
To facilitate such pledge or assignment, the Borrower hereby agrees
that, upon request of any Lender at any time and from time to time
after the Borrower has made its initial borrowing hereunder, the
Borrower shall provide to such Lender, at the Borrower's own expense, a
Note evidencing the Loans owing to such Lender.
9.7 Adjustments; Set-off. (a) If any Lender (a
"Benefitted Lender") shall at any time receive any payment of all or
part of its Loans, or interest thereon, (whether voluntarily or
involuntarily, by set-off, or otherwise) in a greater proportion than
any such payment to any other Lender, if any, in respect of such other
Lender's Loans then due and owing, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Loans then due and
owing, as shall be necessary to cause such Benefitted Lender to share
the excess payment ratably with each of the other Lenders, provided,
however, that if all or any portion of such excess payment is
thereafter recovered from such Benefitted Lender, such purchase shall
be rescinded, and the purchase price returned, to the extent of such
recovery, but without interest and, provided, further, that,
notwithstanding the foregoing, if such Benefitted Lender shall receive
such payment at a time when a Notice of Enforcement shall have been
delivered to the Trustee and be in effect, such Benefitted Lender shall
turn over to the Trustee an amount equal to such payment for deposit in
the Collateral Account (as defined in the Trust Agreement) to be
applied in the manner provided for in the Trust Agreement.
(b) In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without
prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower.
Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by facsimile transmission), and all of said
counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative
Agent.
9.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
9.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by
the Administrative Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other
Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CON-
STRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
9.12 Submission To Jurisdiction; Waivers. Each of
the Borrower, the Administrative Agent and the Lenders hereby irrevo-
ably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement, or for
recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead
or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to it at its address set forth
or referred to in subsection 9.2 or at such other address of
which the other parties shall have been notified pursuant
thereto; and
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction.
9.13 Confidentiality. Each Lender agrees to keep
confidential all nonpublic information (a) provided to it by or on
behalf of the Borrower or any of its Subsidiaries pursuant to or in
connection with this Agreement or (b) obtained by such Lender based on
a review of the books and records of the Borrower or any of its
Subsidiaries; provided that nothing herein shall prevent any Lender
from disclosing any such information (i) to the Administrative Agent or
any other Lender, (ii) to any prospective Transferee which shall have
agreed to comply with the provisions of this subsection, (iii) to its
employees, directors, agents, attorneys, accountants, affiliates and
other professional advisors who have been made aware of the
confidential nature of such information and have agreed to maintain the
confidentiality thereof, (iv) upon the request or demand of any
Governmental Authority having jurisdiction over such Lender and the
authority to make such request or demand, (v) in response to any order
of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, provided that prior
written notice of such disclosure is given to the Borrower (if legally
permitted), (vi) which has been publicly disclosed other than in breach
of this Agreement or (vii) in connection with the exercise of any
remedy hereunder or under any other Loan Document or any litigation
involving any Loan Document. Each Lender acknowledges that the
provisions of this subsection 9.13 are material to this Agreement and
are specifically enforceable.
9.14 No-Recourse. No claim may be made under this
Agreement or any other Loan Document against any of the direct or
indirect partners of the Borrower for the payment of principal of, or
interest on, the Loans, or any expenses or other amounts payable
hereunder or under any other Loan Document, provided, however, that
this subsection shall not (a) affect the validity or enforceability of
the obligations of any Partner under the Capital Contribution Agreement
or (b) operate as a waiver of any rights or claims against any Partner
arising out of or resulting from such Partner's misrepresentations or
fraud in or in respect of the Capital Contribution Agreement.
9.15 Release of Guarantees and Collateral. If the
Borrower shall wish to effect the release of any Collateral or any
Guarantee, it shall give notice thereof to the Administrative Agent.
Upon receipt of such notice, the Administrative Agent shall request the
Lenders to give notice to the Administrative Agent in writing of their
approval or disapproval of the requested release. If Lenders whose
Percentages aggregate at least 75% approve such request, the
Administrative Agent shall give written notice of such approval to the
Borrower, and such release may thereafter be effected without violation
of this Agreement. For avoidance of doubt, no approval of the Requisite
Lenders shall be necessary to effect the release of any Collateral
which is the subject of any Asset Sale permitted by subsection 6.6.
9.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
LENDERS AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above written.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By: __/s/ Robert E. Sleet, Jr.
Title: Treasurer
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a
Lender
By: /s/ Mary E. Cameron_____
Title: Vice President
<PAGE>
BANKERS TRUST COMPANY
By: /s/ Dana Klein
Title: Vice President
<PAGE>
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ David Rockwell
Title: Senior Vice President
By: /s/ Christian Walter
Title: Assistant Vice President
<PAGE>
BANQUE NATIONALE DE PARIS
By: /s/ Arnaud Collin du Bocage
Title: Executive Vice President and
General Manager
<PAGE>
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Stephen C. Levi
Title: Vice President
<PAGE>
NATIONSBANK OF TEXAS, N.A.
By: /s/ Doug Stuart
Title: Senior Vice President
<PAGE>
SOCIETE GENERALE
By: : /s/ John Sadik-Khan
Title: Vice President
<PAGE>
THE BANK OF NEW YORK COMPANY, INC.
By: /s/ Kalpana Raina
Title: Authorized Signer
<PAGE>
THE MITSUBISHI
TRUST AND BANKING CORPORATION
By: /s/ Hachiro Hosada
Title: Senior Vice President
<PAGE>
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH
By: /s/ Charles Columbus
Title: Managing Director
By: /s/ Michael F. McWalters
Title: Managing Director
<PAGE>
BANQUE PARIBAS NEW YORK
By: /s/ Philippe Vuarchex
Title: Vice President
By: /s/ Everett M. Schenk
Title: Managing Director
<PAGE>
CHIAO TUNG BANK CO., LTD.,
NEW YORK AGENCY
By: /s/ Samuel S.T. Liu
Title: Vice President and Deputy
General Manager
<PAGE>
CREDIT LOCAL DE FRANCE,
NEW YORK AGENCY
By: /s/ Philippe Ducos
Title: Deputy General Manager
<PAGE>
FLEET NATIONAL BANK
By: /s/ Jeffrey J. McLaughlin
Title: Senior Vice President
<PAGE>
KOREA FIRST BANK,
NEW YORK AGENCY
By: /s/ Myung Ho Oh
Title: Deputy General Manager
<PAGE>
THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH
By: /s/ Hiroyuki Iwami
Title: Joint General Manager
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON
By: /s/Shepard D. Rainie
Title: Director
<PAGE>
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Jeffrey Cole
Title: Senior Vice President
<PAGE>
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., CHICAGO BRANCH
By: /s/ Armund J. Schoen, Jr.
Title: Vice President and
Deputy General Manager
<PAGE>
THE SAKURA BANK, LIMITED
By: /s/ Tamihiro Kawauchi
Title: Senior Vice President and Head of
Real Estate/Project Finance Dept.
<PAGE>
THE SANWA BANK, LIMITED
By: /s/ Laurance J. Bressler
Title: Vice President and Area Manager
<PAGE>
BANCA COMMERCIALE ITALIANA,
CHICAGO BRANCH
By: /s/ Diana R. Lamb
Title: Vice President
By: /s/ Matthew V. Trujillo
Title: Assistant Vice President
<PAGE>
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By: /s/ John P. Judge
Title: Vice President
<PAGE>
EXPORT DEVELOPMENT CORPORATION
By: /s/ Peter Foran
Title: Vice President,
Information Technologies Team
By: /s/ Rajesh Sharma
Title: Financial Services Manager,
Project Finance and Equity
<PAGE>
THE FUJI BANK, LIMITED
By: /s/ Hidehiko Ide
Title: General Manager
<PAGE>
SKANDINAVISKA ENSKILDA BANKEN CORPORATION
By: /s/ Stefan Hegneil
Title: Head of Commercial Banking
By: /s/ Philip Montemurro
Title: Vice President
<PAGE>
THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By: /s/ Seilchiro Ino
Title: Vice President
<PAGE>
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY
By: /s/ Bernardo E. Correa-Henschke
Title: Vice President and Senior Manager
<PAGE>
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ Russell M. Gibson
Title: Vice President and Deputy Manager
<PAGE>
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH
By: /s/ Suraj P. Bhatia
Title: Senior Vice President,
Manager, Corporate Finance Department
<PAGE>
CRESTAR BANK
By: /s/Thomas C. Palmer
Title: Vice President
<PAGE>
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
By: /s/ Brian W. Good
Title: Vice President
<PAGE>
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ John E. Schlifske
Title: Vice President
<PAGE>
KZH HOLDING CORPORATION
By: /s/ Robert Goodwyn
Title: Authorized Agent
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS TRUSTEE OF A
COMMINGLED TRUST FUND
By: /s/David T. Ellis
Title: Vice President
<PAGE>
CHL HIGH YIELD LOAN PORTFOLIO
(A UNIT OF THE CHASE MANHATTAN BANK)
By: /s/ Andrew D. Gordon
Title: Managing Director
<PAGE>
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/ Mark K. Okada
Title: Executive Vice President
<PAGE>
ALLSTATE INSURANCE COMPANY
By: /s/ Charles D. Mires
Title: Authorized Signatory
By: /s/ Stephen M. Laude
Title: Authorized Signatory
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Charles D. Mires
Title: Authorized Signatory
By: /s/ Stephen M. Laude
Title: Authorized Signatory
<PAGE>
ORIX USA CORPORATION
By: /s/ Hiroyuki Miyauchi
Title: Senior Vice President
<PAGE>
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company, its
investment manager
By: /s/Mark L. Gold
Title: Managing Director
<PAGE>
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
By: /s/ R. Douglas Henderson
Title: Authorized Signatory
<PAGE>
SCHEDULE I
COMMITMENTS; ADDRESSES OF LENDERS
Name and Revolving Term Term
Address Credit Loan I Loan II Total
of Lender Commitment Commitment Commitment Commitments
The Chase Manhattan Bank [ ]
One Chase Manhattan Plaza
New York, NY 10018
Attn: John Huber
Tel: (212) 552-1366
Fax: (212) 552-4266
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attn: Dana Klein
Tel: (212) 250-1724
Fax: (212) 250-7218
Bayerische Hypotheken-und
WechselBank Aktiengesellschaft,
New York Branch
Financial Square
32 Old Slip, 32nd Floor
New York, NY 10005
Attn: Christian Walter
Tel: (212) 440-0742
Fax: (212) 440-0741
Banque Nationale de Paris
209 S. LaSalle
Chicago IL 60604
Attn: Rosalie Hawley
Tel: (312) 977-2203
Fax: (312) 977-1380
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, NY 10019
Attn: Stephen Levi
Tel: (212) 261-7324
Fax: (212) 261-3288
NationsBank of Texas, N.A.
901 Main Street, 64th Floor
Dallas, TX 75202
Attn: Doug Stuart
Tel: (214) 508-0922
Fax: (214) 508-9390
Societe Generale
1221 Avenue of the Americas
New York, NY 10020
Attn: John Sadik-Khan
Tel: (212) 278-6873
Fax: (212) 278-6240
The Bank of New York Company, Inc.
One Wall Street, 16th Floor
New York, NY 10286
Attn: Jim Whitaker
Tel: (212) 635-8843
Fax: (212) 635-8595
The Mitsubishi Trust and Banking
Corporation
520 Madison Avenue, 26th Floor
New York, NY 10022
Attn: Beatrice Kossodo
Tel: (212) 891-8363
Fax: (212) 644-6825
Westdeutsche Landesbank Girozentrale,
New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attn: Charles Columbus
Tel: (212) 852-6164
Fax: (212) 921-5947
Banque Paribas New York
787 Seventh Avenue
New York, NY 10019
Attn: John Andersen
Tel: (212) 841-2229
Fax: (212) 841-2217
Chiao Tung Bank Co., Ltd.,
New York Agency
One World Financial Center, 30th Fl.
New York, NY 10281
Attn: Carbin Lin/ Robert Chen
Tel: (212) 285-2666
Fax: (212) 285-2922
Credit Local de France,
New York Agency
450 Park Avenue, 3rd Floor
New York NY 10022
Attn: Michael Wiskind
Tel: (212) 753-2349
Fax: (212) 753-5522
Fleet National Bank
75 State Street
Boston, MA 02109
Attn: Jeffrey J. McLaughlin
Tel: (617) 346-3774
Fax: (617) 346-3777
Korea First Bank, New York Agency
410 Park Avenue, 8th Floor
New York, NY 10022
Attn: Bong Y. Kim
Tel: (212) 593-2525
Fax: (212) 319-0255
The Sumitomo Bank, Limited,
Chicago Branch
233 South Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Attn: John Byrd
Tel: (312) 876-6453
Fax: (312) 876-6436
The First National Bank of Boston
100 Federal Street
Boston, MA 02110
Attn: Julie Jalelian
Tel: (617) 434-9974
Fax: (617) 434-3401
The Industrial Bank of Japan,
Limited
245 Park Avenue
New York, NY 10167-0037
Attn: A. Kawai/R. Garcia
Tel: (212) 309-6521
Fax: (212) 949-0134
The Long-Term Credit Bank of Japan,
Ltd. Chicago Branch
190 S. LaSalle Street, Suite 800
Chicago, IL 60603
Attn: Gregory Hara
Tel: (312) 704-5454
Fax: (312) 704-8505
The Sakura Bank, Limited
277 Park Avenue, 46th Fl.
New York, NY 10172
Attn: Kazumiro Kuramoto
Tel: (212) 756-6802
Fax: (212) 888-7651
The Sanwa Bank, Limited
10 South Wacker Drive, Suite 3100
Chicago, IL 60606
Attn: Laurance J. Bressler/Kenneth
Eichenwald
Tel: (212) 339-6213
Fax: (212) 754-2360
Banca Commerciale Italiana,
Chicago Branch
150 N. Michigan Avenue, Suite 1500
Chicago, IL 60601
Attn: Matthew V. Trujillo
Tel: (312) 346-1112
Fax: (312) 346-5758
Bank of Tokyo-Mitsubishi
Trust Company
1251 Avenue of the Americas,
12th Floor
New York NY 10020-1104
Attn: Rolando Uy
Tel: (212) 782-4383
Fax: (212) 782-4935
Export Development Corporation
151 O'Connor Street
Ottawa, Ontario K1A 1K3
Attn: Robert Forbes
Tel: (613) 598-2844
Fax: (613) 598-6858
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Attn: Richard T. Ashbeck
Tel: (312) 621-3380
Fax: (312) 621-0539
Skandinaviska Enskilda Banken
Corporation
245 Park Avenue, 42nd Floor
New York, NY 10167
Attn: Alan Plamer/Andrew Balin
Tel: (212) 907-4700
Fax: (212) 370-1709
The Dai-ichi Kangyo Bank, Ltd.,
Chicago Branch
10 South Wacker Drive, 26th Floor
Chicago, IL 60606
Attn: Gary Marthalar
Tel: (312) 715-6451
Fax: (312) 876-2011
The Nippon Credit Bank, Ltd.,
Los Angeles Agency
550 S. Hope Street, Suite 2500
Los Angeles, CA 90071
Attn: Jay Schwartz
Tel: (213) 243-5722
Fax: (213) 892-0111
The Royal Bank of Scotland plc
88 Pine Street
Wall Street Plaza, 26th Fl.
New York, NY 10023
Attn: Karen Stefancic
Tel: (212) 269-3390
Fax: (212) 480-0791
The Sumitomo Trust & Banking Co.,
Ltd., New York Branch
527 Madison Avenue
New York, NY 10022
Attn: Robin Schreiber
Tel: (212) 326-0781
Fax: (212) 418-4848
Crestar Bank
919 East Main Street
Richmond, VA 23219
Attn: Thomas C. Palmer
Tel: (804) 782-5833
Fax: (804) 782-5413
Van Kampen American Capital Prime
Rate Income Trust
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attn: Brian Murphy
Tel: (630) 684-6479
Fax: (630) 684-6740
Copy to: State Street Bank & Trust
Company Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Attn: Laura Magazu
Tel: (617) 664-5481
Fax: (617) 664-5366
The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: John E. Schlifske
Tel: (414) 299-2454
Fax: (414) 299-7124
KZH Holding Corporation
In care of The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attn: Robert Goodwyn
Tel: (212) 552-1366
Fax: (212) 552-1366
Morgan Guaranty Trust Company of New
York as Trustee of a Commingled
Trust Fund
522 Fifth Avenue
New York, NY 10036
Attn: E. Clifford Cole
Tel: (212) 837-2107
Fax: (212) 837-2677
CHL High Yield Loan Portfolio (a
unit of The Chase Manhattan Bank)
380 Madison Avemue - 12th Floor
New York, NY 10017
Attn: Andrew D. Gordon
Tel: (212) 622-3064
Fax: (212) 622-3797
Protective Life Insurance Company
1150 Two Galleria Tower
13455 Noel Road LB #45
Dallas, TX 75240
Attn: Mark Okada
Tel: (972) 233-4300
Fax: (972) 233-4343
Allsate Inusrance Company
3075 Sanders Road
Northbrook, IL 60062-7127
Attn: Linda Dewine
Tel: (847) 402-7946
Fax: (847) 402-3092
Allstate Life Insurance Compan
3075 Sanders Road
Northbrook, IL 60062-7127
Attn: Linda Dewine
Tel: (847) 402-7946
Fax: (847) 402-3092
Orix USA Corporation
780 Third Avenue, 48th fl.
New York, NY 10017
Attn: Chet Malhotra
Tel: (212) 418-8356
Fax: (212) 418-8308
Crescent/Mach I Partners, L.P.
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Attn: Mark L. Gold
Tel: (212) 297-4000
Fax: (212) 297-4159
Copy to: State Street Bank
and Trust Co.
Two International Place
Boston, MA 02110
Attn: Jackie Sweeney
Tel: (617) 664-5482
Fax: (617) 664-5366
Merrill Lynch Senior Floating Rate
Fund, Inc.
800 Scudders Mill Road - Area 2C
Plainsboro, NJ 08536
Attn: Jill Montayne
Tel: (609) 282-3102
Fax: (609) 282-2550
Copy To: MLAM Accounting
500 College Road - 4E
Plainsboro, NJ 08536
Attn: John Dugan
Tel: (609) 282-7705
Fax: (609) 282-7616
<PAGE>
SCHEDULE II
THE BORROWER'S MTA'S
Birmingham
Boston-Providence
Buffalo-Rochester
Dallas-Fort Worth
Denver
Des Moines-Quad Cities
Detroit
Indianapolis
Kansas City
Little Rock
Louisville-Lexington-Evansville
Miami-Fort Lauderdale
Milwaukee
Minneapolis-St. Paul
Nashville
New Orleans-Baton Rouge
New York
Oklahoma City
Phoenix
Pittsburgh
Portland
St. Louis
Salt Lake City
San Antonio
San Francisco-Oakland-San Jose
Seattle
Spokane-Billings
Tulsa
Wichita
<PAGE>
SCHEDULE III
EXISTING INDEBTEDNESS
10% Notes Payable - Zimmer Co., due 1006 $757,522.61
<PAGE>
SCHEDULE IV
EXISTING LIENS
-None-
<PAGE>
SCHEDULE V
EXISTING GUARANTEE OBLIGATIONS
-None-
<PAGE>
EXHIBIT A-1
FORM OF
REVOLVING CREDIT NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$ New York, New York
October __, 1996
FOR VALUE RECEIVED, the undersigned, SPRINT SPECTRUM L.P., a
Delaware limited partnership (the "Borrower"), hereby unconditionally promises
to pay to the order of (the "Lender") at the office of The Chase Manhattan Bank
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, the principal
amount of DOLLARS ($ ) or, if less, the unpaid principal amount of the Revolving
Credit Loans made by the Lender pursuant to subsection 2.1 of the Credit
Agreement, as hereinafter defined. The principal amount shall be paid in the
amounts and on the dates specified in subsection 2.7 of the Credit Agreement.
The Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in subsection 2.9 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Revolving Credit Loan made pursuant to the Credit Agreement and the date
and amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Note (a) is one of the Notes referred to in the Credit
Agreement, dated as of October 2, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions and entities from time to
time parties thereto and The Chase Manhattan Bank, as Administrative Agent, (b)
is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
No claim may be made under this Note against any of the direct
or indirect partners of the Borrower for the payment of principal of, or
interest on, the Loans, or any other amounts payable under the Credit Agreement
or this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SPRINT SPECTRUM L.P.
By:Sprint Spectrum
Holding Company, L.P.,
its general partner
By:
Title:
<PAGE>
Schedule A
to Revolving Credit Note
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
- ----- ------- ----------- ---------- ------------- --------------- -------------
Amount of Amount of
Amount Principal ABR Loans
Amount Converted of ABR Converted to Unpaid Prin-
of ABR to Loans Eurodollar cipal Balance Notation
Date Loans ABR Loans Repaid Loans of ABR Loans Made By
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
<PAGE>
Schedule B
to Revolving Credit Note
------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ----- -------- --------- ---------- ---------- ----------- ----------- ---------
Interest Amount of Amount of Unpaid
Amount Period & Principal Eurodollar Principal
Amount Converted Eurodollar of Loans Con- Balance
of Euro to Euro- Rate with Eurodollar verted to of Notation
dollar dollar Respect Loans ABR Eurodollar Made
Date Loans Loans Thereto Repaid Loans Loans Eurodollar
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<PAGE>
EXHIBIT A-2
FORM OF
TERM NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$ New York, New York
October __, 1996
FOR VALUE RECEIVED, the undersigned, SPRINT SPECTRUM L.P., a
Delaware limited partnership (the "Borrower"), hereby unconditionally promises
to pay to the order of (the "Lender") at the office of The Chase Manhattan Bank
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, the principal
amount of DOLLARS ($ ) or, if less, the unpaid principal amount of the Term
Loans made by the Lender pursuant to subsection 2.1 of the Credit Agreement, as
hereinafter defined. The principal amount shall be paid in the amounts and on
the dates specified in subsection 2.7 of the Credit Agreement. The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in subsection 2.9 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of the Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence of
the accuracy of the information endorsed. The failure to make any such
endorsement shall not affect the obligations of the Borrower in respect of such
Term Loan.
This Note (a) is one of the Notes referred to in the Credit
Agreement, dated as of October 2, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions and entities from time to
time parties thereto and The Chase Manhattan Bank, as Administrative Agent, (b)
is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
No claim may be made under this Note against any of the direct
or indirect partners of the Borrower for the payment of principal of, or
interest on, the Loans, or any other amounts payable under the Credit Agreement
or this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By:
Title:
<PAGE>
Schedule A
to Term Note
------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
- ----- ------- ----------- ---------- ------------- --------------- -------------
Amount of Amount of
Amount Principal ABR Loans
Amount Converted of ABR Converted to Unpaid Prin-
of ABR to Loans Eurodollar cipal Balance Notation
Date Loans ABR Loans Repaid Loans of ABR Loans Made By
- ----- ------- ----------- ---------- ------------- --------------- -------------
- ----- ------- ----------- ---------- ------------- --------------- -------------
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- ----- ------- ----------- ---------- ------------- --------------- -------------
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<PAGE>
Schedule B
to Term Note
------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ----- -------- --------- ---------- ---------- ----------- ----------- ---------
Interest Amount of Amount of Unpaid
Amount Period & Principal Eurodollar Principal
Amount Converted Eurodollar of Loans Con- Balance
of Euro to Euro- Rate with Eurodollar verted to of Notation
dollar dollar Respect Loans ABR Eurodollar Made
Date Loans Loans Thereto Repaid Loans Loans By
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
- ----- -------- --------- ---------- ---------- ----------- ---------- ----------
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<PAGE>
EXHIBIT B-1
FORM OF LEGAL OPINION OF SIMPSON THACHER & BARTLETT
October __, 1996
The Chase Manhattan Bank, as Administrative Agent
under the Credit Agreement, as
hereinafter defined (the "Agent")
and
The Lenders listed on Schedule I hereto which are parties to the Credit
Agreement on the date hereof
Re: Credit Agreement, dated as of October 2, 1996 (the
"Credit Agreement"), among Sprint Spectrum L.P. (the
"Borrower"), the entities from time to time parties
thereto as lenders (the "Lenders") and the Agent
Ladies and Gentlemen:
We have acted as counsel to the Borrower in connection with
the preparation, execution and delivery of the Credit Agreement. Unless
otherwise indicated, capitalized terms used but not defined herein shall have
the respective meanings set forth in the Credit Agreement. This opinion is
furnished to you pursuant to subsection 4.1(j)(i) of the Credit Agreement.
In connection with this opinion, we have examined:
(A) the Credit Agreement; and
(B) the form of the Notes which may be delivered pursuant to
the Credit Agreement after the date hereof.
We also have examined the originals, or certified, conformed or reproduction
copies, of such records, agreements, instruments and other documents and have
made such other investigations as we have deemed relevant and necessary in
connection with the opinions expressed herein. As to questions of fact material
to this opinion, we have relied upon certificates as to matters of fact of
public officials and of officers and representatives of the Loan Parties. In
addition, we have examined, and have relied as to matters of fact upon the
representations made in the Loan Documents.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
As to all matters covered by the opinion letter delivered to
you on the date hereof by Charles R. Wunsch, Associate General Counsel of the
Borrower, we have assumed the accuracy of the legal opinions expressed therein
to the extent relating to the law of the State of Missouri and the State of
Delaware.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
(1) The Credit Agreement constitutes, and each Note, when
executed and delivered by the Borrower in accordance with the Credit Agreement,
will constitute, a valid and legally binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms.
(2) The Borrower is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. The Borrower is not a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935.
(3) No consent, order or authorization of, filing with, notice
to or approval or other act by or in respect of, any United States or State of
New York Governmental Authority is required to be obtained or made by the
Borrower in connection with the borrowings under the Credit Agreement or with
the execution, delivery, performance, validity or enforceability of the Credit
Agreement or any Notes other than those filings required in connection with the
perfection of the Liens created by the Security Documents.
(4) The execution, delivery and performance of the Credit
Agreement and any Notes, the borrowings under the Credit Agreement and the use
of the proceeds thereof will not violate any law, rule or regulation of any
United States or State of New York Governmental Authority applicable to the
Borrower or any of its Subsidiaries.
Our opinion in paragraph (1) above is subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing.
We express no opinion with respect to:
<PAGE>
(A) any matters subject to the Communications Act of
1934, as amended;
(B) the effect of any provision of the Credit Agreement
insofar as it provides that any Person purchasing a
participation from a Lender may exercise set-off or
similar rights with respect to such participation or
that any Lenders may exercise set-off or similar
rights other than in accordance with applicable law;
(C) the effect of any provision of the Credit Agreement
relating to indemnification or exculpation that is
inconsistent with public policy; and
(D) the effect of the compliance or noncompliance with
any federal or state laws or regulations applicable
to any of the Lenders or their affiliates because of
their legal or regulatory status or the nature of
their businesses.
In addition, we express no opinion as to the enforceability of
any provision of the Credit Agreement whereby the Borrower purports to submit to
the subject matter jurisdiction of the United States District Court for the
Southern District of New York. We note the limitations of 28 U.S.C. ss. 1332 on
federal court jurisdiction where diversity of citizenship is lacking, and we
also note that such submission cannot supersede that court's discretion in
determining whether to transfer an action from one federal court to another
under 28 U.S.C. ss. 1404(a).
We are members of the Bar of the State of New York, and we do
not express any opinion herein concerning any law other than the law of the
State of New York and the federal law of the United States.
This opinion letter is rendered to you in connection with the
above-described transactions. It may not be relied upon by you for any other
purpose, or relied upon by any other Person without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
SCHEDULE I
LENDERS
[To be provided]
<PAGE>
EXHIBIT B-2
FORM OF LEGAL OPINION OF CHARLES R. WUNSCH, ESQ.
October __, 1996
The Chase Manhattan Bank, as Administrative Agent
under the Credit Agreement (the "Agent")
and
The Lenders listed on Schedule I to this opinion letter which are parties
to the Credit Agreement on the date of this opinion letter
Re: Credit Agreement, dated as of October 2, 1996 (the
"Credit Agreement"), between Sprint Spectrum L.P.
(the "Borrower"), the lending institutions identified
in the Credit Agreement (the "Lenders") and the
Agent
Ladies and Gentlemen:
I am the Associate General Counsel of the Borrower and have
acted in such capacity in connection with the preparation, execution and
delivery of the Credit Agreement. Unless otherwise indicated, capitalized terms
used but not defined in this opinion letter shall have the respective meanings
set forth in the Credit Agreement. This opinion is furnished to you pursuant to
subsection 4.1(j)(ii) of the Credit Agreement.
<PAGE>
In connection with this opinion letter, I have examined or had
attorneys on my staff examine:
(A) the Credit Agreement; and
(B) the form of the Notes which may be delivered pursuant to
the Credit Agreement after the date of this opinion letter.
I or attorneys on my staff also have examined the originals, or certified,
conformed or reproduction copies, of such records, agreements, instruments and
other documents and have made such other investigations as I have deemed
relevant and necessary in connection with the opinions expressed in this opinion
letter. As to questions of fact material to this opinion, I have relied upon
certificates as to matters of fact of public officials and of officers and
representatives of the Borrower. In addition, I have examined, and have relied
as to matters of fact upon the representations made in the Loan Documents.
In rendering the opinions set forth below, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth in this opinion letter, I am of the
opinion that:
<PAGE>
(1) Each of the Borrower and its Restricted Subsidiaries (a)
is duly formed, validly existing and in good standing under the laws of
the jurisdiction of the State of Delaware, (b) has the partnership
power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it
is currently engaged and (c) is duly qualified to do business and in
good standing in each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
(2) The Borrower has the power and authority to make, execute,
deliver and perform the Credit Agreement and any Notes and to borrow
under the Credit Agreement and has taken all necessary partnership
action to authorize the borrowings on the terms and conditions of the
Credit Agreement and to authorize the execution, delivery and
performance of the Credit Agreement and any Notes. The Credit Agreement
has been duly executed and delivered on behalf of the Borrower.
(3) No consent, order or authorization of, filing with, notice
to or approval or other act by or in respect of, any United States or
State of Missouri Governmental Authority is required to be obtained or
made by the Borrower in connection with the borrowings under the Credit
Agreement or with the execution, delivery, performance, validity or
enforceability of the Credit Agreement or any Notes other than those
filings required in connection with the perfection of the Liens created
by the Security Documents.
(4) The execution, delivery and performance of the Credit
Agreement and any Notes, the borrowings under the Credit Agreement and
the use of the proceeds thereof will not violate the partnership
agreement of Holding or the Borrower or any of its Subsidiaries or any
law, rule or regulation of any United States or State of Missouri
Governmental Authority applicable to the Borrower or any of its
Subsidiaries, or, to my knowledge, any Contractual Obligation of, or
any determination, judgment, writ, injunction, decree or order of any
arbitrator or court or other United States or State of Missouri
Governmental Authority applicable to, the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Partnership Agreement, law, rule or
regulation or, to my knowledge, any such Contractual Obligation or any
determination, judgment, writ, injunction, decree or order or
Contractual Obligation, other than the Liens created by the Security
Documents.
(5) To my knowledge, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is
pending or threatened by or against the Borrower or any of its
Restricted Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to any of the Loan Documents or
(b) which could reasonably be expected to have a Material Adverse
Effect.
(6) To my knowledge, the following constitute all the
Subsidiaries of the Borrower as of the date of this opinion letter: (a)
WirelessCo, L.P. (the sole general partner of which is the Borrower and
the sole limited partner of which is MinorCo), (b) Sprint Spectrum
Equipment Company, L.P. (the sole general partner of which is the
Borrower and the sole limited partner of which is MinorCo), (c) Sprint
Spectrum Realty Company, L.P. (the sole general partner of which is the
Borrower and the sole limited partner of which is MinorCo) and (d)
Sprint Spectrum Finance Corporation, a Delaware corporation and a
wholly owned Subsidiary of the Borrower.
I express no opinion with respect to any matters subject to
the Communications Act of 1934, as amended.
I am a member of the Bar of the State of Missouri, and I do
not express any opinion herein concerning any law other than the law of the
State of Missouri, the federal law of the United States and the Delaware Revised
Uniform Limited Partnership Act.
This opinion letter is rendered to you in connection with the
above described transactions. It may not be relied upon by you for any other
purpose, or relied upon by any other Person without my prior written consent.
Very truly yours,
Charles R. Wunsch
<PAGE>
EXHIBIT B-3
FORM OF LEGAL OPINION OF MORRISON & FOERSTER LLP
October __, 1996
The Chase Manhattan Bank, as Administrative
Agent under the Credit Agreement, as
hereinafter defined (the "Agent")
and
The Lenders listed on Schedule I hereto which are parties to the Credit
Agreement on the date hereof
Re: Credit Agreement, dated as of October 2, 1996
(the "Credit Agreement"), among Sprint Spectrum L.P.
(the "Borrower"), the lending institutions identified
in the Credit Agreement (the "Lenders") and the Agent
Ladies and Gentlemen:
We have been requested to provide you with this opinion
pursuant to subsection 4.1(j)(iii) of the Credit Agreement. This opinion
addresses certain licenses listed in Schedule II that are held by WirelessCo,
L.P. ("WirelessCo"), a subsidiary of the Borrower. Except as otherwise provided
herein, capitalized terms used in this opinion shall be defined as set forth in
the Credit Agreement.
This Firm has been engaged as special Federal Communications
Commission ("FCC") counsel to the Borrower in connection with the Credit
Agreement. WirelessCo has been authorized by the FCC to provide Personal
Communications Services ("PCS"). As special FCC counsel, this opinion is limited
to those matters within the jurisdiction of the FCC pertaining to PCS. As to
questions of law, the following opinions are based upon only the Communications
Act of 1934, as amended by the Telecommunications Act of 1996 ("Communications
Act"), and the rules, regulations and published opinions of the FCC relating
thereto. We offer no opinion as to any other federal law or the laws, rules or
regulations of any state or local government or regulatory authority.
In connection with this opinion, we have examined, and relied
upon, the FCC licensing records and copies of documents filed by WirelessCo with
the FCC and have compared these records to the licenses listed in Schedule II
(the "Licenses"). We also have obtained, and relied upon as to matters of fact,
without independent investigation, such certifications from officers of the
Borrower (the "Officers' Certificates") as we have deemed necessary for purposes
of this opinion. We have also examined FCC orders and other records of the FCC's
Wireless Telecommunications Bureau (the "FCC Files") and have made telephone
inquiries to FCC staff in the FCC's Wireless Telecommunications Bureau with
respect to the opinions stated in paragraphs (iii), (iv), (v), and (vi) herein.
We have also examined the Credit Agreement and the form of Notes which may be
delivered pursuant to the Credit Agreement after the date hereof and have
examined such other documents and records and made such other investigations as
we have deemed relevant and necessary in connection with this opinion.
As to matters of fact, we have relied upon and assumed the
accuracy and completeness of the FCC Files, the documents filed by WirelessCo
with the FCC, and the Officers' Certificate(s). In rendering this opinion, we
have not independently investigated, established or verified the factual basis
of any opinion set forth herein, and, unless otherwise indicated herein, have
relied for such matters solely upon the FCC Files, the documents filed by
WirelessCo with the FCC and the Officers' Certificate(s).
We have assumed: (i) the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
any copies thereof submitted to us as certified, conformed or photostatic copies
for our examination; (ii) that the signatures on all documents examined by us
are genuine; (iii) that where any such signature purports to have been made in a
corporate, governmental, fiduciary or other capacity, the person who affixed
such signature to such documents had authority to do so; and (iv) that all
public files, records and certificates of, or furnished by, governmental or
regulatory agencies or authorities are true, correct and complete.
As to all matters covered by the opinion letter delivered to
you on the date hereof by Charles R. Wunsch, Associate General Counsel of the
Borrower, we have relied upon such opinion letter and assumed the accuracy of
the legal opinions expressed therein.
Based upon our examination of the foregoing documents, records
and disclosures and subject to the qualifications, assumptions and limitations
set forth herein, we are of the opinion that:
(i) The execution and delivery of the Loan Documents and the
consummation by the Loan Parties of all of the transactions contemplated thereby
and the performance thereunder will not result in a violation of the
Communications Act or any order, rule or regulation of the FCC.
