SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1993
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ________________ to ________________
Commission File No. 1-9854
___________________________________________________________________________
McCAW CELLULAR COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1379052
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5400 Carillon Point
Kirkland, Washington 98033
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code:
(206) 827-4500
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of each class on which registered
Class A Common Stock, Pacific Stock Exchange
Par Value $.01 per share
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.01 per share
(Title of Class)
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 required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X
No ___
Indicate by 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. [ ]
The aggregate market value of voting stock held by non-affiliates
of the registrant on March 15, 1994, based on the last reported sales price
by Nasdaq National Market on March 15, 1994, was approximately $5.65
billion.
As of March 15, 1994, 149,154,106 shares of Class A Common Stock,
par value $.01 per share, were outstanding and 59,858,797 shares of Class B
Common Stock, par value $.01 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement relating
to its 1993 annual meeting of stockholders are incorporated by reference
into Part III as set forth herein. Such proxy statement will be filed with
the Securities and Exchange Commission not later than 120 days after the
registrant's fiscal year ended December 31, 1993.<PAGE>
TABLE OF CONTENTS
<PAGE> PART I
Page
Item 1. Business . . . . . . . . . . . . . . . . . . . . .
Business of the Company. . . . . . . . . . . . .
Recent Developments. . . . . . . . . . . . . . .
Cellular Interests . . . . . . . . . . . . . . .
The Cellular Telephone Industry. . . . . . . . .
The Company's Cellular Operations. . . . . . . .
The Company's Radio Common Carrier Operations. .
Air-to-Ground License. . . . . . . . . . . . . .
Business of LIN. . . . . . . . . . . . . . . . .
Private Market Value Guarantee . . . . . . . . .
Governmental Regulation. . . . . . . . . . . . .
Employees. . . . . . . . . . . . . . . . . . . .
Item 2. Properties . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . .
Item 4. Submission of Matters to a Vote of Security Holders. .
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters. . . . . . . . . . .
Item 6. Selected Consolidated Financial Data . . . . . . .
Selected Proportionate Cellular Operating Data . .
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . .
Item 8. Financial Statements and Supplementary Data. . . .
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . .
PART III
Item 10. Directors and Executive Officers of the Registrant .
Item 11. Executive Compensation . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions .
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K. . . . . . . . . . . . . . .
<PAGE>
<PAGE> 1 PART I
Item 1. BUSINESS
Business of the Company
McCaw Cellular Communications, Inc. (the "Company"),
develops and provides wireless personal communications services,
including cellular telephone, messaging and air-to-ground
communications. The Company, both directly and through its 52%
ownership of LIN Broadcasting Corporation (together with its
subsidiaries, "LIN"), is the largest cellular telephone company
in the United States based on 1992 revenues. The Company is also
the fifth largest radio common carrier ("RCC") operator
(providing primarily messaging services) in the United States
based on 1992 year-end subscribers. The Company also owns
Claircom Communications Group, L.P. ("Claircom"), which began
providing common carrier voice communication services for airline
passengers in February 1993 and plans to provide two-way data
communication services (including facsimiles) beginning in 1994.
LIN also owns seven network-affiliated television stations.
The Company's goal is to develop a fully integrated personal
communications network connecting people, instead of places,
throughout North America using the most efficient and effective
technology available. To achieve that goal, the Company has
developed a fourfold strategy: first, create cellular clusters in
major metropolitan areas through the acquisition of adjacent
cellular licenses; second, construct the systems serving such
cellular clusters to a high technical standard; third, link the
country's cellular systems into a "national seamless network";
and fourth, integrate other communications technologies into the
network.
The Company has completed the first and second stages of
this strategy and has begun the third stage. In the first stage,
the Company obtained majority or controlling interests in
cellular systems serving many of the largest and fastest growing
Metropolitan Statistical Areas ("MSAs") and continuously enlarged
the service area provided by obtaining majority or controlling
interests in, or reciprocal service agreements with the other
owners of, cellular systems serving successively adjacent
markets, thereby creating networks of uninterrupted coverage
encompassing large metropolitan complexes. These complexes,
which were arbitrarily divided in the licensing process, are
commercial corridors through which local businesses and
subscribers regularly conduct their affairs. The Company has
largely succeeded in this strategy as approximately 80% of the
persons or "pops" represented by the cellular interests owned by
the Company are in such markets.
With respect to construction, all of the Company's markets
are now served by high quality operating cellular systems, which
the Company continually upgrades with advances in technology.
The Company is currently offering "digital" cellular service to
its customers in Florida, California, New York, Nevada and the<PAGE>
<PAGE> 2
Pacific Northwest. The balance of the Company's markets are
expected to begin offering such service in 1994. Digital service
brings distinct advantages to both the Company and its
subscribers, including enhanced call privacy and increased system
capacity of three or more times the "analog" system capacity. In
addition, digital transmission enhances the Company's opportunity
to offer new services such as caller identification or message
waiting indicator services. The Company uses a digital format
referred to as Time Division Multiple Access ("TDMA") which has
been adopted and recently re-endorsed as an industry standard by
the Cellular Telecommunications Industry Association. Although
digital service is offered, customers are also able to continue
to use their existing analog equipment with the same reliability
they have experienced in the past. The Company expects its
additional capital expenditures in 1994 in connection with the
planned expansion of digital service to be approximately $110
million. Over time, the Company expects its capital expenditures
to be reduced significantly because the increased system capacity
associated with digital service will reduce the need to add new
cell sites.
Having acquired and built strong regional cellular systems,
the Company is in the process of linking those regional cellular
systems into the North American Cellular Network ("NACN")
permitting cellular subscribers, without making special
arrangements, to both place and receive calls anywhere they
travel in areas served by the NACN, even if the local cellular
service is not provided by the Company. All of the Company's
markets within the continental United States, as well as the
systems not affiliated with any landline telephone carrier ("A
Block") in most other major metropolitan areas, and Cantel, which
holds Canada's A Block cellular license, are served by the NACN.
The creation of the NACN does not involve material capital
expenditures, yet markedly increases the quality and convenience
of the Company's service. Administration of the network will not
directly provide the Company with any significant income. As of
February 28, 1994, the NACN served approximately 5 million
subscribers and covered a population base of over 100 million.
GTE Corporation and most of the other major wireline ("B Block")
licensees have formed a national network similar to the NACN,
which competes with the NACN.
Ultimately, the Company's goal is to extend this network to
permit its customers to place and receive calls effortlessly
throughout North America, including integration with American
Mobile Satellite Corporation's satellite-based mobile
communications system (scheduled to begin operations in 1995) and
Claircom's air-to-ground system. The Company expects its
cellular systems to provide the wireless infrastructure for the
fully integrated personal communications network it is
developing. Consequently, the Company is exploring, and will
continue to explore, the use of emerging technologies to expand
the reach of the network, provide additional services (especially
data services) and enhance the convenience provided to the
Company's customers. In addition, the Company expects to<PAGE>
<PAGE> 3
actively seek additional licenses to utilize spectrum for
wireless communications as those licenses may be issued by the
Federal Communications Commission (the "FCC"). There is,
however, no assurance that the Company will be successful in
obtaining additional spectrum or licenses for new services.
Cellular telephone technology provides high-quality mobile
and portable telephone service which permits simultaneous use by
a large number of subscribers within a given market. "Pops"
means the population of a market multiplied by a percentage
ownership interest in an entity licensed or designated to receive
a license (a "licensee") by the FCC to construct or operate a
cellular telephone system in such market. Pops do not represent
actual subscribers in a cellular system. All the Company's
cellular interests are the "A Block licensee" of a given market
which holds the license that originally was reserved for an
entity not affiliated with a landline telephone carrier.
Messaging systems provide messaging services (a lower-cost,
complementary product line to cellular services) and
conventional mobile phone and telephone answering services. As
of December 31, 1993, the Company had 525,000 messaging units in
service.
The Company, a Delaware corporation, was incorporated on
July 7, 1987 and is the successor to McCaw Cellular
Communications, Inc., a Washington corporation, which was
incorporated in 1982. The Company's principal executive office
is located at 5400 Carillon Point, Kirkland, Washington 98033.
Its telephone number is (206) 827-4500. References to "the
Company" in this Annual Report on Form 10-K include McCaw
Cellular Communications, Inc., its subsidiaries and its
predecessors, unless the context otherwise requires. For
information about the Company's industry segments, see Note 14 to
the Company's consolidated financial statements contained herein.
Recent Developments
AT&T Merger Agreement. On August 16, 1993, the Company
entered into a merger agreement (the "AT&T Merger Agreement")
pursuant to which the Company would merge with a subsidiary of
AT&T and thereby become a wholly owned subsidiary of AT&T (the
"Merger" or "AT&T Transaction"). AT&T is subject to the
information and reporting requirements of the Securities Exchange
Act of 1934, as amended, and in accordance therewith files
reports, proxy statements and other information with the
Securities and Exchange Commission. AT&T Stock is traded on the
New York Stock Exchange. For pro forma financial information
regarding AT&T assuming consummation of the AT&T Transaction, see
the Company's Report on Form 8-K filed September 17, 1993, as
amended October 12 and October 29, 1993, incorporated by
reference herein.
In the AT&T Transaction, and subject to the terms referred
to in the following sentences, each share of the Common Stock of<PAGE>
<PAGE> 4
the Company would be converted into one share of AT&T Common
Stock, par value $1.00 per share (the "AT&T Stock"). In the
event that the average closing price of the AT&T Stock is greater
than $71.73 per share during the 20 most recent trading days
ending on the fifth business day prior to the closing of the AT&T
Transaction, the exchange rate will be adjusted downward to
provide for the delivery of shares of AT&T Stock worth $71.73 for
each share of Common Stock, but in no event less than 0.909 of a
share of AT&T Stock for each share of Common Stock. In the event
that the average closing price of the AT&T Stock is less than
$53.00 per share during such period, the exchange rate will be
adjusted upward to provide for the delivery of shares of AT&T
Stock worth $53.00 for each share of Common Stock, but in no
event more than 1.111 shares of AT&T Stock for each share of
Common Stock. Either party will have a right to terminate the
AT&T Merger Agreement if it has not closed by September 30, 1994.
The AT&T Transaction has been approved by the respective
Boards of Directors of AT&T and the Company and the Company's
stockholders, but is subject to the satisfaction of several
conditions, including the receipt of the governmental consents
discussed below. The AT&T Transaction is also subject to the
conditions that the Company receive an opinion of counsel that no
taxable gain or loss will be recognized upon the exchange of
Common Stock for shares of AT&T Stock and that AT&T receive from
its independent public accountants an opinion that the AT&T
Transaction will qualify for pooling-of-interests accounting
treatment.
In connection with the Merger, AT&T and the Company have
made filings or applications with (i) the Federal Trade
Commission and the Antitrust Division of the Department of
Justice (the "Antitrust Division") pursuant to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and the
rules promulgated thereunder (the "HSR Act"), (ii) the FCC and
(iii) various state regulatory commissions. The approvals of all
state regulatory commissions (with the exception of the
California Public Utility Commission) have been received.
Consummation of the Merger is conditioned upon, among other
things, expiration of the waiting periods under the HSR Act,
approval by the FCC of the transfer of control of McCaw and the
receipt of the necessary state regulatory approvals.
On September 22, 1993, AT&T and McCaw each received an
extensive request from the Antitrust Division for additional
information and documents with respect to the Merger and the
telecommunications industry. Accordingly, the waiting period
under the HSR Act has been extended and will not expire until the
twentieth calendar day after AT&T and McCaw have each
substantially complied with such request for additional
information and documents. Each of AT&T and McCaw is responding
to the request, but cannot predict when substantial compliance
will be achieved.<PAGE>
<PAGE> 5
On December 2, 1993, BellSouth Corporation ("BellSouth")
filed a motion in the case entitled United States v. Western
Electric Co. Inc. et al., Civil Action No. 82-0192, for a
declaratory ruling that the Merger would violate Section I(D) of
the Modification of Final Judgment (the "Decree"), United States
v. American Tel. and Tel. Co., 552 F. Supp. 131, 226-34 (D.D.C.
1982), aff'd mem. sub. nom Maryland v. United States, 450 U.S.
1001 (1982), and cannot be consummated without a modification or
waiver of the Decree. The Justice Department has also taken the
position that a modification or waiver is required. AT&T and
McCaw believe that BellSouth is not entitled to the relief
sought. There can be no assurance that AT&T will prevail with
respect to the BellSouth challenge or any other challenge to the
Merger that may be made on antitrust grounds.
The obligations of AT&T and McCaw to consummate the Merger
are also subject to the condition that there be no preliminary or
permanent injunction or other order by any court or governmental
or regulatory authority of competent jurisdiction, including any
state governmental or regulatory authorities, prohibiting
consummation of the Merger or permitting such consummation only
subject to any condition or restriction unacceptable to AT&T in
its reasonable judgment. In addition, the obligation of AT&T to
consummate the Merger is subject to the condition that no suit,
action, investigation, inquiry or other proceeding by any United
States governmental body or other material governmental body
shall have been instituted and be pending which imposes or which
would be reasonably expected to impose any condition or
restriction unacceptable to AT&T in its reasonable judgment.
Each party has agreed to use all reasonable efforts to have any
such injunction or order lifted and otherwise satisfy the
conditions to Closing.
Separately, AT&T has agreed to purchase, at the Company's
option, exercisable in the event the AT&T Merger Agreement is
terminated, approximately 11.7 million newly issued shares of the
Company's Class A Common Stock, par value $.01 per share (the
"Class A Common Stock") at $51.25 per share, for a total purchase
price of $600 million. Such purchase would be subject to the
receipt of necessary governmental approvals. In the event that
it is finally judicially determined that the AT&T Merger
Agreement was terminated as a result of a breach of the Company's
obligations thereunder, AT&T has the right to require the Company
to repurchase all shares so purchased by AT&T, at the original
purchase price plus interest thereon accrued at 7% per annum.
Redemption of Publicly Held Debt. On March 4, 1993, the
Company announced the redemption of all its outstanding
convertible senior subordinated debentures. Between the
announcement of the redemption and the termination on March 31,
1993 of the right of holders to convert, approximately $113.9
million of the debentures were converted into approximately 3.8
million shares of the Company's Class A Common Stock. On April
5, 1993, the Company redeemed the remaining convertible
debentures for cash. <PAGE>
<PAGE> 6
On December 31, 1993, the Company redeemed all of its
remaining senior and senior subordinated notes and debentures.
The Company financed the redemption with borrowings made under
its existing $3 billion Bank Credit Facility and a new $1 billion
parallel facility. Interest under both such facilities is
payable at the applicable margin above, at the Company's
discretion, the prevailing prime, LIBOR or CD rate. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations." The applicable margin for LIBOR loans is
currently 1 1/2%.
Cellular Interests
By obtaining cellular licenses in areas adjacent to or near
those in which it already controls a license, the Company has
assembled and continues to develop eight regional clusters of
operations. Clustering offers the Company operating
efficiencies, capital savings and service advantages. See
"Business--The Company's Cellular Operations." As of December 31,
1993, the number of subscribers in the Company's and LIN's
markets, based on 100% of the subscribers in markets which were
operating and in which the Company or LIN owned at least a 50%
voting interest in a licensee, and also including the Company's
less than 50% interests in the California, Kansas and New York
markets held in joint ventures with AirTouch Communications and
Associated Communications, and in the Philadelphia market, was
approximately 3.1 million and penetration was 3.24%.
The table on the following pages sets forth the markets, by
cluster, in which McCaw and LIN owned an interest as of December
31, 1993.<PAGE>
<PAGE> 7
Ownership 1993 Net 1993
Interest Population(1) Pops(2)
Market
Florida Cluster
Miami/Ft. Lauderdale, FL 100.00% 3,350,000 3,350,000
West Palm Beach, FL 100.00% 918,400 918,400
Fort Pierce, FL 100.00% 271,000 271,000
Tampa, FL 100.00% 2,031,500 2,031,500
Orlando, FL 100.00% 1,172,800 1,172,800
Lakeland, FL 93.02% 428,400 398,500
Melbourne, FL 92.57% 431,500 399,400
Sarasota, FL 84.64% 291,900 247,100
Bradenton, FL 91.01% 223,800 203,700
Jacksonville, FL 100.00% 987,900 987,900
Tallahassee, FL 100.00% 266,200 266,200
Ocala, FL 88.96% 213,400 189,800
Daytona Beach, FL 100.00% 398,700 398,700
Citrus, FL 85.00% 415,500 353,200
11,401,000 11,188,200
California/Nevada Cluster
Los Angeles, CA (3) 39.97% 14,588,100 5,830,900
Oxnard, CA 100.00% 693,400 693,400
Las Vegas, NV 100.00% 899,400 899,400
Santa Barbara, CA 84.13% 379,200 319,000
San Francisco, CA 50.00% 3,796,900 1,898,500
San Jose, CA 50.00% 1,535,800 767,900
Sacramento, CA 100.00% 1,474,100 1,474,100
Fresno, CA 100.00% 720,300 720,300
Stockton, CA 100.00% 513,900 513,900
Vallejo, CA 50.00% 489,400 244,700
Santa Rosa, CA 46.73% 408,700 191,000
Carmel/Mont/Salinas, CA 49.44% 371,300 183,600
Modesto, CA 100.00% 410,700 410,700
Visalia, CA 92.22% 339,900 313,500
Santa Cruz, CA 22.20% 230,600 51,200
Reno, NV 88.59% 276,800 245,200
Redding, CA 88.20% 165,000 145,500
Yuba City, CA 94.37% 132,800 125,300
Alpine, CA 100.00% 139,300 139,300
Madera, CA 24.98% 333,300 83,300
Tehama, CA 100.00% 96,100 96,100
27,995,000 15,346,800
Pacific Northwest Cluster
Seattle, WA 100.00% 2,077,800 2,077,800
Tacoma, WA 100.00% 634,000 634,000
Spokane, WA 88.22% 393,000 346,700
Yakima, WA 93.20% 202,000 188,300
Bremerton, WA 96.70% 218,700 211,500
Olympia, WA 89.20% 182,500 162,800
Richland, WA 100.00% 163,700 163,700
Bellingham, WA 91.48% 140,900 128,900
Clallam, WA 100.00% 252,300 252,300
Pacific, WA 100.00% 174,300 174,300
Kittitas, WA 100.00% 114,000 114,000
Portland, OR 100.00% 1,541,100 1,541,100
Salem, OR 93.91% 300,300 282,000
Eugene, OR 100.00% 295,200 295,200
Medford, OR 91.75% 157,500 144,500
Boise, ID 90.10% 231,600 208,700
Elmore, ID 100.00% 127,800 127,800
Anchorage, AK 88.29% 250,100 220,800
Maui, HI 100.00% 111,700 111,700
7,568,500 7,386,100<PAGE>
<PAGE> 8
Ownership 1993 Net 1993
Interest Population(1) Pops(2)
Market
Rocky Mountain Cluster
Denver, CO 100.00% 1,992,900 1,992,900
Colorado Springs, CO 100.00% 431,000 431,000
Fort Collins, CO 91.14% 203,700 185,700
Greeley, CO 89.38% 137,300 122,700
Pueblo, CO 87.85% 124,600 109,500
Garfield, CO 91.50% 257,100 235,200
Salt Lake City, UT 100.00% 1,178,900 1,178,900
Provo, UT 93.05% 277,400 258,100
Box Elder, UT 100.00% 113,800 113,800
4,716,700 4,627,800
Northeast Cluster
New York, NY (3) 93.08% 14,938,800 13,905,000
Buffalo, NY 25.00% 1,196,900 299,200
Philadelphia, PA (3) 49.99% 4,895,100 2,447,100
Pittsburgh, PA 64.30% 2,108,200 1,355,600
Erie, PA 93.76% 281,400 263,800
Johnstown, PA 100.00% 241,200 241,200
Wheeling, WV/OH 84.56% 156,900 132,700
Parkersburg, WV 98.02% 154,900 151,800
Worcester, MA 9.40% 705,100 66,300
Ocean County, NJ 75.00% 445,600 334,200
25,124,100 19,196,900
Midwest Cluster
St. Louis, MO 15.00% 2,453,700 368,100
Kansas City, MO 50.00% 1,487,200 743,600
St. Joseph, MO 47.50% 98,500 46,800
Lawrence, KS 50.00% 86,100 43,100
Oklahoma City, OK 100.00% 963,300 963,300
Grant, OK 100.00% 203,100 203,100
Tulsa, OK 100.00% 779,800 779,800
Little Rock, AR 89.65% 528,100 473,400
Fort Smith, AR/OK 100.00% 227,600 227,600
Fayetteville, AR 100.00% 229,500 229,500
Pine Bluff, AR 94.73% 84,800 80,300
7,141,700 4,158,600
Upper Midwest Cluster
Minneapolis, MN 100.00% 2,543,700 2,543,700
St. Cloud, MN 69.51% 202,200 140,500
Rochester, MN 84.86% 112,800 95,700
Koochiching, MN 100.00% 57,300 57,300
2,916,000 2,837,200
Texas/Louisiana Cluster
Dallas, TX (3) 83.00% 4,201,900 3,487,600
Houston, TX (3) 56.25% 3,811,900 2,144,200
San Antonio, TX 100.00% 1,359,700 1,359,700
Austin, TX 100.00% 850,200 850,200
Shreveport, LA 97.50% 371,700 362,400
Corpus Christi, TX 90.97% 366,800 333,700
Temple/Killeen, TX 100.00% 237,400 237,400
Lafayette, LA 87.64% 220,600 193,300
Waco, TX 100.00% 194,000 194,000
Longview, TX 100.00% 167,800 167,800
Monroe, LA 80.00% 145,700 116,600
Texarkana, AR/TX 89.29% 134,900 120,500
Bryan-College St., TX 100.00% 125,000 125,000
Sherman-Denison, TX 100.00% 97,500 97,500<PAGE>
<PAGE> 9
Ownership 1993 Net 1993
Interest Population(1) Pops(2)
Market
Texas/Louisiana Cluster (con't.)
