Exhibit 10.5
FOURTH AMENDMENT AND WAIVER
TO
SENIOR SECURED LOAN AGREEMENT
This FOURTH AMENDMENT and WAIVER , dated as of August 25, 2000 (this
"Amendment"), to SENIOR SECURED LOAN AGREEMENT, dated as of March 2, 1999, as
amended by a First Amendment to Senior Secured Loan Agreement, dated as of March
31, 1999, as further amended by a Second Amendment to Senior Secured Loan
Agreement, dated as of June 10, 1999 as further amended by a Third Amendment to
Senior Secured Loan Agreement, dated as of June 19, 2000, as further amended by
a letter agreement, dated as of July 27, 2000 (as amended, the "Loan
Agreement"), is entered into by and among GATX CAPITAL CORPORATION ("Lender"),
CHADMOORE WIRELESS GROUP, INC. ("Chadmoore"), and the SUBSIDIARIES OF CHADMOORE
LISTED ON THE SIGNATURE PAGES HERETO (collectively, the "Chadmoore Subsidiaries"
and, together with Chadmoore, the "Borrowers").
RECITALS
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A. Chadmoore has entered into an Agreement and Plan of Reorganization,
dated as of August 21, 2000 (the "Acquisition Agreement"), with Nextel
Communications, Inc. ("Nextel") and Nextel Finance Company ("Acquisition Sub").
B. Borrowers have requested that Lender amend the Loan Agreement as
provided herein and make certain waivers and Lender has agreed to do so subject
to the terms and conditions of this Amendment.
AGREEMENT
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NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrowers and Lender hereby agree as follows:
1. Definitions; Interpretation. Unless otherwise defined herein, all
capitalized terms used herein and defined in the Loan Agreement shall have the
respective meanings given to those terms in the Loan Agreement. Other rules of
construction set forth in the Loan Agreement, to the extent not inconsistent
with this Amendment, apply to this Amendment and are hereby incorporated by
reference.
2. Amendment to Loan Agreement. Effective upon the satisfaction of the
conditions set forth in Section 3 hereof, Borrowers and Lender hereby agree as
follows:
(a) Section 1.01 is hereby amended to add the following new
definitions in appropriate alphabetical order:
"Acquisition Agreement" means that certain Agreement and Plan
of Reorganization, dated as of August 21, 2000, among
Chadmoore, Nextel Communications, Inc. and Nextel Finance
Company.
"Applicable Acquisition Premium" shall mean the greater of (i)
$1,350,000 and (ii) the lesser of (A) $1,620,000 and (B)
$1,350,000 multiplied by a fraction, the
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numerator of which is the Nextel Closing Price (as defined in
the Acquisition Agreement) and the denominator of which is
$57.1656;
provided, however, that if at the time of prepayment of a
Loan, the U.S. Treasury note rate for notes of a similar term
(the "New Rate") has declined from the U.S. Treasury note rate
used in the calculating the Loan Rate for such Loan (the "Old
Rate"), then there shall be added to the premium determined
above an amount equal to the difference between the amount
determined under the following formula at the New Rate and the
amount determined pursuant to the following formula at the Old
Rate:
The amount equal to the excess of (x) the sum of the present
values, at the date of prepayment of the amount of each
remaining scheduled payment of interest on and principal on a
Loan, or portion of such payment, which will not be required
to be made as a result of such prepayment (each such payment
an "Amount Payable") (each such Amount Payable discounted
separately at the Old Rate or the New Rate, as applicable,
compounded quarterly, from the date such Amount Payable would
be due), over (y) the principal amount of such Note to be
prepaid. The "New Rate" shall be the yield (as quoted in The
Wall Street Journal on the date which is three (3) Business
Days prior to the date of prepayment) on U.S. Treasury
securities adjusted to a constant maturity equal to the
Treasury Note Maturity."
"Acquisition Payoff Conditions" shall mean:
(i) All conditions to closing under the Acquisition Agreement
shall have been satisfied or waived;
(ii) No Default or Event of Default shall have occurred and be
continuing;
(iii) Borrowers shall have delivered to Lender (A) an amount
(the "Payoff Amount") equal to the outstanding principal
amount of all Loans, all accrued and unpaid interest and
all other amounts then due under this Agreement,
including, if applicable, any amounts required to satisfy
the hedging costs, brokerage fees and other costs that
may be incurred under clause (iv) of this definition,
either by wire transfer in immediately available funds or
in freely tradable common stock of Nextel; and
(iv) If Chadmoore shall have delivered the Payoff Amount in
common stock of Nextel, Lender shall have made
arrangements satisfactory to Lender in its sole
discretion such that Lender may sell the common stock so
delivered and receive an amount which, net of all hedging
costs, brokerage fees and other costs relating to the
delivery of such amount in common stock rather than cash,
shall equal the Payoff Amount plus the Applicable
Acquisition Premium."