(ii) No consent, approval, authorization, order, registration,
filing or qualification of or with, or any other act by, any court or
governmental agency or body is required under the Communications Act or the
rules, regulations and published policies of the FCC for the valid execution,
delivery and consummation of and performance under the Loan Documents or the
consummation by the Loan Parties of the transactions contemplated thereby.
(iii) WirelessCo holds and has the right to use all of the
Licenses, without any conflict known to us with the rights of others, except as
such conflict, taken in the aggregate, would not have a Material Adverse Effect.
Such Licenses are in full force and effect and we are not aware of any other
licenses or other approvals or authorizations required by the Borrower or any
Restricted Subsidiary to conduct its business as now operated or as contemplated
to be operated by it.
(iv) To the best of our knowledge, there is no material
respect in which the operation of the Borrower and the Restricted Subsidiaries'
businesses is not in accordance with the Licenses, the Communications Act and
all orders, rules, regulations and published policies of the FCC.
(v) To the best of our knowledge, there are no material
proceedings threatened, pending or contemplated before the FCC against or
involving the properties, businesses or Licenses of the Borrower or any
Restricted Subsidiary.
(vi) To the best of our knowledge, no event has occurred as of
the date hereof that permits, or with notice or lapse of time or both would
permit, the suspension, revocation or termination of any of the Licenses or that
might result in any other material impairment of the rights of the Borrower or
the Restricted Subsidiaries therein.
Whenever our opinion herein with respect to the existence or
absence of facts is indicated to be based on the best of our knowledge or words
to such effect it is intended to signify that, in the course of our
representation of the Borrower in connection with Communications Act and FCC
regulatory matters, none of Cheryl A. Tritt, Joan E. Neal, Joyce H. Jones, Diane
S. Killory, Charles H. Kennedy, Susan H. Crandall, James A. Casey and Stephen J.
Kim (the only attorneys of this Firm with substantive involvement in
representing the Borrower in Communications Act and FCC regulatory matters)
acquired actual knowledge of the existence or absence of any such facts. Except
to the extent expressly stated herein, we have not undertaken any independent
investigation to determine the existence or absence of such facts, and no
inference as to our knowledge of the existence of such facts should be drawn
from the fact of our representation of the Borrower.
The opinion expressed herein is rendered as of the date of
this letter and is specific to the transactions and the documents referred to
herein. This opinion may not be relied upon for any other purpose or by any
other person or entity without our prior written consent. This opinion is
furnished solely for your benefit, and may not be relied upon by any other
person without our prior written consent.
Very truly yours,
Morrison & Foerster LLP
<PAGE>
SCHEDULE I
LENDERS
The Chase Manhattan Bank
Bankers Trust Company
Bayerische Hypotheken-und Wechsel-Bank Aktiengesellschaft, New York Branch
Banque Nationale de Paris
Credit Lyonnais New York Branch
NationsBank of Texas, N.A.
Societe Generale
The Bank of New York Company, Inc.
The Mitsubishi Trust and Banking Corporation
Westdeutsche Landesbank Girozentrale, New York Branch
Banque Paribas New York
Chiao Tung Bank Co., Ltd., New York Agency
Credit Local de France, New York Agency
Fleet National Bank
Korea First Bank, New York Agency
The Sumitomo Bank, Limited, Chicago Branch
The First National Bank of Boston
The Industrial Bank of Japan, Limited
The Long-Term Credit Bank of Japan, Ltd., Chicago Branch
The Sakura Bank, Limited
The Sanwa Bank, Limited
Banca Commerciale Italiana, Chicago Branch
Bank of Tokyo-Mitsubishi Trust Company
Export Development Corporation
The Fuji Bank, Limited
Skandinaviska Enskilda Banken Corporation
The Dai-ichi Kangyo Bank, Ltd., Chicago Branch
The Nippon Credit Bank, Ltd., Los Angeles Agency
The Royal Bank of Scotland plc
The Sumitomo Trust & Banking Co., Ltd., New York Branch
Crestar Bank
Van Kampen American Capital Prime Rate Income Trust
The Northwestern Mutual Life Insurance Company
KZH Holding Corporation
Morgan Guaranty Trust Company of New York, as Trustee of a Commingled Trust Fund
CHL High Yield Loan Portfolio, (a unit of The Chase Manhattan Bank)
Protective Life Insurance Company
Allstate Insurance Company
Orix USA Corporation
Crescent/Mach I Partners, L.P.
<PAGE>
SCHEDULE II
PCS LICENSES HELD BY WIRELESSCO, L.P.1/
Location Call Sign Market No.
New York KNLF204 M001 B
San Francisco-Oakland- KNLF208 M004 A
San Jose
Detroit KNLF211 M005 B
Dallas-Fort Worth KNKF215 M007 B
Boston-Providence KNLF217 M008 B
Minneapolis-St. Paul KNLF223 M012 A
Miami-Fort Lauderdale KNLF229 M015 A
New Orleans-Baton Rouge KNLF233 M017 A
St. Louis KNLF238 M019 B
Milwaukee KNLF239 M020 A
Pittsburgh KNLF241 M021 A
Denver KNLF243 M022 A
Seattle KNLF248 M024 B
Louisville-Lexington- KNLF252 M026 B
Evansville
Phoenix KNLF254 M027 B
Birmingham KNLF257 M029 A
Portland KNLF260 M030 B
Indianapolis KNLF261 M031 A
Des Moines-Quad Cities KNLF264 M032 B
San Antonio KNLF265 M033 A
Kansas City KNLF267 M034 A
Buffalo-Rochester KNLF269 M035 A
Salt Lake City KNLF272 M036 B
Little Rock KNLF280 M040 B
Oklahoma City KNLF282 M041 B
Spokane-Billings KNLF284 M042 B
Nashville KNLF285 M043 A
Wichita KNLF292 M046 B
Tulsa KNLF296 M048 B
1/ WirelessCo, L.P. PCS licenses were granted by the FCC June 23, 1995 and
will expire June 23, 2005.
<PAGE>
SCHEDULE I
LENDERS
[To be provided]
<PAGE>
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of October
2, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Sprint Spectrum L.P., a Delaware limited partnership
(the "Borrower"), the Lenders named therein and The Chase Manhattan Bank, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
<PAGE>
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest").
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that the
Assignor has not created any adverse claim upon the interest being assigned by
it hereunder and that such interest is free and clear of any such adverse claim;
(b) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower, any of its Subsidiaries or
any other obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches any Notes held
by it evidencing the Assigned Interest and (i) requests that the Administrative
Agent, upon request by the Assignee, exchange the attached Notes for a new Note
or Notes payable to the Assignee and (ii) if the Assignor has retained any
Loans, requests that the Administrative Agent exchange the attached Notes for a
new Note or Notes payable to the Assignor, in each case in amounts which reflect
the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 3.1 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, 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 the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
2.15(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall
be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance by it and recording
by the Administrative Agent pursuant to the Credit Agreement, effective as of
the Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by
and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
<PAGE>
Schedule 1
to Assignment and Acceptance
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
[Principal Amount of Revolving Credit Loans Assigned: $ ]
----------------------
Revolving Credit Commitment Percentage Assigned**: . %]
[Principal Amount of Trance [I][II] Term Loans Assigned: $ ]
[Term Loan [I] [II] Commitment Percentage Assigned*: . %]
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
Title: Title:
Accepted: Consented To:
THE CHASE MANHATTAN BANK, as SPRINT SPECTRUM L.P.
Administrative Agent
By: By:
Title: Title:
** Calculate Percentage that is assigned to at least 15 decimal places and
show as a percentage of the aggregate Revolving Credit or Term Loan
Commitments, as applicable, of all the Lenders.
<PAGE>
[CONFOMED COPY]
SPRINT SPECTRUM L.P.
$2,000,000,000
CREDIT AGREEMENT
Dated as of October 2, 1996
THE CHASE MANHATTAN BANK,
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...................................................... 1
1.1 Defined Terms.................................................. 1
1.2 Other Definitional Provisions.................................. 26
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS........................ 27
2.1 Commitments.................................................... 27
2.2 Borrowing Procedures........................................... 27
2.3 Commitment Fee; Other Fees..................................... 28
2.4 Repayment of Loans; Evidence of Debt........................... 29
2.5 Optional Prepayments........................................... 30
2.6 Optional Termination or Reduction of Commitments............... 30
2.7 Automatic Commitment Reductions; Repayment of Term Loans;
Mandatory Prepayments......................................... 31
2.8 Conversion and Continuation Options............................ 32
2.9 Interest Rates and Payment Dates............................... 33
2.10 Computation of Interest and Fees............................... 33
2.11 Inability to Determine Interest Rate........................... 34
2.12 Pro Rata Treatment and Payments................................ 35
2.13 Illegality..................................................... 35
2.14 Requirements of Law............................................ 36
2.15 Taxes.......................................................... 37
2.16 Indemnity...................................................... 40
2.17 Change of Lending Office; Mandatory Assignment or Prepayment... 41
2.18 Treatment of Certain Prepayments............................... 42
SECTION 3. REPRESENTATIONS AND WARRANTIES................................... 43
3.1 Financial Condition............................................ 43
3.2 No Change...................................................... 43
3.3 Existence; Compliance with Law................................. 43
3.4 Power; Authorization; Enforceable Obligations.................. 44
3.5 No Legal Bar................................................... 44
3.6 No Material Litigation......................................... 44
3.7 No Default..................................................... 44
3.8 Ownership of Property; Liens................................... 44
3.9 Intellectual Property.......................................... 45
3.10 Taxes.......................................................... 45
3.11 Federal Regulations............................................ 45
3.12 ERISA.......................................................... 45
3.13 Investment Company Act......................................... 46
3.14 Subsidiaries; Parents.......................................... 46
3.15 Absence of Material Obligations................................ 47
3.16 Environmental Matters.......................................... 47
3.17 Licenses....................................................... 48
3.18 Use of Proceeds................................................ 48
SECTION 4. CONDITIONS PRECEDENT............................................. 50
4.1 Conditions to Initial Loans.................................... 50
4.2 Conditions to Each Loan........................................ 53
SECTION 5. AFFIRMATIVE COVENANTS............................................ 53
5.1 Financial Statements........................................... 53
5.2 Certificates; Other Information................................ 54
5.3 Payment of Obligations......................................... 55
5.4 Conduct of Business; Maintenance of Existence;
Compliance with Laws.................................... 56
5.5 Maintenance of Property; Insurance............................. 56
5.6 Inspection of Property; Books and Records; Discussions......... 56
5.7 Notices........................................................ 56
5.8 Environmental Laws............................................. 57
5.9 After-Acquired Assets.......................................... 57
5.10 Interest Rate Protection....................................... 59
5.11 Fiscal Year.................................................... 59
5.12 Use of Proceeds................................................ 59
5.13 Insurance...................................................... 59
SECTION 6. NEGATIVE COVENANTS............................................... 60
6.1 Financial Condition Covenants.................................. 60
6.2 Limitation on Indebtedness..................................... 63
6.3 Limitation on Liens............................................ 64
6.4 Limitation on Guarantee Obligations............................ 67
6.5 Limitation on Fundamental Changes.............................. 67
6.6 Limitation on Sale of Assets................................... 68
6.7 Limitation on Restricted Payments.............................. 71
6.8 Limitation on Investments, Loans and Advances.................. 72
6.9 Limitation on Transactions with Affiliates..................... 73
6.10 Limitation on Lines of Business; Liabilities of Subsidiaries... 73
6.11 Limitation on Prepayments of Certain Indebtedness.............. 74
6.12 Limitation on Certain Amendments............................... 74
6.13 Limitation on Designation of Secured Obligations............... 74
6.14 Hedging Arrangements........................................... 75
SECTION 7. EVENTS OF DEFAULT................................................ 75
SECTION 8. THE ADMINISTRATIVE AGENT......................................... 79
8.1 Appointment.................................................... 79
8.2 Delegation of Duties........................................... 80
8.3 Exculpatory Provisions......................................... 80
8.4 Reliance by the Administrative Agent........................... 80
8.5 Notice of Default.............................................. 81
8.6 Non-Reliance on Administrative Agent and Other Lenders......... 81
8.7 Indemnification................................................ 81
8.8 Administrative Agent in Its Individual Capacity................ 82
8.9 Successor Administrative Agent................................. 82
SECTION 9. MISCELLANEOUS.................................................... 82
9.1 Amendments and Waivers......................................... 82
9.2 Notices........................................................ 83
9.3 No Waiver; Cumulative Remedies................................. 84
9.4 Survival of Representations and Warranties..................... 84
9.5 Payment of Expenses and Taxes.................................. 85
9.6 Successors and Assigns; Participations and Assignments......... 85
9.7 Adjustments; Set-off........................................... 88
9.8 Counterparts................................................... 89
9.9 Severability................................................... 89
9.10 Integration.................................................... 89
9.11 GOVERNING LAW.................................................. 89
9.12 Submission To Jurisdiction; Waivers............................ 89
9.13 Confidentiality................................................ 90
9.14 No-Recourse.................................................... 90
9.15 Release of Guarantees and Collateral........................... 90
9.16 WAIVER OF JURY TRIAL........................................... 91
<PAGE>
SCHEDULES:
Schedule I Commitments; Addresses of Lenders
Schedule II The Borrower's MTA's
Schedule III Existing Indebtedness
Schedule IV Existing Liens
Schedule V Existing Guarantee Obligations
EXHIBITS:
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term Note
Exhibit B-1 Form of Legal Opinion of Simpson Thacher & Bartlett
Exhibit B-2 Form of Legal Opinion of Charles R. Wunsch, Esq.
Exhibit B-3 Form of Legal Opinion of Morrison & Foerster LLP
Exhibit C Form of Assignment and Acceptance
EXHIBIT 10.31
TRUST AGREEMENT, dated as of October 2, 1996, among SPRINT
SPECTRUM L.P., a Delaware limited partnership (the "Borrower"), FIRST UNION
NATIONAL BANK, a national banking association, as corporate trustee (as
hereinafter defined, the "Corporate Trustee"), and KENNETH D. BENTON, as
individual trustee (as hereinafter defined, the "Individual Trustee").
W I T N E S S E T H :
WHEREAS, the Borrower has entered into the Initial Bank Credit
Facility and the Initial Vendor Credit Facilities (each as defined herein) and
expects to incur certain other obligations;
WHEREAS, the Borrower wishes to cause such obligations to
become Secured Obligations hereunder by causing such obligations to be secured
by the Collateral pursuant to the Security Documents and guaranteed pursuant to
the Guarantees, all in the manner described in this Trust Agreement; and
WHEREAS, the Borrower and certain of its Subsidiaries may,
from time to time, execute and deliver to the Corporate Trustee certain
Additional Guarantees and Additional Security Documents and, pursuant to such
Additional Security Documents, create in favor of the Trustees a security
interest in Additional Collateral, all in the manner described in this Trust
Agreement.
DECLARATION OF TRUST:
NOW, THEREFORE, to secure the payment of the Secured
Obligations and in consideration of the premises and the mutual agreements set
forth herein, the Trustees do hereby declare that they hold and will hold as
trustees in trust under this Trust Agreement all of their right, title and
interest in, to and under all of the Collateral, the Guarantees and the Security
Documents, whether now existing or hereafter arising (and the Borrower does
hereby consent thereto);
TO HAVE AND TO HOLD the Security Documents, the Guarantees and
the Collateral (the right, title and interest of the Trustees in the Security
Documents, the Guarantees and the Collateral being hereinafter referred to as
the "Trust Estate") unto the Trustees and their respective successors in trust
under this Trust Agreement and their respective assigns forever;
IN TRUST NEVERTHELESS, under and subject to the conditions
herein set forth and for the benefit of the Secured Parties, for the enforcement
of the payment of all Secured Obligations, and as security for the performance
of and compliance with the covenants and conditions of this Trust Agreement, the
Secured Instruments, the Guarantees and the Security Documents;
PROVIDED, HOWEVER, that these presents are upon the condition
that, when the events set forth in subsection 9.12(d) shall have occurred, this
Trust Agreement, and the estates and rights hereby assigned, shall cease,
determine and be void except as otherwise provided in subsection 9.12(d);
otherwise they shall remain and be in full force and effect.
IT IS HEREBY FURTHER COVENANTED AND DECLARED, that the Trust
Estate is to be held and applied by the Trustees, subject to the further
covenants, conditions and trusts hereinafter set forth.
SECTION 1
DEFINITIONS
1.1 Defined Terms. As used herein, the following terms shall have the
following meanings:
"Additional Collateral": all Collateral other than the Ini-
tial Collateral.
"Additional Collateral Designation": each Additional Colla-
teral Designation, substantially in the form of Exhibit A, duly com-
pleted and executed by a Responsible Officer and delivered pursuant to
subsection 4.4.
"Additional Guarantee": each guarantee in favor of the
Trustees executed and delivered hereunder in the manner provided in
subsection 4.6, as amended, supplemented or otherwise modified from
time to time in accordance with this Trust Agreement.
"Additional Guarantee Designation": each Additional Guarantee
Designation, substantially in the form of Exhibit B, duly completed and
executed by a Responsible Officer and delivered pursuant to subsection
4.6.
"Additional Secured Instrument": each Secured Instrument evi-
dencing or governing Additional Secured Obligations, as amended, .
supplemented or otherwise modified from time to time in accordance with
this Trust Agreement.
"Additional Secured Obligations": any Permitted Additional
Secured Obligations that become Secured Obligations in the manner pro-
vided in subsection 4.2.
"Additional Secured Obligations Designation": each Additional
Secured Obligations Designation, substantially in the form of Exhibit
C, duly completed and executed by a Responsible Officer and delivered
pursuant to subsection 4.2.
"Additional Security Document": each agreement or instrument
(other than the Initial Security Documents) creating or evidencing a
security interest of the Trustees in, or a lien in favor of the
Trustees on, any Collateral, as amended, supplemented or otherwise
modified from time to time in accordance with this Trust Agreement.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting interests, by contract
or otherwise.
"Asset Sale": any sale, transfer or other disposition or
series of related sales, transfers or other dispositions by the
Borrower or any Subsidiary of any property or assets of the Borrower or
such Subsidiary (including property subject to any Lien under any
Security Document) to a Person other than the Borrower or any
Subsidiary.
"Asset Sale Proceeds Release Request": a request delivered by
the Borrower to the Corporate Trustee requesting the Corporate Trustee
to release funds from the Asset Sale Proceeds Sub-Account for use by
the Borrower to purchase assets in accordance with the applicable
provisions of the Secured Instruments pursuant to which such funds were
originally deposited in the Asset Sale Proceeds Sub-Account. Each Asset
Sale Proceeds Release Request (a) shall specify (i) the amount of funds
to be released, (ii) the date of the requested release, (iii) the
purpose for which the Borrower expects to use such funds, (iv) the
applicable provisions of the Secured Instruments permitting the
requested release and proposed use of such funds, (v) the investments
to be liquidated to provide cash to make such release, and (vi) the
wire instructions for the transfer of such funds to or for the account
of the Borrower and (b) shall be accompanied by a certificate of a
Responsible Officer to the effect that such requested release of funds
and proposed use thereof will not violate any Secured Instrument.
"Asset Sale Proceeds Prepayment Request": a request delivered
by the Borrower to the Corporate Trustee requesting the Corporate
Trustee to release funds from the Asset Sale Proceeds Sub-Account for
use by the Borrower to make a prepayment of Secured Obligations in
accordance with the applicable provisions of the Secured Instruments
pursuant to which such funds were originally deposited in the Asset
Sale Proceeds Sub-Account. Each Asset Sale Proceeds Prepayment Request
(a) shall specify (i) the amount of funds to be released, (ii) the date
of the requested release, (iii) the applicable provisions of the
Secured Instruments permitting or requiring the requested release and
proposed use of such funds, (v) the investments to be liquidated to
provide cash to make such release, and (vi) the wire instructions for
the transfer of such funds to or for the account of Secured Parties and
(b) shall be accompanied by a certificate of a Responsible Officer to
the effect that such requested release of funds and proposed use
thereof will not violate any Secured Instrument.
"Asset Sale Proceeds Sub-Account": as defined in subsection
3.1(a).
"Bank Credit Facility": any credit facility (including the
Initial Bank Credit Facility) which (a) is provided to the Borrower by
commercial banks and/or other lenders and (b) is designated as a Bank
Credit Facility in Schedule I or is designated as a Bank Credit
Facility in the Additional Secured Obligations Designation pursuant to
which the Bank Facility Obligations under such Bank Credit Facility
become Secured Obligations hereunder.
"Bank Facility Agent": with respect to any Bank Credit Faci-
lity, the Person (howsoever designated) performing the functions
customarily associated with an administrative agent for the lenders
thereunder.
"Bank Facility Obligations": at any time, the sum (without
duplication) of (a) the aggregate principal or face amount of the loans
and other extensions of credit outstanding at such time under any of
the Bank Credit Facilities and the aggregate amount of accrued and
unpaid interest thereon at such time, (b) the aggregate amount of
accrued and unpaid fees payable by the Borrower under or in connection
with any of the Bank Credit Facilities at such time, and (c) the
aggregate amount of all other monetary obligations of the Borrower that
are accrued and owing at such time to any Secured Party under any Bank
Credit Facility, including, without limitation, indemnification and
expense reimbursement obligations.
"Bank Facility Secured Party": any Secured Party to the ex-
tent it is a Holder of Bank Facility Obligations.
"Business Day": any day other than a day on which banks are
authorized or required by law to close in New York City, Kansas City,
Missouri, Charlotte, North Carolina or Newark, New Jersey.
"Code": the Uniform Commercial Code as in effect from time t
time in the State of New York.
"Collateral": all the properties and assets of whatever na-
ture, tangible or intangible, now owned or existing or hereafter ac-
quired or arising, in which the Trustees have been granted a lien or
security interest pursuant to any of the Security Documents and all
Proceeds thereof.
"Collateral Account": as defined in subsection 3.1.
"Corporate Trustee": First Union National Bank, in its capa-
city as corporate trustee under this Trust Agreement, and any successor
corporate trustee appointed hereunder.
"Distribution Date": each date fixed by the Corporate Trustee
or the Required Secured Parties for a distribution to the Secured
Parties of funds held in the Collateral Account, the first of which
shall be within 120 days after a Notice of Enforcement is effective as
provided in subsection 2.1(b), and the remainder of which shall occur
(x) monthly thereafter on the day of the month corresponding to the
first Distribution Date (or, if there be no such corresponding day, the
last day of such month), provided, that if any such day is not a
Business Day, such Distribution Date shall be the next Business Day and
(y) on such other dates fixed by the Corporate Trustee or the Required
Secured Parties.
"Dollars" and "$": lawful currency of the United States of
America.
"Effective Date": October 11, 1996.
"Enforcement Proceeds Sub-Account": as defined in subsection
3.1(a).
"Guarantees": the Initial Guarantees and the Additional
Guarantees.
"Hedging Agreement": any interest rate swap, currency swap or
other interest rate or currency hedge arrangement (other than any
interest rate cap or other similar agreement or arrangement under which
the Borrower has no continuing payment obligations) (a) to or under
which the Borrower is a party or a beneficiary and (b) which is
designated as a Hedging Agreement in the Additional Secured Obligations
Designation pursuant to which the Hedging Agreement Obligations under
such Hedging Agreement become Secured Obligations hereunder.
"Hedging Agreement Obligations": at any time, the aggregate
amount of all monetary obligations of the Borrower to any Secured Party
that are accrued and unpaid at such time under any one or more Hedging
Agreements.
"Hedging Agreement Secured Party": any Secured Party to the
extent it is a Holder of Hedging Agreement Obligations.
"Holder": any holder of, or creditor in respect of, Secured
Obligations.
"Holder Representative": (a) with respect to any Holder of
Bank Facility Obligations, the Bank Facility Agent under the Bank
Credit Facility pursuant to which such Bank Facility Obligations are
outstanding, (b) with respect to any Holder of Vendor Facility
Obligations, the Vendor Facility Agent under the Vendor Credit Facility
pursuant to which such Vendor Facility Obligations are outstanding, (c)
with respect to any Holder of Other Facility Obligations, the Other
Facility Agent, if any, under the Other Credit Facility pursuant to
which such Other Facility Obligations are outstanding and (d) with
respect to any Holder of Public Debt Obligations, the Public Debt
Trustee under the Public Debt Indenture pursuant to which such Public
Debt Obligations are outstanding.
"Holding": Sprint Spectrum Holding Company, L.P., a Delaware
limited partnership and the general partner of the Borrower.
"Individual Trustee": Kenneth D. Benton, in his capacity as
individual trustee under this Trust Agreement, and any successor indi-
vidual trustee appointed hereunder.
"Initial Bank Credit Facility": the credit facility provided
pursuant to the Credit Agreement dated as of October 2, 1996, among the
Borrower, the lenders named therein and The Chase Manhattan Bank, as
Administrative Agent, as amended, supplemented or otherwise modified
from time to time.
"Initial Collateral": the Collateral in existence on the
Effective Date in which a security interest is created under the Ini-
tial Security Documents.
"Initial Guarantees": the guarantees described in Schedule
II, as amended, supplemented or otherwise modified from time to time in
accordance with this Trust Agreement.
"Initial Secured Instruments ": the Initial Vendor Credit
Facilities and the Initial Bank Credit Facility.
"Initial Secured Obligations": the Secured Obligations de-
scribed in Schedule I.
"Initial Security Documents": the documents described in
Schedule III, as amended, supplemented or otherwise modified from time
to time in accordance with this Trust Agreement and the Secured Instru-
ments.
"Initial Vendor Credit Facilities": (a) the credit facility
provided pursuant to the Credit Agreement, dated as of October 2, 1996,
among the Borrower, the lenders named therein (including Lucent
Technologies Inc.) and Lucent Technologies Inc., as Agent, and (b) the
credit facility provided pursuant to the Credit Agreement, dated as of
October 2, 1996, among the Borrower, the lenders named therein
(including Northern Telecom Inc.) and the agent named therein, in each
case as amended, supplemented or otherwise modified from time to time.
"Notice of Cancellation of Enforcement": with respect to any
Notice of Enforcement, a notice or notices (a) delivered to the
Corporate Trustee by the Holder Representatives and/or Unrepresented
Holders that delivered such Notice of Enforcement, cancelling such
Notice of Enforcement and (b) requesting the Corporate Trustee not to
commence or, as the case may be, to cease, enforcement actions in
respect of the Collateral and the Guarantees.
"Notice of Enforcement": a notice or notices delivered to the
Corporate Trustee by Unrepresented Holders and/or Holder
Representatives representing the Required Secured Parties (a) stating
that the Secured Obligations owing to the Holders represented by such
Holder Representatives have become due and payable at or prior to the
stated maturity thereof and remain unpaid and (b) requesting the
Corporate Trustee to commence enforcement actions in respect of the
Collateral and the Guarantees as directed by the Required Secured
Parties; provided that a Notice of Enforcement shall be deemed to have
been delivered and to be effective upon the occurrence of any event
that by the terms of any Secured Instrument or Secured Instruments
pursuant to which more than 50% of the aggregate amount of the Voting
Secured Obligations are outstanding would result in such Secured
Instrument or Secured Instruments becoming due and payable prior to
their stated maturity automatically and without notice or other action
by the Secured Parties under such Secured Instrument or Secured
Instruments.
"Opinion of Counsel": an opinion in writing signed by legal
counsel reasonably satisfactory to the Corporate Trustee, who may be an
employee of the Corporate Trustee or of the Borrower or counsel
regularly retained by the Borrower or by the Corporate Trustee. Any
Opinion of Counsel may contain customary exceptions, assumptions and
qualifications and may rely, as to factual matters, on certificates of
public officials or representatives of the Borrower.
"Other Credit Facility": any loan or other credit facility or
other extension of credit to the Borrower which is designated as an
Other Credit Facility in Schedule I or is designated as an Other Credit
Facility in the Additional Secured Obligations Designation pursuant to
which the Other Credit Facility Obligations under such Other Credit
Facility become Secured Obligations hereunder.
"Other Facility Agent": with respect to any Other Credit
Facility, any Person (howsoever designated) performing the functions
customarily associated with an administrative agent for the lenders
thereunder.
"Other Facility Obligations": at any time, the sum (without
duplication) of (a) the aggregate principal or face amount of the loans
and other extensions of credit outstanding at such time under any of
the Other Credit Facilities and the aggregate amount of accrued and
unpaid interest thereon at such time, (b) the aggregate amount of
accrued and unpaid fees payable by the Borrower under or in connection
with any of the Other Credit Facilities at such time, and (c) the
aggregate amount of all other monetary obligations of the Borrower that
are accrued and owing at such time to any Secured Party under any Other
Credit Facility, including, without limitation, indemnification and
expense reimbursement obligations.
"Other Facility Secured Party": any Secured Party to the ex-
tent it is a Holder of Other Facility Obligations.
"Permitted Additional Secured Obligations": at any time, any
indebtedness or other obligations that the Borrower may incur as Bank
Facility Obligations, Vendor Facility Obligations, Public Debt
Obligations, Other Facility Obligations or Hedging Agreement
Obligations, as the case may be, without violating this Trust Agreement
or any Secured Instrument in effect at such time.
"Person": an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Pledged Equity Securities": any portion of the Collateral
consisting of stock of, partnership interests in, or other evidences of
equity ownership in, any Person.
"Possessory Collateral": Collateral in which the Trustees'
security interest may be, in accordance with the Code, perfected only
by means of possession of such Collateral by the Trustees or an agent
or bailee on their behalf.
"Proceeds": all proceeds within the meaning of the Code.
"Public Debt": any indebtedness outstanding under a Public
Debt Indenture.
"Public Debt Indenture": any indenture between the Borrower
and a trustee (a) pursuant to which there are outstanding debt
securities of the Borrower in the form of notes, bonds or debentures
that were issued and sold initially in a public offering or private
placement and (b) which is designated as a Public Debt Indenture in the
Additional Secured Obligations Designation pursuant to which the Public
Debt Obligations under such Public Debt Indenture become Secured
Obligations hereunder.
"Public Debt Obligations": at any time, the aggregate princi-
pal or face amount of Public Debt outstanding and the aggregate amount
at such time of accrued and unpaid interest thereon, and premium, if
any, thereon to the extent such premium is then due and payable.
"Public Debt Trustee": with respect to any Public Debt Inden-
ture, the entity acting as trustee thereunder.
"Required Secured Parties": at a particular time, Secured
Parties holding more than 50% of the aggregate of (a) the amount of the
Voting Secured Obligations plus, (b) if a Notice of Enforcement is not
effective, the amount of commitments to provide credit to the Borrower
pursuant to Secured Instruments that would constitute Voting Secured
Obligations when provided at such time; provided, however, that with
respect to any action (including the delivery of a Notice of
Enforcement or other instruction to exercise foreclosure or other
remedies) that relates to Collateral consisting of rights under a
contract to which any Secured Party or any Affiliate thereof is a
party, the Secured Obligations and commitments to provide credit that,
when provided, would constitute Voting Secured Obligations held by such
Secured Party shall not be included as "Voting Secured Obligations" for
purposes of determining, with respect only to the exercise of remedies
with respect to such contract, whether one or more Secured Parties
constitute Required Secured Parties.
"Responsible Officer": any of the president, chief financial
officer, treasurer, assistant treasurer, controller or director-cor-
porate finance of the Borrower.
"Responsible Trustee Officer": any officer of the Corporate
Trustee with direct responsibility for the administration of this Trust
Agreement, and with respect to a particular corporate trust matter, any
other officer of the Corporate Trustee to whom such matter is referred
because of his knowledge of and familiarity with the particular
subject.
"Secured Instruments": at any time, the loan agreements,
credit agreements, note purchase agreements, financing agreements,
notes, debentures, bonds, Hedging Agreements and other documents and
instruments, however designated (other than the Guarantees and the
Security Documents), that evidence Secured Obligations or govern the
terms of Secured Obligations or pursuant to which Secured Obligations
were issued or are outstanding, as any of the foregoing may be amended,
supplemented or otherwise modified from time to time in accordance with
the respective terms thereof.
"Secured Obligations": (a) the Bank Facility Obligations, (b)
the Vendor Facility Obligations, (c) the Public Debt Obligations,
(d) the Other Facility Obligations and (e) the Hedging Agreement Obli-
gations.
"Secured Parties": the Holders of the Secured Obligations,
including, where the context permits, the Bank Facility Agents, the
Vendor Facility Agents, the Other Facility Agents and the Public Debt
Trustees.
"Security Documents": (a) the Initial Security Documents and
(b) the Additional Security Documents.
"Sub-Account": as defined in subsection 3.1(a).
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Trust Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Trust Agreement": this Trust Agreement, dated as of October
2, 1996, among the Borrower, the Corporate Trustee and the Individual
Trustee, as amended, supplemented or otherwise modified from time to
time.
"Trust Estate": as defined in the Declaration of Trust in
this Trust Agreement.
"Trustee Fees": all fees, costs and expenses of the Trustees
of the types described in subsections 5.3, 5.4, 5.5 and 5.6.
------------
"Trustees": collectively, the Corporate Trustee and the Indi-
vidual Trustee.
"Unrepresented Holder": any Hedging Agreement Secured Party
and any other Holder of Secured Obligations for which there is no
Holder Representative.
"Vendor Credit Facility": any credit facility (including the
Initial Vendor Credit Facilities) (a) pursuant to which a Person
selling goods or services to the Borrower and/or its Subsidiaries, or
an affiliate of such Person, provides credit to the Borrower solely to
finance the purchase of goods or services relating to the Borrower's
national wireless system and/or any costs and expenses relating thereto
and (b) which is designated as a Vendor Credit Facility in Schedule I
or is designated as a Vendor Credit Facility in the Additional Secured
Obligations Designation pursuant to which the Vendor Facility
Obligations under such Vendor Credit Facility become Secured
Obligations hereunder.
"Vendor Facility Agent": in respect of any Vendor Credit Fa-
cility, the Person (howsoever designated) performing the functions
customarily associated with an administrative agent for the lenders
thereunder.
"Vendor Facility Obligations": at any time, the sum (without
duplication) of (a) the aggregate principal amount of the loans
outstanding at such time under any of the Vendor Credit Facilities and
the aggregate amount of accrued and unpaid interest thereon at such
time, (b) the aggregate amount of accrued and unpaid fees payable by
the Borrower under or in connection with any of the Vendor Credit
Facilities at such time, and (c) the aggregate amount of all other
monetary obligations of the Borrower that are accrued and owing at such
time to any Secured Party under any Vendor Credit Facility, including,
without limitation, indemnification and expense reimbursement
obligations.
"Vendor Facility Secured Party": any Secured Party to the ex-
tent it is a Holder of Vendor Facility Obligations.
"Voting Secured Obligations": all Secured Obligations other
than (i) those held by an Affiliate of the Borrower and (ii) those
outstanding under Secured Instruments that provide that the Holders of
such Secured Obligations will not be included in any determination of
Required Secured Parties.
1.2 Other Definitional Provisions. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Trust
Agreement shall refer to this Trust Agreement as a whole and not to any
particular provision of this Trust Agreement, the words "include", "includes"
and "including" when used in this Trust Agreement shall be deemed to be followed
by the phrase "without limitation", and Schedule, section and subsection
references are to this Trust Agreement unless otherwise specified.
SECTION 2
ENFORCEMENT OF SECURITY INTERESTS AND GUARANTEES
2.1 Notice of Enforcement. (a) Upon receipt by the Corporate
Trustee of a Notice of Enforcement, the Corporate Trustee shall immediately
notify the Borrower, each Holder Representative and each Unrepresented Holder of
the receipt and contents thereof. So long as such Notice of Enforcement is in
effect, the Trustees shall exercise the rights and remedies provided in this
Trust Agreement and in the Guarantees and the Security Documents in accordance
with the direction of the Required Secured Parties as provided herein. The
Trustees are not empowered to exercise any remedy hereunder or thereunder
relating to the foreclosure of Collateral or enforcement of any Guarantee unless
a Notice of Enforcement is in effect; provided that, for the avoidance of doubt,
this subsection 2.1(a) shall in no event limit the right of the Trustees to
exercise such rights and remedies as they may have hereunder and under the
Security Documents to preserve and protect the Collateral and the rights of the
Trustees and the Secured Parties therein.