Galveston, TX (3) 42.07% 231,800 97,500
Jack, TX 100.00% 79,400 79,400
Claiborne, LA 25.00% 112,400 28,100
Wichita Falls, TX 49.00% 130,400 63,900
Newton, TX (3) 100.00% 230,200 230,200
13,069,300 10,289,000
Other interests 4,500,500 395,100
TOTAL 104,432,800 75,425,700
__________________________________________
(1) Source: Donnelley Marketing Service Estimate for 1993.
(2) Total Ownership Interest multiplied by 1993 Population.
(3) Interests in Los Angeles, New York, Philadelphia, Houston
and Newton reflect LIN's direct ownership interest therein.
The interest in Dallas represents LIN's direct interest of
60.44% plus the Company's direct and indirect interests of
22.56%. The interest in Galveston represents LIN's direct
interest of 34.60% plus the Company's direct interest of
7.47%. The Company owns an approximate 52% interest in LIN.
LIN shares voting control equally with the other major
partner in Los Angeles and Houston and controls Dallas, New
York and Newton.
Within its clusters, the Company has pursued an aggressive
acquisition strategy designed first to obtain majority or
controlling interests in the largest and fastest growing MSAs and
second to continuously enlarge the service area provided by
obtaining majority or controlling interests in successively
adjacent markets, thereby creating networks of uninterrupted
coverage encompassing large metropolitan complexes. These
complexes, which were arbitrarily divided in the licensing
process, are commercial corridors through which local businesses
and subscribers regularly conduct their affairs.
Illustrated on the next two pages are several examples of
the results of this strategy, both in assembling clusters and
also in the creation of large metropolitan complexes within these
clusters. On the West Coast, for example, the Company is in the
process of establishing uninterrupted service from the Canadian
border to Los Angeles. Within this "I-5 Corridor" the Company
has assembled four metropolitan complexes: Greater Seattle,
Greater Portland, Northern California and Southern
California/Nevada, each area embracing large, growing population
bases. In between, the Company has obtained controlling
interests in key markets along Interstate 5, which links
Washington, Oregon and California. The Company has followed the
same strategy in Florida, the Rocky Mountain area and Texas as
illustrated below, as well as in its other clusters.<PAGE>
<PAGE> 10
This page contains two maps. The first map depicts the
Company's "Florida Cluster". The map shows the state
of Florida, its major highways, and the Company's
coverage area in that state. The following table
appears also:
Total 1993 Company's
Population 1993 Pops
---------- ----------
Greater Tampa/Orlando 5,400,000 5,200,000
Greater Miami/West Palm 4,500,000 4,500,000
Other 1,500,000 1,500,000
---------- ----------
Total 11,400,000 11,200,000
The second map depicts the Company's "I-5 Corridor".
The map shows the states of California, Nevada, Oregon,
Washington and Idaho. It shows major highways in those
states, and the Company's coverage area in those
states. The following table also appears:
Total 1993 Company/LIN
Population 1993 Pops
---------- ----------
Greater Seattle/Portland 6,400,000 6,300,000
Northern CA/NV 10,900,000 7,500,000
Southern CA/NV 16,600,000 7,700,000
Other 800,000 800,000
---------- ----------
Total 34,700,000 22,300,000
<PAGE>
<PAGE> 11
This page contains two maps. The first map depicts the
Company's "Rocky Mountain Cluster". The map shows the
states of Utah and Colorado, the major highways in
those states, and Company's coverage area in those
states. The following table also appears:
Total 1993 Company's
Population 1993 Pops
---------- ----------
Greater Denver 3,100,000 3,100,000
Greater Salt Lake City 1,600,000 1,500,000
---------- ----------
Total 4,700,000 4,600,000
The second map depicts the state of Texas. It shows
the major highways in that state, and the Company's
coverage area in that state. The following table also
appears:
Total 1993 Company/LIN
Population 1993 Pops
---------- ----------
Greater Dallas 4,400,000 3,700,000
Greater Houston 4,400,000 2,600,000
Greater Austin/San Antonio 2,600,000 2,600,000
Other 1,200,000 1,000,000
---------- ----------
Total 12,600,000 9,900,000
<PAGE>
<PAGE> 12
The Cellular Telephone Industry
Cellular telephone technology provides high quality, high
capacity service to and from vehicle-mounted, hand-held portable
and stationary wireless telephones. Cellular telephone systems
("cellular systems") divide a region into many "cells," each
covered by its own low-power transmitter, receiver and signaling
equipment (the "cell site"). Each cell site is connected by
landline, microwave or other technology to the system's computers
in a mobile telephone switching office (the "switch"). The
switches control the operation of the cellular system for the
entire service area. Each conversation in a cellular system
involves a radio transmission between a cellular telephone and a
cell site and the transmission of the call between the cell site
and a switch. The switch and cell sites periodically monitor the
signal quality of calls in progress. The signal quality of the
transmission between the cellular telephone and a cell site in
any cell declines as the signal strength decreases. When the
signal quality of a call declines to a predetermined level, the
switch determines if the signal quality is greater at the cell
site of another cell or different sector within the same cell and
if so, "hands off" the call to that other cell site or sector.
This hand off takes a fraction of a second and is not generally
noticeable to either party to the call. If the cellular telephone
leaves the service area of the cellular system, the call is
disconnected unless an appropriate technical interface is
established with an adjacent cellular system.
Currently, the radio transmission between the cellular
telephone and the cell site is primarily an "analog" transmission
and both the cellular telephone and the transmitting equipment
are designed to send and receive voice signals exclusively in
this mode. The Company is introducing new cellular telephones
and transmitting equipment using "digital" transmission
technology based on the TDMA format. Digital technology offers
many advantages over analog technology, including an initial
three-fold increase in capacity, lower costs and the opportunity
to provide enhanced services, such as improved data
transmissions, short messaging, caller ID and longer phone
battery life. Because existing analog cellular telephones will
not be able to receive digital transmissions from the cell site,
the Company expects that the conversion from analog to digital
will be phased in over a number of years, during which a system
will maintain both analog and digital transmitting equipment and
will thus be able to serve customers with either analog, dual-
mode (analog and digital) or digital only cellular telephones.
All of the Company's systems are already compatible with both
analog and digital transmitting equipment. Thus, implementation
of digital service only involves the change-out of cell site
radios and certain other equipment. The Company expects its
additional capital expenditures in 1994 in connection with the
planned expansion of digital service to be approximately $110
million. Over time, the Company expects its capital expenditures
to be reduced significantly because the resulting increased<PAGE>
<PAGE> 13
system capacity associated with digital service will reduce the
need to add new cell sites.
Cellular systems can offer a variety of features including
call forwarding, call waiting, conference calling, voice message
storage and retrieval and voice recognition where subscribers can
make calls by speaking the number to be dialed. Because cellular
systems are fully interconnected with the landline telephone
network, subscribers can receive and originate both local and
long distance calls from their cellular telephones. The cellular
system operator pays an interconnection charge to the local
landline telephone company to carry calls placed from a mobile
unit to a wired telephone. The amounts paid are subject to
negotiation or tariff and vary from system to system.
All cellular phones are designed for compatibility with
cellular systems in all market areas within the United States,
Canada and Mexico and with all channels allocated for cellular
use, so that a mobile unit may be used wherever a subscriber is
located. Changes of cellular telephone numbers or other
technical adjustments to mobile units by the manufacturer or the
cellular service operator may be required, however, to enable the
subscriber to change from one cellular system to another.
Cellular system operators may provide service to subscribers from
another cellular system temporarily located in or traveling
through the operator's service area. Such subscribers are called
"roamers."
The FCC granted only two licenses for cellular service in
each market. During its initial licensing of cellular MSAs and
rural service areas ("RSAs"), the FCC reserved one license for
applicants (such as the Company) that were not affiliated with
any landline telephone carrier (the "A Block license"), and the
other license for wireline applicants (the ("B Block license") .
Now, subject to FCC rules, an A Block or B Block license may be
granted to either a wireline or nonwireline entity, but no entity
may control more than one cellular system in any service area.
The Company's Cellular Operations
Acquisitions and Dispositions. The Company has aggressively
pursued the acquisition of cellular interests throughout the
United States, both through the application process and through
acquisitions. In evaluating acquisitions, the Company considers
price, the potential demand for cellular service in the market
served, the ability to "cluster" systems in the area and the
ability to obtain control of the system acquired. Attention to
these considerations has enabled the Company to assemble cellular
interests which it believes provide a strong operating base. The
Company now owns cellular interests, located primarily in the
Western and Sunbelt regions of the United States, in and around
areas which it believes (in light of demographics or anticipated
rate of population growth, or both) have above average potential
for the development of cellular service.<PAGE>
<PAGE> 14
The Company is regularly engaged in discussions relating to
the acquisition of additional interests in its existing markets,
in markets adjoining its existing markets and in other areas.
The competition for the purchase of controlling interests in
cellular systems is intense, and the Company must often compete
for control of additional systems with entities that have
substantially greater capital resources. There can be no
assurance that the Company will be able to acquire any additional
cellular interests. The Company has disposed of cellular
interests which were not critical to the completion of the
Company's network.
Clustering. By obtaining licenses in areas adjacent to or
near those in which it already controls a license, the Company
has assembled and continues to develop eight regional clusters of
cellular operations. The Company is a pioneer of the clustering
concept and has successfully created a greater number of clusters
than any other cellular service provider.
The Company's strategy in assembling clusters has been to
build upon core metropolitan areas and by acquiring control of
contiguous or nearby markets, to create wide areas of coverage
serving larger concentrations of population than the original FCC
licensing scheme would have suggested. For example, in Florida
the Company's Miami, West Palm Beach and Fort Pierce markets,
which are all contiguous, cover an aggregate of 4.5 million 1993
population.
These clusters offer many competitive advantages. For
example, clusters permit the Company to offer subscribers more
areas of service as they travel throughout a region, such as the
Pacific Northwest, where the Company controls the A Block
cellular systems in Seattle, Tacoma and Portland. The use of
equipment from a single manufacturer may enable the Company to
offer services at greater convenience to its customers than B
Block competitors using equipment of different manufacturers.
When the markets controlled by the Company are contiguous, the
Company may offer uninterrupted service as a subscriber travels
within the region.
Clustering can reduce capital and operating costs through
shared use of equipment among nearby markets and common
management. The sharing of equipment is especially important for
smaller markets. The majority of the Company's cellular systems
serving markets having populations of approximately 350,000 or
less share equipment and construction and maintenance facilities
with neighboring cellular systems controlled by the Company. The
extent to which the Company centralizes operations within a given
region varies depending on the proximity, size and number of the
component markets.
Clustering also allows the Company to implement regional
marketing and advertising efficiently. For example, customer
recognition of the regional scope of the Company's operations is<PAGE>
<PAGE> 15
enanced by the consistent use by the Company throughout a region
of the "Cellular One" name. See "Marketing".
Majority Control. The Company has sought to obtain majority
ownership or operating control of its cellular systems in order
to control the development and operation of the systems and
capitalize on its experience and expertise. Operating control
enables the Company to implement its strategies, establish
regional networks and take advantage of operating efficiencies
not available to smaller or more fragmented operators. As of
December 31, 1993, the Company owned, or had the right or
obligation to acquire, a majority ownership interest in the A
Block licensees (including the markets in which the CMT Partners
Joint Venture will have a majority interest) in 83 of the 305
MSAs and 15 of the 416 RSAs licensed by the FCC. As of such
date, the Company owned an interest in 34 of the 90 largest
markets in the United States based on 1993 population. Of these
markets, the Company currently has majority ownership in 28
markets.
In those markets in which the Company owns or purchases less
than the entire interest in the cellular licensee, the license is
generally held by a partnership in which the Company or one of
its subsidiaries is a partner, although in smaller markets the
license may be held by a corporation. In each such partnership
in which the Company owns a majority interest, the Company
exercises control over operations. The partnerships in these
markets are governed by partnership agreements which are
substantially similar and contain customary provisions dealing
with capital contributions, distributions, transfers of interests
and management.
The partnership agreement for the Pittsburgh market contains
provisions entitling any partner, on or after June 4, 1991, to
offer either to buy the partnership interest of the other partner
or to sell its partnership interest, in each case at the price
per percentage of interest stipulated by the initiating partner,
and to require the other partner to elect to accept one of such
offers (the "shotgun"). The Company and its other partner have
mutually agreed not to trigger the Pittsburgh "shotgun" before
September 28, 1995.
Marketing. In marketing its services, the Company stresses
that cellular telephones are affordable and easy to use and
produce immediate and direct benefits to subscribers, including
increased productivity for the business user and convenience for
all subscribers. The Company also emphasizes that it is a
locally managed, customer-oriented cellular system operator which
is responsive and accommodating to the needs of subscribers.
Like the A Block licensees in many other markets, most cellular
entities controlled by the Company conduct business under the
service mark "Cellular One." <PAGE>
<PAGE> 16
The Company follows a strategy of controlled
decentralization which allows each regional manager to adapt the
Company's general marketing and incentive plans to the particular
needs of the markets within his or her cluster, to develop
innovative uses for cellular telephones and products which are
responsive to local needs, and to set goals for the sales force
and dealers. The key elements of all such marketing plans are
appealing to potential subscribers, creating public awareness and
understanding of the cellular telephone services offered by the
Company, developing a sales force and dealer network, reducing
the initial investment required by subscribers to obtain cellular
service and certifying installation centers.
Subscribers. While subscribers represent a wide range of
occupations, they have traditionally been individuals who work in
the construction, contracting, real estate, wholesale and retail
industries, service industries and professionals. Because these
individuals often work out of their cars during the day, the
Company's systems are used primarily between the hours of 7:00
a.m. and 6:00 p.m. Increasingly, the Company's subscribers
represent major accounts, such as federal and local governmental
agencies, national and regional shipping, delivery and
transportation companies and other businesses. Although a
majority of the Company's subscribers are business users, a
growing share of new customers use the phone principally for
safety and convenience. The Company expects this trend to
continue as market penetration increases. Over half of the
Company's new subscribers purchase a portable unit that is not
restricted to car use. The Company believes that hand-held
portable cellular telephones will become an increasingly large
portion of its subscriber base as the price for such telephones
continues to decline.
Sales Force, Dealers and Retailers. The Company enlists
subscribers through an internal sales force and through a network
of independent dealers and retailers. Dealers and retailers are
independent contractors who solicit customers on a commission
basis for the Company's cellular systems.
The Company's dealers either are in the business of selling
or servicing cellular telephones exclusively or are engaged in
businesses with customers that are likely to become cellular
subscribers. The Company has established and is continuing to
pursue multi-state dealer arrangements. The Company has several
dealer compensation contracts. Most involve a commission which
is paid immediately to the dealer, but with the dealer's
retention of all or part of the commission contingent upon the
customer keeping the service for a specified period of time
(generally between three and six months). Such contracts may
also involve the payment of a portion of the commission over
time, as service is provided to the subscriber.
The Company has also been successful in attracting premier
national mass market retailers to distribute its products.<PAGE>
<PAGE> 17
National Marketing. Increasingly, large customers with
nationwide needs for cellular services are purchasing these
services centrally. Larger corporations generally require a
national sales force, special volume purchase discounts, trial
programs, central billing, simple rate plans, and national 24-
hour customer service. The Company's National Account Services
Group coordinates these activities with local markets. To
improve these programs, the Company is now operating a central
clearing house for all new national account orders and shipping
of the cellular telephones to national accounts. The National
Account Services Group also accredits local installers, and
establishes the Company's national corporate price plan.
The Company has been authorized to list cellular telephone
equipment on the General Services Administration approved
schedule, which facilitates the buying process for all federal
government agencies.
Telephones and Installation. The Company purchases
telephones under national sales contracts and, as a means of
stimulating demand for cellular service, generally sells phones
to its dealers and the major accounts it services directly at
prices reflecting its costs. The Company cooperates with several
cellular equipment manufacturers in local advertising and
promotion of cellular equipment.
There are a number of different types of cellular telephones
available, all of which are compatible with cellular systems
nationwide. Models vary by type: car-mounted, transportable, and
fully portable; by type of transmission: analog and digital; by
feature, such as: speed dialing, speakerphone, voice recognition
and horn alert; and by price. Prices at which telephones are
sold to subscribers vary by market, resulting in part from local
competitive forces.
To ensure quality installation and customer satisfaction,
the Company certifies installation centers which meet certain
quality control standards.
Products and Services. The Company generally offers its
customers several pricing options. Some options consist of a
fixed monthly charge plus additional variable charges per minute
of telephone use. A high volume caller might find an option with
a high monthly access charge and low per-minute charges to be
most economical. Low volume users might choose a different
package featuring a low access fee and high per-minute charge.
The Company also offers plans with access fees which include a
specified number of minutes, with established per-minute charges
for usage in excess of the included minutes.
The Company makes available to subscribers custom calling
services such as call-forwarding, call-waiting, three-way
calling, no-answer and busy transfer. The Company has also<PAGE>
<PAGE> 18
instituted a voice retrieval message system and has or will be
installing voice recognition technology in all its cellular
systems. The Company also provides news, weather, sports and
financial news recordings.
The Company has also implemented automatic roaming in its
cellular systems. With automatic roaming, the Company's
subscribers are pre-registered in cellular systems outside the
Company's regions. Such subscribers receive service
automatically while they are roaming, without having to
communicate with the local office in any fashion.