"Payoff Amount" shall have the meaning set forth in the
definition of Acquisition Payoff conditions.
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"Subordination Agreement" shall mean the Subordination
Agreement, dated as of the date hereof, between Lender and
Barclays Bank PLC ("Barclays") (to which Borrowers are also
signatories); provided, however, that during any period in
which a wholly owned subsidiary of Nextel Communications, Inc.
is the lender under Section 5.04 of the Acquisition Agreement,
the reference to Barclays in the preceeding sentence shall
mean such subsidiary until such time as such subsidiary shall
have assigned or otherwise transferred the loan(s) to Barclays
and Barclays has become a party to the Subordination
Agreement.
(b) Section 2.02(e) is hereby amended to add the following
sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
2.02(e), subject to satisfaction or waiver in writing of the
Acquisition Payoff Conditions, Borrowers may prepay the Loans
by payment of the Payoff Amount, plus the Applicable
Acquisition Premium."
(c) Section 2.03(a) is hereby amended to add the following
sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
2.03(a), subject to satisfaction or waiver in writing of the
Acquisition Payoff Conditions, Borrowers may repay the Loans
using common stock of Nextel in the manner specified in the
Acquisition Payoff Conditions."
(d) Section 4.01 is hereby amended to add a new Section 4.01(i) at
the end thereof to read in its entirety as follows:
"So long as the Acquisition Agreement has not terminated,
Chadmoore shall make a report to Lender at the time of
delivery of its monthly financial statements on the status of
the acquisition transaction and its business."
(e) Section 7.01(b) is hereby amended to add the following
sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
7.01(b), the Borrowers and their Subsidiaries may grant Liens
in their assets to secure Indebtedness permitted under the
second sentence of Section 7.01(h)."
(f) Section 7.01(c) of the Loan Agreement is hereby amended to add
the following sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
7.01(c), Chadmoore may sell substantially all of its assets
pursuant to and as set forth in the Acquisition Agreement as
it exists on the date hereof, subject to satisfaction or
waiver in writing of the Acquisition Payoff Conditions."
(g) Section 7.01(d) of the Loan Agreement is hereby amended to add
the following sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
7.01(d), Chadmoore may make a distribution of Nextel stock to
its stockholders pursuant to and as set forth in
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the Acquisition Agreement as it exists on the date hereof, so
long as it simultaneously makes the payment specified in the
definition of "Acquisition Payoff Conditions"."
(h) Section 7.01(g) of the Loan Agreement is hereby amended to add
the following sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
7.01(g), so long as no Default or Event of Default has
occurred and is continuing and to the extent permitted under
Section 1(b) of the Subordination Agreement, Chadmoore may
make payments on the Indebtedness permitted under the second
sentence of Section 7.01(h)."
(i) Section 7.01(h) of the Loan Agreement is hereby amended to add
the following sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section
7.01(h), so long as the lender thereof has entered into the
Subordination Agreement, the Borrowers may incur Indebtedness
contemplated under Section 5.04 of the Acquisition Agreement
in an amount not to exceed $32,500,000 on the terms set forth
in the Acquisition Agreement as it exists on the date hereof."
(j) Section 7.02 of the Loan Agreement is hereby amended to add
the following sentence at the end thereof:
"Notwithstanding the foregoing set forth in this Section 7.02,
until the date on which sixty (60) days have passed since any
termination of the Acquisition Agreement for any reason,
compliance with the covenants set forth in this Section 7.02
is waived."
(k) Section 9.01 of the Loan Agreement is hereby amended to add
the new Sections 9.01(m) and (n) at the end thereof to read in
their entirety as follows:
"(m) Sixty (60) days shall have passed since any termination
of the Acquisition Agreement for any reason.
(n) The Lender (as defined in the Acquisition Agreement) shall
fail to make a loan pursuant to Section 5.04 of the
Acquisition Agreement within five (5) business days of the
date such loan is required to be made thereunder."
(l) Lender hereby waives Borrowers' failure to make the payments
due under the Loan Agreement on June 30, 2000.