(b) A Notice of Enforcement shall become effective upon
receipt thereof by the Corporate Trustee and, once effective, shall remain in
effect unless and until cancelled as provided in subsection 2.1(c).
(c) A Notice of Enforcement may be cancelled by the delivery
to the Corporate Trustee of a Notice of Cancellation of Enforcement (i) before
the Trustees take any action to exercise any remedy with respect to the
Collateral or the Guarantees or (ii) thereafter, if the Corporate Trustee
believes that all actions theretofore taken by the Trustees to exercise any
remedy or remedies with respect to the Collateral or the Guarantees can be
reversed without undue difficulty; provided that no Notice of Enforcement shall
be cancelled more than 30 days after it is received by the Corporate Trustee.
The Corporate Trustee shall immediately notify the Borrower as to the receipt of
any such Notice of Cancellation of Enforcement and shall promptly notify the
Borrower, each Holder Representative and each Unrepresented Holder as to the
cancellation of the related Notice of Enforcement.
2.2 General Authority of the Trustees over the Collateral and
Guarantees. The Borrower hereby irrevocably constitutes and appoints the
Trustees and any officer or agent thereof, with full power of substitution, as
its true and lawful attorneys-in-fact with full power and authority in the name
of the Borrower or in its or his own name, from time to time in the Trustees'
discretion, so long as any Notice of Enforcement is in effect, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to carry out the terms of this Trust
Agreement, the Guarantees and the Security Documents and accomplish the purposes
hereof and thereof, and, without limiting the generality of the foregoing, the
Borrower hereby gives the Trustees the power and right on behalf of the
Borrower, without notice to or further assent by the Borrower, to do the
following so long as a Notice of Enforcement is in effect (and, in the case of
clause (e) (i) below, whether or not a Notice of Enforcement is in effect):
(a) to ask for, demand, sue for, collect, re-
ceive and give acquittance for any and all moneys due or to become due
upon, or in connection with, the Guarantees, the Security Documents or
the Collateral;
(b) to receive, take, endorse, assign and deliver any and
all checks, notes, drafts, acceptances, documents and other negotiable
and non-negotiable instruments taken or received by the Trustees as
Collateral or in connection with the Guarantees or any Security
Document;
(c) to commence, prosecute, defend, settle, compromise or
adjust any claim, suit, action or proceeding with respect to, or in
connection with, the Guarantees or the Collateral or the interests,
rights, powers or duties of the Trustees or any Secured Party therein,
whether brought by or against the Borrower, the Trustees or any Secured
Party;
(d) to sell, transfer, assign or otherwise deal
in or with the Collateral or any part thereof as fully and effectively
as if the Trustees were the absolute owner thereof; and
(e) to do, at their option and at the expense and for the
account of the Borrower, at any time or from time to time, all acts and
things which the Trustees deem necessary (i) to protect or preserve the
Collateral and the rights of the Trustees and the Secured Parties
therein and (ii) to realize upon the Guarantees or the Collateral or
any part thereof.
2.3 Right to Initiate Judicial Proceedings. If a Notice of
Enforcement is in effect, the Trustees, subject to the provisions of subsection
2.5(b), (a) shall have the right and power to institute and maintain such suits
and proceedings as they may deem appropriate to protect and enforce the rights
vested in them by this Trust Agreement, the Guarantees and the Security
Documents and (b) may proceed by suit or suits at law or in equity to enforce
such rights and to foreclose upon the Collateral and to sell all or, from time
to time, any of the Collateral under the judgment or decree of a court of
competent jurisdiction.
2.4 Right to Appoint a Receiver. If a Notice of Enforcement is
in effect, upon the filing of a bill in equity or other commencement of judicial
proceedings to enforce the rights of the Trustees under this Trust Agreement,
any Guarantee or any Security Document, the Trustees shall, to the extent
permitted by applicable law, without notice to the Borrower or any party
claiming through the Borrower, without regard to the solvency or insolvency at
the time of any Person then liable for the payment of any of the Secured
Obligations, without regard to the then value of the Trust Estate, and without
requiring any bond from any complainant in such proceedings, be entitled as a
matter of right to the appointment of a receiver or receivers (who may be a
Trustee) of the Trust Estate, or any part thereof, and of the rents, issues,
tolls, profits, royalties, revenues and other income thereof, pending such
proceedings, with such powers as the court making such appointment shall confer,
and to the entry of an order directing that the rents, issues, tolls, profits,
royalties, revenues and other income of the property constituting the whole or
any part of the Trust Estate be segregated, sequestered and impounded for the
benefit of the Trustees and the Secured Parties, and the Borrower irrevocably
consents to the appointment of such receiver or receivers and to the entry of
such order; provided that, notwithstanding the appointment of any receiver, the
Corporate Trustee shall be entitled to retain possession and control, pursuant
to the terms of the Trust Agreement, of all cash held by or deposited with it
pursuant to this Trust Agreement or any Security Document.
2.5 Exercise of Powers; Instructions of Required Secured
Parties. (a) All of the powers, remedies and rights of the Trustees as set forth
in this Trust Agreement may be exercised by the Trustees in respect of any
Guarantee or any Security Document as though set forth in full therein, and all
of the powers, remedies and rights of the Trustees as set forth in any Guarantee
or any Security Document may be exercised from time to time as herein and
therein provided.
(b) The Required Secured Parties shall (subject to the last
sentence of subsection 2.1(a)) have the right, by one or more instruments in
writing executed and delivered to the Corporate Trustee, to direct the time,
method and place of conducting any proceeding for any right or remedy available
to the Trustees, or of exercising any trust or power conferred on the Trustees,
or for the appointment of a receiver, or to direct the taking or the refraining
from taking of any action authorized by this Trust Agreement, any Guarantee or
any Security Document, and the Trustees shall act in accordance with any such
direction; provided that (i) such direction shall not conflict with any
provision of applicable law or of this Trust Agreement, any Guarantee or any
Security Document and the Trustees shall be adequately secured and indemnified
as provided in subsection 7.4(d). In the absence of direction from the Required
Secured Parties, (i) the Trustees shall have no duty to take or refrain from
taking any action unless explicitly required herein or in the Security Documents
or Guarantees and (ii) the Trustees may (but in the absence of a direction from
the Required Secured Parties shall not be required to) take any and all such
actions under this Trust Agreement, the Security Documents and the Guarantees or
any of them or otherwise as the Corporate Trustee shall deem to be in the best
interests of the Secured Parties to maintain the Collateral and protect and
preserve the Collateral and the rights of the Secured Parties; provided,
however, that in the absence of direction (which may relate to the exercise of
specific remedies or to the exercise of remedies in general) from the Required
Secured Parties while a Notice of Enforcement is in effect, the Trustees shall
not foreclose any lien on the Collateral or take any enforcement action under
any Guarantee.
2.6 Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Trustees herein or in any Guarantee or Security Document is
intended to be exclusive of any other remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein, in any Guarantee or in any Security Document or now or hereafter
existing at law or in equity or by statute.
(b) No delay by the Trustees in exercising or failure by the
Trustees to exercise any right, remedy or power hereunder or under any Guarantee
or Security Document shall impair any such right, remedy or power or shall be
construed to be a waiver thereof, and every right, power and remedy given to the
Trustees under this Trust Agreement, any Guarantee or any Security Document may
be exercised from time to time and as often as may be deemed expedient by the
Trustees or the Required Secured Parties.
(c) If the Trustees shall have proceeded to enforce any right,
remedy or power under this Trust Agreement, any Guarantee or any Security
Document and the proceeding for the enforcement thereof shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Trustees, then the Borrower, the Trustees and the Secured Parties shall,
subject to any determination in such proceeding, severally and respectively be
restored to their former positions and rights hereunder or thereunder with
respect to the Trust Estate and in all other respects, and thereafter all
rights, remedies and powers of the Trustees shall continue as though no such
proceeding had been taken.
(d) All rights of action and of asserting claims upon or under
this Trust Agreement, the Guarantees and the Security Documents may be enforced
by the Trustees without the possession of any Secured Instrument, Guarantee,
Security Document or instrument evidencing any Secured Obligation or the
production thereof at any trial or other proceeding relative thereto, and any
suit or proceeding instituted by the Trustees shall be, subject to subsections
7.5(c), 7.5(d) and 7.10(b)(ii), brought in their name as Trustees and any
recovery of judgment shall be held as part of the Trust Estate.
2.7 Waiver and Estoppel. (a) The Borrower hereby agrees, to
the extent it may do so lawfully and without violation of its fiduciary
obligations, that it will not at any time in any manner whatsoever claim, or
take the benefit or advantage of, any appraisement, valuation, stay, extension,
moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance or
enforcement of this Trust Agreement, any Guarantee or any Security Document and
waives all benefit or advantage of all such laws, and the Borrower hereby
covenants that it will not hinder, delay or impede the execution of any power
granted to the Trustees in this Trust Agreement, any Guarantee or any Security
Document but will suffer and permit the execution of every such power as though
no such law were in force.
(b) The Borrower, to the extent it may lawfully do so, on
behalf of itself and all who may claim through or under it, including, without
limitation, any and all subsequent creditors, vendees, assignees and lienors,
waives and releases all rights to demand or to have any marshalling of the
Collateral upon any sale, whether made under any power of sale granted herein or
in any Security Document or pursuant to judicial proceedings or upon any
foreclosure or any enforcement of this Trust Agreement or any Security Document
and consents and agrees that all the Collateral may at any such sale be offered
and sold as an entirety.
(c) The Borrower waives, to the extent permitted by applicable
law, presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under any Secured Instrument, any Guarantee or
any Security Document) in connection with this Trust Agreement, the Guarantees
and the Security Documents, and any action taken by the Trustees with respect to
the Collateral.
2.8 Limitation on Trustees' Duty in Respect of Collateral.
Beyond their duties as to the custody thereof expressly provided herein or in
any Security Document and to account to the Secured Parties and the Borrower for
moneys and other property received by them hereunder or under any Security
Document, the Trustees shall not have any duty to the Borrower or to the Secured
Parties as to any Collateral in their possession or control or in the possession
or control of any of their agents or nominees, or any income thereon or as to
the preservation of rights against prior parties or any other rights pertaining
thereto.
2.9 Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions hereof
are intended to be subject to all applicable provisions of law which may be
controlling and to be limited to the extent necessary so that they will not
render this Trust Agreement invalid, unenforceable in whole or in part or not
entitled to be recorded, registered or filed under the provisions of any
applicable law.
2.10 Rights of Secured Parties Under Secured Instruments.
Notwithstanding any other provision of this Trust Agreement, any Guarantee or
any Security Document, the right of each Secured Party to receive payment of the
Secured Obligations held by such Secured Party when due (whether at the stated
maturity thereof, by acceleration or otherwise) as expressed in the related
Secured Instrument or other instrument evidencing or agreement governing a
Secured Obligation or to institute suit or to obtain a judgment for the
collection of such Secured Obligations or to enforce any such judgment on or
after such due date, and to otherwise exercise the rights and remedies as a
general creditor in accordance with the Secured Instruments to which it is a
party, and the obligation of the Borrower to pay such Secured Obligation when
due, shall not be impaired or affected except as provided in such Secured
Instrument.
2.11 Records. The Corporate Trustee shall maintain records
regarding instructions of the Required Secured Parties, the identity of the
Holder Representatives and the other Secured Parties, determinations of the
types and amounts of the Secured Obligations for any purpose and the allocation
of deposits to the Collateral Account and the Sub-Accounts thereof and any
distributions therefrom. The information contained in such records shall be made
available to any Secured Party upon request.
2.12 Notices. The Corporate Trustee shall promptly notify each
Holder Representative and each Unrepresented Holder in the event it shall
receive, and shall deliver to each such person a copy of, (a) any Notice of
Enforcement, (b) any instructions by the Required Secured Parties to take any
action under this Trust Agreement or any Security Document or Guarantee,
including any instruction to commence any exercise of remedies with respect to
the Collateral or Guarantees, (c) any request by the Borrower or any Secured
Party for any consent, waiver, amendment, supplement, modification or release
with respect to this Agreement, any Security Document, any Collateral or any
Guarantee, or (d) any other material instruction, notice, request, demand,
certificate, opinion of counsel or other communications from any person which is
related to the Collateral, the Security Documents or the Guarantees. The
Corporate Trustee shall also deliver a reasonably detailed notice to each Holder
Representative and each Unrepresented Holder regarding the taking of any
enforcement action or the exercise of any remedies by any of the Trustees with
respect to the Security Documents, the Collateral or the Guarantees which notice
shall be delivered promptly after the occurrence of any such event.
SECTION 3
COLLATERAL ACCOUNT; DISTRIBUTIONS
3.1 The Collateral Account. (a) On the Effective Date there
shall be established and, at all times thereafter until the trusts created by
this Trust Agreement shall have terminated, there shall be maintained with the
Corporate Trustee at the office of the Corporate Trustee's corporate trust
division, a collateral account, which shall be entitled the "Sprint Spectrum
L.P. Collateral Account" (the "Collateral Account"). The Collateral Account
shall be subdivided into two sub-accounts, designated as the "Enforcement
Proceeds Sub-Account" and the "Asset Sale Proceeds Sub-Account" (each, a
"Sub-Account").
(b) All moneys which are required by this Trust Agreement or
any Security Document to be delivered to the Trustees while a Notice of
Enforcement is in effect or which are received by the Trustees or any agent or
nominee of the Trustees in respect of the Collateral or the Guarantees, whether
in connection with the exercise of the remedies provided in this Trust
Agreement, any Guarantee or any Security Document or otherwise, while a Notice
of Enforcement is in effect shall be deposited in the Enforcement Proceeds
Sub-Account and, in each case, held by the Corporate Trustee as part of the
Trust Estate and applied in accordance with the terms of this Trust Agreement.
Upon the cancellation of each effective Notice of Enforcement pursuant to
subsection 2.1(c) the Corporate Trustee shall (subject to the first sentence of
subsection 3.4(a) and the last sentence of subsection 3.1(c)) cause all funds on
deposit in the Enforcement Proceeds Sub-Account to be paid over to the Borrower;
provided, however, that funds (the "Hold-Back Funds") in an amount equal to the
sum of (x) the amount of funds transferred to the Enforcement Proceeds
Sub-Account pursuant to the second sentence of subsection 3.1(c) and (y) the
amount of funds that would have been deposited in the Asset Sale Proceeds
Sub-Account but for the effectiveness of any Notice of Enforcement, together
with all interest and income on such amounts, shall be deposited in the Asset
Sale Proceeds Sub-Account for application in accordance with the terms of
Section 3 as if such Hold-Back Funds had been deposited in such Asset Sale
Proceeds Sub-Account (i) in the case of funds in an amount equal to funds
referred to in (x) above, since the time they were originally deposited on the
Asset Sale Proceeds Sub-Account and (ii) in the case of funds in an amount equal
to the funds referred to in (y) above, since the time they would have been
deposited in the Asset Sale Proceeds Sub-Account if no such Notice of
Enforcement had become effective.
(c) All moneys constituting proceeds of an Asset Sale which
are delivered to the Trustees pursuant to the provisions of any Secured
Instrument shall be deposited in the Asset Sale Proceeds Sub-Account and held by
the Corporate Trustee as part of the Trust Estate and applied in accordance with
the terms of this Trust Agreement. Upon the receipt by the Corporate Trustee of
a Notice of Enforcement, all amounts on deposit in the Asset Sale Proceeds
Sub-Account shall be transferred to the Enforcement Proceeds Sub-Account;
provided, that all amounts so transferred from the Asset Sale Proceeds
Sub-Account to the Enforcement Proceeds Sub-Account, together with all interest
and income on such amounts, shall be returned to the Asset Sale Proceeds
Sub-Account under the circumstances set forth in the proviso in subsection
3.1(b).
(d) The Borrower may, by delivery to the Corporate Trustee of
an Asset Sale Proceeds Release Request, at any time within 270 days after the
deposit of any funds in the Asset Sale Proceeds Sub-Account, request a release
of such funds from the Asset Sale Proceeds Sub-Account for use in funding the
acquisition of assets in accordance with the applicable provisions of the
Secured Instruments. If no Notice of Enforcement is in effect on the date on
which such funds are requested to be released pursuant to such Asset Sale
Proceeds Release Request, the Corporate Trustee shall release to the Borrower
funds from the Asset Sale Proceeds Sub-Account in accordance with such Asset
Sale Proceeds Release Request. To effect such release, the Corporate Trust shall
liquidate such investments of such funds in the Asset Sale Proceeds Sub-Account
as shall be specified in such Asset Sale Proceeds Release Request.
(e) If any funds deposited in the Asset Sale Proceeds
Sub-Account have not been withdrawn therefrom within 270 days after the date of
deposit thereof, such funds may thereafter be withdrawn only (i) by the
Corporate Trustee while a Notice of Enforcement is in effect as contemplated by
the second sentence of subsection 3.1(c) to be distributed pursuant to
subsection 3.4 or (ii) pursuant to an Asset Sale Proceeds Prepayment Request, as
provided in subsection 3.1(f).
(f) The Borrower may, at any time, by delivery to the
Corporate Trustee of an Asset Sale Proceeds Prepayment Request, request the
Corporate Trustee to withdraw funds from the Asset Sale Proceeds Sub-Account and
transfer such funds to Secured Parties for application by such Secured Parties
toward prepayment of Secured Obligations in the manner specified by the relevant
Secured Instruments. If no Notice of Enforcement is in effect on the date on
which such funds are requested to be released pursuant to such Asset Sale
Proceeds Prepayment Request, the Corporate Trustee shall transfer funds from the
Asset Sale Proceeds Sub-Account to Secured Parties in accordance with such Asset
Sale Proceeds Prepayment Request.
3.2 Control of Collateral Account. All right, title and
interest in and to the Collateral Account shall vest in the Corporate Trustee on
behalf of the Secured Parties, and funds on deposit in the Collateral Account
shall constitute part of the Trust Estate. The Collateral Account shall be
subject to the sole and exclusive dominion and control of the Corporate Trustee.
3.3 Investment of Funds Deposited in Collateral Account. The
Corporate Trustee shall invest and reinvest moneys on deposit in the Collateral
Account at any time in:
(a) marketable obligations of the United States
having a maturity of not more than one year from the date of acquis-
tion;
(b) marketable obligations directly and fully
guaranteed by the United States having a maturity of not more than one
year from the date of acquisition;
(c) bankers' acceptances and certificates of deposit and
other interest-bearing obligations issued by any bank organized under
the laws of the United States or any state thereof with capital,
surplus and undivided profits aggregating at least $500,000,000, in
each case having a maturity of not more than one year from the date of
acquisition;
(d) repurchase obligations with a term of not more than
one day for underlying securities of the types described in clauses
(a), (b) and (c) above entered into with any bank meeting the
qualifications specified in clause (c) above;
(e) commercial paper rated at least A-2 or the
equivalent thereof by Standard & Poor's Ratings Group or at least P-2
or the equivalent thereof by Moody's Investors Service, Inc. and matur-
ing within six months after the date of acquisition; and
(f) shares of open end money market mutual or
similar funds which invest exclusively in assets satisfying the re-
quirements of clause (a) through (e) above;
provided that the (i) aggregate amount invested in obligations of the types
described in clauses (c), (d) and (e) above of any one issuer shall not exceed
$50,000,000 at any time and (ii) the Borrower may (so long as no Notice of
Enforcement shall be in effect) specify the category or categories of
investments specified above in which funds on deposit in the Asset Sale Proceeds
Sub-Account shall be invested and may specify the maturities (not in any event
longer than the maturities specified above) of such investments; provided that
the Borrower or the Corporate Trustee, as applicable, shall, to the extent that
the timing of distributions to be made from the Collateral Account is known or
can be reasonably anticipated, select investments for amounts equal to such
distributions that mature prior to the anticipated dates of such distributions.
All such investments of funds in any Sub-Account, the interest and income
received thereon and the net proceeds realized on the sale or redemption thereof
shall be held in such Sub-Account as part of the Trust Estate.
3.4 Application of Moneys. (a) The Corporate Trustee shall
have the right (pursuant to subsection 5.7) at any time to apply moneys held by
it in the Collateral Account to the payment of due and unpaid Trustee Fees. All
remaining moneys held by the Corporate Trustee in the Collateral Account or
received by the Trustees while a Notice of Enforcement is in effect shall, to
the extent available for distribution (it being understood that the Corporate
Trustee may liquidate investments prior to maturity to make a distribution
pursuant to this subsection 3.4), be distributed (subject to the provisions of
subsection 3.5) by the Corporate Trustee on each Distribution Date as follows:
First: to the Trustees, an amount equal to any unpaid Trustee
Fees, and then to any Secured Party which has theretofore advanced or
paid any Trustee Fees constituting administrative expenses allowable
under 11 U.S.C. ss. 503(b), an amount equal to the amount thereof so
advanced or paid by such Secured Party and for which such Secured Party
has not been reimbursed prior to such Distribution Date;
Second: to any Secured Party which has theretofore advanced or
paid any Trustee Fees other than such administrative expenses, an
amount equal to the amount thereof so advanced or paid by such Secured
Party and for which such Secured Party has not been reimbursed prior to
such Distribution Date;
Third: to the Secured Parties in an amount equal to all sums
which constitute Secured Obligations then held by the Secured Parties,
including without limitation the unpaid principal or face amount of,
and unpaid interest on and other charges, if any, in respect of, the
Secured Obligations then outstanding whether or not due and payable and
the costs and expenses of the Secured Parties and their representatives
which are due and payable under the relevant Secured Instruments and
which constitute Secured Obligations as of such Distribution Date, and,
if such moneys shall be insufficient to pay such sums in full, then
ratably to the Secured Parties in proportion to such sums; and
Fourth: any surplus then remaining shall be paid to the
Borrower or its successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct.
(b) The term "unpaid" as used in subsection 3.4(a) refers:
(i) in the absence of a bankruptcy pro-
ceeding with respect to the Borrower, to all amounts of Se-
cured Obligations outstanding as of a Distribution Date, and
(ii) during the pendency of a bankruptcy
proceeding with respect to the Borrower, to all amounts
allowed by the bankruptcy court in respect of Secured
Obligations as a basis for distribution (including estimated
amounts, if any, allowed in respect of contingent claims),
to the extent that prior distributions (whether actually distributed or set
aside pursuant to subsection 3.5) have not been made in respect thereof.
(c) The Corporate Trustee shall make all payments and
distributions under this subsection 3.4: (i) on account of Bank Facility
Obligations owing to any Bank Facility Secured Party for which there is a Bank
Facility Agent, to such Bank Facility Agent, for redistribution or application
in accordance with the provisions of the relevant Secured Instrument, (ii) on
account of any Vendor Facility Obligations owing to any Vendor Facility Secured
Party for which there is a Vendor Facility Agent, to such Vendor Facility Agent,
for redistribution or application in accordance with the provisions of the
relevant Secured Instrument, (iii) on account of any Public Debt Obligations
outstanding under any Public Debt Indenture, to the Public Debt Trustee under
such Public Debentures, for redistribution or application in accordance with the
provisions of such Public Debt Indenture, (iv) on account of any Hedging
Agreement Obligations, directly to the Holder of such Hedging Agreement
Obligations, (v) on account of any Other Facility Obligations owing to any Other
Facility Secured Party for which there is an Other Facility Agent, to such Other
Facility Agent, for redistribution or application in accordance with the
provisions of the relevant Secured Instrument, and (vi) on account of Secured
Obligations owing to any Unrepresented Holder, directly to such Unrepresented
Holder.
3.5 Amounts Held for Contingent Secured Obligations. In the
event any Holder or Holder Representative shall receive any moneys pursuant to
subsection 3.4 in respect of the contingent portion of the outstanding Secured
Obligations, then such Holder or Holder Representative, as the case may be,
shall invest such moneys in obligations of the kinds referred to in clauses (a)
and (b) of subsection 3.3 maturing within 90 days after they are acquired by
such Holder or Holder Representative and shall hold all such amounts so
distributable, and all such investments and the net proceeds thereof, in trust
until (i) all or part of such contingent claim shall have become fixed, in which
case such Holder or Holder Representative, as the case may be, shall apply to
the payment of such fixed claim from such investments and the proceeds thereof
an amount equal to such fixed claim, and shall promptly give notice thereof to
the Borrower and the Corporate Trustee or (ii) all or part of such contingent
claim shall have been extinguished, whether as the result of an expiration
without drawing of any letter of credit, payment of amounts secured or covered
by any letter of credit other than by drawing thereunder, payment of amounts
covered by any guarantee or otherwise, in which case such Holder or Holder
Representative, as the case may be, shall, as soon as practicable thereafter,
notify the Borrower and the Corporate Trustee and shall distribute from such
investments, and the proceeds thereof, an amount equal to the portion of
contingent claim which has been extinguished together with interest earned
thereon from the date first invested until so distributed, to the Corporate
Trustee for deposit in the Collateral Account and application in accordance with
the provisions of subsection 3.4.
3.6 Application of Moneys Distributable to Holder
Representatives. If at any time any moneys collected or received by the Trustees
pursuant hereto are distributable pursuant to subsection 3.4 to a Holder
Representative, and if such Holder Representative shall notify the Corporate
Trustee in writing that no provision is made under the relevant Secured
Instrument for the application by such Holder Representative of moneys (whether
because the Secured Obligations issued under such Secured Instrument have not
become due and payable or otherwise) and that such Secured Instrument does not
effectively provide for the receipt and the holding by such Holder
Representative of such moneys pending the application thereof, then the
Corporate Trustee, after receipt of such notification, shall invest such amounts
in obligations of the kinds referred to in clauses (a) and (b) of subsection 3.3
maturing within 90 days after they are acquired by the Corporate Trustee and
shall hold all such amounts so distributable and all such investments and the
net proceeds thereof in trust solely for such Holder Representative (in its
capacity as such) and for no other purpose until such time as such Holder
Representative shall request in writing the delivery thereof by the Corporate
Trustee for application pursuant to such Secured Instrument.
3.7 Trustees' Calculations. In making the determinations and
allocations required by subsection 3.4, the Corporate Trustee may, unless a
Responsible Trustee Officer has actual knowledge to the contrary, rely upon a
certificate executed and supplied by the Holder Representatives or (in the case
of Hedging Agreement Obligations or other Secured Obligations for which there is
no Holder Representative) the Holders, as the case may be, as to the amounts
payable with respect to Secured Obligations, all in accordance with subsection
7.2(b), and the Trustees shall have no liability to any of the Secured Parties
for actions taken in reliance on such information; provided, however, that if
any Secured Party receives on any Distribution Date an amount pursuant to
subsection 3.4(a) in excess of the amount to which it was entitled to receive on
such Distribution Date pursuant to such subsection 3.4(a) as a result of any
such certificate overstating the amount of the Secured Obligations held by such
Secured Party (or the Secured Obligations held by all the Secured Parties under
any Facility with respect to which such Secured Party is a Holder), then such
Secured Party (by becoming a Holder of Secured Obligations and accepting the
benefits of this Trust Agreement) shall pay such excess to the Corporate Trustee
for application in accordance with subsection 3.4(a) as soon as practicable
after the existence of such overstatement shall have been determined. All
distributions made by the Corporate Trustee pursuant to subsection 3.4 shall be
(subject to any decree of any court of competent jurisdiction and to the proviso
in the preceding sentence) final, and the Trustees shall have no duty to inquire
as to the application by any Holder or Holder Representative of any amounts
distributed to them. By accepting the benefits of this Agreement, the Security
Documents and the Guarantees, each Secured Party and Holder Representative
agrees to act in accordance with this Trust Agreement and not take any action
inconsistent herewith.
SECTION 4
ADDITIONAL SECURED OBLIGATIONS;
ADDITIONAL COLLATERAL; ADDITIONAL
GUARANTEES; CERTAIN DOCUMENTATION REQUIREMENTS
4.1 Delivery of Initial Secured Instruments, Initial Security
Documents and Initial Guarantees. On or before the Effective Date, the Borrower
shall deliver to the Corporate Trustee copies, certified by a Responsible
Officer to be true and complete, of all Initial Secured Instruments, and
executed originals of the Initial Security Documents and Initial Guarantees,
provided that the Corporate Trustee shall not distribute or disclose to any
Holder Representative or Unrepresented Holder any portions of such Initial
Secured Instruments that are reasonably designated in writing by the Borrower as
confidential.
4.2 Additional Secured Obligations. The Borrower may from time
to time designate Permitted Additional Secured Obligations as Secured
Obligations hereunder by (a) delivering to the Corporate Trustee an Additional
Secured Obligations Designation in respect of such Permitted Additional Secured
Obligations describing such Permitted Additional Secured Obligations and
specifying whether such Permitted Additional Secured Obligations shall
constitute Bank Facility Obligations, Vendor Facility Obligations, Public Debt
Obligations, Other Facility Obligations or Hedging Agreement Obligations and
attaching thereto a true and complete copy of all agreements (together with all
schedules, exhibits, annexes, appendices and other attachments thereto),
including but not limited to the applicable Secured Instruments, relating to
such Permitted Additional Secured Obligations to which the Borrower or any
Affiliate thereof is a party, and (b) fulfilling the requirements of subsection
4.8(b) in respect of such Additional Secured Obligations Designation. Upon
completion of the actions described clauses (a) and (b) of the preceding
sentence, but subject to the following sentence, the Permitted Additional
Secured Obligations designated by such Additional Secured Obligations
Designation shall constitute Secured Obligations. Notwithstanding anything
herein to the contrary, in no event shall any indebtedness or other obligations
of the Borrower constitute Additional Secured Obligations hereunder if the
designation of such indebtedness or other obligations as Additional Secured
Obligations would be in contravention of any Secured Instrument, and any
purported designation of any such indebtedness or other obligations of the
Borrower as Additional Secured Obligations in violation of any Secured
Instrument shall be null and void and of no force or effect.
4.3 Notice to Secured Parties of Additional Secured
Obligations. Promptly after the designation of Permitted Additional Secured
Obligations as Secured Obligations pursuant to subsection 4.2, the Corporate
Trustee will deliver a copy of the related Additional Secured Obligations
Designation together with all attachments thereto to each Holder Representative
and Unrepresented Holder; provided, that the Corporate Trustee shall not
distribute or disclose to any Holder Representative or Unrepresented Holder any
portions of such attachments that are reasonably designated in writing by the
Borrower as confidential.
4.4 Additional Collateral. The Borrower may from time to time
provide Additional Collateral to the Trustees by (a) delivering to the Corporate
Trustee an Additional Collateral Designation in respect of such Additional
Collateral and (b) fulfilling the requirements of subsection 4.9(b) in respect
of such Additional Collateral Designation. Upon completion of the actions
described in clauses (a) and (b) of the preceding sentence, the Additional
Collateral designated by such Additional Collateral Designation shall constitute
Collateral for the Secured Obligations.
4.5 Notice to Secured Parties of Additional Collateral.
Promptly after the delivery of Additional Collateral pursuant to subsection 4.4,
the Corporate Trustee will deliver a copy of the related Additional Collateral
Designation to each Holder Representative and Unrepresented Holder.
4.6 Additional Guarantees. The Borrower may from time to time
cause a Subsidiary thereof to provide Additional Guarantees to the Trustees by
(a) delivering to the Corporate Trustee an Additional Guarantee Designation in
respect of each such Additional Guarantee, and (b) fulfilling the requirements
of 4.10(b) in respect of such Additional Guarantee Designation. Upon completion
of the actions described in clauses (a) and (b) of the preceding sentence, the
Additional Guarantee designated by such Additional Guarantee Designation shall
constitute a Guarantee of the Secured Obligations.
4.7 Notice to Secured Parties of Additional Guarantee.
Promptly after the delivery of any Additional Guarantee pursuant to subsection
4.6, the Corporate Trustee will deliver a copy of the related Additional
Guarantee Designation to each Holder Representative and Unrepresented Holder.
4.8 Actions Required with respect to Initial Secured Obliga-
tions and Additional Secured Obligations. (a) Simultaneously with its delivery
to the Corporate Trustee of the Initial Secured Instruments pursuant to sub-
section 4.1, the Borrower shall:
(i) deliver to the Corporate Trustee a certificate of a
Responsible Officer (A) as to the names and signatures of the officers
of Holding who are authorized to execute this Trust Agreement on behalf
of the Borrower and (B) attaching copies of resolutions of the
Partnership Board of Holding authorizing the execution and delivery by
the Borrower of this Trust Agreement, and certifying that such
resolutions are in full force and effect; and
(ii) cause to be delivered to the Corporate Trustee and
each Holder Representative Opinions of Counsel substantially in the
forms of Exhibits D-1, D-2 and D-3.
(b) Simultaneously with its delivery to the Corporate Trustee
of any Additional Secured Obligation Designation pursuant to subsection 4.2, the
Borrower shall:
(i) deliver to the Corporate Trustee copies, certified by
a Responsible Officer to be true and complete, of all Secured
Instruments described in such Additional Secured Obligation
Designation; and
(ii) cause to be delivered to the Corporate Trustee and
each Holder Representative an Opinion of Counsel or Opinions of Counsel
which, taken together, shall contain the opinions set forth in Exhibit
D-4.
Promptly after receipt by the Corporate Trustee of any such documents delivered
by the Borrower pursuant to this paragraph (b), the Corporate Trustee shall at
the expense of the Borrower deliver copies thereof to each Holder Representative
and Unrepresented Holder; provided, that the Corporate Trustee shall not
distribute or disclose to any Holder Representative or Unrepresented Holder any
portions of any Secured Instruments that are reasonably designated in writing by
the Borrower as confidential.
4.9 Actions Required with respect to Security Documents and
Collateral. (a) Simultaneously with its delivery to the Corporate Trustee of the
Initial Security Documents pursuant to subsection 4.1, the Borrower shall:
(i) deliver to the Corporate Trustee a certificate of a
Responsible Officer (A) as to the names and signatures of the
Partnership Board Representatives of Holding or MinorCo, L.P., as the
case may be, who are authorized to execute the Initial Security
Documents on behalf of each grantor party thereto and (B) attaching
copies of resolutions of the Partnership Board of Holding or MinorCo,
L.P., as the case may be, authorizing the execution and delivery of the
Initial Security Document, by each grantor party thereto, and
certifying that such resolutions are in full force and effect;
(ii) deliver to the Corporate Trustee (or its
bailee or agent as designated by the Corporate Trustee) possession of
any Possessory Collateral covered by the Initial Security Documents;
(iii) cause to be filed or recorded in all required filing
or recording offices all financing statements, mortgages and other
instruments necessary to perfect the lien of the Trustees created by
such Initial Security Documents, and deliver to the Corporate Trustee
evidence reasonably satisfactory to it of each such filing and
recording; and
(iv) deliver to the Corporate Trustee and each Holder
Representative Opinions of Counsel substantially in the forms of
Exhibits D-1, D-2 and D-3.
(b) Simultaneously with its delivery to the Corporate Trustee
of any Additional Collateral Designation pursuant to subsection 4.4, the
Borrower shall:
(i) deliver to the Corporate Trustee copies, duly executed
by the grantor parties thereto, of all Additional Security Documents
described in such Additional Collateral Designation; provided that each
such Additional Security Document shall be in substantially the same
form as the corresponding Initial Security Document or, in the event
there is no applicable corresponding Initial Security Document, in form
and substance reasonably satisfactory to the Holder Representatives for
the Initial Bank Credit Facility and the Initial Vendor Credit
Facilities;
(ii) deliver to the Corporate Trustee a certificate of a
Responsible Officer (A) as to the names and signatures of the
Partnership Board Representatives of Holding who are authorized to
execute such Additional Security Documents on behalf of each grantor
party thereto and (B) attaching copies of resolutions of the
Partnership Board of Holding authorizing the execution and delivery by
the Borrower of such Additional Security Document by each grantor party
thereto, and certifying that such resolutions are in full force and
effect;
(iii) deliver to the Corporate Trustee (or its bailee or
agent as designated by the Corporate Trustee) possession of any
Possessory Collateral covered by such Additional Security Documents;
(iv) cause to be filed or recorded in all required filing
or recording offices all financing statements, mortgages and other
instruments necessary to perfect the security interest of the Trustees
created by such Additional Security Documents, and deliver to the
Corporate Trustee customary evidence of each such filing and recording;
and
(v) deliver to the Corporate Trustee and each Holder
Representative an Opinion of Counsel or Opinions of Counsel which,
taken together, shall contain the opinions set forth in Exhibit D-5.