Data-Over-Cellular. In 1992, the Company, together with
several other cellular carriers and IBM, announced a cooperative
effort to develop specifications for a packet data technology to
be used for transmission of data over cellular communications
systems (Cellular Digital Packet Data or "CDPD"). This
technology will allow data to be transmitted across existing
cellular networks without disrupting or degrading voice traffic
and without requiring additional system capacity or spectrum.
The technology is designed to serve wireless personal computing
devices and a variety of other wireless business applications.
The Company and the other participating carriers have funded
development of specifications which have resulted in an open
industry standard, using existing technology as building blocks.
This open industry standard will allow manufacturers to use the
same technical requirements, providing widespread service
capability. The Company recently commenced offering CDPD
services in Las Vegas, Nevada and expects commercial service to
begin in its largest markets during 1994.
Customer Service. The Company recognizes that being
responsive to the problems and concerns of its subscribers is
critical in a service business. The Company trains and certifies
various agents to provide repair services for the Company's
subscribers. The Company continually monitors and provides
ongoing training for service centers. In addition, the Company
operates its markets through an on-site staff, including a branch
manager or managers, technicians and customer service
representatives.
Cellular Competition. The FCC awarded only two cellular
licenses in each market - an A Block and a B Block license.
During its initial licensing of MSAs and RSAs the FCC reserved
the A Block license for a nonwireline company (which in each of
the Company's markets is the partnership or other entity in which
the Company owns an interest) and the B Block license for an
affiliate of a local wireline telephone company. Now, subject to
FCC rules, an A Block or a B Block license may be granted to
either a wireline or a nonwireline entity, but no entity may
control more than one license per market. Only a small number of
RSA cellular licenses have not been granted. Each licensee in a
market has the exclusive grant of a defined frequency band within
that market. The Company also faces competition for wireless<PAGE>
<PAGE> 19
communications services in each market from other wireless
technologies which provide many of the characteristics of
cellular service. See "Competition From Other Technologies".
Competition is principally on the basis of services and
enhancements offered, the technical quality of the system,
quality and responsiveness of customer service and price.
Competition may be intense. Under applicable law, the Company is
required to permit the "reselling" of its services. In certain
larger markets and in certain market segments such as national
customers, competition from resellers may be significant. There
is also competition for dealers.
The Company believes that in most of its markets the B Block
competitor must be viewed as formidable because of its greater
assets and resources and more extensive experience in
telecommunications. Large amounts of capital are required to
build and operate a cellular system, especially for equipment and
marketing. Because of their historical affiliation with the
local telephone company, the financial and other resources
available to the B Block licensees will generally be greater than
those available to the Company. In addition, the B Block
licensee generally completed construction and commenced operation
of its system earlier than the Company's partnership, giving the
B Block licensee a significant head start.
FCC rules require Regional Bell Operating Companies that
become cellular operators to create a separate subsidiary to own
and operate cellular systems. This requirement is intended to
make it more difficult for these companies to engage in
anticompetitive activities, such as subsidizing their cellular
operations from monopoly landline revenues in order to force
cellular competitors out of the market.
There are currently pending several legislative initiatives
which may affect the Company, including proposals regarding the
obligation of common carriers such as the Company to provide
interconnection or equal access to interexchange carriers and the
right of the Regional Bell Operating Companies (which are the
Company's primary B Block competitors) to offer or resell
interexchange services. In light of the uncertainty as to
whether such legislation will be enacted or the final form
thereof, and as to the nature of the additional competitive
services covered thereby, it is impossible to quantify the impact
of these legislative initiatives or such competition on the
Company at this time.
Competition From Other Technologies. Potential users of
cellular systems may find their communication needs satisfied by
other current and developing technologies. For example,
specialized mobile radio ("SMR") systems, generally used by
taxicabs and tow truck services, and other communication services
which have the technical capability to handle mobile telephone<PAGE>
<PAGE> 20
calls may provide competition in certain markets. One-way
messaging or beeper services that feature voice message and data
display as well as tones may be adequate for potential
subscribers who do not need to transmit back to the caller.
Other two-way mobile services may also be competitive with the
Company's services. For example, the second generation of
cordless telephone technology will permit the application of this
technology to a public environment. If sufficient demand
develops for these types of services, however, current regulation
would permit the Company to offer them under its existing
licenses.
In addition to B Block cellular competition, the Company and
its unconsolidated affiliates expect to face competition from
enhanced specialized mobile radio services ("ESMR") operations,
such as Nextel, which are providing cellular-like services in the
Company's California markets. A number of other ESMR networks
are scheduled to begin either operation or construction in 1994
in other cities as well.
In September 1993, the FCC adopted rules for the licensing
of personal communications services ("PCS"). While the Company
and other cellular carriers will be eligible to compete for these
licenses, the amount of PCS spectrum that cellular carriers may
acquire in their own cellular market areas is limited.
Furthermore, the FCC's rules provide for as many as seven PCS
licenses in any market area, so the likelihood of additional
competition in wireless services has increased. The FCC has also
established Rand-McNally Major Trading Areas ("MTAs") and Basic
Trading Areas ("BTAs") as the licensing areas for PCS services.
Both MTAs and BTAs are larger than a cellular MSA or RSA. In
some instances, an MTA may exceed in size the Company's cluster
of cellular licenses in a particular geographic region. It is
expected that PCS licenses will begin to be awarded in 1994.
Several parties to the FCC proceeding including the Company have
petitioned for reconsideration of certain aspects of the PCS
rules and it is possible that the FCC could amend its rules based
on these petitions.
Some of the PCS spectrum is already used by cellular
carriers for microwave transmissions, and the FCC has determined
that the existing microwave users must be phased out or relocated
to new frequencies once PCS is deployed. However, the FCC's
rules enable displaced microwave users to obtain compensation
from PCS licensees for vacating PCS spectrum and provide for a
transition period before incumbent microwave users are forced to
relocate.
Pursuant to the Omnibus Budget Reconciliation Act of 1993,
signed into law in August 1993, the FCC will auction the spectrum
that it has allocated for PCS licenses. Auctions are scheduled
to begin in May 1994. The FCC has recently proposed rules for
conducting auctions; these include a provision for the submission
of bids to acquire all licenses available within a common<PAGE>
<PAGE> 21
spectrum block, thus offering a new PCS entrant the possibility
of obtaining national coverage. Because the auction rules are
only in preliminary form, it is uncertain how they will affect
the Company's competitive position.
The Company's Messaging Operations
General. The Company owns messaging businesses operating
in 13 states comprising the fifth largest messaging business in
the United States. The Company's messaging businesses provide
three services: radio messaging (one-way), conventional mobile
communications (two-way) and telephone answering. Radio
messaging services are either operator-assisted or fully
automated and include tone-alert, silent-alert, tone-and-voice,
alpha-numeric and digital display messaging. Mobile
communications services include conventional mobile telephone
services ("MTS"), Improved Mobile Telephone Service ("IMTS"),
air-to-ground services and marine radio.
The Company's messaging businesses had, as of December 31,
1993, approximately 525,000 messaging units in service in the
states of Washington, Oregon, California, Colorado, Utah, Nevada,
Alaska, Minnesota, Kansas, Missouri, Arkansas, Oklahoma and
Texas. The majority of these subscribers are in locations where
the Company owns or has the right or obligation to acquire
cellular interests. The Company believes that combining cellular
telephone and messaging businesses enables the Company to have a
comprehensive personal communications presence in those markets
and allows it to realize marketing advantages as well as
economies of scale in management services.
Messaging Services. Messaging services provide the ability
to contact, by means of a radio-transmitted signal, persons who
carry small radio receivers. The caller uses a cellular or
landline telephone to reach an assigned telephone number at the
service provider's facilities. The assigned number is
automatically relayed to the messaging terminal, and the call
triggers a signal which is relayed to the terminal's transmitter,
and transmitted to the messaging unit. Subscribers to messaging
services include medical and legal groups, messenger services,
and off-duty emergency personnel. Subscribers typically rent the
messaging units on a month-to-month basis and pay a flat monthly
fee for messaging services.
Competition. Competition in the radio messaging industry is
intense and includes local radio common carriers, private
messaging systems and some FM broadcasters (using the subcarrier
channel). In addition, the FCC has allocated 3 MHz of spectrum
in the 900 MHz band for new narrowband PCS services that it will
auction off in the form of 11 national licenses, 6 regional
licenses, 7 MTA licenses and 2 BTA licenses.
<PAGE>
<PAGE> 22
The Company's Air-to-Ground Communications Operations
Through Claircom, the Company holds a license to provide
common carrier air-to-ground telecommunications services in the
U.S., and holds minority interests in two companies which are
licensed to provide similar service in Canada and Mexico.
Claircom has entered into agreements to provide digital voice and
data services to Alaska Airlines, Inc., American Airlines, Inc.,
Northwest Airlines, Inc. and Southwest Airlines Co. The
agreements with these carriers represent commitments to install
Claircom equipment on approximately 1,100 commercial aircraft.
Claircom also has entered into an agreement with Air France to
install satellite-based equipment on certain international
aircraft. Claircom currently offers nationwide service in the
U.S. and has installed its equipment on approximately 275
aircraft.
Business of LIN
LIN is principally engaged in the cellular telephone and
media (commercial television broadcasting and specialty
publishing) businesses. LIN owns cellular interests representing
approximately 27.2 million 1993 pops in New York, Los Angeles,
Philadelphia and Dallas-Fort Worth, Houston, Galveston and
Newton, Texas and owns seven network-affiliated television
stations. LIN also conducts a specialty publishing business
through its GuestInformant division. Set forth below is a
summary description of LIN's business. For a more complete
description, see LIN's current Annual Report on Form 10-K.
Cellular Operations. LIN, through subsidiaries, holds
significant ownership interests in, and participates in the
management and operation of, cellular systems in New York, Los
Angeles, Philadelphia and Dallas-Fort Worth, Houston, Galveston
and Newton, Texas. Five of LIN's cellular markets are in the ten
largest MSAs in the United States. The licenses or permits for
each cellular telephone market in which LIN has an interest are
held by a general partnership in which one of LIN's subsidiaries
is a general partner (except for the Philadelphia market, in
which the license is held by a corporation). Following is
information with respect to the seven cellular systems in which
LIN owns an interest.<PAGE>
<PAGE> 23
<TABLE>
Market Information
Total
LIN's Interests Population Market B Block
Name and Location Equity Voting (000,000s)(1) Rank(1) Competition
<S> <C> <C> <C> <C> <S> <C>
Cellular One 93.1% 100.0% 14.9 1 NYNEX/Bell
New York Atlantic
Los Angeles Cellular 40.0% 50.0% 14.6 2 AirTouch
Telephone Company Communications
Los Angeles (formerly
PacTel)
Comcast Metrophone 49.9% 49.9% 4.9 4 Bell Atlantic
Philadelphia
Metrocel 60.4% 60.4% 4.2 6 Southwestern
Dallas-Ft. Worth Bell
Houston Cellular 56.3% 50.0% 3.8 8 GTE
Telephone Company
Houston
Galveston Cellular 34.6% 50.0% 0.2 169 GTE
Telephone Company
Galveston
Cellular One 100.0% 100.0% 0.2 N/A GTE
(Texas RSA-17)
Newton, TX (2)
1/ Source: Donnelley Marketing Information Services estimate for 1993.
2/ The Company acquired its interest in the Newton, Texas RSA in 1993.
</TABLE>
<PAGE>
<PAGE> 24
The agreements governing the New York, Los Angeles, Dallas-
Fort Worth, Houston and Galveston partnerships are generally
similar and LIN's subsidiaries have or share effective operating
control of each partnership. LIN's wholly-owned subsidiaries are
general partners in these partnerships, and each of the
partnerships is governed by a Partners' or Executive Committee
consisting of designated representatives from the partners in the
particular partnership. In each case, the applicable partnership
agreement generally provides that all rights and obligations
(other than voting), such as obligations for capital investment,
sharing of profits and losses, and distributions, are based upon
percentage ownership. The cellular system serving the
Philadelphia market is conducted in the form of a corporation,
and Comcast has operating control of the corporation. The
participants in each of these partnership or corporate entities
are generally responsible for their pro rata share of all capital
contributions called for by the governing bodies of such
entities, and failure to make such contributions could result in
the ownership interest being either forfeited or diluted. Such
ownership interests are also subject to restrictions upon the
owners' ability to sell, transfer, pledge or otherwise encumber
or dispose of such interests under certain circumstances.
Television Broadcasting. Information with respect to LIN's
television stations is set forth in the following table.<PAGE>
<PAGE> 25
<TABLE>
Number of
Commercial
Stations
Network NSI Operating
Station and Market Channel Affiliation Market Rank(1) in Market
<S> <C> <C> <S> <C> <C>
KXAS-TV
Ft. Worth-Dallas, 5 (VHF) NBC 8 4 VHF
Texas 8 UHF
WISH-TV
Indianapolis, 8 (VHF) CBS 26 4 VHF
Indiana 4 UHF
WOOD-TV (formerly
WOTV-TV) Grand 8 (VHF) NBC 36 3 VHF
Rapids-Kalamazoo- 2 UHF
Battle Creek, Michigan
WAVY-TV
Hampton Roads, 10 (VHF) NBC 39 3 VHF
Virginia 2 UHF
KXAN-TV (2)
Austin, Texas 36 (UHF) NBC 68 1 VHF
3 UHF
WAND-TV
Decatur-Champaign- 17 (UHF) ABC 77 1 VHF
Springfield-Danville, 6 UHF
Illinois
WANE-TV
Fort Wayne, Indiana 15 (UHF) CBS 103 4 UHF
_______________________
(1) Source: Neilsen Station Index ("NSI") - DMA Market Ranking 1993/1994, A.C. Nielsen
Company.
(2) Station KXAM-TV, Channel 14 (UHF) at Llano, Texas is operated as a satellite station
of KXAN-TV in order to increase its coverage area.<PAGE>
</TABLE>
<PAGE> 26
LIN also provides programming and advertising services
pursuant to a local marketing agreement to WOTV-41, Battle Creek,
Michigan, an ABC affiliate operating on UHF Channel 41. The
Grand Rapids-Kalamazoo-Battle Creek market, with a population of
approximately 1,683,000, is served by three commercial VHF
stations, including station WOOD-TV, which is owned by LIN, and
one other commercial UHF television station and three non-
commercial UHF television stations.
Broadcasting operations are subject to the jurisdiction of
the FCC under the Communications Act. The Communications Act
empowers the FCC, among other things, to issue, revoke, modify
and renew broadcasting licenses, approve the transfer of such
licenses, assign frequency bands and determine the location of
stations, regulate the apparatus used by stations, establish
areas to be served by particular stations, regulate distribution
of network programming and syndicated programs, adopt such
regulations as may be necessary to carry out the provisions of
the Communications Act and impose certain penalties for violation
of those regulations. Both UHF and VHF television licenses
issued by the FCC authorize licensees to provide broadcast
service on specific channels which cover specified service areas.
Broadcasting licenses for television stations are granted
for a maximum period of five years and they are renewable upon
application therefor. During certain periods when a renewal
application is pending, competing applicants may file for the
frequency in use by the renewal applicant. Competing applicants
may be entitled to a comparative hearing in competition with the
renewal applicant. As of December 31, 1993, no competing
applications had been filed against any of LIN's stations.
In addition, petitions to deny applications for renewal of
licenses may be filed during certain periods following the filing
of renewal applications. In recent years, representatives of
various community groups and others have filed numerous petitions
to deny renewal applications of broadcasting stations. None of
LIN's stations are subject to renewal during 1994. Renewal
applications must be filed with the FCC four months before the
expiration date of the license, and competing applications and
petitions to deny must be filed one month prior to the expiration
date.
The foregoing does not purport to be a complete summary of
all of the provisions of the Communications Act or the
regulations and policies of the FCC thereunder which relate to
television broadcasting. Reference is made to the Communications
Act, such regulations and the public notices promulgated
thereunder by the FCC for further information relating thereto.
Specialty Publishing. GuestInformant (managed by
Metromedia) publishes annual, hardcover, high quality
publications which are placed in the rooms of distinguished<PAGE>
<PAGE> 27
hotels in 33 metropolitan areas. For each of these locations,
GuestInformant produces a distinctive magazine, which contains
editorial features relating to places of interest in the area and
advertisements supporting each magazine published. In select
markets, GuestInformant also publishes a Quick City Guide, which
is a softcover magazine distributed in hotel lobbies. Editorial
and production offices are located in Woodland Hills, California,
and sales offices are maintained in New York and most other major
cities. Printing is done by independent contractors.
Private Market Value Guarantee
The Company has entered into the Private Market Value
Guarantee ("PMVG") with LIN for the benefit of LIN's stockholders
(other than the Company and its affiliates). The PMVG provides
among other things that, for as long as the Company and its
affiliates beneficially own in the aggregate at least 25% of the
outstanding shares of LIN Common Stock ("Shares") on a fully
diluted basis or the Company's designees constitute a majority of
the Board of Directors of LIN, and any Shares are held by other
persons, the following provisions shall apply:
Independent Directors. Three members of LIN's board of
directors (the "Independent Directors") will be independent
directors as determined under the New York Stock Exchange Rules
(i.e., independent of management of the Company and its
affiliates and free of any relationship that, in the opinion of
LIN's Board of Directors, would interfere with the exercise of
independent judgment). The initial Independent Directors are
persons who served on LIN's Board of Directors prior to the
completion by the Company of its tender offer for LIN. At each
annual meeting of LIN's stockholders, Independent Directors will
be nominated by the then current Independent Directors and
elected by a Majority Vote of the Public Stockholders, as defined
below. Independent Directors will be subject to removal only (a)
for cause, (b) if a majority of the Independent Directors approve
such removal or (c) if such removal is approved by a Majority
Vote of the Public Stockholders.
"Majority Vote of the Public Stockholders" means (a) the
affirmative vote of the holders of at least a majority of the
Public Shares present and entitled to vote at any meeting at
which the holders of a majority of the Public Shares are present
or (b) the action by written consent (in accordance with
applicable provisions of Delaware law and LIN's certificate of
incorporation and by-laws) of the holders of a majority of the
Public Shares. "Public Shares" means Shares not owned by the
Company or any of its affiliates.
Sale of LIN After Five Years. On or about January 1, 1995
(the "Initiation Date"), the Independent Directors will designate
an investment banking firm of recognized national standing and
the Company will designate an investment banking firm of
recognized national standing, in each case to determine the<PAGE>
<PAGE> 28
private market value per Share. Private market value per Share
is the private market price per Share ("Private Market Price")
(including control premium) that an unrelated third party would
pay if it were to acquire all outstanding Shares (including the
Shares held by the Company and its affiliates) in an arm's length
transaction, assuming that LIN was being sold in a manner
designed to attract all possible participants (including the
Regional Bell Operating Companies) and to maximize stockholder
value, including if necessary through the sale or other
disposition (including tax-free spin-offs, if possible) of
businesses prohibited by legal restrictions to be owned by any
particular buyer or class of buyers (e.g., the Regional Bell
Operating Companies).
Once the Private Market Price is determined pursuant to the
procedures provided for in the PMVG, the Company will have 45
days to decide whether it desires to proceed with an acquisition
of all of the public shares (an "Acquisition") at that price. If
the Company decides to proceed with an Acquisition, it may pay
the Private Market Price in cash or any combination of cash,
common equity securities and/or nonconvertible senior or
subordinated "current cash pay" debt securities that the
Independent Directors, after consultation with their investment
banking firm, believe in good faith will have an aggregate market
value, on a fully distributed basis, of not less than the Private
Market Price. If the Company determines to proceed with an
Acquisition as set forth above, it will enter into an agreement
with LIN (containing customary terms and conditions) and will
cause a meeting of stockholders of LIN to be held as soon as
practicable to consider and vote thereon. The Acquisition may
only be completed if it is approved by a Majority Vote of the
Public Stockholders.