3. Condition to Effectiveness. The Amendment shall be effective as
of the date hereof, upon the satisfaction of the following conditions no later
than August 25, 2000:
(a) the delivery to Lender of this Amendment duly executed by each
Borrower;
(b) the delivery to Borrower of this Amendment duly executed by
Lender;
(c) the delivery to Lender of evidence of execution by Chadmoore
of the Acquisition Agreement;
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(d) the delivery to Lender of copies, certified by the Secretary
of Chadmoore, as of the date hereof, of Chadmoore's corporate
resolutions authorizing the execution and delivery of this
Amendment;
(e) the payment to Lender of deferred principal in the amount of
$1,350,000, deferred interest, all interest accrued thereon
and a fee in the amount of $200,000 as required under the
letter agreement, dated as of July 27, 2000;
(f) the execution by Unrestricted Subsidiary Funding Company and
the delivery to Lender of a Subordination Agreement in the
form attached hereto as Exhibit A; and
(g) the delivery to Lender of all other documents, instruments or
other agreements required in connection with the foregoing
reasonably requested by Lender.
4. Release.
(a) The Borrowers, on behalf of themselves, and their respective
present and former officers, directors, employees, affiliates,
subsidiary corporations or companies, agents, attorneys, investors,
shareholders, partners, members, administrators, predecessor and
successor entities, and assigns, hereby fully and forever release and
discharge the Lender and its respective present and officers,
directors, employees, affiliates, subsidiary corporations or companies,
agents, attorneys, investors, shareholders, partners, members,
administrators, participants, predecessor and successor entities, and
loan participants and assigns, of and from any claim, damages, duty,
obligation or cause of action relating to any matters of any kind that
any of them may possess arising from any omissions, acts or facts that
have occurred up until and including the date hereof, of every nature,
kind and description whatsoever, whether known or unknown, choate or
inchoate, direct or indirect, and whether suspected or unsuspected,
either at law, in equity or otherwise, which may have arisen under or
by virtue of the laws of any jurisdiction and which arise from or in
connection with or relating in any way to the Loan Agreement, the
Operative Documents or the transactions contemplated thereby.
(b) Waiver of California Civil Code Section 1542. Section 1542 of
the California Civil Code provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
The Borrowers expressly waive the provisions of Section 1542 of the
California Civil Code and elect to and do assume all risk for claims
heretofore arising, known or unknown, suspected to exist or not
suspected to exist, as described above, and voluntarily and expressly
release the Lender from all liability on claims arising out of such
matters as described above.
5. Exculpation. Borrowers acknowledge and agree that Lender is entering
into this Amendment as an accommodation to Borrowers and that neither Lender nor
any Indemnified Party (as defined below) shall be liable for any action taken or
omitted to be taken by it or them in connection with any exercise of Lender's
remedies under the Loan Agreement regardless of the effect of such exercise on
the Borrowers or on the Acquisition Agreement and the transactions contemplated
thereunder.
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6. Expenses; Indemnification. The Borrowers shall pay on demand (i) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Lender in connection with the preparation, execution and delivery
of, and the exercise of its duties under, this Amendment, the transactions
contemplated hereby and under the Acquisition Agreement and all other matters
related in any way to the acquisition of the assets of the Borrowers by Nextel,
whether or not such acquisition is consummated, (ii) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Lender
in connection with the preparation, execution and delivery of amendments and
waivers hereunder and (iii) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Lender in connection with
the enforcement or attempted enforcement of Loan Agreement or any of the
Obligations or in preserving any of Lender's rights and remedies (including,
without limitation, all such fees and expenses incurred in connection with any
"workout" or restructuring affecting the Operative Documents or the Obligations
or any bankruptcy or similar proceeding involving any Borrower or any of its
Affiliates). The Borrowers shall indemnify, reimburse and hold Lender, each of
Lender's members, and each of their respective successors, assigns, agents,
officers, directors, shareholders, servants, agents, participants and employees
(each, an "Indemnified Party") harmless from and against all liabilities,
losses, damages, actions, suits, demands, claims of any kind and nature
(including claims relating to environmental discharge, cleanup or compliance),
all costs and expenses whatsoever to the extent they may be incurred or suffered
by such indemnified party in connection therewith (including reasonable
attorneys' fees and expenses), fines, penalties (and other charges of applicable
governmental authorities) (each, a "Claim"), directly or indirectly relating to
or arising out of any matter relating to the subject of this Amendment, the
acquisition of the assets of Chadmoore by Nextel, whether or not such
acquisition is consummated and however such acquisition may be structured. The
foregoing indemnity shall cover, without limitation any Claim for tortious
interference with contract or similar matter. Notwithstanding the foregoing, the
Borrowers shall not indemnify an Indemnified Party for any liability incurred by
an Indemnified Party as a result of such Indemnified Party's gross negligence or
willful misconduct. Such indemnities shall continue in full force and effect,
notwithstanding the expiration or termination of the Loan Agreement. Upon an
Indemnified Party's written demand, the Borrowers shall assume and diligently
conduct, at its sole cost and expense, the entire defense of such Indemnified
Party, using counsel reasonably acceptable to such indemnitee against any
indemnified Claim. The Borrowers shall not settle or compromise any Claim
against or involving an Indemnified Party without first obtaining such
Indemnified Party's and Lender's written consent thereto, which consent shall
not be unreasonably withheld. If an Indemnified Party elects to assume its own
defense in connection with an indemnified Claim, then such Indemnified Party
shall not settle or compromise such Claim without first obtaining Borrowers'
written consent thereto, which consent shall not be unreasonably withheld,
provided that if the Borrowers do not consent thereto, then the Borrowers shall
post security or a bond in the amount of such Claim for the benefit of the
Indemnified Party.