Promptly after receipt by the Corporate Trustee of any such documents delivered
by the Borrower pursuant to this paragraph (b), the Corporate Trustee shall at
the expense of the Borrower deliver copies thereof to each Holder Representative
and Unrepresented Holder.
4.10 Actions Required with respect to Guarantees. (a) Si-
multaneously with its delivery to the Corporate Trustee of the Initial
Guarantees pursuant to subsection 4.1, the Borrower shall:
(i) deliver to the Corporate Trustee a certificate of a
Responsible Officer (A) as to the names and signatures of the
Partnership Board Representatives of Holding who are authorized to
execute the Initial Guarantees and (B) attaching copies of resolutions
of the Partnership Board of Holding authorizing the execution and
delivery by such guarantor of the Initial Guarantee to which it is a
party or evidence of such authorization, and certifying that such
resolutions are in full force and effect; and
(ii) deliver to the Corporate Trustee Opinions of
Counsel substantially in the forms of Exhibits D-1, D-2 and D-3.
(b) Simultaneously with its delivery to the Corporate Trustee
of any Additional Guarantee Designation pursuant to subsection 4.6, the Borrower
shall:
(i) deliver to the Corporate Trustee copies, duly executed
by the grantor parties thereto, of all Additional Guarantees described
in such Additional Guarantee Designation; provided that each such
Additional Guarantee shall be in the form of Exhibit E; and
(ii) deliver to the Corporate Trustee a certificate of a
Responsible Officer (A) as to the names and signatures of the officers
of the relevant guarantors (or, in the case of any guarantor that is a
partnership, the persons authorized to sign on behalf of such guarantor
pursuant to its partnership agreement and applicable law) who are
authorized to execute the Additional Guarantees and (B) attaching
copies of resolutions of the Board of Directors, Partnership Board or
other governing body of each guarantor authorizing the execution and
delivery by such guarantor of the Additional Guarantee to which it is a
party, and certifying that such resolutions are in full force and
effect; and
(iii) deliver to the Corporate Trustee and each Holder
Representative an Opinion of Counsel or Opinions of Counsel which,
taken together, shall contain the opinions set forth in Exhibit D-6.
Promptly after receipt by the Corporate Trustee of any such documents delivered
by the Borrower pursuant to this paragraph (b), the Corporate Trustee shall at
the expense of the Borrower deliver copies thereof to each Holder Representative
and Unrepresented Holder.
4.11 Possessory Collateral. The Borrower shall immediately
deliver to the Corporate Trustee (or an agent or bailee on its behalf designated
by the Corporate Trustee at the sole cost and expense of the Borrower) all
Possessory Collateral that is or may be in the possession of the Borrower or any
of its Subsidiaries, to the extent the Borrower is required to do so by any
Secured Instrument.
SECTION 5
AGREEMENTS WITH TRUSTEES
5.1 Delivery of Amendments to Secured Instruments. The
Borrower shall deliver to the Corporate Trustee (and the Corporate Trustee shall
thereupon promptly deliver to the Holder Representatives and the Unrepresented
Holders), promptly upon the execution thereof, a true and complete copy of all
amendments, supplements or other modifications to any Secured Instrument entered
into after the Effective Date; provided, that the Corporate Trustee shall not
distribute or disclose to any Holder Representative or Unrepresented Holder any
portions of any Secured Instruments (or any amendments, supplements or other
modifications thereto) that are reasonably designated in writing by the Borrower
as confidential.
5.2 Information as to Secured Parties, Holder Representatives,
Unrepresented Holders, Etc.. The Borrower shall deliver to the Corporate Trustee
(and the Corporate Trustee shall thereupon promptly deliver to the Holder
Representatives and the Unrepresented Holders), within 30 days after the
Effective Date, and between May 1 and May 15 and between November 1 and November
15 in each year, and from time to time as may be reasonably requested by the
Corporate Trustee (which request shall be made by the Corporate Trustee at the
reasonable direction of any Secured Party), (i) with respect to all Secured
Obligations other than Hedging Agreement Obligations, a list, setting forth as
of a specified date not more than 30 days prior to the date of such delivery, of
the aggregate unpaid principal or face amount of Secured Obligations outstanding
and the name and address of each Holder Representative and each Unrepresented
Holder and the respective amounts of Secured Obligations attributable to each
and (ii) with respect to Hedging Agreement Obligations, a list specifying for
each Hedging Agreement the notional amount covered thereby and the payment terms
thereof. The Borrower shall deliver to the Corporate Trustee, within 30 days
after the Effective Date, and between May 1 and May 15 and between November 1
and November 15 in each year, and from time to time as may be reasonably
requested by the Corporate Trustee (which request shall be made by the Corporate
Trustee at the reasonable direction of any Secured Party), a list, as of a date
not more than 30 days prior to the date of such list, (i) naming each Secured
Party, (ii) setting forth the amount of Voting Secured Obligations held by each
Secured Party and the amount of commitments to provide credit by such Secured
Party that would constitute Voting Secured Obligations when provided and (iii)
specifying whether any Secured Party or any Person known by the Borrower to be
an Affiliate of any Secured Party is a party to any contract, the rights under
which constitute Collateral.
5.3 Compensation and Expenses. The Borrower agrees to pay to
the Trustees, from time to time upon demand, (i) reasonable compensation (which
shall not be limited by any provision of law in regard to compensation of
fiduciaries or of a trustee of an express trust) for their services hereunder
and under the Guarantees and Security Documents and for administering the Trust
Estate and (ii) all of the fees, costs and expenses of the Trustees (including,
without limitation, the reasonable fees and disbursements of their counsel and
such special counsel as the Trustees shall reasonably elect to retain) (A)
arising in connection with the preparation, execution, delivery, modification,
and termination of or performance under this Trust Agreement, the Guarantees and
the Security Documents or the enforcement of any of the provisions hereof or
thereof, (B) incurred or required to be advanced in connection with the
administration of the Trust Estate, the sale or other disposition of Collateral
pursuant to any Security Document and the preservation, protection, enforcement
or defense of the Trustees' rights under this Trust Agreement, the Guarantees
and the Security Documents and in and to the Collateral and the Trust Estate or
(C) incurred by the Trustees in connection with the removal of either or both of
the Trustees pursuant to subsection 7.7(a). The obligations of the Borrower
under this subsection shall survive the termination of the other provisions of
this Trust Agreement and the resignation or removal of the Trustees.
5.4 Stamp and Other Similar Taxes. The Borrower agrees to
indemnify and hold harmless the Trustees and each Secured Party from any present
or future claim for liability for any stamp or any other similar tax and any
penalties or interest with respect thereto, which may be assessed, levied or
collected by any jurisdiction in connection with this Trust Agreement, any
Security Document, any Guarantee, the Trust Estate or any Collateral. The
obligations of the Borrower under this subsection shall survive the termination
of the other provisions of this Trust Agreement and the resignation or removal
of the Trustees.
5.5 Filing Fees, Excise Taxes, Etc. The Borrower agrees to pay
or to reimburse the Trustees for any and all payments made by the Trustees in
respect of all search, filing, recording and registration fees, taxes, excise
taxes and other similar imposts which may be payable or determined to be payable
in respect of the execution and delivery of this Trust Agreement, the Guarantees
and the Security Documents. The obligations of the Borrower under this
subsection shall survive the termination of the other provisions of this Trust
Agreement and the resignation or removal of the Trustees.
5.6 Indemnification. The Borrower agrees to pay, indemnify,
and hold the Trustees harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, the reasonable fees of counsel) or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Trust Agreement,
the Guarantees and the Security Documents, unless arising from the gross
negligence or willful misconduct of the indemnified party, including, without
limitation, indemnification of the respective Trustees for liabilities of the
respective Trustees for the net amount of taxes (after taking account of any
deduction, credit or other tax reduction or benefit available by reason of the
imposition of any such tax) in any jurisdiction in which the respective Trustees
would not otherwise be subject to tax except by reason of their acting under
this Trust Agreement, any Guarantee or any Security Document (directly or
through agents, separate trustees or co-trustees), provided that such
indemnification for taxes (a) shall apply only (i) in respect of taxes
attributable to the performance of the respective Trustees' obligations as
Trustee hereunder or under any Guarantee or Security Document and (ii) to the
extent that the respective Trustees, using reasonable efforts, shall have been
unable to avoid or minimize the same as contemplated by subsection 7.10 and (b)
shall in no event cover any taxes imposed upon the respective Trustees with
respect to or measured by their net income or profits.
In any suit, proceeding or action brought by the Trustees under or with
respect to any contract, agreement, interest or obligation constituting part of
the Collateral for any sum owing thereunder, or to enforce any provisions
thereof, the Borrower will save, indemnify and keep the Trustees harmless from
and against all expense, loss or damage suffered by reason of any defense,
setoff, counterclaim, recoupment or reduction of liability whatsoever of the
obligor thereunder, arising out of a breach by the Borrower of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligor or its successors from the
Borrower, and all such obligations of the Borrower shall be and remain
enforceable against and only against the Borrower and shall not be enforceable
against the Trustees. The agreements in this subsection shall survive the
termination of the other provisions of this Trust Agreement and the resignation
or removal of the Trustees.
5.7 Trustees' Lien. Notwithstanding anything to the contrary
in this Trust Agreement, as security for the payment of Trustee Fees (i) the
Trustees are hereby granted a first priority lien upon all Collateral and (ii)
the Trustees shall have the right to use and apply any of the funds held by the
Corporate Trustee in the Collateral Account to cover such Trustee Fees.
5.8 Further Assurances. At any time and from time to time,
whether or not a Notice of Enforcement shall be in effect, upon the written
request of the Corporate Trustee (which shall be made only upon the written
direction of the Required Secured Parties), and at the expense of the Borrower,
the Borrower will promptly execute and deliver any and all such further
instruments and documents and take such further action as the Corporate Trustee
has been so directed is necessary or reasonably requested to obtain the full
benefits of this Trust Agreement and the Security Documents and of the rights
and powers herein and therein granted or to cause any assets required under a
Secured Instrument to be subject to a perfected security interest of the
Trustees to be so subject, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the liens and security interests granted
under the Security Documents. The Borrower also hereby authorizes the Corporate
Trustee to sign and to file any such documents, instruments or financing or
continuation statements without the signature of the Borrower to the extent
permitted by applicable law, but in no way is the Corporate Trustee obligated to
do so.
SECTION 6
POSSESSION AND USE OF
COLLATERAL; PARTIAL RELEASES
6.1 Use Prior to Notice of Enforcement. (a) So long as no
Notice of Enforcement is in effect, the Borrower shall have the right (subject
to compliance with subsection 6.1(b)): (i) to remain in possession and retain
exclusive control of the Collateral (except any Possessory Collateral) with
power freely and without hindrance on the part of the Trustees or the Secured
Parties to operate, manage, develop, use and enjoy the Collateral and to receive
the rents, issues, tolls, profits, royalties, revenues and other income thereof,
and (ii) to sell or otherwise dispose of, free and clear of the lien and
security interest created by subsection 5.7 and by the Security Documents, any
Collateral if such sale or other disposition is not prohibited by any Secured
Instrument or Security Document. The Trustees shall have no duty to monitor the
exercise by the Borrower of its rights under this subsection.
(b) If a Notice of Enforcement is in effect, cash Proceeds
received by the Borrower in connection with any Asset Sale in respect of
Collateral shall be promptly deposited in the Enforcement Proceeds Sub-Account.
Any such Proceeds received by the Borrower when a Notice of Enforcement is in
effect shall be held by the Borrower in trust for the Trustees, shall be
segregated from other funds of the Borrower and shall, forthwith upon receipt by
the Borrower, be turned over to the Corporate Trustee, in the same form as
received by the Borrower (duly indorsed to the Corporate Trustee, if required)
for deposit in the Enforcement Proceeds Sub-Account.
6.2 Releases. (a) Asset Sales in respect of Collateral which
are permitted by subsection 6.1 shall not require any written or oral release or
consent of the Trustees. Nevertheless, the Borrower may, upon the delivery to
the Corporate Trustee of a certificate of a Responsible Officer, together with
such other evidence as the Corporate Trustee shall reasonably require, to the
effect that such sale, transfer or disposition is in compliance with the
requirements of such subsection 6.1, that the proceeds of such transaction have
been or will be applied as set forth in the relevant provisions, if any, of each
Secured Instrument and that subsection 6.2(b) has been complied with in full,
request that the Trustees execute and deliver to the Borrower or any purchaser
of Collateral a written release, disclaimer or quitclaim of the Trustees'
interest in any Collateral under subsection 5.7 and under the Security
Documents, and such purchaser shall be entitled to rely conclusively on such
release, disclaimer or quitclaim. Such request shall be in writing, shall
describe the property to be released in reasonable detail, and shall state that
such release is or will be in accordance with all Secured Instruments and shall
be accompanied by a written certificate of a Responsible Officer of the Borrower
directing the Trustees to execute and deliver such release, disclaimer or
quitclaim.
(b) If it is a condition of the release of any Collateral from
the security interest under subsection 5.7 or under any Security Document or
Secured Instrument that the Trustees be granted a first priority lien or
security interest in additional property to be held as Collateral pursuant to
this Trust Agreement, then the Trustees shall be granted such lien or security
interest prior to or concurrently with the delivery to the Borrower of any such
Collateral or any release, disclaimer or quitclaim in connection therewith. The
grant of such lien or security interest shall be effected by (i) delivery to the
Corporate Trustee of an Additional Collateral Designation pursuant to subsection
4.4 and (ii) fulfilling the requirements of subsection 4.9(b) with respect
thereto.
(c) If any Collateral which is being sold or otherwise
disposed of pursuant to this Section 6 is in the possession of the Trustees or
any agent or nominee thereof, the Trustees or such agent or nominee shall upon
the delivery to the Corporate Trustee of a certificate of a Responsible Officer,
together with such other evidence as the Corporate Trustee shall reasonably
require, to the effect that such sale, transfer or disposition is in compliance
with the requirements of such subsection 6.1, that the proceeds of such
transaction have been or will be applied as set forth in the relevant
provisions, if any, of each Secured Instrument and that subsection 6.2(b) has
been complied with in full, release such Collateral to the Borrower in
connection with such Asset Sale.
(d) The notices, statements, directions, evidence and
certificates requested under or required by this subsection (together with any
required certificate of a Responsible Officer under subsection 7.4(e)) shall be
full authority for and direction to the Trustees to execute and deliver the
releases, disclaimers, quitclaims and other instruments referred to in this
subsection, and the Trustees shall promptly do so, subject to the terms of this
subsection 6.2, upon a request therefor. The Trustees in so doing shall have no
liability to any Person other than for its willful misconduct or gross
negligence.
6.3 Insurance and Condemnation Proceeds; Liquidating
Dividends. Any insurance proceeds, any Proceeds from the exercise of rights of
eminent domain or condemnation and any liquidating dividends paid in respect of
Pledged Equity Securities received by the Borrower or the Trustees in respect of
Collateral shall be treated as cash Proceeds received pursuant to subsection
6.1(b) and shall, if a Notice of Enforcement is in effect, be deposited in the
Collateral Account, and if no Notice of Enforcement is in effect, such amounts
shall be delivered to the Borrower unless otherwise required by any Secured
Instrument.
6.4 Purchase of Collateral. Any Secured Party may purchase
Collateral at any public sale of such Collateral pursuant to any of the Security
Documents and, with the consent of the Required Secured Parties and if permitted
by the Secured Instrument governing such Secured Obligation, may make payment on
account of such purchase by using any Secured Obligation then due and payable to
such Secured Party as a credit (up to the amount of such Secured Obligation)
against the purchase price; provided, that in determining the Required Secured
Parties for purposes of this subsection, all Voting Secured Obligations held by
such purchasing Secured Party shall be excluded.
SECTION 7
THE TRUSTEES
7.1 Acceptance of Trust. The Trustees, for themselves and
their respective successors, hereby accept the trusts created by this Trust
Agreement upon the terms and conditions hereof.
7.2 Exculpatory Provisions. (a) The Trustees shall not be
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties herein, all of which are made solely
by the Borrower. The Trustees make no representations as to the value or
condition of the Trust Estate or any part thereof, or as to the title of the
Borrower thereto or as to the security afforded by this Trust Agreement or any
Security Document, or as to the validity, execution (except their own
execution), enforceability, legality or sufficiency of this Trust Agreement, the
Guarantees, the Security Documents or the Secured Obligations, and the Trustees
shall incur no liability or responsibility in respect of any such matters. The
Trustees shall not be responsible for insuring the Collateral or for the payment
of taxes, charges or assessments or discharging of liens upon the Collateral or
otherwise as to the maintenance of the Collateral, except that if the Trustees
take possession of any Collateral, the Trustees shall use reasonable care in the
preservation of the Collateral in their possession.
(b) The Trustees shall not be required to ascertain or inquire
as to the performance by the Borrower or any of its Subsidiaries of any of the
covenants or agreements contained herein or in any Security Document, Guarantee
or Secured Instrument. Whenever it is necessary, or in the opinion of the
Trustees advisable, for the Trustees to ascertain the amount of Secured
Obligations then held by Secured Parties, the Trustees may rely, absent actual
knowledge of a Responsible Trustee Officer to the contrary, on a certificate of
the relevant Holder Representative or Unrepresented Holder, as the case may be,
and, if any Holder Representative or Unrepresented Holder shall not give such
information to the Trustees, it shall not be entitled to receive distributions
hereunder (in which case distributions to those Persons who have supplied such
information to the Corporate Trustee shall be calculated by the Corporate
Trustee using, for those Persons who have not supplied such information, the
list then most recently delivered by the Borrower pursuant to subsection 5.2),
and the amount so calculated to be distributed to the Person who fails to give
such information shall be held in trust for such Person until such Person does
supply such information to the Corporate Trustee, whereupon on the next
Distribution Date the amount distributable to such Person shall be recalculated
using such information and distributed to it.
(c) The Trustees shall be under no obligation or duty to take
any action under this Trust Agreement, any Guarantee or any Security Document if
taking such action (i) would subject the Trustees to a tax in any jurisdiction
where they are not then subject to a tax or (ii) would require the Corporate
Trustee to qualify to do business in any jurisdiction where it is not then so
qualified, unless the Trustees receive security or indemnity satisfactory to
them against such tax (or equivalent liability), or any liability resulting from
such qualification, in each case as results from the taking of such action under
this Trust Agreement, any Guarantee or any Security Document.
(d) Notwithstanding any other provision of this Trust
Agreement, neither the Corporate Trustee nor the Individual Trustee, in its or
his individual capacity, shall be personally liable for any action taken or
omitted to be taken by it or him in accordance with this Trust Agreement, the
Guarantees or the Security Documents except for its or his own gross negligence
or willful misconduct.
(e) The Corporate Trustee shall have the same rights with
respect to any Secured Obligation held by it as any other Secured Party and may
exercise such rights as though it were not the Corporate Trustee hereunder, and
may accept deposits from, lend money to, and generally engage in any kind of
banking or trust business with the Borrower and its affiliates as if it were not
the Corporate Trustee.
7.3 Delegation of Duties. The Trustees may execute any of the
trusts or powers hereof and perform any duty hereunder either directly or by or
through agents or attorneys-in-fact. The Trustees shall be entitled to advice of
counsel concerning all matters pertaining to such trusts, powers and duties. The
Trustees shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by them with reasonable care.
7.4 Reliance by Trustees. (a) Whenever in the administration
of this Trust Agreement, the Guarantees or the Security Documents the Trustees
shall deem it necessary or desirable that a factual matter be proved or
established in connection with the Trustees taking, suffering or omitting any
action hereunder or thereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may be deemed in the absence of
actual knowledge of a Responsible Trustee Officer to the contrary to be
conclusively proved or established by a certificate of a Responsible Officer
delivered to the Corporate Trustee, and such certificate shall be full warrant
to the Trustees for any action taken, suffered or omitted in reliance thereon,
subject, however, to the provisions of subsection 7.5.
(b) The Trustees may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by them hereunder or under any Guarantee or
Security Document in accordance therewith. The Trustees shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement, the Guarantees and the Security Documents from any court of competent
jurisdiction.
(c) The Trustees may rely, and shall be fully protected in
acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document which
they in good faith believe to be genuine and to have been signed or presented by
the proper party or parties or, in the case of cables, telecopies and telexes,
to have been sent by the proper party or parties. In the absence of their gross
negligence or willful misconduct, the Trustees may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustees and conforming to
the requirements of this Trust Agreement.
(d) The Trustees shall not be under any obligation to exercise
any of the rights or powers vested in the Trustees by this Trust Agreement, the
Guarantees and the Security Documents, at the request or direction of the
Required Secured Parties pursuant to this Trust Agreement or otherwise, unless
the Trustees shall have been provided adequate security and indemnity against
the costs, expenses and liabilities which may be incurred by them in compliance
with such request or direction, including such reasonable advances as may be
requested by the Trustees.
(e) Upon any application or demand by the Borrower (except any
such application or demand which is expressly permitted to be made orally) to
the Trustees to take or permit any action under any of the provisions of this
Trust Agreement, any Guarantee or any Security Document, the Borrower shall
furnish to the Corporate Trustee a certificate of a Responsible Officer stating
that all conditions precedent, if any, provided for in this Trust Agreement, in
any relevant Guarantee, Security Document or Secured Instrument relating to the
proposed action have been complied with, and in the case of any such application
or demand as to which the furnishing of any document is specifically required by
any provision of this Trust Agreement, any Guarantee or any Security Document
relating to such particular application or demand, such additional document
shall also be furnished.
7.5 Limitations on Duties of Trustees; Relationship between
Corporate Trustee and Individual Trustee. (a) Unless a Notice of Enforcement is
in effect, the Trustees shall be obligated to perform such duties and only such
duties as are specifically set forth in this Trust Agreement, the Guarantees and
the Security Documents, and no implied covenants or obligations shall be read
into this Trust Agreement, any Guarantee or any Security Document against the
Trustees. If and so long as a Notice of Enforcement is in effect, the Trustees
shall, subject to the provisions of subsection 2.5(b), exercise the rights and
powers vested in them by this Trust Agreement, the Guarantees and the Security
Documents, and shall not be liable with respect to any action taken by them, or
omitted to be taken by them, in accordance with the direction of the Required
Secured Parties.
(b) Except as herein otherwise expressly provided, the
Trustees shall not be under any obligation to take any action which is
discretionary with the Trustees under the provisions hereof or of any Guarantee
or any Security Document except upon the written request of the Required Secured
Parties. The Corporate Trustee shall make available for inspection and copying
by each Holder Representative and each Unrepresented Holder each certificate or
other paper furnished to the Corporate Trustee by the Borrower under or in
respect of this Trust Agreement, any Guarantee or any Security Document or any
of the Collateral.
(c) The Individual Trustee has been joined as such so that if,
by any present or future law in any jurisdiction in which it may be necessary to
perform any act in the execution of the trust hereby created the Corporate
Trustee, or its successor or successors, may be incompetent or unqualified to
act as such Trustee, or would be subject to a tax that would not otherwise be
imposed except for such act, then all the acts required to be performed in such
jurisdiction in the execution of the trusts hereby created, shall and will be
performed by the Individual Trustee, or his successor or successors, acting
alone. Except as it may be deemed necessary for the Individual Trustee solely or
jointly with the Corporate Trustee to execute the trusts hereby created, the
Corporate Trustee, notwithstanding any other provision of this Trust Agreement,
any Guarantee or any Security Document to the contrary, shall solely have and
exercise the powers, and shall be solely charged with the performance of the
duties, of the Trustees provided for herein, in any Guarantee or any Security
Document.
(d) No provision of this Trust Agreement, any Guarantee or any
Security Document shall be deemed to impose any duty or obligation on the
Corporate Trustee to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it, in any jurisdiction in which it shall
be illegal, or in which the Corporate Trustee shall be unqualified or
incompetent, to perform any such act or acts or to exercise any such right,
power, duty or obligation or if such performance or exercise would constitute
doing business by the Corporate Trustee in such jurisdiction or impose a tax on
the Corporate Trustee by reason thereof. The Individual Trustee, to the extent
that he may lawfully so delegate and that the Corporate Trustee is permitted by
law to exercise the power so delegated, and to the extent that such delegation
is not inconsistent with the preceding sentence and does not impair the right,
title and interest of the Individual Trustee under, or the validity of the lien
of, this Trust Agreement and the Security Documents, (i) may delegate to the
Corporate Trustee the exercise of any power, discretionary or otherwise,
conferred by the provisions of this Trust Agreement, any Guarantee or any
Security Document, and (ii) hereby makes, constitutes and appoints the Corporate
Trustee, his true and lawful attorney for him and in his name, or in the name of
the Corporate Trustee, to do and perform all acts necessary or proper in the
execution and prosecution of the duties of the Trustees hereunder in as full and
ample a manner as he might do personally.
7.6 Moneys to be Held in Trust. All moneys received by the
Trustees under or pursuant to any provision of this Trust Agreement, any
Guarantee or any Security Document (except Trustee Fees) shall be held in trust
for the purposes for which they were paid or are held.
7.7 Resignation and Removal of the Trustees. (a) The Trustees
or either of them may at any time, by giving written notice of resignation to
the Borrower, each Holder Representative and each Unrepresented Holder, be
discharged of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of a successor Corporate Trustee and/or
Individual Trustee, as the case may be, (ii) the acceptance of such appointment
by such successor Trustee, (iii) the approval of such successor Trustee
evidenced by one or more instruments signed by the Required Secured Parties and
(iv) in the case of the appointment of a successor Individual Trustee, the
approval of such successor by the Corporate Trustee. If no successor Trustee
shall be appointed and shall have accepted such appointment within 90 days after
the Corporate Trustee or the Individual Trustee gives the aforesaid notice of
resignation, the Corporate Trustee or the resigning Individual Trustee, as the
case may be, or any Secured Party, may apply to any court of competent
jurisdiction to appoint a successor Corporate Trustee or Individual Trustee, as
the case may be, to act until such time, if any, as a successor Corporate
Trustee or Individual Trustee, as the case may be, shall have been appointed as
provided in this subsection. Any successor so appointed by such court shall
immediately and without further act be superseded by any successor Corporate
Trustee or Individual Trustee, as the case may be, appointed as provided in this
subsection.
The Required Secured Parties may, at any time, remove the
Trustees or either of them and appoint a successor Corporate Trustee or
Individual Trustee, as the case may be, such removal to be effective upon (i)
the acceptance of such appointment by the successor, (ii) unless a Notice of
Enforcement is in effect, the written approval of such successor by the
Borrower, such approval not to be unreasonably withheld and (iii) in the case of
the removal of the Individual Trustee, the written approval of the appointment
of the successor Individual Trustee by the Corporate Trustee. The Borrower may,
at any time after the merger of the Corporate Trustee as contemplated by
subsection 7.9, unless a Notice of Enforcement is in effect, remove the
successor Corporate Trustee and appoint another successor Corporate Trustee,
such removal to be effective upon (i) the acceptance of such appointment by the
successor and (ii) the written approval of such successor by the Required
Secured Parties, such approval not to be unreasonably withheld. The Corporate
Trustee may, at any time by giving written notice to the Borrower, each Holder
Representative, each Unrepresented Holder and the Individual Trustee, remove the
Individual Trustee and appoint a successor Individual Trustee, such removal to
be effective upon the acceptance of such appointment by the successor Individual
Trustee and the receipt by the Corporate Trustee of the written approval of such
appointment by the Required Secured Parties. Any Trustee shall be entitled to
Trustee Fees to the extent incurred or arising, or relating to events occurring,
before such resignation or removal.
(b) If at any time the Corporate Trustee or the Individual
Trustee shall resign or be removed or otherwise become incapable of acting, or
if at any time a vacancy shall occur in the office of the Corporate Trustee or
the Individual Trustee for any other cause, a successor Corporate Trustee or
Individual Trustee, as the case may be, may be appointed by the Required Secured
Parties, provided that the appointment of an Individual Trustee shall not be
effective until written approval of such appointment by the Corporate Trustee.
If at any time the Individual Trustee shall resign or be removed or otherwise
become incapable of acting or if at any time a vacancy shall occur in the office
of the Individual Trustee for any other cause, a successor Individual Trustee
may be appointed by the Corporate Trustee, provided that such appointment shall
not be effective until receipt by the Corporate Trustee of written approval of
such appointment by the Required Secured Parties. In either case, the powers,
duties, authority and title of the predecessor Corporate Trustee or Individual
Trustee, as the case may be, shall be terminated and cancelled without procuring
the resignation of such predecessor and without any other formality (except as
may be required by applicable law) than appointment and designation of a
successor in writing duly acknowledged and delivered to the predecessor and the
Borrower. Such appointment and designation shall be full evidence of the right
and authority to make the same and of all the facts therein recited, and this
Trust Agreement, the Guarantees and the Security Documents shall vest in such
successor, without any further act, deed or conveyance, all the estates,
properties, rights, powers, trusts, duties, authority and title of its
predecessor (subject to the lien of such predecessor pursuant to subsection
5.7); but such predecessor shall, nevertheless, on the written request of the
Required Secured Parties, the Borrower, or the successor execute and deliver an
instrument transferring to such successor all the estates, properties, rights,
powers, trusts, duties, authority and title of such predecessor hereunder and
under the Security Documents and shall deliver all Collateral held by it or his
agents to such successor (subject to the lien of such predecessor pursuant to
subsection 5.7). Should any deed, conveyance or other instrument in writing from
the Borrower be required by any successor Corporate Trustee or Individual
Trustee for more fully and certainly vesting in such successor the estates,
properties, rights, powers, trusts, duties, authority and title vested or
intended to be vested in the predecessor Corporate Trustee or Individual
Trustee, as the case may be, any and all such deeds, conveyances and other
instruments in writing shall, on request of such successor, be executed,
acknowledged and delivered by the Borrower. If the Borrower shall not have
executed and delivered any such deed, conveyance or other instrument within 10
days after it received a written request from the successor Corporate Trustee or
Individual Trustee, as the case may be, to do so, or if a Notice of Enforcement
is in effect, the predecessor Corporate Trustee or Individual Trustee, as the
case may be, may execute the same on behalf of the Borrower. The Borrower hereby
appoints any predecessor Corporate Trustee or Individual Trustee, as the case
may be, as its agent and attorney to act for it as provided in the next
preceding sentence.
7.8 Status of Successor Corporate Trustee. Every successor
Corporate Trustee appointed pursuant to subsection 7.7 shall be a bank or trust
company in good standing and having power to act as Corporate Trustee hereunder,
incorporated under the laws of the United States of America or any State thereof
or the District of Columbia and having its principal corporate trust office
within the United States and shall also have capital, surplus and undivided
profits of not less than $500,000,000, if there be such an institution with such
capital, surplus and undivided profits willing, qualified and able to accept the
trust hereunder upon reasonable or customary terms.
7.9 Merger of the Corporate Trustee. Any corporation into
which the Corporate Trustee may be merged, or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Corporate Trustee shall be a party, shall be Corporate Trustee under this Trust
Agreement and the Security Documents without the execution or filing of any
paper or any further act on the part of the parties hereto.
7.10 Co-Trustee; Separate Trustees. (a) If at any time or
times it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which any of the Collateral shall be located, or to avoid any
violation of law or imposition on the Trustees of taxes by such jurisdiction not
otherwise imposed on the Trustees, or the Corporate Trustee shall be advised by
counsel, satisfactory to it, that it is necessary or prudent in the interest of
the Secured Parties, or the Required Secured Parties shall in writing so request
the Corporate Trustee and the Borrower, or the Corporate Trustee shall deem it
desirable for its own protection in the performance of its duties hereunder or
under any Security Document, the Corporate Trustee and, unless a Notice of
Enforcement is in effect, the Borrower shall execute and deliver all instruments
and agreements necessary or proper to constitute another bank or trust company,
or one or more persons approved by the Corporate Trustee and, unless a Notice of
Enforcement is in effect, the Borrower, either to act as co-trustee or
co-trustees of all or any of the Collateral under this Trust Agreement or under
any of the Security Documents, jointly with the Trustees originally named herein
or therein or any successor Trustees, or to act as separate trustee or trustees
of any of the Collateral. If the Borrower shall not have joined in the execution
of such instruments and agreements within 10 days after it receives a written
request from the Corporate Trustee to do so, or if a Notice of Enforcement is in
effect, the Corporate Trustee may act under the foregoing provisions of this
subsection without the concurrence of the Borrower and execute and deliver such
instruments and agreements on behalf of the Borrower. The Borrower hereby
appoints the Corporate Trustee as its agent and attorney to act for it under the
foregoing provisions of this subsection in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than
any successor Corporate Trustee or Individual Trustee appointed pursuant to
subsection 7.7, shall, to the extent permitted by law, be appointed and act and
be such, subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred
upon the Corporate Trustee in respect of the custody, control and
management of moneys, papers or securities shall be exercised solely by
the Corporate Trustee or any agent appointed by the Corporate Trustee;
(ii) all rights, powers, duties and obligations conferred
or imposed upon the Corporate Trustee hereunder and under the relevant
Guarantee or Security Document shall be conferred or imposed and
exercised or performed by the Corporate Trustee and such separate
trustee or separate trustees or co-trustee or co-trustees, jointly, as
shall be provided in the instrument appointing such separate trustee or
separate trustees or co-trustee or co-trustees, except to the extent
that under any law of any jurisdiction in which any particular act or
acts are to be performed the Corporate Trustee shall be incompetent or
unqualified to perform such act or acts, or unless the performance of
such act or acts would result in the imposition of any tax on the
Trustees which would not be imposed absent such joint act or acts, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such separate trustee or separate trustees
or co-trustee or co-trustees;
(iii) no power given hereby or by the relevant Guarantee or
Security Documents to, or which it is provided herein or therein may be
exercised by, any such co-trustee or co-trustees or separate trustee or
separate trustees, shall be exercised hereunder or thereunder by such
co-trustee or co-trustees or separate trustee or separate trustees
except jointly with, or with the consent in writing of, the Corporate
Trustee, anything contained herein to the contrary notwithstanding;
(iv) no trustee hereunder shall be personally li-
able by reason of any act or omission of any other trustee hereunder;
and
(v) the Borrower and the Corporate Trustee, at any time by
an instrument in writing executed by them jointly, may (and, at the
direction of the Required Secured Parties, shall) accept the
resignation of or remove any such separate trustee or co-trustee and,
in that case by an instrument in writing executed by them jointly, may
appoint a successor to such separate trustee or co-trustee, as the case
may be, anything contained herein to the contrary notwithstanding. If
the Borrower shall not have joined in the execution of any such
instrument within 10 days after it receives a written request from the
Corporate Trustee to do so, or if a Notice of Enforcement is in effect,
the Corporate Trustee shall have the power to (and, at the direction of
the Required Secured Parties, shall) accept the resignation of or
remove any such separate trustee or co-trustee and to appoint a
successor without the concurrence of the Borrower, the Borrower hereby
appointing the Corporate Trustee its agent and attorney to act for it
in such connection in such contingency. If the Corporate Trustee shall
have appointed a separate trustee or separate trustees or co-trustee or
co-trustees as above provided, the Corporate Trustee may at any time,
by an instrument in writing, accept the resignation of or remove any
such separate trustee or co-trustee and the successor to any such
separate trustee or co-trustee shall be appointed by the Borrower and
the Corporate Trustee, or by the Corporate Trustee alone pursuant to
this subsection.