If the Company determines not to proceed with an
Acquisition, or if despite the Company's good faith efforts an
Acquisition has not been completed within 12 months following the
Initiation Date (or, if an Acquisition has been approved by a
Majority Vote of the Public Stockholders and is being pursued in
good faith by the Company but has not been completed due to
regulatory delays or litigation, 20 months following the
Initiation Date), the Company will put LIN in its entirety up for
sale under direction of the Independent Directors in a manner
intended by the Independent Directors to maximize value for all
Shares. The sale procedures will be set by the Independent
Directors and may include, if necessary in order to maximize
stockholder value, provision for the sale or other disposition of
businesses prohibited by legal restrictions to be owned by any
particular buyer or class of buyers (e.g., the Regional Bell
Operating Companies). The Independent Directors will select from
among the proposed transactions the one or more transactions
determined by them (including tax-free spin-offs, if possible) as
being most likely to maximize value for all Shares and will cause
a meeting of LIN's stockholders to be held as soon as practicable<PAGE>
<PAGE> 29
to consider and vote thereon. The Company will not bid unless
requested to do so by the Independent Directors. The Company
will fully cooperate in this process and, if one or more of the
transactions so selected by the Independent Directors are
approved by a Majority Vote of the Public Stockholders, will
cause all Shares owned by it or its affiliates to be voted in
favor thereof. Any sale of LIN would be subject to receipt of
FCC and other necessary regulatory approvals.
If a transaction is presented for approval at a meeting of
stockholders as contemplated above and fails to receive the
requisite Majority Vote of the Public Stockholders, the Company
will have no further rights or obligations to purchase the
remaining interest in LIN, but the remainder of the PMVG shall
continue to apply to the extent described therein.
Continuing Stockholder Protections. Except as described
above, neither the Company nor any of its non-LIN affiliates may
engage in any material transaction (including, without
limitation, agreements, such as roaming agreements, which are
standard in the industry) with LIN or any of its subsidiaries
(other than proportionate as a stockholder of LIN) unless such
transaction has been approved by a majority of the Independent
Directors.
Except as described above, neither the Company nor any of
its non-LIN affiliates may engage in a merger or consolidation
with LIN, or purchase all or substantially all of LIN's assets,
unless the transaction is approved not only by a majority of the
Independent Directors but also by a Majority Vote of the Public
Stockholders. In deciding whether to approve such a transaction,
the Independent Directors will be instructed to consider as a
fair price per Share the Private Market Price per Share
(including control premium) that an unrelated third party would
pay if it were to acquire all outstanding Shares (including the
Shares held by the Company and its affiliates) in an arm's length
transaction, assuming that LIN was being sold in the manner
contemplated above. The Independent Directors will retain
independent financial advisors and counsel to advise them with
respect to any such transaction.
No transaction will be undertaken, and LIN will not take any
action, whether or not approved by a majority of the board of
directors of LIN, if the Independent Directors determine in their
good faith judgment by unanimous vote that such transaction or
action would likely depress the value of LIN on the Initiation
Date. In addition, LIN will not acquire or dispose of any
business (other than acquisitions of additional cellular
interests in markets in which LIN has an interest), whether or
not approved by a majority of the board of directors of LIN, if
the Independent Directors determine in their good faith judgment
by unanimous vote that such acquisition or disposition is not in
the best interests of LIN.<PAGE>
<PAGE> 30
Additional Share Purchases. Except as permitted above,
neither the Company nor any of its non-LIN affiliates may
purchase additional Shares if, after giving effect thereto, they
would beneficially own in the aggregate more than 75% of the
outstanding Shares on a fully diluted basis.
Corporate Opportunities. The Company will direct to LIN,
and LIN will have a priority right to pursue, all corporate
opportunities to acquire interests in U.S. cellular telephone
systems other than those in markets in which the Company has an
interest or contiguous to markets in which the Company has such
an interest (in the latter instance, however, only if such market
is not a market in which LIN has such an interest or contiguous
to such a market). For purposes of the foregoing, a party will
not be deemed to have an interest in a cellular telephone system
solely by reason of such party's ownership of less than a
majority equity interest in a public company having such an
interest. The Independent Directors will be afforded an amount
of time reasonably necessary to consider any such transaction,
consistent with any time constraints imposed by the other party
to such transaction, and if and for as long as a majority of the
Independent Directors desire to pursue such transaction, the
Company will not separately pursue that transaction.
Certain Transferees Bound. Except pursuant to a sale of LIN
as described above, neither the Company nor any of its non-LIN
affiliates may sell more than 25% of the outstanding Shares on a
fully diluted basis to a third party or group unless that third
party or group agrees in writing to be bound by the provisions
set forth in the PMVG to the same extent as the Company is so
bound.
Amendments. The provisions of the PMVG may be amended in
any respect not materially adverse to the holders of Public
Shares, but only if the amendment is approved by a majority of
the Independent Directors. Any such amendment will promptly be
disclosed in a filing with the Securities and Exchange
Commission. The determination of the Independent Directors as to
whether an amendment is materially adverse to the holders of
Public Shares shall be final and shall bind all holders of Public
Shares. The provisions of the PMVG may also be amended in any
other respect if the amendment is approved by a Majority Vote of
the Public Stockholders.
The foregoing description is only a summary of the PMVG,
which has been filed with the Securities and Exchange Commission
as an exhibit to this Annual Report on Form 10-K.
Governmental Regulation
Cellular. The construction, operation and transfer of
cellular systems in the United States are regulated to varying
degrees by the FCC pursuant to the Communications Act. The FCC<PAGE>
<PAGE> 31
has promulgated regulations governing the construction and
operation of cellular systems, licensing and technical standards
for the provision of cellular telephone service.
For licensing purposes the FCC divided the United States
into separate geographic markets (MSAs and RSAs). In each
market, the allocated cellular frequencies are divided into two
equal blocks. During the initial application process for MSAs
and RSAs, the FCC reserved the A Block frequencies for
nonwireline applicants (such as the Company) and the B Block for
wireline applicants. Now, subject to FCC rules, an A Block or B
Block license may be granted to either a wireline or nonwireline
entity, but no entity may control more than one cellular system
in any MSA or RSA.
The completion of acquisitions involving the transfer of
control of a cellular system requires prior FCC approval and, in
certain cases, compliance with the HSR Act and state regulatory
approval. Acquisitions of minority interests generally do not
require FCC approval. Whenever FCC approval is required, any
interested party may file a petition to dismiss or deny the
Company's application for approval of the proposed transfer. The
Company expects to receive in the ordinary course FCC approval
for the completion of all of its pending acquisitions for which
such approval is required and which has not already been
obtained.
When a cellular system has been constructed, the licensee is
required to notify the FCC that construction has been completed.
Immediately upon this notification, but not before, FCC rules
authorize the licensee to offer commercial service to the public.
The licensee is then said to have "operating authority." The
Company has obtained operating authority for each of its cellular
systems that is currently in operation. Initial operating
licenses are granted for 10 year periods. The FCC has recently
established the procedures and standards for filing renewal
applications, filing petitions to deny applications for renewal
and conducting comparative renewal proceedings between cellular
licensees and challengers filing competing applications. The FCC
will award a "renewal expectancy" to cellular operators meeting
specific criteria that establish that the licensee has adequately
provided service to the public and has complied with applicable
rules and regulations. The ruling establishing the process of
obtaining a "renewal expectancy" and other procedures for renewal
is subject to further FCC review. The Company filed its renewal
application for its Minneapolis, Minnesota license in 1993. No
competing applications were filed and the application was
unopposed. Licenses may be revoked and license renewal
applications denied for cause. In addition, if a renewal
expectancy is not granted, a license could be awarded to a
competing applicant if it prevails in a comparative hearing.
<PAGE>
<PAGE> 32
Under FCC rules, the authorized service area for the Company
in each of its markets is referred to as the "cellular geographic
service area" or CGSA. The CGSA is comprised of the composite
service area of the system's cell sites as measured according to
a formula established by the FCC in 1992 and contained in its
rules. The CGSA may be coincident with or smaller than the
related MSA or RSA. The right to serve areas which fall within
the licensee's MSA or RSA but outside of its CGSA is exclusive to
such licensee for a period of 5 years from the date the licensee
receives authority to construct its system. This ruling and the
manner in which the FCC defines the CGSA is currently subject to
further FCC and court review. At the conclusion of such 5-year
period other entities may apply to serve areas within the MSA or
RSA that are unserved by the licensee. If more than one mutually
exclusive application is filed for an unserved area, the FCC is
considering whether to use its auction authority to choose a
winner or whether to award the area by lottery. In March 1993
the FCC began accepting such unserved areas applications and the
Company expects that there will be applications filed for
unserved areas within MSAs where it holds the initial A Block
licenses. The Company expects that any unserved areas within its
MSAs will be immaterial to the Company. In addition, the Company
intends to file several unserved areas applications to attempt to
obtain rights to serve additional territory. Because of the
possibility of other competing applications, the Company has no
assurance that these applications will be granted.
The FCC requires landline telephone carriers in each market
to offer reasonable interconnection facilities to both cellular
systems in the market and to disclose how the B Block licensee
will interconnect with the landline network. The A Block
cellular licensee has the right to interconnect with the landline
network in a manner no less favorable than that of the B Block
licensee; it may, however, negotiate interconnection arrangements
that are not identical to those provided to the B Block licensee
in that market. In addition, the FCC is now considering the
issue of whether commercial mobile radio services such as
cellular should be required to provide interconnection to their
networks to other carriers.
The FCC's rules also generally require persons or entities
holding cellular construction permits or licenses to coordinate
their proposed frequency usage and system design with other
cellular users and licensees in order to avoid electrical
interference between adjacent systems or the capture of another
market's subscribers. The height and power of base stations in
the cellular system are regulated by FCC rules, as are the type
of signals emitted by these stations. In addition to regulation
by the FCC, cellular systems are subject to certain Federal
Aviation Administration regulations respecting the marking,
lighting, siting and construction of cellular transmitter towers
and antennas.<PAGE>
<PAGE> 33
The FCC has initiated a rulemaking to update its rules which
ensure that FCC-regulated transmitters do not expose the public
or workers to potentially harmful levels of radio frequency
radiation. The Company does not believe that the standards that
have been proposed will have any significant impact on the
Company or its services.
The Company is also subject to state and local regulation in
some instances. In 1981, the FCC preempted the states from
exercising jurisdiction in the areas of licensing, technical
standards and market structure. However, certain states require
cellular system operators to go through a state certification
process to serve communities within their borders. All such
certificates can be revoked for cause. In addition, certain
state authorities regulate several aspects of a cellular
operator's business, including the rates it charges its
subscribers and cellular resellers, the resale of long-distance
service to its subscribers, the technical arrangements and
charges for interconnection with the landline network and the
transfer of interests in cellular systems. The siting and
construction of the cellular facilities, including transmitter
towers, antennas and equipment shelters may also be subject to
state or local zoning, land use and other local regulations.
Public utility or public service commissions (or certain of
the commissioners) and legislators in several states have
expressed an interest in examining whether the cellular industry
should be more closely regulated by such states. Such regulation
could include one or all of the following: regulating the manner
in which cellular service is provided to "wholesale" or "bulk"
purchasers who resell such service to the public; regulating the
provision of cellular service across landline telephone
"exchange" or "LATA" boundaries; or mandating that cellular
providers allow "equal access" to long-distance providers,
thereby allowing cellular subscribers to choose their long-
distance provider. There can be no assurance that this does not
evidence a future trend in state regulation of the cellular
industry.
Applicable law administered by the FCC requires that the
total percentage of shares of the Company owned of record or
voted by non-United States persons or entities shall not exceed
25%. Under Article IX of the Company's Restated Certificate of
Incorporation, the Company has the right to redeem outstanding
shares of its stock if the Board of Directors determines that
such redemption is necessary to prevent the loss or secure the
reinstatement of any governmental license or franchise held by
the Company. Although the Company believes that its foreign
ownership is currently less than the 25% limit, because BT USA
Holdings, Inc. ("BT USA") owns a significant portion of the 25%
permitted foreign ownership and the Company has additional
foreign ownership, the Company may, from time to time, redeem
stock from non-United States persons or entities. <PAGE>
<PAGE> 34
The Omnibus Budget Reconciliation Act specifies that
cellular and other commercial mobile providers should be subject
to similar regulatory treatments, including possible federal pre-
emption of state rate and entry regulation. These provisions may
reduce some of the Company's regulatory compliance costs and may
ensure that competing wireless services do not acquire
competitive advantages as a result of disparate regulatory
treatment. Nevertheless, in light of the uncertainty as to how
the legislation will be implemented, and as to the nature of the
additional competitive services covered thereby, it is impossible
to quantify the impact of these legislative and regulatory
initiatives on the Company at this time.
Messaging. FCC regulations control the number of
frequencies available to conduct messaging and mobile
communications operations. Competition for new frequencies can be
intense and any qualified applicant could be granted such a
frequency.
The Company's radio messaging and other radio
telecommunications activities are subject to FCC regulation. All
channels used in these activities are licensed by the FCC, and
future business may be limited by FCC regulations in a variety of
areas, including, among other things, regulations restricting the
number of available channels. The FCC allocates a limited number
of messaging frequencies in a given geographical area and grants
licenses for the exclusive use of such channels only upon a
satisfactory showing of compliance with FCC regulations. The
licenses are generally issued for up to 10-year periods. At the
end of the 10 years, a renewal application must be made for the
license which will be granted only upon showing compliance with
FCC regulations, and continuing service to the public. The
Company believes there will not be competition for a license upon
the expiration of its initial 10-year period, but there can be no
assurance that any license will be renewed. Such licenses are
revocable only for specified causes.
Various states require radio messaging and mobile radio
service providers to go through a state certification process
prior to providing service in a proposed area. All such
certificates can be revoked for cause. State public service
commissions may also have regulatory authority over rates charged
for messaging, IMTS and MTS service. The siting and construction
of messaging and other radio transmitters, antennae and equipment
shelters is subject to the same state or local zoning, land use
and other local regulations as is the siting and construction of
cellular systems.
Employees
The Company (excluding LIN) has approximately 5,800
employees. LIN has approximately 4,060 employees, including
employees in the cellular ventures in which LIN has an interest. <PAGE>
<PAGE> 35
The majority of such employees are not represented by a labor
organization. Management considers its employee relations to be
good.
Item 2. PROPERTIES
To provide service the Company maintains sales and
administrative offices, and many transmitter or antenna sites.
The Company generally leases all of these facilities, although it
does own such premises where it is in the best interests of the
Company to do so. See Note 13 to the Company's Consolidated
Financial Statements included herein.
Item 3. LEGAL PROCEEDINGS
The Company is a party to certain litigation in the ordinary
course of business and to routine filings with the FCC and state
regulatory authorities, customary regulatory proceedings in
connection with acquisitions and interconnection rates and
practices, proceedings concerning the telecommunications industry
and other proceedings which management believes are immaterial to
the Company.
In May 1990, a suit was filed in the United States District
Court for the District of Columbia against the Company by the
former owners (the "Charisma Group") of cellular interests which
the Company acquired in 1986 and 1987 and some of which the
Company sold in its transaction with Contel Cellular Inc. (the
"Charisma Litigation"). The suit alleges that the transaction
with Contel breached an agreement that would have required the
Company to share with the Charisma Group up to 25 percent of the
net capital gains from such sale.
During the same period that the Company acquired cellular
interests from the Charisma Group in 1986 and 1987, the Company
also acquired similar interests from Maxcell Telecom Plus, Inc.
("Maxcell"). On November 1, 1993, Maxcell and its parent,
Telecom Plus, Inc. ("TPI") filed a suit in the Circuit Court,
Palm Beach County, Florida alleging that the Company made certain
oral representations to the former owners of Maxcell that they
would be treated identically to the Charisma Group in connection
with their sale of interests to the Company, and that the alleged
agreement made by the Company with the Charisma Group violated
that oral agreement (the "TPI Litigation"). In an apparent
response to defendant's motion to dismiss, plaintiff filed an
amended complaint. Plaintiff's allegations in the amended
complaint include claims for fraud, breach of contract, breach of
implied contract, interference with contract, breach of fiduciary
duty, constructive trust, promissory estoppel, breach of covenant
of good faith and fair dealing, conspiracy and concealment.
Various types of relief including rescission, reformation,
damages and punitive damages are sought. Former owners of
Charisma are co-defendants individually and as class defendants.<PAGE>
<PAGE> 36
The Company believes that the Plaintiffs in both suits are
not entitled to the relief sought and is defending the lawsuits
vigorously. The Company initially filed a response to the
complaint denying the allegations in the Charisma Litigation and
asserting various affirmative defenses, and has subsequently
filed counter claims and third-party claims in such litigation.
The Company also filed two motions for summary judgment
dismissing the Charisma Litigation. The Court denied those
summary judgment motions. Discovery in the Charisma Litigation
is proceeding; no trial date has been set. In the TPI
Litigation, defendant's motion to dismiss is still pending.
Management believes the results of the Charisma Litigation and
the TPI Litigation will not have a material adverse impact on the
financial position or results of operations of the Company.
On August 15, 1993, the Company entered into a Memorandum of
Understanding which would result in the settlement of the
litigation entitled In re McCaw Cellular Communications, Inc.
Shareholders Litigation, Consolidated Civil Action No. 12793,
described in the Company's Current Report on Form 8-K, dated
November 17, 1992. The settlement is subject to approval by the
court, consummation of the AT&T Transaction and other customary
conditions. The defendants have denied, and continue to deny,
that they have committed any violations of law and, as the
Memorandum of Understanding states, are entering into the
settlement solely to eliminate the burden and expense of further
litigation. If approved, the settlement will release all claims
of the Company's stockholders in connection with or that arise
out of the subject matter of the action, the Company's proposed
strategic alliance with AT&T (which was abandoned when the
proposed Merger with AT&T was agreed to), the proposed Merger,
the negotiation and consideration of such transactions, and the
fiduciary or disclosure obligations of any of the defendants (or
other persons to be released) with respect to any of the
foregoing. It is expected that the Company's stockholders
separately will be provided a notice containing further
information regarding the proposed settlement and related
proceedings, including a settlement hearing to be scheduled by
the court.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders
during the quarter ended December 31, 1993.
<PAGE>
<PAGE> 37
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Class A Common Stock has been quoted on the Nasdaq
National Market under the symbol MCAWA since the Company's
initial public offering on August 21, 1987. On March 17, 1988,
the Class A Common Stock began trading on the Pacific Stock
Exchange under the symbol MCWA. The following table sets forth,
for the calendar quarters indicated, the high and low sales
prices of the Class A Common Stock on the Nasdaq National Market
as reported in published financial sources. These prices reflect
inter-dealer prices, without retail mark-up, mark-down or
commission, and may not necessarily represent actual
transactions.
Year High Low
1992:
First Quarter . . . . . . . . . . . 36 28 3/4
Second Quarter. . . . . . . . . . . 29 3/4 22 3/4
Third Quarter . . . . . . . . . . . 28 1/4 23 1/8
Fourth Quarter . . . . . . . . . . 34 1/4 20 1/4
1993:
First Quarter . . . . . . . . . . . 41 1/4 31 1/2
Second Quarter. . . . . . . . . . . 46 1/4 35
Third Quarter . . . . . . . . . . . 57 3/4 44 3/4
Fourth Quarter. . . . . . . . . . . 57 5/8 50
1994:
First Quarter
(through March 15, 1994). . . . . 54 1/4 48 3/4
There is no public trading market for the Company's Class B
Common Stock.
As of March 15, 1994, there were 8,001 holders of record of
the Company's Class A Common Stock (which number does not include
the number of stockholders whose shares are held of record by a
broker or clearing agency but does include such a brokerage house
or clearing agency as one recordholder). As of March 15, 1994,
there were 21 holders of record of the Company's Class B Common
Stock, par value $.01 per share.