7. Effect of Amendment. On and after the date hereof, each reference to
the Loan Agreement in the Loan Agreement or in any other document shall mean the
Loan Agreement as amended by this Amendment. The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power, or remedy of Lender, nor constitute a waiver of any provision of the Loan
Agreement which is not specifically waived hereunder. Upon the termination of
any period during which a waiver was effective, the provision so waived shall be
reinstated in full force and effect. Lender retains its rights to exercise its
remedies under the Loan Agreement or otherwise upon the occurrence of any Event
of Default under the Loan Agreement.
8. Representations and Warranties. Each Borrower hereby represents and
warrants to Lender that:
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(a) such Borrower is a corporation or limited liability company
duly organized, validly existing and in good standing under
the laws of its state of incorporation or formation;
(b) such Borrower has the full corporate or company power,
authority and legal right and has obtained all necessary
approvals, consents and given all notices to execute and
deliver this Amendment and perform the terms thereof;
(c) there is no action, proceeding or claim pending or, insofar as
such Borrower knows, threatened against such Borrower or any
of its subsidiaries before any court or administrative agency
which might have a materially adverse effect on the business,
condition or operations of such Borrower;
(d) this Amendment has been duly executed and delivered by such
Borrower and constitutes the valid, binding and enforceable
obligation of such Borrower;
(e) the Borrowers have delivered to Lender a true and correct copy
of the Acquisition Agreement; and
(f) After giving effect to the waivers set forth in this Fourth
Amendment, no Default or Event of Default under the Loan
Agreement has occurred which has not been waived.
9. Full Force and Effect. Except as amended above, the Loan Agreement
remains in full force and effect.
10. Headings. Headings in this Amendment are for convenience of
reference only and are not part of the substance hereof.
11. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of California without reference to
conflicts of law rules.
12. Counterparts. This Amendment may be executed in any number of
identical counterparts, any set of which signed by all of the parties hereto
shall be deemed to constitute a complete, executed original for all purposes.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, Each Borrower and Lender has caused this Amendment
to be executed as of the day and year first above written.
Lender: GATX CAPITAL CORPORATION
By: /s/Michael Liebsch
Name: Michael Liebsch
Title: Managing Director
Borrowers: CHADMOORE WIRELESS GROUP, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
CHADMOORE COMMUNICATIONS, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT TANNER, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT BEACON HILL, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT OF NEVADA, INC.
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By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
CMRS SYSTEMS, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
CHADMOORE CONSTRUCTION SERVICES, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
CHADMOORE COMMUNICATIONS OF TENNESSEE, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT COMMUNICATIONS OF RICHMOND, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
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PTT MAPLE, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT COMMUNICATIONS OF HUNTSVILLE, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT BURTON, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT COMMUNICATIONS OF FORT WAYNE, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT COMMUNICATIONS OF ROANOKE, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT TRISTAN, INC.
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By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT COMMUNICATIONS OF AUSTIN, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT COMMUNICATIONS OF JACKSONVILLE, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT COMMUNICATIONS OF VIRGINIA BEACH, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT ROSELAND, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT ARTINA, INC.
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By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT FRANKLIN, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT CHACO, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
800 SMR NETWORK, INC.
By: /s/Robert W. Moore
Name: Robert W. Moore
Title: President
PTT COMMUNICATIONS OF BATON ROUGE LIMITED
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT COMMUNICATIONS OF LAKE CHARLES, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
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Title: Manager
PTT COMMUNICATIONS OF BAY CITY, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT COMMUNICATIONS OF ROCKFORD, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
PTT COMMUNICATIONS OF BATON ROUGE, LLC
By: /s/ Rick D. Rhodes
Name: Rick D. Rhodes
Title: Manager
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EXHIBIT A
SUBORDINATION AGREEMENT
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