7.11 Treatment of Payee or Indorsee by Trustees;
Representatives of Secured Parties. (a) The Trustees may treat the registered
holder or, if none, the payee or indorsee of any promissory note or debenture
evidencing a Secured Obligation as the absolute owner thereof for all purposes
and shall not be affected by any notice to the contrary, whether such promissory
note or debenture shall be past due or not.
(b) Any Person which shall be designated as the duly
authorized representative of one or more Secured Parties to act as such in
connection with any matters pertaining to this Trust Agreement or the Collateral
shall present to the Corporate Trustee such documents, including, without
limitation, Opinions of Counsel, as the Corporate Trustee may reasonably
require, to demonstrate to the Corporate Trustee the authority of such Person to
act as the representative of such Secured Parties (it being understood that the
authority of the Bank Facility Agents, Vendor Facility Agents, Other Facility
Agents and Public Debt Trustees shall be demonstrated by their inclusion as such
in the lists from time to time delivered pursuant to subsection 5.2.)
(c) Whenever this Trust Agreement requires or permits any
Secured Party or the Required Secured Parties to sign any instrument, give any
notice or take any action, the Holder Representative or Holder Representatives
on behalf of such Secured Party or Required Secured Parties may sign such
instrument, give such notice or take such action with the same effect as if done
directly by such Secured Party or Required Secured Parties.
7.12 Notices to Corporate Trustee under Security Documents. In
the event that the Corporate Trustee receives any notice from the grantor under
any Security Document, the Corporate Trustee shall promptly transmit a copy
thereof to the Borrower, each Holder Representative and each Unrepresented
Holder, and the Corporate Trustee shall take such action in respect of such
notice which is permitted by this Trust Agreement as shall be directed by the
Required Secured Parties.
SECTION 8
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of the Corporate Trustee.
The Corporate Trustee hereby represents and warrants that:
(a) it is a national banking association duly organized,
validly existing and in good standing under the laws of the United States and
has the corporate power and authority and the legal right to execute and
deliver, and to perform its obligations under, this Trust Agreement and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Trust Agreement; and
(b) this Trust Agreement has been duly executed by the
Corporate Trustee and constitutes a legal, valid and binding obligation of the
Corporate Trustee, enforceable in accordance with its terms, subject to the
effects of insolvency, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally, general
equitable principles and an implied covenant of good faith and fair dealing.
8.2 Representations and Warranties of the Borrower. The
Borrower hereby represents and warrants that:
(a) it is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the partnership power and authority and the legal right to execute and deliver,
and to perform its obligations under, this Trust Agreement and has taken all
necessary partnership action to authorize the execution, delivery and
performance of this Trust Agreement;
(b) this Trust Agreement has been duly executed and delivered
by the Borrower and constitutes a legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally, general
equitable principles and implied covenant of good faith and fair dealing;
(c) the execution, delivery and performance by the Borrower of
this Trust Agreement will not violate, result in a default under, or give rise
to any acceleration, prepayment, repurchase or redemption obligation of the
Borrower or any Subsidiary which is a party to any Guarantee or Security
Document as a result of (i) the partnership agreement of the Borrower or any
such Subsidiary or (ii) any law, rule or regulation binding on the Borrower or
any such Subsidiary or any contractual obligation of the Borrower and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such law, rule or
regulation or contractual obligation, other than the Liens created by the
Security Documents; and
(d) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or governmental authority and no consent of
any other Person is required of the Borrower in connection with the execution,
delivery, performance, validity or enforceability of this Trust Agreement,
except for any of the foregoing that have been obtained and are in full force
and effect.
SECTION 9
MISCELLANEOUS
9.1 Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications given to the Borrower, the Trustees,
the Holder Representatives or the Unrepresented Holders shall be given in
writing or by facsimile transmission and shall be deemed to have been duly given
when personally delivered or when duly deposited in the mails, registered or
certified mail postage prepaid, or if transmitted by facsimile transmission,
when received in legible form, addressed (i) if to the Borrower or the Trustees,
to such party at its address specified on the signature pages hereof or any
other address which such party shall have specified as its address for the
purpose of communications hereunder, by notice given in accordance with this
subsection 9.1 to the party sending such communication or (ii) if to any of the
Holder Representatives or Unrepresented Holder, to it at its address specified
from time to time in the list provided by the Borrower to the Corporate Trustee
pursuant to subsection 5.2; provided that any notice, request or demand to the
Trustees shall not be effective until received by the Corporate Trustee in the
corporate trust division at the office designated by it pursuant to this
subsection 9.1.
9.2 No Waivers. No failure on the part of the Trustees, any
co-trustee, any separate trustee, or any Secured Party to exercise, no course of
dealing with respect to, and no delay in exercising, any right, power or
privilege under this Trust Agreement, any Guarantee or any Security Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
9.3 Amendments, Supplements, Waivers and Releases. (a) With
the written consent of the Required Secured Parties, the Trustees and the
Borrower may, from time to time, enter into written agreements supplemental
hereto or to any Guarantee or Security Document for the purpose of adding to, or
waiving any provisions of, this Trust Agreement, any Guarantee or any Security
Document or changing in any manner the rights of the Trustees, the Secured
Parties or the Borrower hereunder or thereunder or releasing any of the
Collateral or any Guarantee; provided that no such supplemental agreement shall
(i) (A) amend, modify or waive any provision of this subsection 9.3, (B) amend,
modify or waive any provision of subsections 2.10 or 3.4, or the definitions of
Secured Obligations, Voting Secured Obligations, Bank Facility Obligations,
Vendor Facility Obligations, Public Debt Obligations, Other Facility
Obligations, Hedging Agreement Obligations, Secured Parties or Required Secured
Parties, or (C) release any Guarantee, terminate any Security Document or
release all or any material part of the Collateral, unless the Trustees have
received a certificate of a Responsible Officer of the Borrower, and an Opinion
of Counsel, in each case to the effect that such action does not violate any
Secured Instrument or (ii) amend, modify or waive any provision of Section 5 or
7 or alter the duties, rights or obligations of the Trustees hereunder or under
the Guarantees or the Security Documents without the written consent of the
Trustees. Any such supplemental agreement shall be binding upon the Borrower,
each Holder Representative, the Secured Parties and the Trustees and their
respective successors and assigns.
(b) Without the consent of any Holder Representative or any Secured
Party, the Trustees and the Borrower and, in the case of any modification of any
Guarantee, the guarantor party to such Guarantee, at any time and from time to
time, may enter into one or more agreements supplemental hereto, to any
Guarantee or to any Security Document, in form satisfactory to the Corporate
Trustee, (i) to add to the covenants of the Borrower, any guarantor party to any
Guarantee or any grantor party to any Security Document, for the benefit of the
Secured Parties or to surrender any right or power herein conferred upon the
Borrower; or (ii) to cure any ambiguity, to correct or supplement any provision
herein or in any Guarantee or Security Document which may be defective or
inconsistent with any other provision herein or therein, or to make any other
provision with respect to matters or questions arising hereunder which shall not
be inconsistent with any provision hereof; provided that any such action
contemplated by this clause (ii) shall not, and could not reasonably be expected
to, adversely affect the interests of any Secured Party (as certified by a
Responsible Officer pursuant to paragraph (c) below).
(c) The Trustees shall not enter into any agreement supplemental hereto
pursuant to subsection 9.3(a) or (b) unless the Trustees have received a
certificate of a Responsible Officer of the Borrower, and an Opinion of Counsel,
in each case to the effect that such action does not violate this Trust
Agreement.
(d) The Corporate Trustee shall at the expense of the Borrower promptly
deliver to each Holder Representative and Unrepresented Holder copies of all
amendments, waivers or supplements to this Trust Agreement, any Guarantee or any
Security Document that may be entered into pursuant to subsection 9.3(a) or (b).
9.4 Headings. The table of contents and the headings of
Sections and subsections have been included herein for convenience only and
should not be considered in interpreting this Trust Agreement.
9.5 Severability. Any provision of this Trust Agreement which
is prohibited or unenforceable in any jurisdiction shall not invalidate 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.
9.6 Successors and Assigns. This Trust Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and shall
inure to the benefit of each of the Secured Parties and their respective
successors and assigns, and nothing herein is intended or shall be construed to
give any other Person any right, remedy or claim under, to or in respect of this
Trust Agreement, any Guarantee or any Collateral.
9.7 Currency Conversions. In calculating the amount of Secured
Obligations for any purpose hereunder, including, without limitation, voting or
distribution purposes, the amount of any Secured Obligation which is denominated
in a currency other than Dollars shall be converted into Dollars at the spot
rate for purchasing Dollars with such currency determined by the Corporate
Trustee to be in effect in the New York foreign exchange market at the close of
business on the Business Day prior to the date on which such calculation is to
be made.
9.8 GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
9.9 No Recourse. No claim may be made under this Trust
Agreement against any of the direct or indirect partners of the Borrower for any
obligations of the Borrower hereunder; provided that this subsection 9.9 shall
not in any way limit the Trustees' right to make any claim against any such
direct or indirect partner under any contract that any such party may have
entered into with the Borrower to the extent that the rights under such contract
constitute Collateral.
9.10 Submission to Jurisdiction; Waivers. The Borrower and
each Trustee hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such party
at its address set forth on the signature pages hereof or at such other address
of which the parties hereto shall have been notified pursuant hereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
9.11 Counterparts. This Trust Agreement may be signed in any
number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument.
9.12 Release of Liens; Guarantees. (a) Upon (i) receipt by the
Corporate Trustee of a request by the Borrower to release the liens created by
subsection 5.7 and by the Security Documents in respect of any Collateral
(including, without limitation, any Collateral that is the subject of any Asset
Sale), together with a certificate of a Responsible Officer and an Opinion of
Counsel, in each case to the effect that such release will not violate any
Secured Instrument and (ii) in the case of a release of all the Collateral,
payment in full of all Trustee Fees, the security interests created by
subsection 5.7 and by the Security Documents shall terminate forthwith, and all
right, title and interest of the Trustees in and to such Collateral shall revert
to the Borrower, its successors and assigns.
(b) Upon receipt by the Corporate Trustee of a request by the
Borrower to release any Guarantee, together with a certificate of a Responsible
Officer and an Opinion of Counsel, in each case to the effect that such release
will not violate any Secured Instrument, such Guarantee shall be immediately
released.
(c) Upon the termination of the Trustees' security interest
and the release of any Collateral in accordance with subsection 9.12(a), the
Trustees will promptly, at the Borrower's written request and expense, (i)
execute and deliver to the Borrower such documents as the Borrower shall
reasonably request to evidence the termination of such security interest or the
release of such Collateral and (ii) in the case of a release of all Collateral,
deliver or cause to be delivered to the Borrower all property of the Borrower
then held by the Trustees or any agent thereof.
(d) This Trust Agreement shall terminate when (i) the
Guarantees have terminated, (ii) the Liens and security interests granted under
the Security Documents have terminated and (iii) the Collateral has been
released and the Secured Obligations have been indefeasibly paid and performed
in full and all commitments to extend credit under any Secured Instrument that
when extended would constitute Secured Obligations shall have been terminated;
provided that the provisions of subsections 5.3, 5.4, 5.5 and 5.6 shall not be
affected by any such termination.
(e) The Corporate Trustee shall promptly give notice to each
Holder Representative and Unrepresented Holder of any release of Collateral or a
Guarantee pursuant to this subsection.
9.13 Complete Agreement. This Trust Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior representations, negotiations, writings,
memoranda and agreements.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed (by their respective authorized officers or
representatives in the case of parties other than the Individual Trustee) as of
the day and year first written above.
SPRINT SPECTRUM L.P.
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By: _ /s/ Robert E. Sleet, Jr.
Title: Treasurer
Address for Notices:
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-3550
With a copy to:
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
<PAGE>
FIRST UNION NATIONAL BANK
By: /s/ James J. Waters___
Title: Vice President
Address for Notices:
765 Broad Street
Newark, New Jersey 07102
Attention: Corporate Trust
Department
Fax: (201) 430-2117
[SEAL]
Attest:
/s/ Melissa Matthew
Title: Vice President
_/s/ Kenneth D. Benton__________
KENNETH D. BENTON
Address for Notices:
c/o First Union National Bank
765 Broad Street
Newark, New Jersey 07102
Attention: Kenneth D. Benton
Fax: (201) 430-2117
Witness:
/s/ Linda J. Schneider
Name:
Linda J. Schneider
Corporate Trust Officer
<PAGE>
BORROWER
STATE OF NEW YORK)
:ss:
COUNTY OF NEW YORK)
On the 2 day of October 1996, before me personally came Robert E. Sleet, Jr., to
me personally known and known to me to be the person described in and who
executed the foregoing instrument as Treasurer of Sprint Spectrum Holding
Company, L.P., who, being by me duly sworn, did depose and say that he resides
at Kansas City, Missouri, that he is the Treasurer of Sprint Spectrum Holding
Company, L.P., one of the persons described in and which executed the foregoing
instrument; that said instrument was signed on behalf of said partnership by
order of its general partners; that he signed his name thereto by like order;
and that he acknowledged said instrument to be the free act and deed of said
partnership.
[NOTARIAL SEAL] /s/ Nadia Guerra
<PAGE>
CORPORATE TRUSTEE
STATE OF NEW JERSEY)
) :ss:
COUNTY OF ESSEX )
On the 2nd day of October, 1996, before me personally came James J. Waters and
Melissa Matthews, to me personally known and known to me to be the persons
described in and who executed the foregoing instrument as Vice President, and
Vice President, respectively, of First Union National Bank, by me duly sworn,
did depose and say that they reside at 206 Grandview Dr., Neshanic Station, NJ
and 62 S. Pierson Rd., Maplewood, NJ, respectively; that they are Vice President
and Vice President, respectively, of First Union National Bank, one of the
corporations described in and which executed the foregoing instrument; that they
know the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that said instrument was signed and sealed on behalf of
said corporation in accordance with its by-laws; that they signed their names
thereto by like order; and that they acknowledged said instrument to be the free
act and deed of said corporation.
[NOTARIAL SEAL] /s/ Richard Perez
<PAGE>
INDIVIDUAL TRUSTEE
STATE OF NEW JERSEY)
) :ss:
COUNTY OF ESSEX )
On the 2nd day of October, 1996, before me personally came Kenneth D. Benton, to
me personally known who, being by me duly sworn, did depose and say that he
resides in Ridgewood, New Jersey; and that said instrument is his free act and
deed.
[NOTARIAL SEAL] /s/ Richard Perez
<PAGE>
SCHEDULE I
INITIAL SECURED OBLIGATIONS
A. Bank Facility Obligations under the following Bank Credit Facility:
1. Credit Agreement, dated as of October 2, 1996, as amended,
among the Borrower, the lenders from time to time parties
thereto and The Chase Manhattan Bank, as Administrative Agent.
B. Vendor Facility Obligations under the following Vendor Credit Facili-
ties:
1. Credit Agreement, dated as of October 2, 1996, as amended,
among the Borrower, Lucent Technologies Inc., the other
lenders from time to time parties thereto and Lucent
Technologies Inc., as Agent.
2. Credit Agreement, dated as of October 2, 1996, as amended,
among the Borrower, Northern Telecom Inc., the other lenders
from time to time parties thereto and the agent named therein.
<PAGE>
SCHEDULE II
INITIAL GUARANTEES
1. Guarantee, dated as of October 2, 1996, by WirelessCo, L.P.
2. Guarantee, dated as of October 2, 1996, by Sprint Spectrum Equipment
Company, L.P.
3. Guarantee, dated as of October 2, 1996, by Sprint Spectrum Realty
Company, L.P.
<PAGE>
SCHEDULE III
INITIAL SECURITY DOCUMENTS
1. Pledge Agreement, dated as of October 2, 1996, made by each of Sprint
Spectrum L.P. and MinorCo, L.P. in favor of the Trustees.
2. Security Agreement, dated as of October 2, 1996, made by Sprint Spec-
trum L.P. in favor of the Trustees.
3. Security Agreement, dated as of October 2, 1996, made by Sprint Spec-
trum Equipment Company, L.P. in favor of the Trustees.
<PAGE>
TRUST AGREEMENT
among
SPRINT SPECTRUM L.P.
FIRST UNION NATIONAL BANK,
as Corporate Trustee
and
KENNETH D. BENTON,
as Individual Trustee
Dated as of October 2, 1996
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE..................................................................... 1
DECLARATION OF TRUST......................................................... 1
SECTION 1 DEFINITIONS....................................................... 2
1.1 Defined Terms............................................... 2
1.2 Other Definitional Provisions............................... 10
SECTION 2 ENFORCEMENT OF SECURITY INTERESTS AND GUARANTEES.................. 11
2.1 Notice of Enforcement....................................... 11
2.2 General Authority of the Trustees over the Collateral and
Guarantees............................................... 11
2.3 Right to Initiate Judicial Proceedings...................... 12
2.4 Right to Appoint a Receiver................................. 12
2.5 Exercise of Powers; Instructions of Required Secured
Parties.................................................. 13
2.6 Remedies Not Exclusive...................................... 13
2.7 Waiver and Estoppel......................................... 14
2.8 Limitation on Trustees' Duty in Respect of Collateral....... 15
2.9 Limitation by Law........................................... 15
2.10 Rights of Secured Parties Under Secured Instruments......... 15
2.11 Records..................................................... 15
2.12 Notices..................................................... 15
SECTION 3 COLLATERAL ACCOUNT; DISTRIBUTIONS................................. 16
3.1 The Collateral Account...................................... 16
3.2 Control of Collateral Account............................... 17
3.3 Investment of Funds Deposited in Collateral Account......... 17
3.4 Application of Moneys....................................... 18
3.5 Amounts Held for Contingent Secured Obligations............. 20
3.6 Application of Moneys Distributable to Holder
Representatives.......................................... 20
3.7 Trustees' Calculations...................................... 20
SECTION 4 ADDITIONAL SECURED OBLIGATIONS; ADDITIONAL COLLATERAL; ADDITIONAL
GUARANTEES; CERTAIN DOCUMENTATION REQUIREMENTS................ 21
4.1 Delivery of Initial Secured Instruments, Initial Security
Documents and Initial Guarantees......................... 21
4.2 Additional Secured Obligations.............................. 21
4.3 Notice to Secured Parties of Additional Secured Obligations. 22
4.4 Additional Collateral....................................... 22
4.5 Notice to Secured Parties of Additional Collateral.......... 22
4.6 Additional Guarantees....................................... 22
4.7 Notice to Secured Parties of Additional Guarantee........... 22
4.8 Actions Required with respect to Initial Secured Obligations
and Additional Secured Obligations....................... 23
4.9 Actions Required with respect to Security Documents and
Collateral............................................... 23
4.10 Actions Required with respect to Guarantees................. 25
4.11 Possessory Collateral....................................... 26
SECTION 5 AGREEMENTS WITH TRUSTEES.......................................... 26
5.1 Delivery of Amendments to Secured Instruments............... 26
5.2 Information as to Secured Parties, Holder Representatives,
Unrepresented Holders, Etc............................... 26
5.3 Compensation and Expenses................................... 27
5.4 Stamp and Other Similar Taxes............................... 27
5.5 Filing Fees, Excise Taxes, Etc.............................. 27
5.6 Indemnification............................................. 27
5.7 Trustees' Lien.............................................. 28
5.8 Further Assurances.......................................... 28
SECTION 6 POSSESSION AND USE OF COLLATERAL; PARTIAL RELEASES............... 29
6.1 Use Prior to Notice of Enforcement.......................... 29
6.2 Releases.................................................... 29
6.3 Insurance and Condemnation Proceeds; Liquidating Dividends.. 30
6.4 Purchase of Collateral...................................... 30
SECTION 7 THE TRUSTEES...................................................... 31
7.1 Acceptance of Trust......................................... 31
7.2 Exculpatory Provisions...................................... 31
7.3 Delegation of Duties........................................ 32
7.4 Reliance by Trustees........................................ 32
7.5 Limitations on Duties of Trustees; Relationship between
Corporate Trustee and Individual Trustee................. 33
7.6 Moneys to be Held in Trust.................................. 34
7.7 Resignation and Removal of the Trustees..................... 34
7.8 Status of Successor Corporate Trustee....................... 36
7.9 Merger of the Corporate Trustee............................. 36
7.10 Co-Trustee; Separate Trustees............................... 36
7.11 Treatment of Payee or Indorsee by Trustees; Representatives
of Secured Parties....................................... 38
7.12 Notices to Corporate Trustee under Security Documents....... 38
SECTION 8 REPRESENTATIONS AND WARRANTIES.................................... 39
8.1 Representations and Warranties of the Corporate Trustee..... 39
8.2 Representations and Warranties of the Borrower.............. 39
SECTION 9 MISCELLANEOUS..................................................... 40
9.1 Notices..................................................... 40
9.2 No Waivers.................................................. 40
9.3 Amendments, Supplements, Waivers and Releases............... 40
9.4 Headings.................................................... 41
9.5 Severability................................................ 41
9.6 Successors and Assigns...................................... 41
9.7 Currency Conversions........................................ 41
9.8 GOVERNING LAW............................................... 42
9.9 No Recourse................................................. 42
9.10 Submission to Jurisdiction; Waivers......................... 42
9.11 Counterparts................................................ 42
9.12 Release of Liens; Guarantees................................ 42
9.13 Complete Agreement.......................................... 43
<PAGE>
SCHEDULES:
SCHEDULE I Initial Secured Obligations
SCHEDULE II Initial Guarantees
SCHEDULE III Initial Security Documents
EXHIBITS:
EXHIBIT A Form of Additional Collateral Designation
EXHIBIT B Form of Additional Guarantee Designation
EXHIBIT C Form of Additional Secured Obligations Designation
EXHIBIT D-1 Form of Opinion of Charles R. Wunsch, Esq.
EXHIBIT D-2 Form of Opinion of Simpson Thacher & Bartlett
EXHIBIT D-3 Form of Opinion of Morrison & Foerster LLP
EXHIBIT D-4 Matters to be Covered by Opinion Pursuant to Subsection
4.8(b)(ii)
EXHIBIT D-5 Matters to be Covered by Opinion Pursuant to Subsection
4.9(b)(v)
EXHIBIT D-6 Matters to be Covered by Opinion Pursuant to Subsection
4.10(b)(iii)
EXHIBIT E Form of Guarantee EXHIBIT F Form of Borrower
Security Agreement
EXHIBIT G Form of Pledge Agreement EXHIBIT H Form of Subsidiary
Security Agreement
Exhibit 10.32
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of October 2, 1996, made by each of
SPRINT SPECTRUM L.P. a Delaware limited partnership (the "Borrower"), and
MINORCO, L.P., a Delaware limited partnership ("MinorCo") (each of the Borrower
and MinorCo, a "Pledgor", and together, the "Pledgors"), in favor of the
Trustees under the Trust Agreement described below for the benefit of the
Secured Parties that are the beneficiaries of the Trust Estate under the Trust
Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have severally agreed to make
loans and other extensions of credit to the Borrower;
WHEREAS, the Borrower and MinorCo are engaged in related
businesses, and MinorCo will derive substantial direct and indirect benefit from
the making of the loans to the Borrower; and
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to make their respective loans and other extensions of credit to
the Borrower that the Pledgors shall have executed and delivered this Agreement
to the Trustees;
NOW, THEREFORE, each of the Pledgors hereby agrees with the
Trustees for the benefit of the Secured Parties, as follows:
1. Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amend-
ed, supplemented or otherwise modified from time to time.
"Code": the Uniform Commercial Code from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.
"Collateral Account": as defined in the Trust Agreement.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or anY
of its property is bound.
"Corporate Trustee": First Union National Bank, as Corporate
Trustee under the Trust Agreement, and its successors pursuant to the
Trust Agreement.
"FCC": the Federal Communications Commission, and any
successor Governmental Authority performing the functions of the Feder-
al Communications Commission referred to in Section 21.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Individual Trustee": Kenneth D. Benton, as Individual
Trustee under the Trust Agreement, and his successors pursuant to the
Trust Agreement.
"Issuer": each of WirelessCo, L.P., Sprint Spectrum Equipment
Company, L.P. and Sprint Spectrum Realty Company, L.P., each a Delaware
limited partnership.
"Lien": any mortgage, pledge, hypothecation, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), charge or
other security interest of any kind or nature whatsoever.
"Notice of Enforcement": as defined in the Trust Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Partnership Agreement": with respect to each Issuer, the
Amended and Restated Agreement of Limited Partnership of such Issuer,
among the Borrower, as the general partner, and MinorCo, as the limited
partner, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Code and, in any event, shall include, without limita-
tion, all dividends or other income from the Collateral, collections
thereon or distributions with respect thereto.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Secured Instrument": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Secured Obligation Commitments": all commitments by Secured
Parties to make loans or extend other credit to the Borrower that, when
so made or extended, would constitute Secured Obligations.
"Secured Parties": as defined in the Trust Agreement.
"Securities Act": the Securities Act of 1933, as amended.
"Trust Agreement": the Trust Agreement, dated as of October
2, 1996, among the Borrower and the Trustees, as the same may be
amended, supplemented or otherwise modified from time to time.
"Trustees": the collective reference to the Corporate Trustee
and the Individual Trustee.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
paragraph, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of all the Secured Obligations and to
induce the Secured Parties to extend credit to the Borrower, each Pledgor hereby
pledges, assigns and transfers to the Trustees, for the benefit of the Secured
Parties, and grants to the Trustees, for the benefit of the Secured Parties, a
security interest in, all of the following property now owned or at any time
hereafter acquired by such Pledgor or in which such Pledgor now has or at any
time in the future may acquire any right, title or interest (collectively, the
"Collateral"):
(a) all present and future rights of such Pledgor to receive
any payment of money or other distribution or payment arising out of or
in connection with the limited partnership or general partnership
interests in each Issuer and the rights of such Pledgor under the
Partnership Agreement relating to such Issuer, including, without
limitation, all of such Pledgor's right, title and interest in, to and
under all (i) distributions of profits and income of such Issuer, (ii)
capital distributions from such Issuer, (iii) distributions of cash
flow by such Issuer and (iv) in the case of a general partnership
interest, all rights, title and interest as a general partner to
participate in the management or operation of such Issuer;
(b) such Pledgor's interest in each Issuer and all of such
Pledgor's rights under the Partnership Agreement relating to such
Issuer and applicable law in its capacity as a limited partner or
general partner, as the case may be (including, without limitation, all
of such Pledgor's right, title and interest as a limited or general
partner to reports, accounting, information and voting and any rights
of such Pledgor to participate in certain aspects of the operation or
management of such Issuer (in accordance with such Partnership
Agreement and with applicable Requirements of Law) and all of the
Pledgor's right, title and interest to property, assets, partnership
interests and distributions under such Partnership Agreement) but not
any of its obligations as a general or limited partner of such Issuer
(unless the Corporate Trustee or any Secured Party shall become a
general or limited partner of such Issuer as a result of the exercise
of remedies pursuant to the terms hereof);
(c) any other rights of such Pledgor to receive any
distributions or other payments of any kind whatsoever from or in
respect of each Issuer, whether any of such distributions consist of
money or property; and
(_) (d) to the extent not otherwise included, all Proceeds,
products and accessions of any and all of the foregoing, including
without limitation, all Proceeds of any liquidation upon the
dissolution of each Issuer and the winding up of its affairs.
This Agreement shall create a continuing security interest in the Collateral for
all the Secured Obligations, now or hereafter existing or arising, which shall
remain in effect until the Secured Obligations shall have been paid in full and
all Secured Obligation Commitments have been terminated.
3. Registration of Pledge. Concurrently with the execution and
delivery of this Agreement, each Pledgor shall execute and deliver to each
Issuer instructions to register, substantially in form of Exhibit A. Each
Pledgor shall cause each Issuer to deliver to the Corporate Trustee an initial
transaction statement, substantially in the form of Exhibit B, confirming that
such Issuer has registered the pledge by each Pledgor effected by this Agreement
on its books.
4. Representations and Warranties. Each Pledgor represents
and warrants that:
(a) such Pledgor is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has the partnership power and authority to execute and
deliver, to perform its obligations under, and to grant the security
interest in the Collateral pursuant to, this Agreement, and has taken
all necessary partnership action to authorize its execution, delivery
and performance of, and grant of the security interest in the
Collateral pursuant to, this Agreement;
(b) this Agreement constitutes a legal, valid and binding
obligation of such Pledgor, enforceable in accordance with its terms,
subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing;
(c) the execution, delivery and performance of this Agreement
will not violate in any material respect, result in a default under, or
give rise to any acceleration, prepayment, repurchase or redemption
obligation of such Pledgor as a result of, any provision of any
Requirement of Law or (after giving effect to any relevant waivers that
have been obtained and are in full force and effect) Contractual
Obligation of such Pledgor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of such
Pledgor pursuant to any Requirement of Law or any Contractual
Obligation of such Pledgor, except the security interest created by
this Agreement;
(d) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person, is required in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, other than any of the foregoing that have been obtained or
made and are in full force and effect;
(e) as of the date hereof, the Collateral listed on Schedule 1
constitutes all interests in each Issuer owned by such Pledgor and all
issued and outstanding equity interests in each Issuer;
(f) such Pledgor is the sole legal, record and beneficial
owner of the Collateral listed with such Pledgor's name on Schedule I,
subject to no Lien except the Lien created by this Agreement;
(g) this Agreement is effective to create in favor of the
Trustees a legal, valid and (assuming the filing of UCC-1 financing
statements with the Secretary of State of Missouri and the Recorder of
Deeds Office, Jackson County, Missouri and the taking of the actions
described in Section 3) enforceable perfected first priority security
interest in the Collateral, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing;
(h) the Partnership Agreement constitutes a legal, valid and
binding obligation of such Pledgor, enforceable against such Pledgor in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and an
implied covenant of good faith and fair dealing; and
(i) such Pledgor's chief executive office and chief place of
business is located at either 4717 Grand Avenue, Kansas City, Missouri
64112 or 4900 Main Street, Kansas City, Missouri 64112.
5. Covenants. Each Pledgor covenants and agrees with the
Trustees and the Secured Parties that, from and after the date of this Agreement
until this Agreement is terminated and the security interests created hereby are
released:
(a) If such Pledgor shall, as a result of its ownership of the
Collateral, become entitled to receive or shall receive any option or rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any of Collateral owned by it, or otherwise in respect thereof, such Pledgor
shall accept the same as the agent of the Trustees and the Secured Parties, hold
the same (to the extent they are evidenced by a certificated security or other
instrument) in trust for the Trustees and the Secured Parties and deliver the
same (to the extent so evidenced) forthwith to the Corporate Trustee in the
exact form received, duly indorsed by such Pledgor to the Corporate Trustee, if
required, to be held by the Corporate Trustee, subject to the terms hereof, as
additional collateral security for the Secured Obligations. Any sums paid upon
or in respect of the Collateral upon the liquidation or dissolution of the
Issuer shall be paid over to the Corporate Trustee to be held by it under the
Trust Agreement as additional collateral security for the Secured Obligations,
and in case any distribution of capital shall be made on or in respect of the
Collateral or any property shall be distributed upon or with respect to the
Collateral pursuant to the recapitalization or reclassification of the capital
of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall be delivered to the Corporate Trustee to be held by it under
the Trust Agreement as additional collateral security for the Secured
Obligations. If any sums of money or property so paid or distributed in respect
of the Collateral shall be received by either Pledgor, such Pledgor shall, until
such money or property is paid or delivered to the Corporate Trustee, hold such
money or property in trust for the Secured Parties, segregated from other funds
of such Pledgor, as additional collateral security for the Secured Obligations.
(b) Without the prior written consent of the Corporate
Trustee, such Pledgor will not (i) consent to, vote in favor of or otherwise
permit any amendment to the Partnership Agreement that would violate the
provisions of any Secured Instrument, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral, (iii)
vote to enable, or take any action to permit, any Issuer to issue any
partnership interests or other Capital Stock (as defined in any Secured
Instrument) or (iv) create, incur or permit to exist any Lien on any of the
Collateral, except for the security interest created by this Agreement.
(c) Such Pledgor shall maintain the security interest created
by this Agreement as a first priority perfected security interest and shall
defend such security interest against claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of the
Corporate Trustee, and at the sole expense of such Pledgor, such Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Corporate Trustee may reasonably request for
the purposes of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to the Corporate Trustee, duly
endorsed in a manner reasonably satisfactory to the Corporate Trustee, to be
held as Collateral pursuant to this Agreement. Such Pledgor will not change the
location of its chief executive office or change its name, identity or corporate
structure to such an extent that any financing statement filed in connection
with this Agreement would become seriously misleading, unless, in each such
case, it shall have given the Corporate Trustee 30 days prior written notice and
caused to be filed such financing statement amendments, or new financing
statements, as shall be required to continue the perfection and priority of the
Lien on the Collateral created in favor of the Trustees hereunder.
(d) Such Pledgor shall pay, and save the Corporate Trustee and
the Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to this
Agreement or any of the Collateral.
6. Distributions; Voting Rights. Unless a Notice of
Enforcement shall be in effect and the Corporate Trustee shall have given notice
to the Pledgors of the Corporate Trustee's intent to exercise its corresponding
rights pursuant to Section 7, the Pledgors shall be permitted to receive all
distributions from any Issuer made pursuant to the Partnership Agreement
relating to such Issuer and to exercise all voting and other rights with respect
to the Collateral; provided, however, that no vote will be cast or partnership
right exercised or other action taken which would impair the Collateral or which
would violate any provision of the Trust Agreement or any Secured Instrument.
7. Rights of the Secured Parties and the Corporate Trustee.
(a) All money Proceeds received by the Corporate Trustee hereunder shall be held
by the Corporate Trustee for the benefit of the Secured Parties in the
Collateral Account. All Proceeds while held by the Corporate Trustee in the
Collateral Account (or by the Borrower or a Pledgor in trust for the Corporate
Trustee and the Secured Parties) shall continue to be held as collateral
security for all the Secured Obligations and shall not constitute payment
thereof until applied as provided in paragraph 8(a).
(b) If a Notice of Enforcement shall be in effect and the
Corporate Trustee shall give notice to the Pledgors of its intent to exercise
such rights, then, (i) the Corporate Trustee shall have the right to receive any
and all distributions paid to the Pledgors in respect of the Collateral and make
application thereof to the Secured Obligations in accordance with the Trust
Agreement, and (ii) the Collateral shall be registered in the name of the
Corporate Trustee or its nominee, and the Corporate Trustee or its nominee may
thereafter exercise (A) all voting, partnership and other rights pertaining to
the Collateral and (B) any and all rights of conversion, exchange, subscription
and any other rights, privileges or options pertaining to the Collateral as if
it were the absolute owner thereof, all without liability except to account for
property actually received by it, but the Corporate Trustee shall have no duty
to the Pledgors to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
8. Remedies. (a) If a Notice of Enforcement shall be in
effect, at any time at the Corporate Trustee's election, the Corporate Trustee
may apply all or any part of Proceeds held in the Collateral Account in payment
of the Secured Obligations in the manner specified by the Trust Agreement.
(b) If a Notice of Enforcement shall be in effect, the
Corporate Trustee, on behalf of the Secured Parties, may exercise, in addition
to all other rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Corporate Trustee, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Pledgors or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby expressly waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Corporate Trustee or any Secured Party
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Corporate Trustee or any Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted
by law and by the Trust Agreement, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Pledgor, which right or equity is hereby waived or
released. The Corporate Trustee shall apply any Proceeds from time to time held
by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale in the manner specified by the Trust
Agreement. To the extent permitted by applicable law, the Pledgors waive all
claims, damages and demands it may acquire against the Corporate Trustee or any
Secured Party arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
9. Private Sale. The Pledgors recognize that the Corporate
Trustee may be unable to effect a public sale of any or all the Collateral, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. The Pledgors acknowledge and agree that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agree that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Corporate Trustee shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit any Issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if such Issuer would agree to do so. Each Pledgor
further agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make such sale or sales of all or any portion of the
Pledged Stock pursuant to this subsection valid and binding and in compliance
with all other applicable Requirements of Law. Each Pledgor further agrees that
a breach of any of the covenants contained in this subsection will cause
irreparable injury to the Trustees and the Secured Parties, that the Trustees
and the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this subsection
shall be specifically enforceable against such Pledgor, and such Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Notice of Enforcement
is effective under the Trust Agreement.