The Company has never paid cash dividends on its Class A
Common Stock or Class B Common Stock. The Board of Directors
will determine future dividend policy based on the Company's
results of operations, financial condition, capital requirements
and other circumstances. The McCaw Bank Credit Facilities (as
defined below) prohibit the Company from paying cash dividends. <PAGE>
<PAGE> 38
There are also restrictions on the ability of certain of the
Company's subsidiaries to pay dividends to the Company. It is
not anticipated that any cash dividends will be paid on the Class
A Common Stock or Class B Common Stock in the foreseeable future.
<PAGE>
<PAGE> 39
<TABLE>
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
Set forth below is selected consolidated historical financial data with respect to the Company for the five years
ended December 31, 1993. During these five years, the Company has been involved in a number of significant
transactions. Therefore, the following selected financial data may not be comparable from year to year. This data
should be read in conjunction with the consolidated financial statements of the Company and related notes thereto for
the corresponding periods which are contained herein. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included in Item 7 herein.
Year Ended December 31,
1993 1992 (2) 1991 (2) 1990(1) 1989
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenues . . . . . . . . . . . . $2,194,810 $1,743,336 $1,365,571 $1,037,453 $504,138
Operating and corporate expenses . . 1,407,574 1,098,645 904,933 736,148 451,999
Depreciation . . . . . . . . . . . . 225,239 179,747 143,231 103,288 65,049
Valuation loss on equipment. . . . . 123,559 -- -- -- --
Amortization of intangible assets. . 178,360 205,452 201,617 149,637 127,312
Income (loss) from operations. . . . 260,078 259,492 115,790 48,380 (140,222)
Other income (expense):
Interest expense . . . . . . . . . (394,187) (490,040) (577,992) (496,602) (245,523)
Equity in income of
unconsolidated investees . . . 71,071 40,177 22,874 16,752 6,886
Provision for preferred stock
dividend of a subsidiary . . . . (134,300) (134,300) (134,300) (52,348) --
Other, net(3)(4) . . . . . . . . . (29,944) 39,065 298,609 855,217 90,331
Income (loss) before extraordinary
item and cumulative effect of
the change in accounting for
income taxes . . . . . . . . . . . (227,282) (285,606) (275,019) 371,399 (288,528)
Extraordinary items: Loss on early
extinguishment of debt, net of income
tax benefit in 1993 and income tax
benefit of prior years' operating
loss in 1990 . . . . . . . . . . . (45,034) -- -- 190,919 --
Cumulative effect of the
change in accounting for
income taxes . . . . . . . . . . . -- -- (1,956,346) -- --
Net income (loss). . . . . . . . . . $(272,316) $(285,606) $(2,231,365) $562,318 $(288,528)
Weighted average number of
common and common
equivalent shares
outstanding . . . . . . . . . . . 202,948 182,675 181,487 182,424 148,158
(continued)<PAGE>
<PAGE> 40
Year Ended December 31,
1993 1992 (2) 1991 (2) 1990(1) 1989
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data (con't.):
Per share amounts:
Income (loss) before
extraordinary items and
cumulative effect of the
change in accounting for
income taxes . . . . . . . . . . $(1.12) $(1.60) $(1.62) $1.92 $(2.07)
Extraordinary items: Loss on early
extinguishment of debt in 1993
and income tax benefit in 1990 . (0.22) -- -- 1.05 -- --
Cumulative effect of the
change in accounting
for income taxes . . . . . . . . -- -- (10.78) -- --
Net income (loss). . . . . . . . . $(1.34) $(1.60) $(12.40) $2.97 $(2.07)
Balance Sheet Data:
Working capital (deficit). . . . . . $(91,459) $71,674 $146,757 $288,970 $773,417
Property and equipment, net. . . . . 1,616,480 1,439,058 1,196,482 874,725 630,264
Total assets . . . . . . . . . . . . 9,064,929 8,955,445 8,727,637 8,714,165 3,041,344
Net deferred tax liability . . . . . 1,955,687 1,899,581 1,993,920 40,047 - -
Long-term portion of debt
and mandatory repurchase
obligation. . . . . . . . . . . . 4,989,746 5,562,393 5,281,742 5,289,236 1,786,376
Redeemable preferred stock of
a subsidiary. . . . . . . . . . . 1,305,248 1,170,948 1,036,648 902,348 - -
Total stockholders' investment
(deficiency) . . . . . . . . . . . (37,904) (409,741) (135,623) 2,044,711 1,003,969
<PAGE>
<PAGE> 41
(1) Effective January 1, 1990, the Company prospectively changed its amortization period for cellular licensing costs
from 10 years to 40 years to conform more closely with industry practices. The effect of this change for the year
ended December 31, 1990 was to reduce amortization of intangible assets $153.1 million, increase equity in income
of unconsolidated investees $99.3 million, increase net income $242.4 million and increase net income per common
share $1.33. In addition, during 1990, the Company acquired controlling interest in LIN Broadcasting ("LIN") and
LIN acquired controlling interest in the A Block licensee in New York City.
(2) The retroactive adoption of SFAS No. 109, effective January 1, 1991, increased net loss in 1991 by the cumulative
effect of the change in accounting for income taxes of $1,956.3 million or $10.78 per share, increased 1992 and
1991 amortization of intangibles by $1.0 million and $0.2 million, respectively, and increased 1992 and 1991 other,
net by $80.1 million and $76.3 million, respectively. The adoption decreased the loss per share before
extraordinary item and cumulative effect of the change in accounting for income taxes by $0.43 to a loss of $1.60
in 1992 and by $0.42 to a loss of $1.62 in 1991. The effect of the adoption on the December 31, 1992 and 1991
balance sheets was to increase total assets by $39.5 million and $10.9 million, respectively; increase deferred tax
liability by $1,861.1 million and $1,911.7 million, respectively; and negatively impact stockholders' investment
(deficiency) by $1,801.2 million and $1,880.3 million, respectively.
(3) Includes $243 million in pre-tax gain and related taxes on the BellSouth Transaction for the year ended December
31, 1991 and $1,158 million in gain and related taxes on the Contel Transaction for the year ended December 31,
1990.
(4) The year ended December 31, 1993 includes $79 million in nonrecurring charges associated with the McCaw Bank Credit
Facilities; $91.5 million in after tax gains recognized on the sale of the Company's Upstate New York and certain
Kansas cellular interests and $49.6 million increase in tax expense resulting from the adjustment of the Company's
tax liability to reflect the increase in federal tax rates from 34% to 35%.<PAGE>
</TABLE>
<PAGE> 42
Selected Proportionate Cellular Operating Data
The following table sets forth unaudited, supplemental
financial data for the Company's cellular segment reflecting
proportionate consolidation of entities in which the Company has
a substantial interest. This presentation differs from the
consolidation methodology used to prepare the Company's principal
financial statements in accordance with generally accepted
accounting principles. The proportionate cellular operating data
reflects the Company's ownership percentage of systems
consolidated for financial reporting purposes (including
approximately 52% of LIN's proportionate results) and the
Company's ownership percentage of certain of its significant
unconsolidated investees (which are accounted for on the equity
method for financial reporting purposes).
Year Ended December 31,
1993 1992(4) 1991(4)
($ in thousands)
Service revenue $1,646,630 $1,284,402 $ 974,505
Equipment revenue, net 286 1,342 191
Net revenues 1,646,916 1,285,744 974,696
Direct costs and expenses
excluding marketing 513,051 413,350 323,507
Marketing expenses 393,629 301,162 257,650
Depreciation 195,573 151,169 120,250
Valuation loss on equipment 93,786 -- --
Amortization of intangible
assets 178,214 229,050 223,480
Total operating costs 1,374,253 1,094,731 924,887
Operating income
proportionate basis $272,663 $191,013 $49,809
Proportionate subscribers(1) 1,934,000 1,366,000 985,000
Proportionate pops(2)(3) 61,600,000 60,400,000 57,400,000
(1) As of December 31, 1993, 100% of subscribers in markets which the
Company (exclusive of LIN) owned at least a 50% interest in plus
100% of the subscribers of the cellular systems serving the CMT
Partnership was 1,602,000 and average penetration in such markets
was 3.10%. The Company's (exclusive of LIN's) proportionate
share of subscribers based on its December 31, 1993 ownership
position in markets where it owned an interest was 1,481,000. As
of December 31, 1993, 100% of subscribers in markets in which LIN
owned an interest was 1,434,000 and average penetration in such
markets was 3.34%. LIN's proportionate share of such subscribers
based on its ownership position at December 31, 1993 was 865,000.
(2) Calculated by multiplying (i) the Donnelley Marketing Service
estimate of current population in a market by (ii) the percentage
ownership interest which the Company owned, or had the right or
obligation to acquire, in the A Block licensee for that market.
As of December 31, 1993, the Company (exclusive of LIN) owned
47.4 million proportionate pops and LIN owned 27.2 million
proportionate pops.<PAGE>
<PAGE> 43
(3) Excludes 0.9 million, 0.4 million and 2.3 million proportionate
pops for the periods ended December 31, 1993, 1992 and 1991,
respectively, which are not reflected in the supplemental
financial data for the Company's cellular segment set forth above
because the effect on such results would not be material. Such
pops consisted primarily of pending acquisitions and minority
interests accounted for by the cost method for financial
reporting purposes.
(4) During the first quarter of 1993, the Company retroactively
adopted SFAS No. 109, effective January 1, 1991. The effect on
the proportionate cellular operating data was to increase
amortization expense and decrease operating income by $1.0
million in 1992 and $0.2 million in 1991.<PAGE>
<PAGE> 44
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company completed a sale of properties to BellSouth
Corporation in September 1991. Results of operations for the
properties sold are included in the Company's results through the
date of sale. Exclusive of the effect of significant
acquisitions and dispositions, the Company's revenues and cash
flows (as defined in the McCaw Bank Credit Facilities) have
historically grown at significant rates. While the Company
expects its revenues and cash flows to continue to grow in the
future, there can be no assurance that this will occur or that
the rates of growth will equal the rates achieved by the Company
in prior periods. Indeed, as absolute levels of revenues and
cash flows increase, it is expected that the percentage rate of
growth will decline.
There are several legislative and regulatory initiatives at
the federal and state levels that are expected to result in the
allocation of additional spectrum for use for mobile
communications services, and may result in the modification of
rights held by providers of mobile communications services and
the modification of relationships between facilities-based
cellular carriers and resellers of cellular services. See "The
Company's Cellular Operations-Cellular Competition" and
"Governmental Regulation." The Company believes these
initiatives will continue and will result, in some cases, in
additional competition for the Company. One entity has already
been authorized to provide a cellular-like mobile service in
certain markets of the Company (in addition to the B Block
cellular competition) commencing in 1993 and 1994. The Company
also intends to pursue rights to offer additional mobile
communications services. In light of the uncertainty as to the
eventual outcome of any of these specific initiatives, including
as to the nature and timing of the additional competitive
services covered thereby, it is impossible to quantify the impact
of these legislative and regulatory initiatives or such
competition on the Company at this time. For each of the reasons
set forth above, results of operations for the periods discussed
herein are not necessarily indicative of the Company's future
results and are not necessarily comparable.
During the first quarter of 1993, the Company retroactively
adopted SFAS No. 109, "Accounting for Income Taxes," effective
January 1, 1991. The adoption of SFAS No. 109 as of January 1,
1991 required the Company to record a cumulative effect of the
change in accounting for income taxes, increasing the Company's
net loss in 1991 by $1,956.3 million with a corresponding
increase in deferred tax liability. This change in accounting
for income taxes has no effect on cash flow and will reduce<PAGE>
<PAGE> 45
(increase) the income tax expense (benefit) the Company will
recognize in future periods as the difference in the book and tax
basis of the intangible assets is reduced. See Note 1 to the
Company's consolidated financial statements included herein.
Certain reclassifications have been made to the 1992 segment
information to conform with the 1993 presentation. See Note 14
to the Company's consolidated financial statements included
herein for further information regarding the Company's business
segments.
Years Ended December 31, 1993 and 1992
Net Revenues
Consolidated net revenues increased 26 percent to $2,194.8
million for 1993 compared with $1,743.3 million for the year
ended December 31, 1992. Net revenues of the Company's cellular
operations for the year ended December 31, 1993 were $1,919.4
million and represented 87 percent of the total consolidated net
revenues of the Company for the year. Net revenues for the year
ended December 31, 1993 of the broadcast segment and messaging
and other segments were $145.5 million and $129.9 million,
respectively and accounted for 7 percent and 6 percent,
respectively, of the Company's consolidated net revenues for the
year.
Net revenues for the Company's cellular operations increased
29 percent to $1,919.4 million for 1993 compared with $1,486.2
million for the year ended December 31, 1992, despite a gradual
decrease in average revenue per cellular subscriber, a trend that
the Company expects may continue as the subscriber base continues
to grow.
Net revenues for the Company's broadcast operations
increased 2 percent to $145.5 in 1993 from $142.9 million in
1992. Excluding cyclical political and Olympic revenues from
both years, the net broadcast revenues increased 6 percent in
1993 compared to 1992.
Net revenues grew 14 percent in the messaging and other
segment to $129.9 million in 1993, with the increase due
primarily to the continuous growth of messaging net revenues.
Total messaging net revenues continue to grow due to an increase
in the messaging subscriber base, through both acquisitions and
growth in existing markets. 1993 messaging net revenue per
subscriber declined slightly from 1992, a trend the Company
expects may continue as the messaging subscriber base continues
to grow.
<PAGE>
<PAGE> 46
Operating Expenses
Consolidated operating expenses, exclusive of corporate
expenses, for the year ended December 31, 1993 were $1,385.2
million, an increase of $306.1 million or 28 percent, from
December 31, 1992. A significant portion of these expenses was
associated with the Company's cellular operations which accounted
for 85 percent of the Company's total operating expenses for the
year ended December 31, 1993.
Operating expenses for the cellular segment, exclusive of
depreciation, amortization and valuation loss on equipment,
increased to $1,174.7 million, an increase of $263.4 million or
29 percent, from the year ended December 31, 1992. A significant
portion of this increase resulted from an increase in cost of
equipment sales and marketing costs incurred as a result of the
Company's 27 percent increase in new cellular subscribers in 1993
over 1992. Operating expenses as a percentage of net revenues
for the cellular segment remained constant at 61 percent for 1993
and 1992. Operating costs associated with the broadcast
operations increased $3.0 million, or 4 percent from the year
ended December 31, 1992. Total operating expenses, exclusive of
depreciation and amortization, for the broadcast operations for
1993 were $79.1 million. These costs as a percentage of net
revenues of the broadcast operations increased slightly from 53
percent in 1992 to 54 percent in 1993. Operating expenses,
exclusive of depreciation and amortization, of the messaging and
other segment increased by 43 percent over 1992 to $131.4 million
for 1993. The significant portion of this increase resulted from
the Company's start-up air-to-ground communications operations.
Depreciation and amortization increased from $385.2 million
in the year ended December 31, 1992 to $403.6 million for the
same period in 1993. Contributing to the 5 percent increase in
depreciation and amortization was the Company s improvement and
expansion of its existing cellular, messaging and air-to-ground
systems offset in part by a decrease in amortization expense due
to fully amortized assets. Depreciation and amortization is
expected to increase due to continued improvement and expansion
of the Company s cellular, messaging and air-to-ground systems,
including the implementation of digital cellular service. During
1993, the Company recognized a valuation loss on equipment of
$123.6 million associated with replacing and upgrading certain
cellular equipment in its Minnesota, Rocky Mountain and Southwest
markets. This valuation loss represents the excess of net book
value of the cellular equipment being replaced over the estimated
realizable value as of its replacement date. See Note 4 to the
Company's consolidated financial statements included herein
regarding the replacement and upgrade of certain of the Company's
cellular equipment.
<PAGE>
<PAGE> 47
Other Income and Expenses
Interest expense was $394.2 million in 1993, a $95.9 million
or 20 percent decrease from 1992. This decrease resulted from
reductions in the applicable margin and base borrowing rates on
the McCaw Bank Credit Facilities and LIN's credit facilities
offset by increased borrowings under the McCaw Bank Credit
Facilities. On April 5, 1993, the Company redeemed all of its
outstanding convertible senior subordinated debentures. There
were approximately $400 million of these debentures outstanding
at redemption. The Company recognized a savings of interest
expense of approximately $31 million in 1993 as a result of the
redemption of these debentures. On December 31, 1993, the
Company redeemed its approximate $1.2 billion of remaining
publicly held fixed rate debt and replaced it with lower cost
borrowings on its Bank Credit Facilities. This redemption should
result in significant future interest savings.
Gain on disposition of assets, net was $141.2 million for
the year ended December 31, 1993. This gain consists primarily
of the gain recognized on the sale to Associated Communications
Corporation of the Company's interests in the A Block cellular
systems in Albany, Glens Falls and Rochester, New York and the
gain recognized on the sale of the Company's Wichita and Topeka
systems to PacTel.
Equity in income of unconsolidated investees was $71.1
million in 1993 compared with $40.2 million in 1992. This
increase is primarily attributable to lower amortization expense
due to fully amortized assets.
Other expense of $76.3 million for the year ended December
31, 1993 primarily represents nonrecurring charges associated
with the Company's Bank Credit Facilities. See "Liquidity and
Capital Resources" and Note 7 to the Company's consolidated
financial statements included herein regarding the Company's Bank
Credit Facilities.
A tax benefit of $35.0 million was recognized for the year
ended December 31, 1992 primarily due to the reversal of deferred
taxes established on the difference in the book and tax basis of
certain intangible assets as a result of the retroactive
implementation of SFAS No. 109. The tax expense of $97.9 million
for 1993 includes a one time charge of $49.6 million required
under SFAS No. 109 as a result of the change in the federal
corporate tax rate to 35 percent from 34 percent as well as state
and federal taxes applicable to the gains on dispositions of
assets. The 1993 expense was offset in part by tax benefits
associated with other 1993 expenses and the reversal of deferred
taxes established on the difference in the book and tax basis of
certain intangible assets as a result of SFAS No. 109.
<PAGE>
<PAGE> 48
During the fourth quarter of 1993, the Company recognized an
extraordinary loss, net of income tax benefit, of $45.0 million
on the early extinguishment of its public debt. See Note 7 to
the Company's consolidated financial statements included herein
regarding the redemption.
For the reasons discussed above the net loss of $285.6
million in 1992 decreased to a net loss of $272.3 million in
1993.
Years Ended December 31, 1992 and 1991
Net Revenues
Consolidated net revenues increased 28 percent to $1,743.3
million for 1992 compared with $1,365.6 million for the year
ended December 31, 1991. Net revenues of the Company's cellular
operations for the year ended December 31, 1992 were $1,486.2
million and represented 85 percent of the total consolidated net
revenues of the Company for the year. Net revenues for the year
ended December 31, 1992 of the broadcast and messaging and other
segments were $142.9 million and $114.2 million, respectively and
accounted for 8 percent and 7 percent, respectively, of the
Company's consolidated net revenues for the year.
Net revenues for the Company's cellular operations increased
31 percent to $1,486.2 million for 1992 compared with $1,135.2
million for the year ended December 31, 1991, despite a gradual
decrease in average revenue per cellular subscriber, a trend that
the Company expects may continue as the subscriber base continues
to grow. The effect on the Company's cellular operations of the
continued weakness of the California economy was offset by
unexpected strength from the Company s Florida properties,
arising at least in part from Hurricane Andrew.
Net revenues for the Company's broadcast operations
increased 10 percent to $142.9 million in 1992 from $129.5
million in 1991. Improved economic conditions in many of the
Company's broadcast market areas stimulated growth in advertising
spending. The broadcast operations also benefited from the
election year activity; political advertising revenues
contributed 26% to the total increase in net revenues.
Net revenues grew 13 percent in the messaging and other
segment to $114.2 million in 1992, with the increase due
substantially to the continuous growth of messaging net revenues.
Although 1992 messaging net revenue per subscriber declined
slightly from 1991, a trend the Company expects may continue as
the messaging subscriber base continues to grow, total messaging
net revenues continue to grow due to an increase in the messaging
subscriber base, both through acquisition and growth in existing
markets.<PAGE>
<PAGE> 49
Operating Expenses
Consolidated operating expenses, exclusive of corporate
expenses, for the year ended December 31, 1992 were $1,079.1
million, an increase of $190.7 million or 21 percent, from
December 31, 1991. A significant portion of these expenses was
associated with the Company's cellular operations which accounted
for 84 percent of the Company's total operating expenses for the
year ended December 31, 1992.
Operating expenses for the cellular segment, exclusive of
depreciation and amortization, increased to $911.3 million, an
increase of $165.8 million, or 22 percent, from the year ended
December 31, 1991. This increase in operating expenses resulted
primarily from an increase in marketing and administrative costs
incurred as a result of the increase in the segment's subscriber
base. Operating expenses as a percentage of net revenues for the
cellular segment decreased to 61 percent for 1992 compared to 66
percent for 1991. This trend is primarily due to the economies
of scale resulting from growth in the Company's subscriber base.
Operating costs associated with the broadcast operations
increased $7.1 million, or 10 percent from the year ended
December 31, 1991. Total operating expenses, exclusive of
depreciation and amortization, for the broadcast operations for
1992 were $76.2 million. These costs as a percentage of net
revenues of the broadcast operations remained constant from 1991
to 1992 at 53 percent. Operating expenses, exclusive of
depreciation and amortization, of the messaging and other segment
increased by 24 percent over 1991 to $91.6 million for 1992. A
significant portion of this increase resulted from the Company's
start-up air-to-ground communications operations.
Depreciation and amortization increased from $344.8 million
in the year ended December 31, 1991 to $385.2 million for the
same period in 1992. Contributing to the 12 percent increase in
depreciation and amortization was the Company s improvement and
expansion of its existing cellular and messaging systems. In the
future, depreciation and amortization will continue to increase
due to continued improvement and expansion of the Company s
cellular and messaging systems, including the implementation of
digital cellular service.
Other Income and Expenses
Interest expense was $490.0 million in 1992, an $88.0
million or 15 percent decrease from 1991. The majority of this
decrease resulted from a reduction in the applicable margin and
base borrowing rates on the McCaw Bank Credit Facilities and
LIN's credit facilities offset by increased borrowings under the
McCaw Bank Credit Facilities. Interest expense is expected to be
at or above current levels in the foreseeable future (see
"Liquidity and Capital Resources") for the Bank Credit Facility. <PAGE>
<PAGE> 50
Interest income decreased 41 percent to $17.9 million for
the year ended December 31, 1992 primarily as a result of lower
yields on investments. Equity in income of unconsolidated
investees was $40.2 million in 1992 compared with $22.9 million
in 1991. This increase is primarily due to improved operating
results of BACTC and the LIN unconsolidated investees.
The year ended December 31, 1991 includes a net pre-tax gain
on assets sold of $249.5 million resulting primarily from the
BellSouth Transaction. The Company also recognized a gain of
$6.2 million on the exchange of $68.7 million principal amount of
outstanding debentures during 1991. This gain is reflected as a
nonrecurring benefit in other income and expense.
The tax benefit of $26.8 million in 1991 reflects taxes
recognized on the BellSouth Transaction and state income taxes
offset by the benefit recognized from the adoption of SFAS No.
109 due to the reversal of deferred taxes established on the
difference in the book and tax basis of certain intangible
assets. The tax benefit of $35.0 million for 1992 is primarily
the result of state income taxes in McCaw markets and state and
federal income taxes attributable to LIN markets offset by
reversals of deferred taxes related to SFAS No. 109. Excluding
the impact of the adoption of SFAS No. 109, income tax expense
would have been $49.5 million in 1991 and $45.1 million in 1992.
Minority interest in income of consolidated subsidiaries
increased from $14.0 million in 1991 to $16.3 million for 1992.
This increase is primarily due to improved operating results of
less than 100 percent owned consolidated subsidiaries partially
offset by the consolidation of the operations of Claircom.
The year ended December 31, 1991 includes a $1,956.3 million
cumulative effect of the change in accounting for income taxes as
a result of the retroactive adoption of SFAS No. 109. See Note 1
to the Company's consolidated financial statements included
herein.
For the reasons discussed above the net loss of $2,231.4
million in 1991 decreased to a net loss of $285.6 million in
1992. Excluding the impact of the adoption of SFAS No. 109, net
loss would have been $364.7 million in 1992 and $351.1 million in
1991.
LIQUIDITY AND CAPITAL RESOURCES
The Company utilizes capital to make acquisitions of
cellular and messaging interests (which may include the
acquisition of stock of publicly traded corporations), to
complete the construction of and to operate and expand its
communications systems, to fund start-up operating losses for its
transmitting systems and to cover interest payments on its<PAGE>
<PAGE> 51
indebtedness. Moreover, as subscribers are added and usage
increases, it will be necessary to make additional capital
expenditures for the purchase of additional sites and operating
equipment. The Company is in the process of changing cellular
equipment to accommodate the transition from analog to digital
cellular service. The conversion from analog to digital
equipment will require significant expenditures but will expand
the capacity of the Company's cellular systems. The Company
expects its additional capital expenditures in 1994 in connection
with the planned expansion of digital service to be approximately
$110 million and otherwise expects that it will continue to
invest cash to grow its businesses at levels similar to or in
excess of its 1993 investing activity.
Cash provided by operating activities totaled $294.5 million
in 1993, an increase of $132.9 million from 1992's total of
$161.6 million. A significant portion of the Company's cash
provided by operations is derived from the Company's cellular
operations.
Interest expense decreased 20 percent from the year ended
December 31, 1992 to $394.2 million for the year ended December
31, 1993. This decrease resulted from reductions in the
applicable margin and base borrowing rates on the McCaw Bank
Credit Facilities and LIN's credit facilities offset by increased
borrowings under the McCaw Bank Credit Facilities. The Company
redeemed all of its outstanding convertible senior subordinated
debentures on April 5, 1993. There were approximately $400
million of these debentures outstanding at redemption. The
Company recognized a savings of interest expense of approximately
$31 million in 1993 as a result of the redemption of these
debentures. On December 31, 1993, the Company redeemed its
approximate $1.2 billion of remaining publicly held fixed rate
debt and replaced it with lower cost borrowings on its Bank
Credit Facilities. This redemption should result in significant
future interest savings.
The Company does not expect that its operations will
generate sufficient cash to meet its expenditure requirements for
the next few years. Historically the Company has raised capital
through the issuance of public indebtedness, bank borrowings and
the sale of equity or assets. For example, in February 1994, in
connection with the pending Merger of the Company with a
subsidiary of AT&T, AT&T and the Company entered into a credit
agreement under which an aggregate of $350 million is available
for the Company's financing of certain acquisitions and other
business opportunities. In addition, AT&T has agreed to purchase
approximately 11.7 million newly issued shares of Class A Common
Stock for a total purchase price of $600 million in the event
that the AT&T Merger Agreement is terminated.
There can be no assurance that the Company will be able to
obtain such additional financing or sell assets when needed, or
if it is able to obtain such financing or sell assets, that the <PAGE>
<PAGE> 52
terms will be favorable to the Company. The Company will be
required by the terms of the McCaw Bank Credit Facilities to
apply the proceeds of certain asset sales to the repayment of
loans thereunder.
The Company's indebtedness is due and payable over a several
year period. The revolving period under the McCaw Bank Credit
Facilities ends on March 31, 1996, at which time the obligation
to repay principal commences. See Note 7 to the consolidated
financial statements included herein. If the Company does not
have sufficient internally generated funds to repay its
indebtedness at maturity, it may issue additional indebtedness,
sell equity or sell assets to refinance such maturing
indebtedness. There can be no assurance that such issuances or
sales will be possible or, if carried out, that the terms thereof
will be favorable to the Company or its security holders.
In connection with its acquisition of a controlling interest
in LIN in 1990, the Company entered into the PMVG for the benefit
of the public stockholders of LIN. See "Business--Private Market
Value Guarantee." Pursuant to the PMVG, the Company is required,
beginning January 1, 1995, either to offer to purchase the
remaining outstanding shares of LIN at private market value (an
"Acquisition") or put LIN in its entirety up for sale. If the
Company decides to proceed with an Acquisition, it may pay the
purchase price in cash or any combination of cash, common equity
securities and/or nonconvertible senior or subordinated "current
cash pay" debt securities that the Independent Directors believe
in good faith will have an aggregate market value on a fully
distributed basis of not less than the private market value
purchase price. If the Company determines not to proceed with an
Acquisition, there can be no certainty that LIN will be sold to a
third party. The Company s completion of an Acquisition may
diminish the Company s liquidity, either through draws by the
Company on outstanding facilities, the refinancing of such
facilities or the issuance of securities which, by their nature,
may limit the ability of the Company to issue further securities
for other purposes. Conversely, if LIN is sold, it is likely
that such transaction will enhance the Company s liquidity.
There can be no assurance as to whether the Company will
determine to make an Acquisition or not or, if it does determine
to proceed with an Acquisition, what the price for the remaining
outstanding interest in LIN will be, the manner in which it will
be financed and what effect the payment of such purchase price
will have on the Company s liquidity.
It is the Company s policy to carefully monitor the state of
its business, cash requirements and capital structure. From time
to time, the Company may enter into transactions pursuant to
which debt is extinguished, such as the CMT Partners transaction,
the redemption of public debentures, the sale of stock to AT&T
and the proposed merger with AT&T. The Company will continue to
explore other such opportunities, which could include sales of <PAGE>
<PAGE> 53
assets or equity, joint ventures, reorganizations or further
recapitalizations. There can be no assurance that any further
such transactions will be undertaken, or, if undertaken, will be
favorable to stockholders.
McCaw Bank Credit Facilities
Under the McCaw Bank Credit Facilities, interest is payable
at the applicable margin above, at the Company's discretion, the
prevailing prime, LIBOR or CD rate. Interest is fixed for a
period ranging from one month to twelve months, depending on
availability of the interest basis selected, although if the
Company selects a prime-based loan, the interest rate will
fluctuate during the period as the prime rate fluctuates. The
applicable margin for each loan will be determined on the basis
of the Company's ratio of adjusted total debt (as determined
under the McCaw Bank Credit Facilities) to cash flow (i.e., net
income, excluding extraordinary items, plus depreciation,
amortization, interest expense, reserves for deferred taxes and
other noncash items deducted in determining net income). For
example, if the ratio was 6.0 to 1 or greater, the applicable
margin for LIBOR, CD and prime loans would be 1-5/8%, 1-3/4% and
5/8%, respectively, while if the ratio was less than 4.5 to 1,
such margins would be 1-1/8%, 1-1/4% and 1/8%, respectively.
Beginning on March 31, 1996 and at the end of each fiscal quarter
thereafter until the maturity date (which will be on or about
March 31, 2000), the Company will be required to make payments
amortizing the amount outstanding under the McCaw Bank Credit
Facilities on December 31, 1995. In addition, the Company will
be required to apply cash proceeds from certain sales of assets
not reinvested in similar assets, and, after January 1, 1996, all
excess cash flow, to the prepayment of loans.
The McCaw Bank Credit Facilities contains covenants
restricting certain activities by the Company and its restricted
subsidiaries, including, without limitation, restrictions on (i)
investments in unrestricted subsidiaries, (ii) the incurrence of
debt, (iii) distributions and dividends to stockholders, (iv)
mergers and sales of assets, (v) prepayments of subordinated
indebtedness, (vi) creation of liens, and (vii) issuance of
preferred stock.
In addition, the Company and its subsidiaries are required
to maintain compliance with certain financial covenants set forth
in the McCaw Bank Credit Facilities. The Company is required to
maintain certain ratios of combined outstanding indebtedness to
the number of pops owned. The Company is also required to
maintain ratios of senior debt and combined debt to cash flow in
compliance with amounts specified in the McCaw Bank Credit
Facilities. Substantially all the Company's assets, consisting
of the stock of its first-tier (i.e., direct) subsidiaries, are
pledged as security for repayment of amounts due under the McCaw
Bank Credit Facilities.<PAGE>
<PAGE> 54
Although the Company is currently in compliance with all
covenants under the McCaw Bank Credit Facilities, because the
ratios of indebtedness to cash flow required to be maintained by
the McCaw Bank Credit Facilities decrease each quarter through
1996, it will be necessary over that time period for the Company
either to continue to increase cash flow or to reduce debt in
order to remain in compliance.
The McCaw Bank Credit Facilities contains customary events
of default, including (i) failure to make principal or interest
payments when due, (ii) failure to comply with covenants, (iii)
misrepresentations, (iv) defaults on other indebtedness, (v)
material adverse change in the business, condition, operations,
performance or properties of the Company, (vi) unpaid judgments,
and (vii) standard ERISA and bankruptcy defaults. In addition,
it shall be an event of default if, except in connection with the
AT&T Merger, the Designated Party under the McCaw Shareholders
Agreement fails to be entitled to appoint a majority of the Board
of Directors of the Company or if the McCaw Family (as defined
below) fails to hold at least 20 million shares subject to the
McCaw Shareholders Agreement.
The ability of the Company to comply with the covenants
contained in the McCaw Bank Credit facilities may be affected by
events beyond its control. If the Company fails to service its
indebtedness or satisfy the covenants contained in the McCaw Bank
Credit Facilities or the agreements relating to its other
indebtedness, the Company will be in default. In such an event,
holders of the Company's indebtedness will be able to exercise
their rights including the right to declare all the borrowed
funds and interest thereon immediately due and payable. If the
Company were unable to repay such indebtedness, the holders of
such indebtedness could proceed against their collateral, if any.
Substantially all the Company's assets, including its stock in
subsidiaries and its ownership interests in entities holding
cellular licenses, are pledged or encumbered as security for
indebtedness.
LIN's Credit Facilities
LIN has arranged financing through two bank facilities. LIN
Cellular Network, Inc. ("LCNI"), a wholly-owned subsidiary of LIN
(owning all of LIN's cellular operations other than
Philadelphia), has an aggregate of $1,480 million outstanding and
$240 million available as of December 31, 1993 (the "Cellular
Facility"). LIN Television Corporation ("LTC"), a wholly-owned
subsidiary of LIN (owning all of LIN's television operations
other than WOOD-TV), has $222 million outstanding and no
additional amounts available as of December 31, 1993 (the
"Broadcast Facility"), (collectively, the "LIN Bank Credit
Facilities").<PAGE>
<PAGE> 55
During the second quarter of 1993, LIN renegotiated its
Cellular Facility. This resulted in an extension in the
commencement of amortization of the $400 million revolving
portion of the Cellular Facility from September 1993 to March
1996 and a change in certain financial covenants and other terms.
LIN's credit facilities prohibit the payment of dividends
and distributions to LIN by its major operating subsidiaries,
thereby effectively limiting the ability of LIN to transfer funds
to the Company.
Funds available under the McCaw Bank Credit Facilities can
only be utilized by the Company and certain of its subsidiaries
other than LIN. Proceeds from LIN's credit facilities are only
available to LIN and its subsidiaries. For additional
information regarding LIN's credit facilities, see LIN's current
Annual Report on Form 10-K.
LCH's Redeemable Preferred Stock
On August 10, 1990, LIN completed its acquisition of
Metromedia Company's interest in the New York City A Block
licensee (the "Metromedia Transaction"). In addition to the cash
portion of the purchase price for the Metromedia interests, LIN's
subsidiary, LCH Communications, Inc. ("LCH"), issued $850 million
of newly issued Class A Redeemable Preferred Stock (the "LCH
Preferred Stock") to Metromedia. Metromedia has subsequently
transferred the LCH Preferred Stock to a subsidiary of Comcast
Corporation. The holder of the LCH Preferred Stock is entitled
to appoint two members of the LCH Board of Directors and will be
entitled to dividends if and when declared by the Board. LCH may
redeem the LCH Preferred Stock at any time at a price equal, at
its option, to either:
(1) all of the issued and outstanding capital stock of LCH's
subsidiary ("LIN-Penn"), which holds GuestInformant and
LIN's ownership interest in the Philadelphia A Block
cellular system, plus cash equal to 15 percent of the fair
market value of all businesses (currently, only WOOD,
formerly WOTV, LIN's broadcast business in Grand Rapids -
Kalamazoo - Battle Creek, Michigan) then operated by LCH
(the "Operating Business Portion"); or
(2) a cash amount equal to the greater of (a) the fair market
value of the issued and outstanding capital stock of LIN-
Penn plus the Operating Business Portion and (b) $850
million, plus, in each case, dividends which would have
accrued on the LCH Preferred Stock from the issuance date
(to the extent not previously paid) at the rate of 15.8
percent per year.
<PAGE>
<PAGE> 56
LCH is required to redeem the LCH Preferred Stock in the
year 2000 (if not redeemed prior to such time) at a price
comparable to that described above. In certain circumstances,
the holder of the LCH Preferred Stock may require the corporate
parent of LCH to purchase the LCH Preferred Stock.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements and
supplementary data, together with the reports of Arthur Andersen
& Co., independent public accountants and Ernst & Young,
independent auditors, are included elsewhere herein. Reference
is made to the "Index to Financial Statements" immediately
preceding page F-1.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.<PAGE>
<PAGE> 57
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is hereby incorporated by reference the information
under the captions "Election of Directors," "Executive Officers,"
and "Section 16 Compliance" in the Company's Proxy Statement
relating to its 1994 annual meeting of stockholders (the "Proxy
Statement").
Item 11. EXECUTIVE COMPENSATION
There is hereby incorporated by reference the information
under the captions "Election of Directors" and "Compensation of
Executive Officers" in the Proxy Statement.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
There is hereby incorporated by reference the information
under the caption "Security Ownership of Certain Beneficial
Owners and Management" in the Proxy Statement.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is hereby incorporated by reference the information
under the caption "Compensation Committee Interlocks and Insider
Participation" and "Certain Transactions" in the Proxy Statement.
<PAGE>
<PAGE> 58
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K
(a)(1) Consolidated Financial Statements of McCaw Cellular
Communications, Inc. and Subsidiary Companies:
- Report of Arthur Andersen & Co., Independent Public
Accountants
- Report of Ernst & Young, Independent Auditors
- Balance Sheets as of December 31, 1993 and 1992
- Statements of Operations for the Years Ended
December 31, 1993, 1992 and 1991
- Statements of Changes in Stockholders' Investment
(Deficiency) for the Years Ended December 31, 1993,
1992 and 1991
- Statements of Cash Flows for the Years Ended
December 31, 1993, 1992 and 1991
- Notes to Financial Statements for December 31, 1993
Combined Financial Statements of LIN's Unconsolidated
Affiliates
- Report of Ernst & Young, Independent Auditors
- Independent Auditors' Report
- Report of Independent Public Accountants
- Combined Balance Sheets at December 31, 1993 and
1992
- Combined Statements of Income for the Years Ended
December 31, 1993, 1992 and 1991
- Combined Statements of Ventures' Equity for the
Years Ended December 31, 1993, 1992 and 1991
- Combined Statements of Cash Flows for the Years
Ended December 31, 1993, 1992 and 1991
- Notes to Combined Financial Statements for December
31, 1993
(a)(2) Financial Statement Schedules of LIN's Unconsolidated
Affiliates
Schedule II - Amounts Receivable from Related
Parties for the Years Ended December
31, 1993, 1992 and 1991
Schedule IV - Indebtedness to Related Parties for
the Years Ended December 31, 1993,
1992 and 1991
Schedule V - Property and Equipment for the Years
Ended December 31, 1993, 1992 and 1991
Schedule VI- Accumulated Depreciation and
Amortization of Property and Equipment
for the Years Ended December 31, 1993,
1992 and 1992<PAGE>
<PAGE> 59
Schedule VIII - Valuation and Qualifying Accounts and
Reserves for the Years Ended December
31, 1993, 1992 and 1991
Schedule X - Supplementary Income Statement
Information for the Years Ended
December 31, 1993, 1992 and 1991
(a)(3) Exhibit Index
2.1 Agreement and Plan of Merger, dated August 16, 1993,
among American Telephone and Telegraph Company, Ridge
Merger Corporation and McCaw Cellular Communications,
Inc. (incorporated by reference to Exhibit 2(a) to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993, as amended)
3.1 Restated Certificate of Incorporation of the
Registrant, as amended (incorporated by reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992)
3.2 By-Laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992)
10.1 Credit Agreement, dated as of February 8, 1994, between
AT&T and MCCI Acquisitions, Inc.