10. Irrevocable Authorization and Instruction to Issuer. The
Pledgors hereby authorize and instruct the Issuers to comply with any
instruction received by it from the Corporate Trustee in writing that (a) states
that a Notice of Enforcement is in effect and (b) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
the Pledgors, and the Pledgors agree that the Issuer shall be fully protected in
so complying.
11. Corporate Trustee's Appointment as Attorney-in-Fact. (a)
The Pledgors hereby irrevocably constitute and appoint the Corporate Trustee and
any officer or agent of the Corporate Trustee, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Pledgors and in the name of the Pledgors
or in the Corporate Trustee's own name, from time to time in the Corporate
Trustee's discretion for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Pledgors hereby ratify all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
paragraph 11.(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
12. Duty of Corporate Trustee. The Corporate Trustee's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Corporate Trustee deals with
similar securities and property for its own account, except that the Corporate
Trustee shall have no obligation to invest funds held in any Collateral Account
and may hold the same as demand deposits. Neither the Trustees, any Secured
Party nor any of their respective directors, officers, employees or agents shall
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgors or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Corporate Trustee
and the Secured Parties hereunder are solely to protect the Corporate Trustee's
and the Secured Parties' interests in the Collateral and shall not impose any
duty upon the Corporate Trustee or any Secured Party to exercise any such
powers. The Corporate Trustee and the Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Pledgors for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
13. Execution of Financing Statements. Pursuant to Section
9-402 of the Code, the Pledgors authorize the Trustees to file financing
statements with respect to the Collateral without the signature of the Pledgors
in such form and in such filing offices as the Trustees reasonably determine to
be appropriate to perfect the security interests of the Trustees under this
Agreement; provided, that the Corporate Trustee shall not be required to take
any such action unless directed to do so by a Holder Representative or the
Required Secured Parties. A carbon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
14. Authority of Corporate Trustee. The Pledgors acknowledge
that the rights and responsibilities of the Trustees under this Agreement with
respect to any action taken by the Trustees or the exercise or non-exercise by
the Trustees of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement shall,
as between the Trustees and the Secured Parties, be governed by the Trust
Agreement and by such other agreements with respect thereto as may exist from
time to time among the Secured Parties and the Trustees, but, as between the
Trustees and the Pledgors, the Trustees shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and neither the Pledgors nor the Issuer shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
15. Notices. All notices, requests and demands to or upon
the Trustees or the Pledgors to be effective shall be in writing (or by fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (a) when delivered by hand or (b) if given by mail,
five days after being deposited in the mails by certified mail, return receipt
requested, or (c) if by fax or similar electronic transfer, when received in
legible form addressed to the Trustees, c/o the Corporate Trustee at its address
or transmission number for notices provided in subsection 9.1 of the Trust
Agreement or the Pledgors at 4717 Grand Avenue, Kansas City, Missouri 64112,
Attention: Treasurer, Fax: (816) 559-1490. The Corporate Trustee and the
Pledgors may change their addresses and transmission numbers for notices by
giving notice thereof to the other parties in the manner provided in this Sec-
tion.
16. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgors and the Corporate Trustee, provided that any provision of this
Agreement may be waived by the Corporate Trustee and the Secured Parties in a
letter or agreement executed by the Corporate Trustee or by facsimile
transmission from the Corporate Trustee.
(b) Neither the Corporate Trustee nor any Secured Party shall
by any act (except by a written instrument pursuant to paragraph 17.(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of the
Corporate Trustee or any Secured Party, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Corporate Trustee or any Secured Party of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Corporate Trustee or such Secured Party would otherwise have on any future
occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
18. Section Headings. The section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Pledgors and shall inure to the
benefit of the Trustees and the Secured Parties and their successors and
assigns.
20. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
21. Approvals. Any provision contained herein to the contrary
notwithstanding, no action shall be taken hereunder by the Trustees with respect
to the Collateral unless and until all applicable requirements of the FCC, if
any, under the Communications Act of 1934, as amended, applicable state laws and
the respective rules and regulations thereunder and thereof, as well as any
other laws, rules and regulations of any other Governmental Authority applicable
to or having jurisdiction over any Pledgor, have in the reasonable judgment of
the Corporate Trustee been fully satisfied to the extent necessary to take such
action and there have been obtained such consents, approvals and authorizations,
as may be required to be obtained from the FCC, applicable state and local
regulatory authorities and municipalities and any other Governmental Authority
under the terms of any franchise, license or similar operating right held by any
Pledgor in order to take such action. It is the intention of the parties hereto
that the pledge in favor of the Trustees of the Collateral, the grant of a
security interest to the Trustees in the Collateral, and all rights and remedies
by the Trustees with respect to the Collateral, shall in all relevant aspects be
subject to and governed by said statutes, rules and regulations and that nothing
in this Agreement shall be construed to diminish the control exercised by any
Pledgor, except in accordance with the provisions of such statutory requirements
and rules and regulations. By its acceptance of this Agreement, the Corporate
Trustee agrees that the Trustees will not take any action pursuant to this
Agreement which constitutes or results in any assignment of a license or
franchise or any change of control over the communications properties owned and
operated by any Pledgor, if such assignment of license or franchise or change of
control would, under then existing law or under any franchise, require the prior
approval of a Governmental Authority, without first obtaining such approval.
Upon the exercise by the Corporate Trustee of any power, right, privilege or
remedy pursuant to this Agreement which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, each
Pledgor will execute and deliver, or will cause the execution and delivery of,
all applications, certificates, instruments and other documents and papers that
the Corporate Trustee may reasonably require in order for such governmental
consent, approval, recording, qualification or authorization to be obtained.
Each Pledgor agrees to use its best efforts to cause such governmental consents,
approvals, recordings, qualifications and authorizations to be forthcoming.
22. No-Recourse. No claim may be made under this Agreement
against any of the direct or indirect partners of any Pledgor for the payment of
any amounts payable hereunder, it being understood that this Section 22 shall in
no way limit any claims of any Trustee or Secured Party other than under this
Agreement.
23. Submission to Jurisdiction; Waivers. Each Pledgor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Pledgor at its address set forth under its signature below or at such other
address of which the Trustees shall have been notified pursuant hereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
24. The Trustees. Notwithstanding anything herein to the
contrary, the obligations of the Trustees hereunder are subject to the rights,
privileges and protections of the Trust Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.
SPRINT SPECTRUM L.P.,
General Partner
By: Sprint Spectrum Holding
Company, L.P.,
its general partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
MINORCO, L.P.,
Limited Partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
<PAGE>
SCHEDULE 1
To Pledge Agreement
DESCRIPTION OF COLLATERAL
Issuer Partner Type of Percentage
Interest of Profits
WirelessCo, L.P. Sprint Spectrum L.P. General 98.9824095%
WirelessCo, L.P. MinorCo, L.P. Limited 1.0175905%
Sprint Spectrum Equipment Sprint Spectrum L.P. General 99.0%
Company, L.P.
Sprint Spectrum Equipment MinorCo, L.P. Limited 1.0%
Company, L.P.
Sprint Spectrum Realty Sprint Spectrum L.P. General 99.0%
Company, L.P.
Sprint Spectrum Realty MinorCo, L.P. Limited 1.0%
Company, L.P.
<PAGE>
EXHIBIT A
To Pledge Agreement
FORM OF
INSTRUCTION TO REGISTER PLEDGE
October , 1996
[WirelessCo, L.P.]
[Sprint Spectrum Equipment Company, L.P.]
[Sprint Spectrum Realty Company, L.P.]
4717 Grand Avenue
Kansas City, Missouri 64112
Attention: Treasurer
Ladies and Gentlemen:
The undersigned, a [general] [limited] partner of [WirelessCo.,
L.P.] [Sprint Spectrum Equipment Company, L.P.] [Sprint Spectrum Realty Company,
L.P.], a Delaware limited partnership (the "Issuer"), hereby instructs the
Issuer to register on the books of the Issuer the pledge of the undersigned's
[general] [limited] partnership interest in favor of the Corporate Trustee
hereinafter referred to pursuant to the Pledge Agreement, dated as of October 2,
1996, made by the undersigned and the other pledgor named therein in favor of
First Union National Bank, as Corporate Trustee, and Kenneth D.
Benton, as Individual Trustee.
Very truly yours,
[SPRINT SPECTRUM L.P.,
General Partner
By: Sprint Spectrum
Holding Company, L.P.,
its general partner
By:
Title:]
[MINORCO, L.P.,
Limited Partner
By:
Title:]
<PAGE>
EXHIBIT B
To Pledge Agreement
FORM OF
INITIAL TRANSACTION STATEMENT
October , 1996
To: First Union National Bank, as Corporate Trustee
765 Broad Street
Newark, New Jersey 07102
Attention: Corporate Trust Department
This statement is to advise you that pledges of the
following uncertificated securities issued by the undersigned have been
registered in the name of First Union National Bank, as Corporate Trustee, as
follows:
1. Uncertificated Securities:
The entire [general] [limited] partnership interest of [Sprint
Spectrum L.P.] [MinorCo, L.P.] in the undersigned partnership.
2. Registered Owner:
[Sprint Spectrum L.P.]
[MinorCo, L.P.]
4717 Grand Avenue
Kansas City, Missouri 64112
3. Registered Pledgee:
First Union National Bank, as Corporate Trustee
765 Broad Street
Newark, New Jersey 07102
Taxpayer Identification Number: 22-1147033
4. There are no liens or restrictions of the undersigned part-
nership and no adverse claims to which such uncertificated security
is or may be subject known to the undersigned partnership.
<PAGE>
5. The pledge was registered on October , 1996.
Very truly yours,
[WIRELESSCO, L.P.]
[SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P.]
[SPRINT SPECTRUM REALTY COMPANY,
L.P.]
By:Sprint Spectrum L.P.,
its general partner
By:Sprint Spectrum Holding
Company, L.P.,
its general partner
By:______________________________
Title:
cc: [Sprint Spectrum L.P.]
[MinorCo, L.P.]
Exhibit 10.33
BORROWER SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 2, 1996, made by
SPRINT SPECTRUM L.P., a Delaware limited partnership (the "Borrower"), in favor
of the Trustees under the Trust Agreement described below for the benefit of the
Secured Parties that are the beneficiaries of the Trust Estate under the Trust
Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have severally agreed to make
loans and other extensions of credit to the Borrower; and
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to make their respective loans and other extensions of credit to
the Borrower that the Borrower shall have executed and delivered this Security
Agreement to the Trustees;
NOW, THEREFORE, the Borrower hereby agrees with the Trustees
for the benefit of the Secured Parties as follows:
I. Defined Terms.
A. Definitions. 1. Unless otherwise defined herein, and the
following terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, Documents, Farm Products, General Intangibles
(including but not limited to contract rights of the Borrower, whether or not
under Contracts), Instruments and Proceeds. Other terms used but not defined
herein shall have the meanings ascribed thereto in the Trust Agreement.
2. As used in this Agreement, the following terms shall have
the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, supplemented or otherwise
modified from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.
"Contracts": the rights under, and the benefits of, the
contracts and agreements listed in Schedule 1, as the same may be
amended, supplemented or otherwise modified from time to time,
including, in each case, without limitation, (a) all rights of the
Borrower to receive moneys due and to become due to it thereunder or in
connection therewith, (b) all rights of the Borrower to damages arising
out of or for breach or default in respect thereof, (c) all rights of
the Borrower to exercise all remedies thereunder, (d) all rights of the
Borrower to receive and compel performance thereunder, (e) all rights
of the Borrower to enter into any waiver or amendment thereof and (f)
all other rights thereunder.
"Contractual Obligations": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Corporate Trustee": First Union National Bank, as Corporate
Trustee under the Trust Agreement, and its successors pursuant to the
Trust Agreement.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Individual Trustee": Kenneth D. Benton, as Individual
Trustee under the Trust Agreement, and his successors pursuant to the
Trust Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), charge or
other security interest of any kind or nature whatsoever.
"Notice of Enforcement": as defined in the Trust Agreement.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 2, and (b) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in
Schedule 2.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Borrower of any right to manufac-
ture, use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule 2.
"Permitted Lien": with respect to any Collateral, any Lien
permitted to exist on such Collateral without violating any Secured In-
strument.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Pledge Agreements": the collective reference to (a) the
Pledge Agreement, dated as of October 2, 1996, made by the Borrower and
MinorCo, L.P. in favor of the Trustees and (b) any other pledge agree-
ment made from time to time by the Borrower and MinorCo, L.P. in favor
of the Trustees.
"Receivable": any right to payment whether or not such right
is evidenced by an Instrument or Chattel Paper and whether or not it
has been earned by performance (including, without limitation, any
Account).
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Secured Obligations": as defined in the Trust Agreement.
"Secured Obligation Commitments": all commitments by Secured
Parties to make loans or extend other credit to the Borrower that, when
so made or extended, would constitute Secured Obligations.
"Secured Parties": as defined in the Trust Agreement.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 3, and (b) all renewals thereof.
"Trademark License": any agreement, written or oral, provid-
ing for the grant by or to the Borrower of any right to use any Trade-
mark, including, without limitation, any thereof referred to in
Schedule 3.
"Trust Agreement": the Trust Agreement, dated as of October
2, 1996, among the Borrower, the Corporate Trustee and the Individual
Trustee, as the same may be amended, supplemented or otherwise modified
from time to time.
"Trust Estate": as defined in the Trust Agreement.
"Trustees": the collective reference to the Corporate Trustee
and the Individual Trustee.
"Voting Secured Obligations": as defined in the Trust Agree-
ment.
B. Other Definitional Provisions. 1. The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, subsection, Annex and Schedule
references are to this Agreement unless otherwise specified.
2. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
II. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations, the Borrower
hereby grants to the Trustees for the benefit of the Secured Parties a security
interest in all of the following property now owned or at any time hereafter
acquired by the Borrower or in which the Borrower now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"):
1. all Accounts;
2. all Chattel Paper;
3. all Contracts;
4. all Documents;
5. all General Intangibles;
6. all Instruments;
7. all Patents;
8. all Patent Licenses;
9. all Trademarks;
10. all Trademark Licenses;
11. all books and records pertaining to the Collateral; and
12. to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
provided, however, that the Collateral shall not include the Collateral under
(and as defined in) the Pledge Agreements.
III. Representations and Warranties. The Borrower hereby
represents and warrants that:
A. Power and Authority. The Borrower has the partnership power
and authority and the legal right to execute and deliver, to perform its
obligations under, and to grant the security interest in the Collateral pursuant
to, this Agreement and has taken all necessary partnership action to authorize
its execution, delivery and performance of, and grant of the security interest
in the Collateral pursuant to, this Agreement.
B. No Other Liens. Except for the security interest granted to
the Trustees pursuant to this Agreement and Permitted Liens, the Collateral is
free and clear of any Liens. No security agreement, financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Corporate Trustee pursuant to this Agreement or as have been filed or recorded
in connection with Permitted Liens.
C. Enforceable Obligation; Perfected, First Priority Security
Interests. This Agreement constitutes a legal, valid and binding obligation of
the Borrower, enforceable in accordance with its terms, subject to the effects
of bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. The security interests granted
pursuant to this Agreement 1. upon completion of the filings and other actions
specified on Schedule 4 will constitute perfected security interests in the
Collateral as collateral security for the Secured Obligations and 2. are prior
to all other Liens on the Collateral in existence on the date hereof except for
any Permitted Liens that may be permitted to have priority pursuant to the
Secured Instruments.
D. No Violation. The execution, delivery and performance of
this Agreement will not violate, result in a default under, or give rise to any
acceleration, prepayment, repurchase or redemption obligation of the Borrower or
any of its Restricted Subsidiaries as a result of, any Requirement of Law or
Contractual Obligation of the Borrower or of any of its Restricted Subsidiaries
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation, except the security interests
created hereby.
E. No Consents Required. No consent or authorization of,
filing with, or other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person, is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
other than any of the foregoing that have been obtained or made and are in full
force and effect.
F. Chief Executive Office. The Borrower's chief executive
office is located at either 4717 Grand Avenue, Kansas City, Missouri 64112 or
4900 Main Street, Kansas City, Missouri 64112.
G. Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
H. Accounts. No Receivable of the Borrower is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Agent, except to
the extent that such Instruments or Chattel Paper would not be required by any
Secured Instrument to constitute Collateral. The Borrower's records concerning
the Accounts will be maintained in the state in which its chief executive office
is located or in such other state in which the Borrower has filed any UCC
financing statements required to perfect the Trustee's security interest in such
Accounts.
IV. Covenants. The Borrower covenants and agrees that, from
and after the date of this Agreement until the Secured Obligations shall have
been paid and performed in full and the Secured Obligation Commitments are ter-
minated:
A. Limitation on Dispositions and Liens; Further Documenta-
tion. 1. The Borrower will not sell, transfer, lease or otherwise dispose of
any of the Collateral, except as permitted by the Secured Instruments.
2. The Borrower will not create, incur or permit to exist any
Lien or claim on or to the Collateral, other than the security interests created
hereby and the Permitted Liens, will maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in subsection 3.3 and will defend such security interest against
claims and demands of all Persons whomsoever.
3. At any time and from time to time, at the sole expense of
the Borrower, the Borrower will promptly and duly execute and deliver such
further instruments and documents and take such further actions as may be
necessary or as the Corporate Trustee may reasonably request (provided that the
Corporate Trustee shall not be required to make any such request unless given
direction to do so by a Holder Representative or the Required Secured Parties)
for the purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the Uniform Commercial
Code in effect in any jurisdiction with respect to the security interests
created hereby.
B. Delivery of Instruments. If any Collateral is or shall be
or become evidenced by any Instrument or Chattel Paper, such Instrument or
Chattel Paper shall be immediately delivered to the Corporate Trustee, duly
indorsed in a manner satisfactory to the Corporate Trustee, to be held by it
under the Trust Agreement as collateral for the Secured Obligations, except to
the extent that such Instrument or Chattel Paper would not be required by any
Secured Instrument to constitute Collateral.
C. Changes in Locations, Name, etc. The Borrower will not
change the location of its chief executive office from that specified in
subsection 3.6 or change its name, identity or corporate structure to such an
extent that any financing statement filed in connection with this Agreement
would become seriously misleading, unless, in each such case, it shall have
given the Corporate Trustee at least 30 days prior written notice thereof and
caused to be filed such financing statement amendments, or new financing
statements, as shall be required to continue the perfection and priority of the
Trustees' security interest hereunder.
D. Notices. The Borrower will advise the Corporate Trustee
promptly upon becoming aware thereof, in reasonable detail, at its address for
notices provided for in the Trust Agreement, of any Lien (other than security
interests created hereby or Permitted Liens) on any of the Collateral.
E. Indemnification. The Borrower agrees to pay, and to hold
the Trustees and the Secured Parties harmless from, any and all liabilities,
costs and expenses (including, without limitation, reasonable legal fees and
expenses) (i) with respect to, or resulting from any delay in paying, any and
all excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral, (ii) with respect to, or
resulting from, any delay in complying with any Requirement of Law applicable to
any of the Collateral or (iii) in connection with any of the transactions
contemplated by this Security Agreement. In any suit, proceeding or action
brought by any Trustee under any Account or Contract for any sum owing
thereunder, or to enforce any provisions of any Account or Contract, the
Borrower will indemnify and hold the Trustees and the Secured Parties harmless
from and against all expenses, loss or damage suffered by reason of any defense,
setoff counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by the Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from the Borrower.
F. Maintenance of Records. The Borrower will keep and maintain
at its own cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Accounts. The Borrower will mark its books and
records pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby.
G. Right of Inspection. The Trustees shall at all times have
full and free access during normal business hours and upon reasonable notice to
all the books, correspondence and records of the Borrower relating to the
Collateral, and the Trustees and their representatives may examine the same,
take extracts therefrom and make photocopies thereof, and the Borrower agrees to
render to the Trustees, at the Borrower's cost and expenses, such clerical and
other assistance as may be reasonably requested with regard thereto.
H. Payment of Taxes and Other Accounts. The Borrower will pay
promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of its income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral which have a
reasonable likelihood of adverse determination, except that no such charge need
be paid if (i) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein and (iii) such charge is adequately reserved against on
the Borrower's books in accordance with GAAP.
I. Liens on Collateral. The Borrower will defend the
Collateral against, and will take such other action as is necessary to remove,
any Lien or claim on or to the Collateral, other than the Liens created hereby
and other than Permitted Liens, and will defend the right, title and interest of
the Trustees and the Secured Parties in and to any of the Collateral against the
claims and demands of all Persons whomsoever.
J. Further Identification of Collateral. The Borrower will
furnish to the Trustees from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Corporate Trustee may reasonably request, all in
reasonable detail.
K. Acknowledgements and Consents. The Borrower will deliver
to the Trustees on the date hereof Acknowledgement and Consents, substantially
in the form of Annex I, in respect of the Sprint Trademark Agreement, the Lucen
Agreement and the Nortel Agreement (as such terms are defined in Schedule 1),
duly executed by Sprint Communications Company, L.P., Lucent Technologies Inc.
and Northern Telecom Inc., respectively.
V. Provisions Relating to Receivables.
A. Borrower Remains Liable under Receivables. Anything herein
to the contrary notwithstanding, the Borrower shall remain liable under each of
the Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Receivable. Neither the Trustees nor any
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by the Trustees or any Secured Party of any payment relating to
such Receivable pursuant hereto, nor shall the Trustees or any Secured Party be
obligated in any manner to perform any of the obligations of the Borrower under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
under any Receivable (or any agreement giving rise thereto), to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
B. Representations and Warranties. No Receivable shall be
evidenced by any Instrument which is not delivered to the Corporate Trustee in
the manner required by subsection 4.2.
C. Covenants. Other than in the ordinary course of business,
the Borrower will not (i) grant any extension of the time of payment of any Re-
ceivable, (ii) compromise or settle any Receivable for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the payment
of any Receivable, (iv) allow any credit or discount whatsoever on any Receiv-
able, or (v) amend, supplement or modify any Receivable in any manner that could
adversely affect the value of any material amount of Receivables.
D. Notice of Enforcement. If a Notice of Enforcement is in
effect, the Borrower shall, if so directed by the Corporate Trustee (who shall
give such direction only if required to do so by the Required Secured Parties)
or if an Automatic Acceleration Event (as defined below) has occurred:
1. instruct all account debtors and parties to Contracts to
make all payments in respect of Receivables to the Enforcement Proceeds
Sub-Account; and the Borrower shall have the right and privilege to and
may and will, and the Trustees hereby authorize the Borrower to,
enforce, compromise and collect amounts owing on the Receivables, for
the benefit of the Trustees and the Secured Parties, at the expense of
the Borrower, provided that such right and privilege shall
automatically be suspended upon the occurrence of any event that by the
terms of any Secured Instrument or Secured Instruments pursuant to
which more than 50% of the aggregate amount of the Voting Secured
Obligations are outstanding would result in any amounts in respect of
any outstanding extensions of credit under such Secured Instrument
becoming due and payable prior to their stated maturity automatically
and without notice or other action by the Secured Party or Secured
Parties under such Secured Instrument (an "Automatic Acceleration
Event"); and
2. with respect to any Proceeds that are not deposited
directly into the Enforcement Proceeds Sub-Account in accordance with
paragraph (a) above, when collected by the Borrower, whether consisting
of cash, checks, notes, drafts, bills of exchange, money orders,
commercial paper of any kind whatsoever or other documents, received in
payment of any Receivable or otherwise shall be immediately turned over
by the Borrower to the Corporate Trustee, in precisely the form
received, except for its endorsement when required, and until turned
over shall be deemed to be held in trust by the Borrower for and as the
Corporate Trustee's property, and shall be held separately from the
Borrower's other funds. Such Proceeds shall continue to be collateral
security for all of the Secured Obligations and shall be applied in
accordance with the Trust Agreement.
VI. Provisions Relating to Contracts.
A. Borrower Remains Liable under Contracts. Anything herein to
the contrary notwithstanding, the Borrower shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. Neither the Trustees nor any Secured
Party shall have any obligation or liability under any Contract by reason of or
arising out of this Agreement or the receipt by the Trustees or any such Secured
Party of any payment or performance relating to such Contract pursuant hereto,
nor shall the Trustees or any Secured Party be obligated in any manner to
perform any of the obligations of the Borrower under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Contract, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.
B. Communication With Contracting Parties. The Corporate
Trustee in its own name or in the name of others may at any time when a Notice
of Enforcement is in effect communicate with parties to the Contracts and with
account debtors to verify with them to the Corporate Trustee's satisfaction the
existence, amount and terms of any Contracts or Receivables.
C. Covenants. 1. The Borrower will perform and comply in
all material respects with all its obligations under all material Contracts.
2. Except to the extent that no Secured Instrument would be
violated thereby, the Borrower will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral.
D. Notice of Enforcement. At any time that a Notice of
Enforcement is in effect, the Corporate Trustee may at its option (but shall not
be obligated to do so in the absence of a direction from the Required Secured
Parties), without notice to or demand upon the Borrower (both of which are
hereby waived for the purpose of this subsection), in addition to all other
rights and remedies provided under the Trust Agreement, this Agreement and the
other Security Documents, in its own name or the name of the Borrower, perform,
demand, exercise any of the rights of the Borrower under, agree to waive, amend
or modify any provision of, sue upon or otherwise enforce the Contracts to the
same extent as if the Corporate Trustee were the party named in the Contract,
and exercise all other rights of the Borrower under the Contracts in such manner
as it may determine.
VII. Provisions Relating to Copyrights, Patents and Trade-
marks.
A. Representations and Warranties. The Borrower represents
and warrants that: 1. The Borrower does not own any material copyrights or
copyright licenses in its own name as of the date hereof. Schedule 2 includes
all Patents and Patent Licenses owned by the Borrower in its own name on the
date hereof.
2. Schedule 3 includes all Trademarks and Trademark Licenses
owned by the Borrower in its own name on the date hereof.
3. To the best of the Borrower's knowledge, each Patent and
Trademark is on the date hereof valid, subsisting, unexpired, enforceable and
has not been abandoned.
4. Except as set forth in either Schedule 2 or Schedule 3,
none of such Patents and Trademarks is on the date hereof the subject of any
licensing or franchise agreement.
5. No action or proceeding is pending on the date hereof
a. seeking to limit, cancel or question the validity of any material Patent or
Trademark owned by or licensed to the Borrower, or b. which, if adversely deter-
mined, would have a material adverse effect on the value of any material Patent
or Trademark.
B. Covenants. 1. The Borrower (either itself or through li-
censees) will (i) continue to use each material Trademark in order to maintain
such Trademark in full force free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered under
such Trademark, (iii) employ such Trademark with the appropriate notice of regi-
stration, (iv) not adopt or use any mark which is confusingly similar or a
colorable imitation of such Trademark unless the Trustees shall obtain a per-
fected security interest in such mark pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated.
2. The Borrower will not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
3. The Borrower will notify the Corporate Trustee promptly if
it knows, or has reason to know, that any application or registration relating
to any material Patent or material Trademark may become abandoned or dedicated,
or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office or any court or tribunal in any
country) regarding the Borrower's ownership of any material Patent or material
Trademark or its right to register the same or to keep and maintain the same.
4. Whenever the Borrower, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any material Patent or material Trademark with the United States
Patent and Trademark Office, the Borrower shall report such filing to the
Corporate Trustee and the Secured Parties within thirty Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of any
Holder Representative (transmitted through the Corporate Trustee), the Borrower
shall execute and deliver any and all agreements, instruments, documents, and
papers as such Holder Representative may reasonably request to evidence the
Trustees' and the Secured Parties' security interest in any material Patent or
material Trademark and the goodwill and general intangibles of the Borrower
relating thereto or represented thereby, and the Borrower hereby constitutes
each Trustee as its attorney-in-fact to execute and file all such writings for
the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable until the
Secured Obligations are paid in full and the Secured Obligation Commitments are
terminated.
5. The Borrower will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Patents and material Trademarks, including, without limitation, filing
of applications for renewal, affidavits of use and affidavits of
incontestability.
6. In the event that any Patent or Trademark included in the
Collateral is infringed, misappropriated or diluted by a third party, the
Borrower shall promptly notify the Trustees after it learns thereof and shall,
unless the Borrower shall reasonably determine that such Patent or Trademark is
immaterial to the Borrower (which determination the Borrower shall promptly
report to the Trustees), promptly sue for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any and all
damages for such infringement, misappropriation or dilution, and take such other
actions as the Borrower shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
VIII. Remedies.
A. Notice to Obligors and Contract Parties. Upon the request
of the Corporate Trustee (given at the direction of the Required Secured
Parties) at any time when a Notice of Enforcement is in effect, the Borrower
shall notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Trustees hereunder and
that payments in respect thereof shall be made directly to the Corporate
Trustee.
B. Proceeds to be Turned Over To Corporate Trustee. If a
Notice of Enforcement is in effect all Proceeds received by the Borrower
consisting of cash, checks and other near-cash items shall be held by the
Borrower in trust for the Secured Parties, segregated from other funds of the
Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to
the Corporate Trustee in the exact form received by the Borrower (duly indorsed
by the Borrower to the Corporate Trustee, if required) and held by the Corporate
Trustee under the Trust Agreement.
C. Code Remedies. If a Notice of Enforcement shall be in
effect, the Trustees, on behalf of the Secured Parties, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Trustees, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby expressly waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Trustees or any Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Trustees or any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Borrower, which right or
equity is hereby waived or released. The Borrower further agrees, at the
Corporate Trustee's request, to assemble the Collateral and make it available to
the Trustees at places which the Trustees shall reasonably select, whether at
the Borrower's premises or elsewhere. The Corporate Trustee shall apply the net
proceeds of any action taken pursuant to this subsection in the manner specified
in the Trust Agreement. To the extent permitted by applicable law, the Borrower
waives all claims, damages and demands it may acquire against the Trustees or
any Secured Party arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
IX. Corporate Trustee's Appointment as Attorney-in-Fact; Cor-
porate Trustee's Performance of Borrower's Obligations.
A. Powers. The Borrower hereby irrevocably constitutes and
appoints the Corporate Trustee and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in its own name, from time to time in the Corporate Trustee's
discretion for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and instru-
ments which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, the Borrower
hereby gives the Corporate Trustee the power and right, on behalf of and at the
sole expense of the Borrower, without notice to or assent by the Borrower, to do
any or all of the following:
1. at any time when a Notice of Enforcement is in
effect, in the name of the Borrower or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Corporate Trustee
for the purpose of collecting any and all such moneys due under any
Receivable or Contract or with respect to any other Collateral whenever
payable;
2. in the case of any Patent or Trademark, execute
and deliver any and all agreements, instruments, documents, and papers
as the Corporate Trustee may request to evidence the Corporate
Trustee's and the Secured Parties' security interest in such Patent or
Trademark and the goodwill and general intangibles of the Borrower
relating thereto or represented thereby;
3. pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral, effect any repairs or any in-
surance called for by the terms of this Agreement and to pay all or any
part of the premiums therefor and the costs thereof;
4. execute, in connection with the sale provided for
in subsection 8.3, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
5. at any time when a Notice of Enforcement is in
effect (i) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Corporate Trustee or as the Corporate
Trustee shall direct; (ii) ask or demand for, collect, receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (iii) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any thereof and to enforce any other right
in respect of any Collateral; (iv) defend any suit, action or
proceeding brought against the Borrower with respect to any Collateral;
(v) settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, to give such discharges or releases as
the Corporate Trustee may deem appropriate; (vi) use (and the Borrower
hereby grants a license to the Corporate Trustee for such purpose) or
assign, or grant licenses with respect to, any Patent or Trademark
(along with the goodwill of the business to which any such Patent or
Trademark pertains), and, to the extent permitted under applicable
Contractual Obligations and Requirements of Law, any Patent License or
Trademark License, throughout the world for such term or terms, on such
conditions, and in such manner, as the Corporate Trustee shall in its
sole discretion determine; (vii) sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; and (viii)
generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely
as though the Corporate Trustee were the absolute owner thereof for all
purposes, and do, at the Corporate Trustee's option and the Borrower's
expense, at any time, or from time to time, all acts and things which
the Corporate Trustee deems necessary to protect, preserve or realize
upon the Collateral and the Corporate Trustee's and the Secured
Parties' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as the Borrower might do.
B. Performance by Corporate Trustee of Borrower's Obligations.
If the Borrower fails to perform or comply with any of its agreements contained
herein, the Corporate Trustee, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement, and the expenses of the Corporate Trustee incurred in connection
with such performance or compliance shall be payable by the Borrower to the
Corporate Trustee on demand and shall constitute Secured Obligations secured
hereby.
C. Ratification; Power Coupled With An Interest. The Borrower
hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
X. Duty of Corporate Trustee. The Corporate Trustee's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Corporate Trustee deals with
similar property for its own account. Neither the Corporate Trustee, any Secured
Party nor any of their respective officers, directors, employees or agents shall
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Borrower or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Corporate Trustee
and the Secured Parties hereunder are solely to protect the Corporate Trustee's
and the Secured Parties' interests in the Collateral and shall not impose any
duty upon the Corporate Trustee or any Secured Party to exercise any such
powers. The Corporate Trustee and the Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Borrower for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
XI. Execution of Financing Statements. Pursuant to Section
9-402 and 9-403 of the Code, the Borrower authorizes the Corporate Trustee to
file financing statements and continuation statements with respect to the
Collateral without the signature of the Borrower in such form and in such filing
offices as the Corporate Trustee reasonably determines appropriate to perfect
the security interests of the Corporate Trustee under this Agreement and to
cause any financing statement relating to the Collateral to not lapse; provided
that the Corporate Trustee shall not be required to take any such action unless
directed to do so by a Holder Representative or the Required Secured Parties. A
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement for filing in any jurisdiction.
XII. Authority of Corporate Trustee. The Borrower acknowledges
that the rights and responsibilities of the Corporate Trustee under this
Agreement with respect to any action taken by the Corporate Trustee or the
exercise or non-exercise by the Corporate Trustee of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Corporate Trustee and the
Secured Parties, be governed by the Trust Agreement and by such other agreements
with respect thereto as may exist from time to time among the Secured Parties
and the Corporate Trustee, but, as between the Corporate Trustee and the
Borrower, the Corporate Trustee shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and the Borrower shall be under no obligation, or entitlement, to
make any inquiry respecting such authority.
XIII. Notices. All notices, requests and demands to or upon
the Corporate Trustee or the Borrower to be effective shall be in writing (in-
cluding by facsimile transmission) and shall be deemed to have been duly given
or made (a) the case of delivery by hand, when delivered, (b) in the case of de-
livery by mail, five days after being deposited in the mails by certified mail,
return receipt requested, or (c) in the case of delivery by facsimile tran-
mission, when received in legible form, in each case addressed as follows or to
such other address as may be hereafter notified by the respective parties here-
to:
(a) if to the Corporate Trustee, at its address or
transmission number for notices specified in subsection 9.1 of the
Trust Agreement; and
(b) if to the Borrower, at its address or
transmission number for notices specified in subsection 9.1 of the
Trust Agreement.
XIV. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without in-
validating the remaining provisions hereof, and any such prohibition or unen-
forceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
XV. Amendments in Writing; No Waiver; Cumulative Remedies.
A. Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Borrower and the Corporate Trustee in
accordance with the Secured Instruments and Section 9.3 of the Trust Agreement,
provided that any provision of this Agreement imposing obligations on the
Borrower may be waived by the Corporate Trustee in accordance with the Secured
Instruments and the terms of the Trust Agreement in a written instrument
executed by the Corporate Trustee.
B. No Waiver by Course of Conduct. Neither the Corporate
Trustee nor any Secured Party shall by any act (except by a written instrument
pursuant to subsection 15.1 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced with
respect to any Notice of Enforcement. No failure to exercise, nor any delay in
exercising, on the part of the Corporate Trustee or any Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Corporate Trustee or any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Corporate Trustee or such Secured Party would
otherwise have on any future occasion.