10.2 Credit Agreement, dated as of December 3, 1993
10.3 Credit Agreement, dated as of February 26, 1990, as
amended and restated
10.4 Stock Pledge Agreement of McCaw Cellular, Inc.,
together with Amendment to Stock Pledge Agreement
(incorporated by reference to Exhibit 10.11 to
Registration Statement No. 33-15727)
10.5* Amended and Restated Equity Purchase Program
(incorporated by reference to Exhibit 4.1 to
Registration Statement No. 33-20985)
10.6* Amended and Restated 1983 Non-Qualified Stock Option
Plan (incorporated by reference to Exhibit 4.3 to
Registration Statement No. 33-27820)
10.7* Employee Stock Purchase Plan (incorporated by reference
to Exhibit 4.8 to Registration Statement No. 33-20985)
10.8* Amended and Restated 1987 Stock Option Plan
(incorporated by reference to Exhibit 4.6 to
Registration Statement No. 33-20985)
10.9 Purchase Agreement between McCaw Cellular
Communications, Inc. and British Telecom USA Holdings,
Inc. (incorporated by reference to Exhibit 10.16 to
Registration Statement No. 33-32874)
10.10 Guaranty Agreement between McCaw Cellular
Communications, Inc. and British Telecommunications
plc. (incorporated by reference to Exhibit 10.17 to
Registration Statement No. 33-32874)
10.11 Shareholders Agreement, dated May 31, 1989, as amended
December 31, 1989, among McCaw Cellular Communications,
Inc., the Jordan and Taylor Trusts, Craig, John, Bruce
and Keith McCaw and the other parties named therein
(incorporated by reference to Exhibit 10.18 to
Registration Statement No. 33-32874)<PAGE>
<PAGE> 60
10.12 Shareholders Agreement, dated June 20, 1989 among McCaw
Cellular Communications, Inc., British Telecom USA
Holdings, Inc. and Craig, John, Bruce and Keith McCaw
(incorporated by reference to Exhibit 10.19 to
Registration Statement No. 33-32874)
10.13 Agreement, dated December 11, 1989, between McCaw, MMM
Holdings, Inc. and LIN (incorporated by reference to
Exhibit 10.20 to Registration Statement No. 33-32874)
10.14 Private Market Value Guarantee, dated December 11, 1989
(incorporated by reference to Exhibit 10.21 to
Registration Statement No. 33-32874)
10.15* Employment Agreement, dated as of November 1, 1991, of
James L. Barksdale (incorporated by reference to
Exhibit 10.15 to the McCaw Cellular Communications Inc.
Annual Report on Form 10-K for the fiscal year ended
December 31, 1991)
10.16* Employment Agreement, dated as of March 23, 1989,of
Peter L.S. Currie
10.17 Agreement of Purchase and Partnership Contribution and
other related agreements in connection with the Bay
Area Transaction (incorporated by reference to Exhibit
28 to the Company's Current Report on Form 8-K dated
October 1, 1991)
10.18 Agreement of Purchase and Sale, dated as of April 10,
1991, by and between BellSouth Enterprises, Inc. and
Rochester Cellular Corporation and McCaw Cellular
Communications, Inc., Cellular Fund, Inc. and McCaw
Cellular, Inc. (incorporated by reference to Exhibit
10.18 to the McCaw Cellular Communications, Inc. Annual
Report on Form 10-K for the fiscal year ended December
31, 1991)
10.19* Employment Agreement, dated as of May 31, 1990, of Tom
A. Alberg (incorporated by reference to Exhibit 10.22
to the McCaw Cellular Communications, Inc. Annual
Report on Form 10-K for the fiscal year ended December
31, 1991)
10.20* McCaw Cellular Communications, Inc. 401(k) Plan, dated
as of July 1, 1991 (incorporated by reference to
Exhibit 10.23 to the McCaw Cellular Communications,
Inc. Annual Report on Form 10-K for the fiscal year
ended December 31, 1991)
10.21* 1992 Stock Option Plan for Non-Employee Directors
(incorporated by reference to Exhibit 10.24 to the
McCaw Cellular Communications, Inc. Annual Report on
Form 10-K for the fiscal year ended December 31, 1991)
10.22* 1992 Stock Option Plan for British Telecom
Directorships (incorporated by reference to Exhibit
10.25 to the McCaw Cellular Communications, Inc. Annual
Report on Form 10-K for the fiscal year ended December
31, 1991)<PAGE>
<PAGE> 61
10.23 Purchase and Sale Agreement, dated as of July 31, 1992,
among McCaw Cellular Communications, Inc., Associated
Communications Corporation and Celcom Communications
Corporation of Pittsburgh, and other related agreements
in connection with the McCaw/Associated Joint Venture
(incorporated by reference to Exhibit 10.24 to the
McCaw Cellular Communications, Inc. Annual Report on
Form 10-K for the fiscal year ended December 31, 1992)
10.24* McCaw Employee Plan, established in connection with
AT&T Merger Agreement
10.25* McCaw Cellular Communications, Inc. Deferred
Compensation Plan, dated December 15, 1993
21 Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Ernst & Young
23.3 Consent of Deloitte & Touche
23.4 Consent of Arthur Andersen & Co.
24 Powers of attorney with respect to certain signatures
* Management contract or compensatory plan or
arrangement.
(b) Reports on Form 8-K
There was one report on Form 8-K filed during the quarter
ended December 31, 1993:
December 3, 1993: Announcing redemption of all of the
Company's publicly held debt.<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
McCAW CELLULAR COMMUNICATIONS, INC.
By: ANDREW A. QUARTNER
Andrew A. Quartner
Senior Vice President-Law
March 31, 1994
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board,
Chief Executive Officer and
Director (Principal
Craig O. McCaw* Executive Officer) March 31, 1994
- ------------------------
Craig O. McCaw
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting
Steven W. Hooper* Officer) March 31, 1994
- ------------------------
Steven W. Hooper
Vice Chairman
Wayne M. Perry* of the Board March 31, 1994
- ------------------------
Wayne M. Perry
President and
James L. Barksdale* Director March 31, 1994
- ------------------------
James L. Barksdale
John W. Stanton* Director March 31, 1994
- ------------------------
John W. Stanton
John E. McCaw, Jr.* Director March 31, 1994
- ------------------------
John E. McCaw, Jr.<PAGE>
<PAGE>
Signature Title Date
Bruce R. McCaw* Director March 31, 1994
- ------------------------
Bruce R. McCaw
Harold S. Eastman* Director March 31, 1994
- ------------------------
Harold S. Eastman
Harold W. Andersen* Director March 31, 1994
- ------------------------
Harold W. Andersen
Daniel J. Evans* Director March 31, 1994
- ------------------------
Daniel J. Evans
John C. McDonald* Director March 31, 1994
- ------------------------
John C. McDonald
Stuart M. Sloan* Director March 31, 1994
- ------------------------
Stuart M. Sloan
Malcolm Argent* Director March 31, 1994
- ------------------------
Malcolm Argent
Bruce R. Bond* Director March 31, 1994
- ------------------------
Bruce R. Bond
*By: ANDREW A. QUARTNER
------------------------
Andrew A. Quartner
Attorney-in-fact
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Consolidated Financial Statements of the Company
Report of Arthur Andersen & Co., Independent
Public Accountants.......................................F-1
Report of Ernst & Young, Independent Auditors..............F-2
Consolidated Balance Sheets as of December 31,
1993 and 1992............................................F-3
Consolidated Statements of Operations for the
Years Ended December 31, 1993, 1992 and 1991.............F-5
Consolidated Statements of Changes in
Stockholders' Investment (Deficiency) for the
Years Ended December 31, 1993, 1992 and 1991.............F-7
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1993, 1992 and 1991.............F-9
Notes to Consolidated Financial Statements for
December 31, 1993.......................................F-12
Combined Financial Statements of LIN's Unconsolidated Affiliates
Report of Ernst & Young, Independent Auditors.............F-48
Independent Auditors' Report..............................F-49
Report of Independent Public Accountants..................F-50
Combined Balance Sheets at December 31, 1993 and 1992.....F-51
Combined Statements of Income for the Years Ended
December 31, 1993, 1992 and 1991........................F-53
Combined Statements of Ventures' Equity for the Years
Ended December 31, 1993, 1992 and 1991..................F-54
Combined Statements of Cash Flows for the Years
Ended December 31, 1993, 1992 and 1991..................F-55
Notes to Combined Financial Statements for
December 31, 1993.......................................F-58
<PAGE>
<PAGE>
Financial Statement Schedules of LIN's Unconsolidated Affiliates
Schedule II - Amounts Receivable from Related Parties
for the Years Ended December 31, 1993,
1992 and 1991..........................F-66
Schedule IV - Indebtedness to Related Parties
for the Years Ended December 31,
1993, 1992 and 1991....................F-67
Schedule V - Property and Equipment for the
Years Ended December 31, 1993,
1992 and 1991..........................F-68
Schedule VI- Accumulated Depreciation and
Amortization of Property and
Equipment for the Years Ended
December 31, 1993, 1992 and 1992.......F-69
Schedule VIII - Valuation and Qualifying Accounts
and Reserves for the Years Ended
December 31, 1993, 1992 and 1991.......F-70
Schedule X - Supplementary Income Statement
Information for the Years Ended
December 31, 1993, 1992 and 1991.......F-71
<PAGE>
<PAGE> F-1
Report of Independent Public Accountants
To McCaw Cellular Communications, Inc.:
We have audited the accompanying consolidated balance sheets of
McCaw Cellular Communications, Inc. (a Delaware corporation) and
subsidiary companies as of December 31, 193 and 1992, and the
related consolidated statements of operations, stockholders'
investment (deficiency) and cash flows for each of the three
years in the period ended December 31, 1993. 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 did not audit the financial
statements of LIN Broadcasting Corporation and subsidiaries,
which statements reflect assets of 32 percent of the 1993 and
1992 consolidated assets and net revenues of 34 percent, 35
percent, and 36 percent for 1993, 1992 and 1991 consolidated net
revenues, respectively. Those statements were audited by other
auditors whose report has been furnished to us and our opinion,
insofar as it relates to the amounts included for those entities,
is based solely on the report of 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 financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the report of other
auditors, the financial statements referred to above present
fairly, in all material respects, the financial position of McCaw
Cellular Communications, Inc. and subsidiary companies as of
December 31, 1993 and 1992 and the results of their operations
and their cash flows for each of the three years in the period
ended December 31,1993 in conformity with generally accepted
accounting principles.
As explained in Note 1 to the financial statements, the Company
has adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," by applying it retroactively
effective January 1, 1991.
ARTHUR ANDERSEN & CO.
Seattle, Washington
March 30, 1994<PAGE>
<PAGE> F-2
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
Board of Directors and Stockholders of
LIN Broadcasting Corporation
We have audited the consolidated balance sheets of LIN
Broadcasting Corporation and subsidiaries as of December 31, 1993
and 1992, and the related consolidated statements of operations,
stockholders' deficit, and cash flows for each of the three years
in the period ended December 31, 1993 (not presented separately
herein). 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 our audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects the consolidated
financial position of LIN Broadcasting Corporation and
subsidiaries at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993 in conformity
with generally accepted accounting principles.
Seattle, Washington
February 4, 1994<PAGE>
<PAGE> F-3
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(Dollars In Thousands, Except Per Share Amounts)
ASSETS
1993 1992
---- ----
Current assets:
Cash and cash equivalents $138,908 $201,606
Marketable securities 57,661 168,306
Accounts receivable, net of allowance
for doubtful accounts
(1993, $36,682; 1992, $31,298) 326,584 250,265
Other 106,041 51,917
--------- ---------
Total current assets 629,194 672,094
Property and equipment, net of
accumulated depreciation and
amortization (1993, $784,330;
1992, $494,322) 1,616,480 1,439,058
Licensing costs, net of accumulated
amortization (1993, $505,303;
1992, $407,169) 3,994,511 3,991,928
Other intangible assets, net of
accumulated amortization
(1993, $221,152; 1992, $365,717) 768,481 804,963
Investments 1,960,863 1,856,669
Other assets 95,400 190,733
--------- --------
$9,064,929 $8,955,445
========== =========
(continued)<PAGE>
<PAGE> F-4
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(Dollars In Thousands, Except Per Share Amounts)
(continued)
LIABILITIES AND STOCKHOLDERS DEFICIENCY
1993 1992
---- ----
Current liabilities:
Current portion of long-term debt $158,925 $90,906
Accounts payable 159,129 124,339
Accrued expenses 333,481 326,052
Unearned revenues and customer
deposits 69,118 59,123
--------- ---------
Total current liabilities 720,653 600,420
Long-term debt, net of
current portion 4,989,746 5,562,393
Net deferred tax liability 1,955,687 1,899,581
Other noncurrent liabilities 131,499 131,844
--------- ---------
Total liabilities 7,797,585 8,194,238
--------- ---------
Commitments and contingencies
Redeemable preferred stock of
a subsidiary 1,305,248 1,170,948
--------- ---------
Stockholders deficiency:
Preferred stock, $0.01 par:
Authorized 10,000,000 shares;
none issued
Common stock, $0.01 par:
Class A: Authorized 400,000,000
shares; issued and outstanding,
1993, 148,411,196;
1992, 124,769,731 1,484 1,247
Class B: Authorized 200,000,000
shares; issued and outstanding,
1993, 60,142,047;
1992, 61,356,282 602 614
Additional paid-in capital 2,888,565 2,244,637
Deficit (2,928,555) (2,656,239)
--------- ---------
Total stockholders
deficiency (37,904) (409,741)
--------- ---------
$9,064,929 $8,955,445
========== =========
See notes to consolidated financial statements.<PAGE>
<PAGE> F-5
<TABLE>
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands, Except Per Share Amounts)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Net revenues $2,194,810 $1,743,336 $1,365,571
--------- --------- ---------
Expenses:
Operating 1,385,231 1,079,116 888,419
Corporate 22,343 19,529 16,514
Depreciation 225,239 179,747 143,231
Valuation loss on equipment 123,559 -- --
Amortization of intangible assets 178,360 205,452 201,617
--------- --------- ---------
1,934,732 1,483,844 1,249,781
--------- --------- ---------
Income from operations 260,078 259,492 115,790
--------- --------- ---------
Other income (expense):
Interest expense (394,187) (490,040) (577,992)
Gain on dispositions of assets, net 141,180 2,530 249,479
Interest income 21,680 17,892 30,072
Equity in income of unconsolidated
investees 71,071 40,177 22,874
Other (76,265) -- 6,241
--------- --------- ---------
(236,521) (429,441) (269,326)
--------- --------- ---------
Income (loss) before income taxes,
minority interest, extraordinary item
and cumulative effect of the
change in accounting for income taxes 23,557 (169,949) (153,536)
Income tax (expense) benefit (97,919) 34,992 26,817
--------- --------- ---------
Loss before minority interest,
extraordinary item and cumulative
effect of the change in
accounting for income taxes (74,362) (134,957) (126,719)
(continued)<PAGE>
<PAGE> F-6 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands, Except Per Share Amounts)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Minority interest:
Income of consolidated subsidiaries $(18,620) $(16,349) $(14,000)
Provision for preferred stock dividend
of a subsidiary (134,300) (134,300) (134,300)
--------- --------- ---------
Loss before extraordinary item and
cumulative effect of the change
in accounting for income taxes (227,282) (285,606) (275,019)
Extraordinary item: Loss on early
extinguishment of debt, net of
income tax benefit (45,034) -- --
Cumulative effect of the change in
accounting for income taxes -- -- (1,956,346)
--------- --------- ---------
Net loss $(272,316) $(285,606) $(2,231,365)
========== ========== ============
Weighted average number of common and
common equivalent shares outstanding 202,948,471 182,675,314 181,487,069
=========== =========== ===========
Per share amounts:
Loss before extraordinary item and
cumulative effect of the change in
accounting for income taxes $(1.12) $(1.60) $(1.62)
Extraordinary item: Loss on early
extinguishment of debt, net of
income tax benefit (0.22) -- --
Cumulative effect of the change in
accounting for income taxes -- -- (10.78)
--------- --------- ---------
Net loss $(1.34) $(1.60) $ (12.40)
========= ========= =========
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-7 McCAW CELLULAR COMMUNICATIONS, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS INVESTMENT (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands)
Common Stock
--------------------------------------------- Total
Class A Class B Additional stockholders'
------------------- ------------------ paid-in investment
Shares Amount Shares Amount capital Deficit (deficiency)
------ ------ ------ ------ ---------- ------- -----------
<C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1990 112,810,611 $1,128 66,389,937 $664 $2,156,722 $(113,803) $2,044,711
Stock issued 2,462,761 25 60,448 60,473
Options exercised
and related income
tax benefits 67,071 1 548,399 5 6,771 6,777
Conversion of common
stock 5,865,342 58 (5,865,342) (58)
Compensation attributable
to stock options
vesting 2,226 2,226
Net loss (2,231,365) (2,231,365)
Accretion of mandatory
repurchase obligation,
net (18,445) (18,445)
--------- --------- --------- --------- --------- --------- ---------
Balance, December 31,
1991 121,205,785 1,212 61,072,994 611 2,226,167 (2,363,613) (135,623)
Stock issued 94,751 1 2,245 2,246
Options exercised 231,734 2 3,520,749 35 12,281 12,318
Conversion of
common stock 3,237,461 32 (3,237,461) (32)
Compensation attributable
to stock options
vesting 3,944 3,944
Net loss (285,606) (285,606)
Accretion of mandatory
repurchase obligation,
net (7,020) (7,020)
--------- --------- --------- --------- --------- --------- ---------
(continued)<PAGE>
<PAGE> F-8 McCAW CELLULAR COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS INVESTMENT (DEFICIENCY) (continued)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands)
Common Stock
--------------------------------------------- Total
Class A Class B Additional stockholders'
------------------- ------------------ paid-in investment
Shares Amount Shares Amount capital Deficit (deficiency)
------ ------ ------ ------ ---------- ------- -----------
<C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1992 124,769,731 $1,247 61,356,282 $614 $2,244,637 $(2,656,239) $(409,741)
Stock issued 20,655,667 207 614,511 614,718
Options exercised 1,198,563 12 573,000 6 27,635 27,653
Conversion of
common stock 1,787,235 18 (1,787,235) (18)
Compensation attributable
to stock options
vesting 1,782 1,782
Net loss (272,316) (272,316)
--------- --------- --------- --------- --------- --------- ---------
Balance, December 31,
1993 148,411,196 $1,484 60,142,047 $602 $2,888,565 $(2,928,555) $(37,904)
========== ====== ========== ==== ========== =========== =========
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-9 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Operating activities:
Net loss $(272,316) $(285,606) $(2,231,365)
---------- ---------- ----------
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 403,599 385,199 344,848
Gain on dispositions of assets, net (141,180) (2,530) (249,479)
Cumulative effect of change in
accounting for income taxes -- -- 1,956,346
Equity in income of unconsolidated
investees (71,071) (40,177) (22,874)
Premium on early extinguishment of debt 48,131 -- --
Valuation loss and other 206,146 -- (6,241)
Minority interest:
Income of consolidated subsidiaries 18,620 16,349 14,000
Provision for preferred stock
dividend of a subsidiary 134,300 134,300 134,300
Amortization of costs associated with
long-term debt 25,430 41,173 57,812
Changes in operating assets and
liabilities:
Accounts receivable, net (85,105) (47,065) (50,565)
Other current assets (50,265) (10,231) 46,038
Accounts payable 36,455 16,276 26,427
Accrued expenses (2,866) 11,439 82,531
Unearned revenues and customer
deposits 11,927 14,599 12,412
Net deferred tax liability 28,532 (77,860) (46,703)
Other noncurrent liabilities 2,402 1,810 3,400
Other 1,783 3,944 23,770
---------- ---------- ----------
566,838 447,226 2,326,022
Net cash provided by ---------- ---------- ----------
operating activities 294,522 161,620 94,657
---------- ---------- ----------
(continued)<PAGE>
<PAGE> F-10 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Investing activities:
Purchase or acquisition of:
Cellular systems, net $-- $(106,384) $--
Marketable securities (300,076) (176,966) (403,690)
Property and equipment, net (594,923) (394,743) (516,245)
Licensing costs (89,257) (19,542) (14,872)
Other intangible assets, net (878) (15,974) (8,476)
Other assets (1,921) (15,946) (14,796)
Minority interests (41,169) (679) (7,585)
Investments in and advances to
unconsolidated investees (47,580) (44,766) (22,714)
Sale or redemption of:
Cellular systems, net 185,621 -- 360,586
Marketable securities 411,895 267,824 224,158
Distributions from investments 116,860 89,290 63,411
Contributions from minority
interest holders 35,290 13,471 11,992
Other investing activities, net 454 (10,094) 7,064
--------- --------- ---------
Net cash used in investing
activities (325,684) (414,509) (321,167)
--------- --------- ---------
Financing activities:
Proceeds from long-term debt 1,930,350 439,650 484,659
Principal and premium payments
on long-term debt (2,396,397) (47,979) (463,357)
Repurchase of subsidiary's warrants -- (89,924) --
Net proceeds from issuance of
common stock 434,511 14,564 3,617
Deferred financing costs -- -- (5,534)
--------- --------- ---------
Net cash (used in) provided
by financing activities (31,536) 316,311 19,385
--------- --------- ---------
Increase (decrease) in cash and
cash equivalents (62,698) 63,422 (207,125)
(continued)<PAGE>
<PAGE> F-11 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars In Thousands)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cash and cash equivalents,
beginning of year 201,606 138,184 345,309
--------- --------- ---------
Cash and cash equivalents, end of year $138,908 $201,606 $138,184
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid (received) for:
Interest $427,264 $454,359 $525,071
========= ========= =========
Income taxes $58,457 $30,012 $(68,958)
========= ========= =========
</TABLE>
<PAGE>
<PAGE> F-12 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. Summary of significant accounting policies:
Principles of consolidation:
The consolidated financial statements include the accounts
of McCaw Cellular Communications, Inc., a Delaware
corporation, and its majority-owned subsidiary companies
(the Company), including LIN Broadcasting Corporation,
together with its subsidiaries (LIN).