C. Remedies Cumulative. The rights, powers and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights, powers or remedies provided by law.
XVI. No-Recourse. No claim may be made under this Agreement
against any of the direct or indirect partners of the Borrower for the payment
of any amounts payable by the Borrower hereunder; provided that this Section
shall not in any way limit the Trustees' right to make any claim against any
such direct or indirect partner under any contract that any of such party may
have entered into with the Borrower to the extent that the rights under such
contract constitute Collateral.
XVII. Submission to Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
1. submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
2. consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
3. agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth under its signature below or at such other
address of which the Trustees shall have been notified pursuant hereto; and
4. agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
XVIII. Section Headings. The Section and subsection headings
used in this Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the interpreta-
tion hereof.
XIX. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Borrower and shall inure to the benefit
of the Trustees and the Secured Parties and their successors and assigns,
provided that the Borrower shall not assign its rights or obligations under this
Agreement except by operation of law to the extent not prohibited by the Secured
Instruments.
XX. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
XXI. The Trustees. Notwithstanding anything herein to the
contrary, the obligations of the Trustees hereunder are subject to the rights,
privileges and protections of the Trust Agreement.
XXII. Termination. This Agreement will remain in full force
and effect until the Secured Obligations are paid in full and all Secured Obli-
gation Commitments are terminated.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.
SPRINT SPECTRUM L.P.,
By: Sprint Spectrum Holding
Company, L.P.,
its general partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
<PAGE>
SCHEDULE 1
CONTRACTS
1. Amended and Restated Capital Contribution Agreement, dated as of October 2,
1996, among Sprint Corporation, Tele-Communications, Inc., Comcast
Corporation, Cox Communications, Inc. and Spring Spectrum L.P.
2. Amended and Restated Sprint Trademark License Agreement, dated as of
January 31, 1996, between Sprint Communications Company, L.P. and Sprint
Spectrum L.P. (formerly MajorCo., L.P.) (the "Sprint Trademark Agreement").
3. Funding Agreement, dated as of October 2, 1996, between Sprint Spectrum
L.P. and WirelessCo., L.P.
4. Funding Agreement, dated as of October 2, 1996, between Sprint Spectrum
L.P. and Sprint Spectrum Equipment Company, L.P.
5. Funding Agreement, dated as of October 2, 1996, between Spring Spectrum
L.P. and Sprint Spectrum Realty Company, L.P.
6. Procurement and Services Contract, dated as of January 31, 1996, between
Sprint Spectrum L.P. (formerly MajorCo, L.P.) and Lucent Technologies Inc.
(formerly AT&T Corp.) (the "Lucent Agreement").
7. Procurement and Services Contract, dated as of January 31, 1996, between
Sprint Spectrum L.P. (formerly MajorCo, L.P.) and Northern Telecom Inc.
(the "Nortel Agreement").
<PAGE>
SCHEDULE 2
PATENTS
- None -
PATENTS LICENSES
1. The Borrower has a licensed right to use patents under the Purchase and
Supply Agreement, dated June 21, 1996, among the Borrower, QUALCOMM
Personal Electronics, QUALCOMM Incorporated and Sony Electronics, Inc.
2. In addition, under the first sale doctrine, the Borrower has the
purchaser rights to use patents on routine office equipment it
acquires, such as personal computers and copy machines, but has not
endeavored to list such patents on this Schedule 2.
<PAGE>
SCHEDULE 3
TRADEMARKS AND TRADEMARK LICENSES
- None -
TRADEMARK LICENSES
Pursuant to the Amended and Restated Trademark License Agreement, dated January
31, 1996, as amended by the First Amendment, dated September 26, 1996 and as
assigned by the Assignment and Acceptance Agreement, dated September 30, 1996,
the Borrower is licensed to use the following trademarks:
Sprint
Sprint PCS
Sprint Personal Communication Services
<PAGE>
SCHEDULE 4
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Office of Secretary of State of Missouri
Recorder of Deeds Office, Jackson County, Missouri
Patent and Trademark Filings
- None -
Other Actions
- None -
<PAGE>
ANNEX I
FORMS OF ACKNOWLEDGEMENT AND CONSENTS
Exhibit 10.34
SUBSIDIARY SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 2, 1996, made by
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P., a Delaware limited partnership (the
"Grantor"), in favor of the Trustees under the Trust Agreement described below
for the benefit of the Secured Parties that are the beneficiaries of the Trust
Estate under the Trust Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have severally agreed to make
loans and other extensions of credit to Sprint Spectrum L.P. (the "Borrower"),
the general partner of the Grantor;
WHEREAS, a portion of the proceeds of such loans and exten-
sions of credit will be advanced to the Grantor for its use;
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to make their respective loans and other extensions of credit to
the Borrower that the Grantor shall have executed and delivered this Security
Agreement to the Trustees; and
WHEREAS, the Borrower has requested that the Grantor enter
into this Agreement and has assigned to the Grantor certain rights and benefits
under certain vendor procurement contracts to which the Borrower is party in
consideration thereof;
NOW, THEREFORE, the Grantor hereby agrees with the Trustees
for the benefit of the Secured Parties as follows:
I.. Defined Terms.
<PAGE>
A. Definitions. 1. Unless otherwise defined herein, and the
following terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, Documents, Farm Products, General Intangibles
(including but not limited to contract rights, whether or not under Contracts),
Instruments and Proceeds. Other terms used but not defined herein shall have the
meanings ascribed thereto in the Trust Agreement.
2. As used in this Agreement, the following terms shall have
the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.
"Contracts": the rights under, and the benefits of, the
contracts and agreements listed in Schedule 1, as the same may be
amended, supplemented or otherwise modified from time to time,
including, in each case, without limitation, (a) all rights of the
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (b) all rights of the Grantor to damages arising
out of or for breach or default in respect thereof, (c) all rights of
the Grantor to exercise all remedies thereunder, (d) all rights of the
Grantor to receive and compel performance thereunder, (e) all rights of
the Grantor to enter into any waiver or amendment thereof and (f) all
other rights thereunder.
"Contractual Obligations": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which
it or any of its property is bound.
"Corporate Trustee": First Union National Bank, as Corporate
Trustee under the Trust Agreement, and its successors pursuant to the
Trust Agreement.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Individual Trustee": Kenneth D. Benton, as Individual
Trustee under the Trust Agreement, and his successors pursuant to the
Trust Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), charge or
other security interest of any kind or nature whatsoever.
"Notice of Enforcement": as defined in the Trust Agreement.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 2, and (b) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in
Schedule 2.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Grantor of any right to manufac-
ture, use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule 2.
"Permitted Lien": with respect to any Collateral, any Lien
permitted to exist on such Collateral without violating any Secured In-
strument.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Receivable": any right to payment whether or not such right
is evidenced by an Instrument or Chattel Paper and whether or not it
has been earned by performance (including, without limitation, any
Account).
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Secured Obligations": as defined in the Trust Agreement.
"Secured Obligation Commitments": all commitments by Secured
Parties to make loans or extend other credit to the Borrower that, when
so made or extended, would constitute Secured Obligations.
"Secured Parties": as defined in the Trust Agreement.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 3, and (b) all renewals thereof.
"Trademark License": any agreement, written or oral, provid-
ing for the grant by or to the Grantor of any right to use any Trade-
mark, including, without limitation, any thereof referred to in
Schedule 3.
"Trust Agreement": the Trust Agreement, dated as of October
2, 1996, among the Borrower, the Corporate Trustee and the Individual
Trustee, as the same may be amended, supplemented or otherwise
modified from time to time.
"Trust Estate": as defined in the Trust Agreement.
"Trustees": the collective reference to the Corporate Trustee
and the Individual Trustee.
"Voting Secured Obligations": as defined in the Trust Agree-
ment.
B. Other Definitional Provisions. 1. The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, subsection, Annex and Schedule ref-
erences are to this Agreement unless otherwise specified.
2. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
II. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations, the Grantor
hereby grants to the Trustees for the benefit of the Secured Parties a security
interest in all of the following property now owned or at any time hereafter
acquired by the Grantor or in which the Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"):
1. all Accounts;
2. all Chattel Paper;
3. all Contracts;
4. all Documents;
5. all General Intangibles;
6. all Instruments;
7. all Patents;
8. all Patent Licenses;
9. all Trademarks;
10. all Trademark Licenses;
11. all books and records pertaining to the Collateral; and
12. to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
III. Representations and Warranties. The Grantor hereby rep-
resents and warrants that:
A. Power and Authority. The Grantor has the partnership power
and authority and the legal right to execute and deliver, to perform its
obligations under, and to grant the security interest in the Collateral pursuant
to, this Agreement and has taken all necessary partnership action to authorize
its execution, delivery and performance of, and grant of the security interest
in the Collateral pursuant to, this Agreement.
B. No Other Liens. Except for the security interest granted to
the Trustees pursuant to this Agreement and Permitted Liens, the Collateral is
free and clear of any Liens. No security agreement, financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Corporate Trustee pursuant to this Agreement or as have been filed or recorded
in connection with Permitted Liens.
C. Enforceable Obligation; Perfected, First Priority Security
Interests. This Agreement constitutes a legal, valid and binding obligation of
the Grantor, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. The security interests granted
pursuant to this Agreement 1. upon completion of the filings and other actions
specified on Schedule 4 will constitute perfected security interests in the
Collateral as collateral security for the Secured Obligations and 2. are prior
to all other Liens on the Collateral in existence on the date hereof except for
any Permitted Liens that may be permitted to have priority pursuant to the
Secured Instruments.
D. No Violation. The execution, delivery and performance of
this Agreement will not violate, result in a default under, or give rise to any
acceleration, prepayment, repurchase or redemption obligation of the Grantor or
any of its Restricted Subsidiaries as a result of, any Requirement of Law or
Contractual Obligation of the Grantor or of any of its Restricted Subsidiaries
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation, except the security interests
created hereby.
E. No Consents Required. No consent or authorization of,
filing with, or other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person, is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
other than any of the foregoing that have been obtained or made and are in full
force and effect.
F. Chief Executive Office. The Grantor's chief executive
office is located at either 4717 Grand Avenue, Kansas City, Missouri 64112 or
4900 Main Street, Kansas City, Missouri 64112.
G. Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
H. Accounts. No Receivable of the Grantor is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Agent, except to
the extent that such Instruments or Chattel Paper would not be required by any
Secured Instrument to constitute Collateral. The Grantor's records concerning
the Accounts will be maintained in the state in which its chief executive office
is located or in such other state in which the Grantor has filed any UCC
financing statements required to perfect the Trustees' security interest in such
Accounts.
IV. Covenants. The Grantor covenants and agrees that, from
and after the date of this Agreement until the Secured Obligations shall have
been paid and performed in full and the Secured Obligation Commitments are ter-
minated:
A. Limitation on Dispositions and Liens; Further Documenta-
tion. 1. The Grantor will not sell, transfer, lease or otherwise dispose of
any of the Collateral, except as permitted by the Secured Instruments.
2. The Grantor will not create, incur or permit to exist any
Lien or claim on or to the Collateral, other than the security interests created
hereby and the Permitted Liens, will maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in subsection 3.3 and will defend such security interest against
claims and demands of all Persons whomsoever.
3. At any time and from time to time, at the sole expense of
the Grantor, the Grantor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as may be necessary or
as the Corporate Trustee may reasonably request (provided that the Corporate
Trustee shall not be required to make any such request unless given direction to
do so by a Holder Representative or the Required Secured Parties) for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, the filing
of any financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the security interests created
hereby.
B. Delivery of Instruments. If any Collateral is or shall be
or become evidenced by any Instrument or Chattel Paper, such Instrument or
Chattel Paper shall be immediately delivered to the Corporate Trustee, duly
indorsed in a manner satisfactory to the Corporate Trustee, to be held by it
under the Trust Agreement as collateral for the Secured Obligations, except to
the extent that such Instrument or Chattel Paper would not be required by any
Secured Instrument to constitute Collateral.
C. Changes in Locations, Name, etc. The Grantor will not
change the location of its chief executive office from that specified in
subsection 3.6 or change its name, identity or corporate structure to such an
extent that any financing statement filed in connection with this Agreement
would become seriously misleading, unless, in each such case, it shall have
given the Corporate Trustee at least 30 days prior written notice thereof and
caused to be filed such financing statement amendments, or new financing
statements, as shall be required to continue the perfection and priority of the
Trustees' security interest hereunder.
D. Notices. The Grantor will advise the Corporate Trustee
promptly upon becoming aware thereof, in reasonable detail, at its address for
notices provided for in the Trust Agreement, of any Lien (other than security
interests created hereby or Permitted Liens) on any of the Collateral.
E. Indemnification. The Grantor agrees to pay, and to hold the
Trustees and the Secured Parties harmless from, any and all liabilities, costs
and expenses (including, without limitation, reasonable legal fees and expenses)
(i) with respect to, or resulting from any delay in paying, any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting from, any
delay in complying with any Requirement of Law applicable to any of the
Collateral or (iii) in connection with any of the transactions contemplated by
this Security Agreement. In any suit, proceeding or action brought by any
Trustee under any Account or Contract for any sum owing thereunder, or to
enforce any provisions of any Account or Contract, the Grantor will indemnify
and hold the Trustees and the Secured Parties harmless from and against all
expenses, loss or damage suffered by reason of any defense, setoff counterclaim,
recoupment or reduction or liability whatsoever of the account debtor or obligor
thereunder, arising out of a breach by the Grantor of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to or in favor of such account debtor or obligor or its successors from
the Grantor.
F. Maintenance of Records. The Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Accounts. The Grantor will mark its books and
records pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby.
G. Right of Inspection. The Trustees shall at all times have
full and free access during normal business hours and upon reasonable notice to
all the books, correspondence and records of the Grantor relating to the
Collateral, and the Trustees and their representatives may examine the same,
take extracts therefrom and make photocopies thereof, and the Grantor agrees to
render to the Trustees, at the Grantor's cost and expenses, such clerical and
other assistance as may be reasonably requested with regard thereto.
H. Payment of Taxes and Other Accounts. The Grantor will pay
promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of its income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral which have a
reasonable likelihood of adverse determination, except that no such charge need
be paid if (i) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein and (iii) such charge is adequately reserved against on
the Grantor's books in accordance with GAAP.
I. Liens on Collateral. The Grantor will defend the Collateral
against, and will take such other action as is necessary to remove, any Lien or
claim on or to the Collateral, other than the Liens created hereby and other
than Permitted Liens, and will defend the right, title and interest of the
Trustees and the Secured Parties in and to any of the Collateral against the
claims and demands of all Persons whomsoever.
J. Further Identification of Collateral. The Grantor will
furnish to the Trustees from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Corporate Trustee may reasonably request, all in
reasonable detail.
K. Acknowledgements and Consents. The Grantor will deliver
to the Trustees on the date hereof Acknowledgement and Consents, substantially
in the form of Annex I, in respect of the Lucent Agreement and the Nortel Agree-
ment (as such terms are defined in Schedule 1), duly executed by Lucent Technol-
ogies Inc. and Northern Telecom Inc., respectively.
V. Provisions Relating to Receivables.
A. Grantor Remains Liable under Receivables. Anything herein
to the contrary notwithstanding, the Grantor shall remain liable under each of
the Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Receivable. Neither the Trustees nor any
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by the Trustees or any Secured Party of any payment relating to
such Receivable pursuant hereto, nor shall the Trustees or any Secured Party be
obligated in any manner to perform any of the obligations of the Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
under any Receivable (or any agreement giving rise thereto), to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
B. Representations and Warranties. No Receivable shall be
evidenced by any Instrument which is not delivered to the Corporate Trustee in
the manner required by subsection 4.2.
C. Covenants. Other than in the ordinary course of business,
the Grantor will not (i) grant any extension of the time of payment of any Re-
ceivable, (ii) compromise or settle any Receivable for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the payment
of any Receivable, (iv) allow any credit or discount whatsoever on any Recei-
vable, or (v) amend, supplement or modify any Receivable in any manner that
could adversely affect the value of any material amount of Receivables.
D. Notice of Enforcement. If a Notice of Enforcement is in
effect, the Grantor shall, if so directed by the Corporate Trustee (who shall
give such direction only if required to do so by the Required Secured Parties)
or if an Automatic Acceleration Event (as defined below) has occurred:
1. instruct all account debtors and parties to Contracts to
make all payments in respect of Receivables to the Enforcement Proceeds
Sub-Account; and the Grantor shall have the right and privilege to and
may and will, and the Trustees hereby authorize the Grantor to,
enforce, compromise and collect amounts owing on the Receivables, for
the benefit of the Trustees and the Secured Parties, at the expense of
the Grantor, provided that such right and privilege shall automatically
be suspended upon the occurrence of any event that by the terms of any
Secured Instrument or Secured Instruments pursuant to which more than
50% of the aggregate amount of the Voting Secured Obligations are
outstanding would result in any amounts in respect of any outstanding
extensions of credit under such Secured Instrument becoming due and
payable prior to their stated maturity automatically and without notice
or other action by the Secured Party or Secured Parties under such
Secured Instrument (an "Automatic Acceleration Event"); and
2. with respect to any Proceeds that are not deposited
directly into the Enforcement Proceeds Sub-Account in accordance with
paragraph (a) above, when collected by the Grantor, whether consisting
of cash, checks, notes, drafts, bills of exchange, money orders,
commercial paper of any kind whatsoever or other documents, received in
payment of any Receivable or otherwise shall be immediately turned over
by the Grantor to the Corporate Trustee, in precisely the form
received, except for its endorsement when required, and until turned
over shall be deemed to be held in trust by the Grantor for and as the
Corporate Trustee's property, and shall be held separately from the
Grantor's other funds. Such Proceeds shall continue to be collateral
security for all of the Secured Obligations and shall be applied in
accordance with the Trust Agreement.
VI. Provisions Relating to Contracts.
A. Grantor Remains Liable under Contracts. Anything herein to
the contrary notwithstanding, the Grantor shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. Neither the Trustees nor any Secured
Party shall have any obligation or liability under any Contract by reason of or
arising out of this Agreement or the receipt by the Trustees or any such Secured
Party of any payment or performance relating to such Contract pursuant hereto,
nor shall the Trustees or any Secured Party be obligated in any manner to
perform any of the obligations of the Grantor under or pursuant to any Contract,
to make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party under any Contract, to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
B. Communication With Contracting Parties. The Corporate
Trustee in its own name or in the name of others may at any time when a Notice
of Enforcement is in effect communicate with parties to the Contracts and with
account debtors to verify with them to the Corporate Trustee's satisfaction the
existence, amount and terms of any Contracts or Receivables.
C. Covenants. 1. The Grantor will perform and comply in all
material respects with all its obligations under all material Contracts.
2. Except to the extent that no Secured Instrument would be
violated thereby, the Grantor will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral.
D. Notice of Enforcement. At any time that a Notice of
Enforcement is in effect, the Corporate Trustee may at its option (but shall not
be obligated to do so in the absence of direction from the Required Secured
Parties), without notice to or demand upon the Grantor (both of which are hereby
waived for the purpose of this subsection), in addition to all other rights and
remedies provided under the Trust Agreement, this Agreement and the other
Security Documents, in its own name or the name of the Grantor, perform, demand,
exercise any of the rights of the Grantor under, agree to waive, amend or modify
any provision of, sue upon or otherwise enforce the Contracts to the same extent
as if the Corporate Trustee were the party named in the Contract, and exercise
all other rights of the Grantor under the Contracts in such manner as it may
determine.
VII. Provisions Relating to Copyrights, Patents and Trade-
marks.
A. Representations and Warranties. The Grantor hereby repre-
sents and warrants that: 1. The Grantor does not own any material copyrights
or copyright licenses in its own name as of the date hereof. Schedule 2 includes
all Patents and Patent Licenses owned by the Grantor in its own name on the date
hereof.
2. Schedule 3 includes all Trademarks and Trademark Licenses
owned by the Grantor in its own name on the date hereof.
3. To the best of the Grantor's knowledge, each Patent and
Trademark is on the date hereof valid, subsisting, unexpired, enforceable and
has not been abandoned.
4. Except as set forth in either Schedule 2 or Schedule 3,
none of such Patents and Trademarks is on the date hereof the subject of any
licensing or franchise agreement.
5. No action or proceeding is pending on the date hereof
a. seeking to limit, cancel or question the validity of any material Patent or
Trademark owned by or licensed to the Grantor, or b. which, if adversely deter-
mined, would have a material adverse effect on the value of any material Patent
or Trademark.
B. Covenants. 1. The Grantor (either itself or through li-
censees) will (i) continue to use each material Trademark in order to maintain
such Trademark in full force free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered under
such Trademark, (iii) employ such Trademark with the appropriate notice of regi-
stration, (iv) not adopt or use any mark which is confusingly similar or a
colorable imitation of such Trademark unless the Trustees shall obtain a per-
fected security interest in such mark pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated.
2. The Grantor will not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
3. The Grantor will notify the Corporate Trustee promptly if
it knows, or has reason to know, that any application or registration relating
to any material Patent or material Trademark may become abandoned or dedicated,
or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office or any court or tribunal in any
country) regarding the Grantor's ownership of any material Patent or material
Trademark or its right to register the same or to keep and maintain the same.
4. Whenever the Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any material Patent or material Trademark with the United States
Patent and Trademark Office, the Grantor shall report such filing to the
Corporate Trustee and the Secured Parties within thirty Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of any
Holder Representative (transmitted through the Corporate Trustee), the Grantor
shall execute and deliver any and all agreements, instruments, documents, and
papers as such Holder Representative may reasonably request to evidence the
Trustees' and the Secured Parties' security interest in any material Patent or
material Trademark and the goodwill and general intangibles of the Grantor
relating thereto or represented thereby, and the Grantor hereby constitutes each
Trustee as its attorney-in-fact to execute and file all such writings for the
foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable until the
Secured Obligations are paid in full and the Secured Obligation Commitments are
terminated.
5. The Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Patents and material Trademarks, including, without limitation, filing
of applications for renewal, affidavits of use and affidavits of
incontestability.
6. In the event that any Patent or Trademark included in the
Collateral is infringed, misappropriated or diluted by a third party, the
Grantor shall promptly notify the Trustees after it learns thereof and shall,
unless the Grantor shall reasonably determine that such Patent or Trademark is
immaterial to the Grantor (which determination the Grantor shall promptly report
to the Trustees), promptly sue for infringement, misappropriation or dilution,
to seek injunctive relief where appropriate and to recover any and all damages
for such infringement, misappropriation or dilution, and take such other actions
as the Grantor shall reasonably deem appropriate under the circumstances to
protect such Patent or Trademark.
VIII. Remedies.
A. Notice to Obligors and Contract Parties. Upon the request
of the Corporate Trustee (given at the direction of the Required Secured
Parties) at any time when a Notice of Enforcement is in effect, the Grantor
shall notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Trustees hereunder and
that payments in respect thereof shall be made directly to the Corporate
Trustee.
B. Proceeds to be Turned Over To Corporate Trustee. If a
Notice of Enforcement is in effect all Proceeds received by the Grantor
consisting of cash, checks and other near-cash items shall be held by the
Grantor in trust for the Secured Parties, segregated from other funds of the
Grantor, and shall, forthwith upon receipt by the Grantor, be turned over to the
Corporate Trustee in the exact form received by the Grantor (duly indorsed by
the Grantor to the Corporate Trustee, if required) and held by the Corporate
Trustee under the Trust Agreement.
C. Code Remedies. If a Notice of Enforcement shall be in
effect, the Trustees, on behalf of the Secured Parties, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Trustees, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby expressly waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Trustees or any Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Trustees or any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Grantor, which right or
equity is hereby waived or released. The Grantor further agrees, at the
Corporate Trustee's request, to assemble the Collateral and make it available to
the Trustees at places which the Trustees shall reasonably select, whether at
the Grantor's premises or elsewhere. The Corporate Trustee shall apply the net
proceeds of any action taken pursuant to this subsection in the manner specified
in the Trust Agreement. To the extent permitted by applicable law, the Grantor
waives all claims, damages and demands it may acquire against the Trustees or
any Secured Party arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
IX. Corporate Trustee's Appointment as Attorney-in-Fact; Cor-
porate Trustee's Performance of Grantor's Obligations.
A. Powers. The Grantor hereby irrevocably constitutes and
appoints the Corporate Trustee and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Grantor and in the name of the
Grantor or in its own name, from time to time in the Corporate Trustee's dis-
cretion for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this Agree-
ment, and, without limiting the generality of the foregoing, the Grantor hereby
gives the Corporate Trustee the power and right, on behalf of and at the sole
expense of the Grantor, without notice to or assent by the Grantor, to do any or
all of the following:
1. at any time when a Notice of Enforcement is in
effect, in the name of the Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Corporate Trustee
for the purpose of collecting any and all such moneys due under any
Receivable or Contract or with respect to any other Collateral whenever
payable;
2. in the case of any Patent or Trademark, execute
and deliver any and all agreements, instruments, documents, and papers
as the Corporate Trustee may request to evidence the Corporate
Trustee's and the Secured Parties' security interest in such Patent or
Trademark and the goodwill and general intangibles of the Grantor
relating thereto or represented thereby;
3. pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral, effect any repairs or any in-
surance called for by the terms of this Agreement and to pay all or any
part of the premiums therefor and the costs thereof;
4. execute, in connection with the sale provided for
in subsection 8.3, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
5. at any time when a Notice of Enforcement is in
effect (i) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Corporate Trustee or as the Corporate
Trustee shall direct; (ii) ask or demand for, collect, receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (iii) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any thereof and to enforce any other right
in respect of any Collateral; (iv) defend any suit, action or
proceeding brought against the Grantor with respect to any Collateral;
(v) settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, to give such discharges or releases as
the Corporate Trustee may deem appropriate; (vi) use (and the Grantor
hereby grants a license to the Corporate Trustee for such purpose) or
assign, or grant licenses with respect to, any Patent or Trademark
(along with the goodwill of the business to which any such Patent or
Trademark pertains), and, to the extent permitted under applicable
Contractual Obligations and Requirements of Law, any Patent License or
Trademark License, throughout the world for such term or terms, on such
conditions, and in such manner, as the Corporate Trustee shall in its
sole discretion determine; (vii) sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; and (viii)
generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely
as though the Corporate Trustee were the absolute owner thereof for all
purposes, and do, at the Corporate Trustee's option and the Grantor's
expense, at any time, or from time to time, all acts and things which
the Corporate Trustee deems necessary to protect, preserve or realize
upon the Collateral and the Corporate Trustee's and the Secured
Parties' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as the Grantor might do.
B. Performance by Corporate Trustee of Grantor's Obligations.
If the Grantor fails to perform or comply with any of its agreements contained
herein, the Corporate Trustee, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement, and the expenses of the Corporate Trustee incurred in connection
with such performance or compliance shall be payable by the Grantor to the
Corporate Trustee on demand and shall constitute Secured Obligations secured
hereby.
C. Ratification; Power Coupled With An Interest. The Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
X. Duty of Corporate Trustee. The Corporate Trustee's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Corporate Trustee deals with
similar property for its own account. Neither the Corporate Trustee, any Secured
Party nor any of their respective officers, directors, employees or agents shall
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Grantor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof. The powers conferred on the Corporate Trustee and the Secured
Parties hereunder are solely to protect the Corporate Trustee's and the Secured
Parties' interests in the Collateral and shall not impose any duty upon the
Corporate Trustee or any Secured Party to exercise any such powers. The
Corporate Trustee and the Secured Parties shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to the Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
XI. Execution of Financing Statements. Pursuant to Section
9-402 and 9-403 of the Code, the Grantor authorizes the Corporate Trustee to
file financing statements and continuation statements with respect to the
Collateral without the signature of the Grantor in such form and in such filing
offices as the Corporate Trustee reasonably determines appropriate to perfect
the security interests of the Corporate Trustee under this Agreement and to
cause any financing statement relating to the Collateral to not lapse; provided
that the Corporate Trustee shall not be required to take any such action unless
given direction to do so by a Holder Representative or the Required Secured
Parties. A carbon, photographic or other reproduction of this Agreement shall be
sufficient as a financing statement for filing in any jurisdiction.
XII. Authority of Corporate Trustee. The Grantor acknowledges
that the rights and responsibilities of the Corporate Trustee under this
Agreement with respect to any action taken by the Corporate Trustee or the
exercise or non-exercise by the Corporate Trustee of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Corporate Trustee and the
Secured Parties, be governed by the Trust Agreement and by such other agreements
with respect thereto as may exist from time to time among the Secured Parties
and the Corporate Trustee, but, as between the Corporate Trustee and the
Grantor, the Corporate Trustee shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and the Grantor shall be under no obligation, or entitlement, to
make any inquiry respecting such authority.
XIII. Notices. All notices, requests and demands to or upon
the Corporate Trustee or the Grantor to be effective shall be in writing (inclu-
ding by facsimile transmission) and shall be deemed to have been duly given or
made (a) the case of delivery by hand, when delivered, (b) in the case of deli-
very by mail, five days after being deposited in the mails by certified mail,
return receipt requested, or (c) in the case of delivery by facsimile trans-
mission, when received in legible form, in each case addressed as follows or to
such other address as may be hereafter notified by the respective parties
hereto:
(a) if to the Corporate Trustee, at its address or
transmission number for notices specified in subsection 9.1 of the
Trust Agreement; and
(b) if to the Grantor, at its address or trans-
mission number for notices set forth under its signature below.
XIV. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without in-
validating the remaining provisions hereof, and any such prohibition or unen-
forceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
XV. Amendments in Writing; No Waiver; Cumulative Remedies
A. Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Grantor and the Corporate Trustee in
accordance with the Secured Instruments and Section 9.3 of the Trust Agreement,
provided that any provision of this Agreement imposing obligations on the
Grantor may be waived by the Corporate Trustee in accordance with the Secured
Instruments and the terms of the Trust Agreement in a written instrument
executed by the Corporate Trustee.
B. No Waiver by Course of Conduct. Neither the Corporate
Trustee nor any Secured Party shall by any act (except by a written instrument
pursuant to subsection 15.1 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced with
respect to any Notice of Enforcement. No failure to exercise, nor any delay in
exercising, on the part of the Corporate Trustee or any Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Corporate Trustee or any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Corporate Trustee or such Secured Party would
otherwise have on any future occasion.
C. Remedies Cumulative. The rights, powers and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights, powers or remedies provided by law.
XVI. No-Recourse. No claim may be made under this Agreement
against any of the direct or indirect partners of the Grantor for the payment of
any amounts payable by the Grantor hereunder; provided that this Section shall
not in any way limit the Trustees' right to make any claim against any such
direct or indirect partner under any contract that any of such party may have
entered into with the Grantor to the extent that the rights under such contract
constitute Collateral.
XVII. Submission to Jurisdiction; Waivers. The Grantor here-
by irrevocably and unconditionally:
1. submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
2. consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
3. agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Grantor at its address set forth under its signature below or at such other
address of which the Trustees shall have been notified pursuant hereto; and
4. agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
XVIII. Section Headings. The Section and subsection headings
used in this Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the interpreta-
tion hereof.
XIX. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Grantor and shall inure to the benefit of
the Trustees and the Secured Parties and their successors and assigns, provided
that the Grantor shall not assign its rights or obligations under this Agreement
except by operation of law to the extent not prohibited by the Secured
Instruments.
XX. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
XXI. The Trustees. Notwithstanding anything herein to the
contrary, the obligations of the Trustees hereunder are subject to the rights,
privileges and protections of the Trust Agreement.
XXII. Termination. This Agreement will remain in full force
and effect until the Secured Obligations are paid in full and all Secured Obli-
gation Commitments are terminated.
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the date first above written.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P.,
By: Sprint Spectrum, L.P.,
its general partner
By: Sprint Spectrum Holding
Company, L.P., its general
partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
Address for Notices:
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-3550
With a copy to:
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
<PAGE>
SCHEDULE 1
CONTRACTS
1. Procurement and Services Contract, dated as of January 31, 1996, between
Sprint Spectrum L.P. (formerly MajorCo, L.P.) and Lucent Technologies Inc.
(formerly AT&T Corp.).
2. Procurement and Services Contract, dated as of January 31, 1996, between
Sprint Spectrum L.P. (formerly MajorCo, L.P.) and Northern Telecom Inc.
3. Funding Agreement, dated as of October 2, 1996, between Sprint Spectrum
L.P. and Sprint Spectrum Equipment Company, L.P.
<PAGE>
SCHEDULE 2
PATENTS
- None -
PATENT LICENSES
1. The Grantor has a licensed right to use patents under the Contracts
referred to in items 1 and 2 in Schedule 1.
<PAGE>
SCHEDULE 3
TRADEMARKS
- None -
TRADEMARK LICENSES
- None -
<PAGE>
SCHEDULE 4
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Office of the Secretary of State of Missouri
Recorder of Deeds Office, Jackson County, Missouri
Patent and Trademark Filings
- None -
Other Actions
- None -
Exhibit 10.35
GUARANTEE
GUARANTEE, dated as of October 2, 1996, made by WirelessCo,
L.P., a Delaware limited partnership (the "Guarantor"), in favor of the Trustees
under the Trust Agreement described below for the benefit of the Secured Parties
that are the beneficiaries of the Trust Estate under the Trust Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have severally agreed to make
loans and other extensions of credit to Sprint Spectrum L.P., a Delaware limited
partnership (the "Borrower");
WHEREAS, the Borrower and the Guarantor are engaged in related
businesses, and the Guarantor will derive substantial direct and indirect
benefit from the making of such loans and other extensions of credit by the
Secured Parties; and
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to make their respective loans and other extensions of credit to
the Borrower that the Guarantor shall have executed and delivered this Guarantee
to the Trustees;
NOW, THEREFORE, the Guarantor hereby agrees with the Trustees
for the benefit of the Secured Parties as follows:
1. Defined Terms. (a) As used in this Guarantee, the follow-
ing terms shall have the following meanings:
"Contractual Obligations": as to any Person, any provision of
any security issued by such Person or of any agreement, indenture, in-
strument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"Corporate Trustee": First Union National Bank, as Corporate
Trustee under the Trust Agreement, and its successors pursuant to the
Trust Agreement.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantee": this Guarantee, as the same may be amended,
supplemented otherwise modified from time to time.
"Individual Trustee": Kenneth D. Benton, as Individual
Trustee under the Trust Agreement, and his successors pursuant to the
Trust Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), charge or
other security interest of any kind or nature whatsoever.
"Notice of Enforcement": as defined in the Trust Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Secured Parties": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Secured Obligation Commitments": all commitments by Secured
Parties to make loans or extend other credit to the Borrower that, when
so made or extended, would constitute Secured Obligations.
"Security Document": as defined in the Trust Agreement.
"Trust Agreement": the Trust Agreement, dated as of October
2, 1996, among the Borrower and the Trustees, as the same may be
amended, supplemented or otherwise modified from time to time.
"Trust Estate": as defined in the Trust Agreement.
"Trustees": the collective reference to the Corporate Trustee
and the Individual Trustee.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and Section and
paragraph references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) Subject to the provisions of paragraph 2(b),
the Guarantor, as primary obligor and not merely as surety, hereby
unconditionally and irrevocably guarantees to the Trustees and their respective
successors and assigns, for the benefit of the Secured Parties, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations. The
Guarantor, as primary obligor and not merely as surety, further agrees to pay
any and all reasonable expense (including, without limitation, all reasonable
fees and disbursements of counsel) which may be paid or incurred by the Trustees
in enforcing any rights to, or collecting, any or all of the Secured Obligations
and/or enforcing any rights with respect to, or collecting against, the
Guarantor under this Guarantee.
(b) Anything herein, in the Trust Agreement or in any Secured
Instrument or Security Document to the contrary notwithstanding, the maximum
liability of the Guarantor hereunder, and under any other document, agreement or
instrument entered into in connection with the Trust Agreement or the Secured
Obligations, shall in no event exceed the maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder and thereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of comparable
state law.
(c) This Guarantee shall remain in full force and effect until
the Secured Obligations are paid and performed in full and all Secured
Obligation Commitments are terminated, notwithstanding that from time to time
prior thereto the Borrower may be free from any Secured Obligations.
(d) The Guarantor agrees that the Secured Obligations may at
any time and from time to time exceed the amount of the liability of the
Guarantor hereunder without impairing this Guarantee or affecting the rights and
remedies of the Trustees or any Secured Party hereunder.
(e) No payment or payments made by the Borrower, the
Guarantor, any other guarantor or any other Person or received or collected by
the Trustees or any Secured Party from the Borrower, the Guarantor, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of the Guarantor hereunder
which shall, notwithstanding any such payment or payments other than payments
made by the Guarantor in respect of the Secured Obligations, remain liable for
the Secured Obligations up to the maximum liability of the Guarantor hereunder
until the Secured Obligations are paid in full and the Secured Obligation
Commitments are terminated.
3. No Subrogation. Notwithstanding any payment or payments
made by the Guarantor hereunder or any set-off or application of funds of the
Guarantor by any Secured Party, the Guarantor shall not be entitled to be
subrogated to any of the rights (whether contractual, under the Bankruptcy Code,
including Section 509 thereof, or otherwise) of the Trustees or any Secured
Party against the Borrower or any collateral security or guarantee or right of
offset held by the Trustees or any Secured Party for the payment of the Secured
Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Person in respect
of payments made by the Guarantor hereunder, until all payment obligations owing
to the Trustees and the Secured Parties by the Borrower on account of the
Secured Obligations are paid and performed in full and all Secured Obligation
Commitments are terminated. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Secured
Obligations shall not have been paid and performed in full or the Secured
Obligation Commitments shall not have been terminated, such amount shall be held
by the Guarantor in trust for the Trustees and the Secured Parties, segregated
from other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Corporate Trustee in the exact form received by
the Guarantor (duly indorsed by the Guarantor to the Corporate Trustee, if
required), to be applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Trust Agreement.
4. Amendments, etc. with respect to the Secured Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, any demand for payment of any of the
Secured Obligations made by any Secured Party may be rescinded by such party and
any of the Secured Obligations continued, and the Secured Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Trustees or any
Secured Party, as the case may be, and the Trust Agreement, any Secured
Instrument or Security Document and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the parties thereto may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Trustees or any Secured Party for the payment of the Secured Obligations may
be sold, exchanged, waived, surrendered or released. Neither any Trustee nor any
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Secured Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against the Guarantor, the Corporate Trustee may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Corporate Trustee to make any such demand or to collect any
payments from the Borrower or any such other guarantor or any release of the
Borrower or such other guarantor shall not relieve the Guarantor of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Trustees or any
Secured Party against the Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
5. Right of Set-off. The Guarantor irrevocably authorizes each
Trustee and Secured Party at any time and from time to time without notice to
the Guarantor or any other Person, any such notice being expressly waived by the
Guarantor to the extent permitted by applicable law, upon any amount becoming
due and payable by the Guarantor hereunder to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Trustee or
Secured Party or any branch or agency thereof to or for the credit or the
account of the Guarantor, or any part thereof, whether or not any Trustee and
Secured Party has made any demand for payment. Each Trustee and Secured Party
shall notify the Guarantor promptly after any such set-off and application made
by such Trustee or Secured Party, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Trustee and Secured Party under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Trustee or Secured Party may have.
6. Guarantee Absolute and Unconditional. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Secured Obligations and notice of or proof of reliance by any Secured Party upon
this Guarantee or acceptance of this Guarantee, and the Secured Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower and the Guarantor, on the one
hand, and the Trustees and the Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guarantee. The Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or the
Guarantor with respect to the Secured Obligations. The Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of any of the Secured Obligations, any Secured
Instrument, any Security Document or any other collateral security for the
Secured Obligations or guarantee or right of offset with respect thereto at any
time or from time to time held by the Trustees or any Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Trustees or any Secured Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Secured Obligations, or of
the Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the Corporate
Trustee and any Secured Party may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Borrower or any other Person
or against any collateral security or guarantee for the Secured Obligations or
any right of offset with respect thereto, and any failure by the Corporate
Trustee or any Secured Party to pursue such other rights or remedies or to
collect any payments from the Borrower or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or any such
collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Trustees and the Secured Parties against the Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon the Guarantor and the successors and assigns thereof,
and shall inure to the benefit of the Trustees and the Secured Parties, and
their respective successors, indorsees, transferees and assigns, until all the
Secured Obligations and the obligations of the Guarantor under this Guarantee
shall have been satisfied by payment and performance in full and all Secured
Obligation Commitments shall be terminated, notwithstanding that from time to
time the Borrower may be free from any Secured Obligations.
7. Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Secured Obligations is rescinded or must otherwise
be restored or returned by the Corporate Trustee or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantor or any other Person, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any other Person or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. Payments. The Guarantor hereby guarantees that payments
hereunder will be paid to the Corporate Trustee without set-off or counterclaim
in U.S. Dollars in immediately available funds at the office of the Corporate
Trustee located at 765 Broad Street, Newark, New Jersey 07102, Attention:
Corporate Trust Department.
9. Representations and Warranties. The Guarantor hereby rep-
resents and warrants that:
(a) it is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the partnership power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged;
(b) it has the partnership power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Guarantee, and has taken all necessary partnership action to authorize its
execution, delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing;
(d) the execution, delivery and performance of this Guarantee
will not violate, result in a default under, or give rise to any acceleration,
prepayment, repurchase or redemption obligation of the Guarantor as a result of,
any Requirement of Law or Contractual Obligation of the Guarantor and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation, other than the Liens created by the Security Documents; and
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no consent of
any other Person, is required in connection with the execution, delivery,
performance, validity or enforceability of this Guarantee, other than any of the
foregoing that have been obtained and are in full force and effect.
10. Authority of Trustees. The Guarantor acknowledges that the
rights and responsibilities of the Trustees under this Guarantee with respect to
any action taken by the Trustees or the exercise or non-exercise by the Trustees
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guarantee shall, as between the
Trustees and the Secured Parties, be governed by the Trust Agreement and by such
other agreements with respect thereto as may exist from time to time among the
Secured Parties and the Trustees, but, as between the Trustees and the
Guarantor, the Trustees shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Guarantor shall not be under any obligation, or entitlement, to
make any inquiry respecting such authority.
11. Notices. All notices, requests and demands to or upon the
Trustees or the Guarantor to be effective shall be in writing (or by fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (a) when delivered by hand or (b) if given by mail, five
days after being deposited in the mails by certified mail, return receipt
requested, or (c) if by fax or similar electronic transfer, when received in
legible form, addressed as follows:
(i) if to the Trustees, c/o the Corporate Trustee at its
address or transmission number for notices provided in subsection 9.1 of the
Trust Agreement; and
(ii) if to the Guarantor, at its address or transmission
number for notices set forth under its signature below.
Each of the Corporate Trustee and the Guarantor may change its
address and transmission numbers for notices by giving notice thereof to the
other party in the manner provided in this Section.
12. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. Integration. This Guarantee represents the agreement of
the Guarantor with respect to the subject matter hereof, and there are no
promises or representations by the Corporate Trustee or any Secured Party rela-
tive to the subject matter hereof not reflected herein.
14. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Corporate Trustee (at the direction of the Required
Secured Parties), provided that any provision of this Guarantee may be waived by
the Trustees and the Secured Parties in a letter or agreement executed by the
Corporate Trustee (at the direction of the Required Secured Parties) or by
facsimile transmission from the Corporate Trustee (at the direction of the
Required Secured Parties).
(b) Neither any Secured Party nor either Trustee shall by any
act (except by a written instrument pursuant to paragraph 14(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of any
Secured Party or either Trustee, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustees of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Trustees or such Secured Party would
otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
15. No-Recourse. No claim may be made under this Guarantee
against any of the direct or indirect partners of the Guarantor (it being
understood that this paragraph 15 shall in no way limit any claims of any
Trustee or Secured Party other than under this Guarantee).
16. Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the con-
struction hereof or be taken into consideration in the interpretation hereof.
17. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantor and shall inure to the benefit
of the Trustees and the Secured Parties and their successors and assigns;
provided, however that the Guarantor shall not have the right to assign its
rights hereunder or any interest herein or delegate any of its duties hereunder
without the prior written consent of the Required Secured Parties.
18. Submission to Jurisdiction; Waivers. The Guarantor here-
by irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address set forth under its signature below or at such other
address of which the Trustees shall have been notified pursuant hereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
19. Governing Law. This Guarantee shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
20. WAIVERS OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RE-
LATING TO THIS GUARANTEE.
21. The Trustees. Notwithstanding anything herein to the
contrary, the obligations of the Trustees hereunder are subject to the rights,
privileges and protections of the Trust Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
WIRELESSCO, L.P.
By: Sprint Spectrum L.P., its
general partner
By: Sprint Spectrum Holding
Company, L.P., its
general partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
Address for Notices:
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-3550
With a copy to:
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
Exhibit 10.36
GUARANTEE
GUARANTEE, dated as of October 2, 1996, made by Sprint
Spectrum Equipment Company, L.P., a Delaware limited partnership (the
"Guarantor"), in favor of the Trustees under the Trust Agreement described below
for the benefit of the Secured Parties that are the beneficiaries of the Trust
Estate under the Trust Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have severally agreed to make
loans and other extensions of credit to Sprint Spectrum L.P., a Delaware limited
partnership (the "Borrower");
WHEREAS, the Borrower and the Guarantor are engaged in related
businesses, and the Guarantor will derive substantial direct and indirect
benefit from the making of such loans and other extensions of credit by the
Secured Parties; and
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to make their respective loans and other extensions of credit to
the Borrower that the Guarantor shall have executed and delivered this Guarantee
to the Trustees;
NOW, THEREFORE, the Guarantor hereby agrees with the Trustees
for the benefit of the Secured Parties as follows:
1. Defined Terms. (a) As used in this Guarantee, the follow-
ing terms shall have the following meanings:
"Contractual Obligations": as to any Person, any provision of
any security issued by such Person or of any agreement, indenture, in-
strument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"Corporate Trustee": First Union National Bank, as Corporate
Trustee under the Trust Agreement, and its successors pursuant to the
Trust Agreement.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantee": this Guarantee, as the same may be amended,
supplemented otherwise modified from time to time.
"Individual Trustee": Kenneth D. Benton, as Individual
Trustee under the Trust Agreement, and his successors pursuant to the
Trust Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), charge or
other security interest of any kind or nature whatsoever.
"Notice of Enforcement": as defined in the Trust Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Secured Parties": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Secured Obligation Commitments": all commitments by Secured
Parties to make loans or extend other credit to the Borrower that, when
so made or extended, would constitute Secured Obligations.
"Security Document": as defined in the Trust Agreement.
"Trust Agreement": the Trust Agreement, dated as of October
2, 1996, among the Borrower and the Trustees, as the same may be
amended, supplemented or otherwise modified from time to time.
"Trust Estate": as defined in the Trust Agreement.
"Trustees": the collective reference to the Corporate Trustee
and the Individual Trustee.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and Section and
paragraph references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) Subject to the provisions of paragraph 2(b),
the Guarantor, as primary obligor and not merely as surety, hereby
unconditionally and irrevocably guarantees to the Trustees and their respective
successors and assigns, for the benefit of the Secured Parties, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations. The
Guarantor, as primary obligor and not merely as surety, further agrees to pay
any and all reasonable expense (including, without limitation, all reasonable
fees and disbursements of counsel) which may be paid or incurred by the Trustees
in enforcing any rights to, or collecting, any or all of the Secured Obligations
and/or enforcing any rights with respect to, or collecting against, the
Guarantor under this Guarantee.
(b) Anything herein, in the Trust Agreement or in any Secured
Instrument or Security Document to the contrary notwithstanding, the maximum
liability of the Guarantor hereunder, and under any other document, agreement or
instrument entered into in connection with the Trust Agreement or the Secured
Obligations, shall in no event exceed the maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder and thereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of comparable
state law.
(c) This Guarantee shall remain in full force and effect until
the Secured Obligations are paid and performed in full and all Secured
Obligation Commitments are terminated, notwithstanding that from time to time
prior thereto the Borrower may be free from any Secured Obligations.
(d) The Guarantor agrees that the Secured Obligations may at
any time and from time to time exceed the amount of the liability of the
Guarantor hereunder without impairing this Guarantee or affecting the rights and
remedies of the Trustees or any Secured Party hereunder.
(e) No payment or payments made by the Borrower, the
Guarantor, any other guarantor or any other Person or received or collected by
the Trustees or any Secured Party from the Borrower, the Guarantor, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of the Guarantor hereunder
which shall, notwithstanding any such payment or payments other than payments
made by the Guarantor in respect of the Secured Obligations, remain liable for
the Secured Obligations up to the maximum liability of the Guarantor hereunder
until the Secured Obligations are paid in full and the Secured Obligation
Commitments are terminated.
3. No Subrogation. Notwithstanding any payment or payments
made by the Guarantor hereunder or any set-off or application of funds of the
Guarantor by any Secured Party, the Guarantor shall not be entitled to be
subrogated to any of the rights (whether contractual, under the Bankruptcy Code,
including Section 509 thereof, or otherwise) of the Trustees or any Secured
Party against the Borrower or any collateral security or guarantee or right of
offset held by the Trustees or any Secured Party for the payment of the Secured
Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Person in respect
of payments made by the Guarantor hereunder, until all payment obligations owing
to the Trustees and the Secured Parties by the Borrower on account of the
Secured Obligations are paid and performed in full and all Secured Obligation
Commitments are terminated. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Secured
Obligations shall not have been paid and performed in full or the Secured
Obligation Commitments shall not have been terminated, such amount shall be held
by the Guarantor in trust for the Trustees and the Secured Parties, segregated
from other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Corporate Trustee in the exact form received by
the Guarantor (duly indorsed by the Guarantor to the Corporate Trustee, if
required), to be applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Trust Agreement.
4. Amendments, etc. with respect to the Secured Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, any demand for payment of any of the
Secured Obligations made by any Secured Party may be rescinded by such party and
any of the Secured Obligations continued, and the Secured Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Trustees or any
Secured Party, as the case may be, and the Trust Agreement, any Secured
Instrument or Security Document and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the parties thereto may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Trustees or any Secured Party for the payment of the Secured Obligations may
be sold, exchanged, waived, surrendered or released. Neither any Trustee nor any
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Secured Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against the Guarantor, the Corporate Trustee may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Corporate Trustee to make any such demand or to collect any
payments from the Borrower or any such other guarantor or any release of the
Borrower or such other guarantor shall not relieve the Guarantor of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Trustees or any
Secured Party against the Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
5. Right of Set-off. The Guarantor irrevocably authorizes each
Trustee and Secured Party at any time and from time to time without notice to
the Guarantor or any other Person, any such notice being expressly waived by the
Guarantor to the extent permitted by applicable law, upon any amount becoming
due and payable by the Guarantor hereunder to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Trustee or
Secured Party or any branch or agency thereof to or for the credit or the
account of the Guarantor, or any part thereof, whether or not any Trustee and
Secured Party has made any demand for payment. Each Trustee and Secured Party
shall notify the Guarantor promptly after any such set-off and application made
by such Trustee or Secured Party, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Trustee and Secured Party under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Trustee or Secured Party may have.
6. Guarantee Absolute and Unconditional. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Secured Obligations and notice of or proof of reliance by any Secured Party upon
this Guarantee or acceptance of this Guarantee, and the Secured Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower and the Guarantor, on the one
hand, and the Trustees and the Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guarantee. The Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or the
Guarantor with respect to the Secured Obligations. The Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of any of the Secured Obligations, any Secured
Instrument, any Security Document or any other collateral security for the
Secured Obligations or guarantee or right of offset with respect thereto at any
time or from time to time held by the Trustees or any Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Trustees or any Secured Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Secured Obligations, or of
the Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the Corporate
Trustee and any Secured Party may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Borrower or any other Person
or against any collateral security or guarantee for the Secured Obligations or
any right of offset with respect thereto, and any failure by the Corporate
Trustee or any Secured Party to pursue such other rights or remedies or to
collect any payments from the Borrower or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or any such
collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Trustees and the Secured Parties against the Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon the Guarantor and the successors and assigns thereof,
and shall inure to the benefit of the Trustees and the Secured Parties, and
their respective successors, indorsees, transferees and assigns, until all the
Secured Obligations and the obligations of the Guarantor under this Guarantee
shall have been satisfied by payment and performance in full and all Secured
Obligation Commitments shall be terminated, notwithstanding that from time to
time the Borrower may be free from any Secured Obligations.
7. Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Secured Obligations is rescinded or must otherwise
be restored or returned by the Corporate Trustee or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantor or any other Person, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any other Person or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. Payments. The Guarantor hereby guarantees that payments
hereunder will be paid to the Corporate Trustee without set-off or counterclaim
in U.S. Dollars in immediately available funds at the office of the Corporate
Trustee located at 765 Broad Street, Newark, New Jersey 07102, Attention:
Corporate Trust Department.
9. Representations and Warranties. The Guarantor hereby rep-
resents and warrants that:
(a) it is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the partnership power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged;
(b) it has the partnership power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Guarantee, and has taken all necessary partnership action to authorize its
execution, delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing;
(d) the execution, delivery and performance of this Guarantee
will not violate, result in a default under, or give rise to any acceleration,
prepayment, repurchase or redemption obligation of the Guarantor as a result of,
any Requirement of Law or Contractual Obligation of the Guarantor and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation, other than the Liens created by the Security Documents; and
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no consent of
any other Person, is required in connection with the execution, delivery,
performance, validity or enforceability of this Guarantee, other than any of the
foregoing that have been obtained and are in full force and effect.
10. Authority of Trustees. The Guarantor acknowledges that the
rights and responsibilities of the Trustees under this Guarantee with respect to
any action taken by the Trustees or the exercise or non-exercise by the Trustees
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guarantee shall, as between the
Trustees and the Secured Parties, be governed by the Trust Agreement and by such
other agreements with respect thereto as may exist from time to time among the
Secured Parties and the Trustees, but, as between the Trustees and the
Guarantor, the Trustees shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Guarantor shall not be under any obligation, or entitlement, to
make any inquiry respecting such authority.
11. Notices. All notices, requests and demands to or upon the
Trustees or the Guarantor to be effective shall be in writing (or by fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (a) when delivered by hand or (b) if given by mail, five
days after being deposited in the mails by certified mail, return receipt
requested, or (c) if by fax or similar electronic transfer, when received in
legible form, addressed as follows:
(i) if to the Trustees, c/o the Corporate Trustee at its
address or transmission number for notices provided in subsection 9.1 of the
Trust Agreement; and
(ii) if to the Guarantor, at its address or transmission
number for notices set forth under its signature below.
Each of the Corporate Trustee and the Guarantor may change its
address and transmission numbers for notices by giving notice thereof to the
other party in the manner provided in this Section.
12. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. Integration. This Guarantee represents the agreement of
the Guarantor with respect to the subject matter hereof, and there are no
promises or representations by the Corporate Trustee or any Secured Party rela-
tive to the subject matter hereof not reflected herein.
14. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Corporate Trustee (at the direction of the Required
Secured Parties), provided that any provision of this Guarantee may be waived by
the Trustees and the Secured Parties in a letter or agreement executed by the
Corporate Trustee (at the direction of the Required Secured Parties) or by
facsimile transmission from the Corporate Trustee (at the direction of the
Required Secured Parties).
(b) Neither any Secured Party nor either Trustee shall by any
act (except by a written instrument pursuant to paragraph 14(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of any
Secured Party or either Trustee, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustees of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Trustees or such Secured Party would
otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
15. No-Recourse. No claim may be made under this Guarantee
against any of the direct or indirect partners of the Guarantor (it being
understood that this paragraph 15 shall in no way limit any claims of any
Trustee or Secured Party other than under this Guarantee).
16. Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the con-
struction hereof or be taken into consideration in the interpretation
hereof.
17. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantor and shall inure to the benefit
of the Trustees and the Secured Parties and their successors and assigns;
provided, however that the Guarantor shall not have the right to assign its
rights hereunder or any interest herein or delegate any of its duties hereunder
without the prior written consent of the Required Secured Parties.
18. Submission to Jurisdiction; Waivers. The Guarantor here-
by irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address set forth under its signature below or at such other
address of which the Trustees shall have been notified pursuant hereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
19. Governing Law. This Guarantee shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
20. WAIVERS OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RE-
LATING TO THIS GUARANTEE.
21. The Trustees. Notwithstanding anything herein to the
contrary, the obligations of the Trustees hereunder are subject to the rights,
privileges and protections of the Trust Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P.
By: Sprint Spectrum L.P., its
general partner
By: Sprint Spectrum Holding
Company, L.P., its
general partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
Address for Notices:
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-3550
With a copy to:
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
Exhibit 10.37
GUARANTEE
GUARANTEE, dated as of October 2, 1996, made by Sprint
Spectrum Realty Company, L.P., a Delaware limited partnership (the "Guarantor"),
in favor of the Trustees under the Trust Agreement described below for the
benefit of the Secured Parties that are the beneficiaries of the Trust Estate
under the Trust Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have severally agreed to make
loans and other extensions of credit to Sprint Spectrum L.P., a Delaware limited
partnership (the "Borrower");
WHEREAS, the Borrower and the Guarantor are engaged in related
businesses, and the Guarantor will derive substantial direct and indirect
benefit from the making of such loans and other extensions of credit by the
Secured Parties; and
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to make their respective loans and other extensions of credit to
the Borrower that the Guarantor shall have executed and delivered this Guarantee
to the Trustees;
NOW, THEREFORE, the Guarantor hereby agrees with the Trustees
for the benefit of the Secured Parties as follows:
1. Defined Terms. (a) As used in this Guarantee, the follow-
ing terms shall have the following meanings:
"Contractual Obligations": as to any Person, any provision of
any security issued by such Person or of any agreement, indenture, in-
strument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"Corporate Trustee": First Union National Bank, as Corporate
Trustee under the Trust Agreement, and its successors pursuant to the
Trust Agreement.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising execu-
tive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantee": this Guarantee, as the same may be amended,
supplemented otherwise modified from time to time.
"Individual Trustee": Kenneth D. Benton, as Individual
Trustee under the Trust Agreement, and his successors pursuant to the
Trust Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), charge or
other security interest of any kind or nature whatsoever.
"Notice of Enforcement": as defined in the Trust Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Requirement of Law": as to any Person, the partnership
agreement, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination, judgment, writ,
injunction, decree or order of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Secured Parties": as defined in the Trust Agreement.
"Secured Obligations": as defined in the Trust Agreement.
"Secured Obligation Commitments": all commitments by Secured
Parties to make loans or extend other credit to the Borrower that, when
so made or extended, would constitute Secured Obligations.
"Security Document": as defined in the Trust Agreement.
"Trust Agreement": the Trust Agreement, dated as of October
2, 1996, among the Borrower and the Trustees, as the same may be
amended, supplemented or otherwise modified from time to time.
"Trust Estate": as defined in the Trust Agreement.
"Trustees": the collective reference to the Corporate Trustee
and the Individual Trustee.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and Section and
paragraph references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) Subject to the provisions of paragraph 2(b),
the Guarantor, as primary obligor and not merely as surety, hereby
unconditionally and irrevocably guarantees to the Trustees and their respective
successors and assigns, for the benefit of the Secured Parties, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations. The
Guarantor, as primary obligor and not merely as surety, further agrees to pay
any and all reasonable expense (including, without limitation, all reasonable
fees and disbursements of counsel) which may be paid or incurred by the Trustees
in enforcing any rights to, or collecting, any or all of the Secured Obligations
and/or enforcing any rights with respect to, or collecting against, the
Guarantor under this Guarantee.
(b) Anything herein, in the Trust Agreement or in any Secured
Instrument or Security Document to the contrary notwithstanding, the maximum
liability of the Guarantor hereunder, and under any other document, agreement or
instrument entered into in connection with the Trust Agreement or the Secured
Obligations, shall in no event exceed the maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder and thereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of comparable
state law.
(c) This Guarantee shall remain in full force and effect until
the Secured Obligations are paid and performed in full and all Secured
Obligation Commitments are terminated, notwithstanding that from time to time
prior thereto the Borrower may be free from any Secured Obligations.
(d) The Guarantor agrees that the Secured Obligations may at
any time and from time to time exceed the amount of the liability of the
Guarantor hereunder without impairing this Guarantee or affecting the rights and
remedies of the Trustees or any Secured Party hereunder.
(e) No payment or payments made by the Borrower, the
Guarantor, any other guarantor or any other Person or received or collected by
the Trustees or any Secured Party from the Borrower, the Guarantor, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of the Guarantor hereunder
which shall, notwithstanding any such payment or payments other than payments
made by the Guarantor in respect of the Secured Obligations, remain liable for
the Secured Obligations up to the maximum liability of the Guarantor hereunder
until the Secured Obligations are paid in full and the Secured Obligation
Commitments are terminated.
3. No Subrogation. Notwithstanding any payment or payments
made by the Guarantor hereunder or any set-off or application of funds of the
Guarantor by any Secured Party, the Guarantor shall not be entitled to be
subrogated to any of the rights (whether contractual, under the Bankruptcy Code,
including Section 509 thereof, or otherwise) of the Trustees or any Secured
Party against the Borrower or any collateral security or guarantee or right of
offset held by the Trustees or any Secured Party for the payment of the Secured
Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Person in respect
of payments made by the Guarantor hereunder, until all payment obligations owing
to the Trustees and the Secured Parties by the Borrower on account of the
Secured Obligations are paid and performed in full and all Secured Obligation
Commitments are terminated. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Secured
Obligations shall not have been paid and performed in full or the Secured
Obligation Commitments shall not have been terminated, such amount shall be held
by the Guarantor in trust for the Trustees and the Secured Parties, segregated
from other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Corporate Trustee in the exact form received by
the Guarantor (duly indorsed by the Guarantor to the Corporate Trustee, if
required), to be applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Trust Agreement.
4. Amendments, etc. with respect to the Secured Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, any demand for payment of any of the
Secured Obligations made by any Secured Party may be rescinded by such party and
any of the Secured Obligations continued, and the Secured Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Trustees or any
Secured Party, as the case may be, and the Trust Agreement, any Secured
Instrument or Security Document and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the parties thereto may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Trustees or any Secured Party for the payment of the Secured Obligations may
be sold, exchanged, waived, surrendered or released. Neither any Trustee nor any
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Secured Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against the Guarantor, the Corporate Trustee may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Corporate Trustee to make any such demand or to collect any
payments from the Borrower or any such other guarantor or any release of the
Borrower or such other guarantor shall not relieve the Guarantor of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Trustees or any
Secured Party against the Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
5. Right of Set-off. The Guarantor irrevocably authorizes each
Trustee and Secured Party at any time and from time to time without notice to
the Guarantor or any other Person, any such notice being expressly waived by the
Guarantor to the extent permitted by applicable law, upon any amount becoming
due and payable by the Guarantor hereunder to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Trustee or
Secured Party or any branch or agency thereof to or for the credit or the
account of the Guarantor, or any part thereof, whether or not any Trustee and
Secured Party has made any demand for payment. Each Trustee and Secured Party
shall notify the Guarantor promptly after any such set-off and application made
by such Trustee or Secured Party, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Trustee and Secured Party under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Trustee or Secured Party may have.
6. Guarantee Absolute and Unconditional. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Secured Obligations and notice of or proof of reliance by any Secured Party upon
this Guarantee or acceptance of this Guarantee, and the Secured Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower and the Guarantor, on the one
hand, and the Trustees and the Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guarantee. The Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or the
Guarantor with respect to the Secured Obligations. The Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of any of the Secured Obligations, any Secured
Instrument, any Security Document or any other collateral security for the
Secured Obligations or guarantee or right of offset with respect thereto at any
time or from time to time held by the Trustees or any Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Trustees or any Secured Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Secured Obligations, or of
the Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the Corporate
Trustee and any Secured Party may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Borrower or any other Person
or against any collateral security or guarantee for the Secured Obligations or
any right of offset with respect thereto, and any failure by the Corporate
Trustee or any Secured Party to pursue such other rights or remedies or to
collect any payments from the Borrower or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or any such
collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Trustees and the Secured Parties against the Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon the Guarantor and the successors and assigns thereof,
and shall inure to the benefit of the Trustees and the Secured Parties, and
their respective successors, indorsees, transferees and assigns, until all the
Secured Obligations and the obligations of the Guarantor under this Guarantee
shall have been satisfied by payment and performance in full and all Secured
Obligation Commitments shall be terminated, notwithstanding that from time to
time the Borrower may be free from any Secured Obligations.
7. Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Secured Obligations is rescinded or must otherwise
be restored or returned by the Corporate Trustee or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantor or any other Person, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any other Person or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. Payments. The Guarantor hereby guarantees that payments
hereunder will be paid to the Corporate Trustee without set-off or counterclaim
in U.S. Dollars in immediately available funds at the office of the Corporate
Trustee located at 765 Broad Street, Newark, New Jersey 07102, Attention:
Corporate Trust Department.
9. Representations and Warranties. The Guarantor hereby rep-
resents and warrants that:
(a) it is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the partnership power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged;
(b) it has the partnership power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Guarantee, and has taken all necessary partnership action to authorize its
execution, delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing;
(d) the execution, delivery and performance of this Guarantee
will not violate, result in a default under, or give rise to any acceleration,
prepayment, repurchase or redemption obligation of the Guarantor as a result of,
any Requirement of Law or Contractual Obligation of the Guarantor and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation, other than the Liens created by the Security Documents; and
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no consent of
any other Person, is required in connection with the execution, delivery,
performance, validity or enforceability of this Guarantee, other than any of the
foregoing that have been obtained and are in full force and effect.
10. Authority of Trustees. The Guarantor acknowledges that the
rights and responsibilities of the Trustees under this Guarantee with respect to
any action taken by the Trustees or the exercise or non-exercise by the Trustees
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guarantee shall, as between the
Trustees and the Secured Parties, be governed by the Trust Agreement and by such
other agreements with respect thereto as may exist from time to time among the
Secured Parties and the Trustees, but, as between the Trustees and the
Guarantor, the Trustees shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Guarantor shall not be under any obligation, or entitlement, to
make any inquiry respecting such authority.
11. Notices. All notices, requests and demands to or upon the
Trustees or the Guarantor to be effective shall be in writing (or by fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (a) when delivered by hand or (b) if given by mail, five
days after being deposited in the mails by certified mail, return receipt
requested, or (c) if by fax or similar electronic transfer, when received in
legible form, addressed as follows:
(i) if to the Trustees, c/o the Corporate Trustee at its
address or transmission number for notices provided in subsection 9.1 of the
Trust Agreement; and
(ii) if to the Guarantor, at its address or transmission
number for notices set forth under its signature below.
Each of the Corporate Trustee and the Guarantor may change its
address and transmission numbers for notices by giving notice thereof to the
other party in the manner provided in this Section.
12. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. Integration. This Guarantee represents the agreement of
the Guarantor with respect to the subject matter hereof, and there are no
promises or representations by the Corporate Trustee or any Secured Party rela-
tive to the subject matter hereof not reflected herein.
14. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Corporate Trustee (at the direction of the Required
Secured Parties), provided that any provision of this Guarantee may be waived by
the Trustees and the Secured Parties in a letter or agreement executed by the
Corporate Trustee (at the direction of the Required Secured Parties) or by
facsimile transmission from the Corporate Trustee (at the direction of the
Required Secured Parties).
(b) Neither any Secured Party nor either Trustee shall by any
act (except by a written instrument pursuant to paragraph 14(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of any
Secured Party or either Trustee, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustees of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Trustees or such Secured Party would
otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
15. No-Recourse. No claim may be made under this Guarantee
against any of the direct or indirect partners of the Guarantor (it being
understood that this paragraph 15 shall in no way limit any claims of any
Trustee or Secured Party other than under this Guarantee).
16. Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the con-
struction hereof or be taken into consideration in the interpretation
hereof.
17. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantor and shall inure to the benefit
of the Trustees and the Secured Parties and their successors and assigns;
provided, however that the Guarantor shall not have the right to assign its
rights hereunder or any interest herein or delegate any of its duties hereunder
without the prior written consent of the Required Secured Parties.
18. Submission to Jurisdiction; Waivers. The Guarantor here-
by irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address set forth under its signature below or at such other
address of which the Trustees shall have been notified pursuant hereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
19. Governing Law. This Guarantee shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
20. WAIVERS OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RE-
LATING TO THIS GUARANTEE.
21. The Trustees. Notwithstanding anything herein to the
contrary, the obligations of the Trustees hereunder are subject to the rights,
privileges and protections of the Trust Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
SPRINT SPECTRUM REALTY
COMPANY, L.P.
By: Sprint Spectrum L.P., its
general partner
By: Sprint Spectrum Holding
Company, L.P., its
general partner
By: /s/ Robert E. Sleet, Jr.
Title: Treasurer
Address for Notices:
4717 Grand Avenue, 5th Floor
Kansas City, Missouri 64112
Attention: Treasurer
Fax: (816) 559-3550
With a copy to:
4900 Main Street, 12th Floor
Kansas City, Missouri 64112
Attention: General Counsel
Fax: (816) 559-2591
EXHIBIT 12
<TABLE>
<CAPTION>
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Enterprise)
COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(In Thousands)
For the
Period from
October 24,
1994 (date of
For the Years Ended inception) to
December 31, December 31,
----------------------------------------------------
1996 1995 1994
----------------------------------------------------
<S> <C> <C> <C>
Earnings:
Net loss.............................. $ (438,565) $ (110,428) $ (3,308)
Capitalized interest.................. (30,461) - -
Equity in subs........................ 92,284 46,206 -
--------------- ------------------ ------------
Subtotal (376,742) (64,222) (3,308)
Fixed charges:
Interest charges...................... 31,010 - -
Interest factor of operating rents.... 2,943 - -
--------------- ------------------ ------------
Total fixed charges................... 33,953 - -
--------------- ------------------ ------------
Earnings as adjusted.................... $ (342,789) $ - $ -
=============== ================== ============
Ratio of earnings to fixed charges (A).. (B) (C) (C)
</TABLE>
(A) For purposes of determining the ratio of earnings to fixed charges,
earnings (loss) is defined as losses from continuing operations excluding
equity in losses in unconsolidated partnerships. Fixed charges consist of
interest expense on all indebtedness (including amortization of deferred
debt issuance costs) and the portion of rental expense that is
representative of the interest factor.
(B) The earnings are inadequate to cover fixed charges by $410,695 for the
year ended December 31, 1996. (C) The Company had no fixed charges as de-
fined for the year ended December 31, 1995 or the period from October
24, 1994 (date of inception) through December 31, 1994.
Exhibit 21
SPRINT SPECTRUM L.P. AND SUBSIDIARIES
(As Reorganized)
(A Development Stage Company)
SUBSIDIARIES OF REGISTRANT
Sprint Spectrum L.P. is the parent. The subsidiaries of Sprint Spectrum L.P. are
as follows:
Ownership
Jurisdiction or Interest Held
Incorporation of By Its
Name Organization Immediate Parent
- --------------------------------------- ------------------ -----------------
WirelessCo, L.P. Delaware 100
Sprint Spectrum Equipment Company, L.P. Delaware 100
Sprint Spectrum Realty Company, L.P. Delaware 100
Sprint Spectrum Finance Corporation Delaware 100
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 49,988
<RECEIVABLES> 3,108
<ALLOWANCES> 202
<INVENTORY> 72,414
<CURRENT-ASSETS> 153,993
<PP&E> 1,418,263
<DEPRECIATION> (9,583)
<TOTAL-ASSETS> 3,898,766
<CURRENT-LIABILITIES> 266,021
<BONDS> 686,192
0
0
<COMMON> 0
<OTHER-SE> 2,215,263
<TOTAL-LIABILITY-AND-EQUITY> 3,898,766
<SALES> 4,142
<TOTAL-REVENUES> 4,175
<CGS> 14,148
<TOTAL-COSTS> 360,048
<OTHER-EXPENSES> 1,804
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,788
<INCOME-PRETAX> (438,565)
<INCOME-TAX> 0
<INCOME-CONTINUING> (438,565)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (438,565)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