The Company s consolidated financial statements include 100%
of the assets, liabilities and results of operations of
subsidiaries (both corporations and partnerships) in which
the Company has a voting interest of greater than 50%. The
ownership interest of the other interest holders is
reflected as minority interests. Losses in consolidated
corporations (including LIN s) attributable to minority
interest holders in excess of their respective share of the
subsidiaries net equity are not eliminated in
consolidation. All significant intercompany accounts and
transactions have been eliminated.
Certain reclassifications were made to prior years amounts
to conform with the 1993 presentation.
Operations:
The Company s activities primarily consist of the
acquisition of interests in cellular licensees and the
construction, operation and expansion of cellular, air-to-
ground, messaging and broadcasting communications systems.
The Company has experienced substantial net losses,
exclusive of gains on dispositions of assets, and has had
insufficient internally generated funds to cover capital,
operating expenditures and debt service since its inception.
Cash and cash equivalents:
Cash equivalents consist of repurchase obligations,
certificates of deposit, commercial paper and other
investments with a maturity of 90 days or less when
purchased. The carrying amount reported in the balance
sheets for cash and cash equivalents approximates fair
value.
<PAGE>
<PAGE> F-13 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. Summary of significant accounting policies (continued):
Marketable securities:
The Company invests excess cash in marketable securities
which include equity and debt securities, certificates of
deposit and other investment instruments with maturities
greater than 90 days when purchased. Marketable securities
are stated at the lower of aggregate cost or market value.
At December 31, 1993 and 1992, aggregate cost approximated
market value. The Company recognized net gains of
approximately $1.1, $1.0 and $13.5 million on sales of
marketable securities in 1993, 1992 and 1991, respectively.
The gains are reflected in the accompanying statements of
operations as gain on dispositions of assets, net.
Revenue recognition:
Cellular and air-to-ground air time is recorded as revenue
as earned. Sales of equipment and related services are
recorded when goods and services are delivered. Cellular
access charges and messaging services generally are billed
in advance and recognized as revenue when the services are
provided. Broadcast revenue is billed when contracted and
recognized during the period the advertising is aired or
appears in publications.
Property and equipment:
Property and equipment are stated at cost. Repair and
maintenance costs are charged to expense when incurred.
Renewals and betterments are capitalized. Gains or losses
on disposition of property and equipment are reflected in
income currently. Depreciation is computed using the
straight-line method over the estimated useful lives of the
assets which are generally 10 to 12 years for cellular, 2 to
12 years for messaging, 10 to 20 years for broadcast, 3 to
12 years for air-to-ground and 3 to 5 years for other
equipment. Leasehold improvements are amortized using the
straight-line method over the terms of the leases.
During 1993 certain cellular equipment was identified for
early replacement and reduced to its estimated realizable
value (see Footnote 4--Property and equipment).
<PAGE>
<PAGE> F-14 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. Summary of significant accounting policies (continued):
Licensing costs:
Licensing costs primarily represent costs incurred to
develop or acquire cellular and messaging licenses.
Generally, amortization begins with the commencement of
service to customers and is computed using the straight-line
method over a period of 40 years.
Other intangible assets:
Other intangible assets primarily represent costs allocated
in acquisitions to customer contracts, broadcast licenses,
network affiliations and goodwill. Customer contracts are
amortized using the straight-line method over the expected
term of the customers service, generally 3 years.
Broadcast licenses, network affiliations and goodwill are
amortized using the straight-line method over a period of 40
years.
Income taxes:
The Company provides for income taxes currently payable and
for deferred income taxes resulting from temporary
differences in the recognition of income and expense for
financial reporting and tax reporting purposes.
During the first quarter of 1993, the Company retroactively
adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes," effective January 1,
1991. SFAS No. 109 requires an asset and liability approach
for financial accounting and reporting for income tax
purposes. The principal impact of SFAS No. 109 on the
Company relates to the requirement that a deferred tax
liability be provided to recognize the differences in book
and tax basis for certain intangible assets recorded as a
result of purchase business combinations, such as the
Company s acquisition of LIN and LIN s acquisition of
Metromedia s indirect interest in the New York City
licensee. The adoption of SFAS No. 109 retroactive to
January 1, 1991 resulted in an increase to the 1991 net loss
for the cumulative effect of the change of $1,956 million
or $10.78 per share and an increase of the deferred tax
liability of $1,956 million.
<PAGE>
<PAGE> F-15 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. Summary of significant accounting policies (continued):
Net loss per share:
Net loss per share is computed based on the weighted average
number of common and common equivalent shares outstanding
during the year. In the years where the Company has
reported a net loss, only common shares outstanding are
considered since the assumed conversion of options and
convertible securities would be antidilutive. The
computation of 1992 and 1991 net loss per share also
reflects the accretion of the mandatory repurchase
obligation of McCaw Cellular, Inc. (MCI) warrants net of the
accretion of warrants held by the Company.
Recently issued accounting standards:
In December 1992, the Financial Accounting Standards Board
issued Statement No. 112, Employers Accounting for
Postemployment Benefits. This statement is effective for
fiscal years beginning after December 15, 1993 and requires
accrual of the expected cost of benefits provided to former
or inactive employees after employment but before retirement
either over the period of employment or as an expense at the
date of the event giving rise to the benefits. The Company
has decided to adopt Statement No. 112, effective January 1,
1994. All such postemployment benefits provided by the
Company in prior years have not been material, and
accordingly, the adoption of Statement No. 112 will not have
a material impact on the financial position or results of
operations of the Company.
2. Significant acquisitions and dispositions:
1993 Transactions:
On January 8, 1993, the Company and Associated
Communications Corporation (Associated) completed the
formation of a joint venture combining Associated s 6%
interest in Bay Area Cellular Telephone Company (BACTC) and
the Company s 50% interest in the Buffalo, New York A Block
cellular system (AM Partners). Associated and the Company
each have a 50% ownership interest in AM Partners. In
addition, Associated purchased the Company s 34.17% interest
in the A Block cellular system in Albany, New York, its 100%
interest in the A Block cellular system in Glens Falls, New
York and its 28.57% interest in the A Block cellular system
in Rochester, New York. The total price for the three
combined interests was approximately $85.6 million on<PAGE>
<PAGE> F-16 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
2. Significant acquisitions and dispositions (continued):
which the Company recognized an after tax gain of
approximately $35.5 million.
On September 1, 1993, the Company and PacTel, a subsidiary
of Pacific Telesis Group, completed the formation of a 99-
year joint venture combining PacTel s 61.1% interest in
BACTC and its approximate 34% interest in the A Block
cellular system in Dallas and the Company s 32.9% interest
in BACTC, certain of its interests in the A Block cellular
systems in Vallejo, Santa Rosa and Carmel/Monterey/Salinas,
California, and certain of its interests in the A Block
cellular systems in Kansas City, St. Joseph and Lawrence,
Kansas/Missouri (collectively, CMT Partners). PacTel and
the Company each have a 50% ownership interest in CMT
Partners. In addition, PacTel directly purchased the
Company s 100% interest in the A Block cellular system in
Wichita, Kansas and an approximate 78% interest in the A
Block cellular system in Topeka, Kansas for $100 million.
The Company recognized an after tax gain on the sale of
approximately $56 million, subject to certain purchase price
adjustments.
The primary effect on the consolidated balance sheet of the
formation of CMT Partners, net of cash, was to increase
investments approximately $97.7 million, decrease property
and equipment approximately $55.0 million and decrease
licensing costs and other intangible assets approximately
$44.5 million.
The Company completed the acquisition of interests in
several A Block cellular licensees in exchange for
approximately 2.2 million shares of the Company s Class A
Common Stock for an approximate $96.1 million.
1992 Transaction:
On January 7, 1992, the Company completed the acquisition
from Crowley Cellular Telecommunications Limited
Partnership, of its 100% interests in the A Block cellular
systems in Waco, Texas and Daytona Beach, Florida, as well
as certain minority interests in other cellular systems for
approximately $107 million in cash.
<PAGE>
<PAGE> F-17 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
2. Significant acquisitions and dispositions (continued):
1991 Transaction:
On September 20, 1991 the Company sold to BellSouth
Enterprises, Inc. (BellSouth) the Company s cellular
interests in Indiana, Wisconsin and Illinois (Upper Midwest
Cellular Systems) for approximately $360 million in cash and
BellSouth s approximate 29% interest in the A Block cellular
system in Rochester, New York valued at $21.0 million. In
addition, as part of the transaction, the Company released
Graphic Scanning Corporation (Graphic) from a pending
lawsuit and terminated the pending formation of a joint
venture between the Company and Graphic to which the Company
would have contributed the cellular interests sold to
BellSouth and Graphic would have contributed its 50%
interest in Milwaukee, Wisconsin. Under the joint venture
agreement, the Company would have had to pay Graphic
approximately $50 million in exchange for an additional
interest in the profits of the joint venture. The
termination of the joint venture agreement eliminated this
contingent obligation. The Company recognized an after tax
gain of approximately $153.3 million on the sale.
3. Other current assets
December 31,
1993 1992
---- ----
(In thousands)
Inventories $40,190 $20,268
Accounts and notes receivable 36,603 16,343
Prepaids and other 29,248 15,306
------- -------
$106,041 $51,917
======== =======
<PAGE>
<PAGE> F-18 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
4. Property and equipment:
December 31,
1993 1992
---- ----
(In thousands)
Cellular $1,579,839 $1,310,765
Messaging 106,148 102,401
Broadcast 99,766 95,566
Air-to-ground 68,954 --
Other 264,635 219,095
------- -------
2,119,342 1,727,827
Less accumulated
depreciation and
amortization 784,330 494,322
------- -------
1,335,012 1,233,505
Construction in progress 281,468 205,553
------- -------
$1,616,480 $1,439,058
========== ==========
During 1993, the Company entered into agreements to replace
and upgrade certain cellular equipment in its Minnesota,
Rocky Mountain and Southwest markets during 1994 and 1995.
The new equipment will be digital compatible. As a result,
the Company adjusted the cellular equipment to reflect its
estimated realizable value at the time of replacement. The
excess of net book value of the cellular equipment over the
estimated realizable value as of its replacement date has
been reflected as a valuation loss on equipment in the
accompanying financial statements.
5. Investments:
Subsidiary corporations and joint ventures in which the
Company has investments with voting interests of at least
20% but not more than 50% are reported on the equity method.
Under the equity method, investments are stated at cost and
are adjusted for the Company s share of undistributed
earnings and losses. Partnerships in which the Company has
ownership interests not exceeding 50% are also reported on
the equity method. The excess of the Company s investment
over the underlying book value of the investees net assets
<PAGE>
<PAGE> F-19 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
5. Investments (continued):
has been allocated to licensing costs and customer contracts
and is being amortized consistent with the amortization
periods for those assets. Amortization of this excess of
$45.9, $74.3 and $73.9 million for the years ended December
31, 1993, 1992 and 1991, respectively, is reflected in the
accompanying statements of operations in equity in income of
unconsolidated investees. At December 31, 1993 and 1992,
the investments accounted for under the equity method
exceeded the Company s share of the underlying net assets by
approximately $1,447.0 and $1,599.5 million, respectively.
Ownership percentages of significant investees are as
follows:
December 31,
1993 1992
---- ----
Equity investments held
directly by the Company:
CMT Partners(1) 50.00% --
Bay Area Cellular
Telephone Company(1) -- 32.90%
AM Partners(1) 50.00% --
Buffalo Telephone Company(1) -- 50.00%
Albany Telephone Company(1) -- 34.17%
Genesee Telephone Company
(Rochester, NY)(1) -- 28.57%
Cybertel Cellular Telephone
Company (St. Louis, MO) 15.00% 15.00%
Northeast Pennsylvania Cellular
Telephone Company -- 34.26%
SmarTone Limited (Hong Kong) 27.00% 27.00%
Movitel del Noroeste, SA de CV
(States of Sinaloa and
Sonora, Mexico) 22.00% 22.00%<PAGE>
<PAGE> F-20 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
5. Investments (continued):
December 31,
1993 1992
---- ----
Cellular One Group 48.75% 48.75%
Equity investments held
by LIN(2):
Houston Cellular Telephone
Company 56.25% 56.25%
Los Angeles Cellular
Telephone Company 39.97% 39.97%
Metrophone (Philadelphia) 49.99% 49.99%
American Mobile Satellite
Corporation(3) 12.49% 32.35%
Galveston Cellular
Telephone Company(4) 42.07% 41.93%
(1) See Footnote 2 for description of transactions affecting the
Company s equity investment interests in 1993.
(2) LIN s ownership percentages reflect LIN s equity interest in
each investee. LIN s voting interest in both Houston
Cellular Telephone Company and Los Angeles Cellular
Telephone Company was 50% at December 31, 1993 and 1992.
(3) At December 31, 1993 and 1992 the Company, excluding LIN,
held a 4.91% and 12.72% direct interest in American Mobile
Satellite Corporation (AMSC), respectively. LIN owned an
interest of 7.58% and 19.63% at December 31, 1993 and 1992,
respectively. The fair value of the Company s investment in
AMSC at December 31, 1993 is approximately $62.8 million
based on the closing price of AMSC s publicly traded stock.
(4) At December 31, 1993 and 1992 the Company, excluding LIN,
held a 7.47% and 9.76% direct interest in Galveston Cellular
Telephone Company. LIN owned an interest of 34.60% and
32.17% at December 31, 1993 and 1992, respectively.
<PAGE>
<PAGE> F-21
<TABLE>
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
5. Investments (continued):
The following is a summary of combined results of operations and financial position of these significant
investments accounted for under the equity method:
Investments held directly by:
-------------------------------------------------------------
LIN McCaw LIN McCaw LIN McCaw
1993 1993 1992 1992 1991 1991
----- ----- ----- ----- ----- -----
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Revenues $760,800 $368,400 $654,800 $301,100 $537,000 $240,900
======== ======== ======== ======== ======== ========
Net income $255,700 $76,200 $238,100 $59,600 $207,800 $47,000
======== ======== ======== ======== ======== ========
Current assets $183,600 $101,000 $137,500 $82,400 $119,500 $89,700
Other 488,000 528,200 423,700 369,000 366,300 266,700
-------- -------- -------- -------- -------- --------
Total assets $671,600 $629,200 $561,200 $451,400 $485,800 $356,400
======== ======== ======== ======== ======== ========
Current liabilities $128,000 $66,600 $ 83,200 $ 75,500 $75,600 $84,800
Other 100,900 63,900 130,900 83,400 42,500 23,600
-------- -------- -------- -------- -------- --------
Total liabilities 228,900 130,500 214,100 158,900 118,100 108,400
Equity 442,700 498,700 347,100 292,500 367,700 248,000
-------- -------- -------- -------- -------- --------
Total liabilities and equity $671,600 $629,200 $561,200 $451,400 $485,800 $356,400
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> F-22 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
6. Accrued expenses:
December 31,
1993 1992
---- ----
(In thousands)
Interest $12,611 $71,346
Income taxes 34,241 45,340
Payroll and related benefits 55,913 38,571
Business taxes 39,543 32,064
Other 191,173 138,731
------- -------
$333,481 $326,052
======== ========
7. Long-term debt:
December 31,
1993 1992
---- ----
(In thousands)
McCaw Bank Credit
Facilities (a) $3,400,000 $2,229,650
LIN Bank Credit
Facilities (b) 1,698,338 1,769,682
Senior and senior subordinated
notes and debentures (c) -- 1,195,555
Convertible senior subordinated
debentures (d) -- 399,720
Other (e) 50,333 58,692
------- -------
5,148,671 5,653,299
Less current portion 158,925 90,906
------- -------
$4,989,746 $5,562,393
========== ==========
<PAGE>
<PAGE> F-23 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
7. Long-term debt (continued):
(a) McCaw Bank Credit Facilities
The Company has arranged $4,000 million in financing
with a group of banks through two Revolving Credit and
Term Loan Agreements. During the fourth quarter of
1993, the Company renegotiated its existing $3,000
million Bank Credit Facility and entered into a new
$1,000 million Bank Credit Facility (together the McCaw
Bank Credit Facilities). The renegotiation of the
$3,000 million facility resulted in an extension of the
commencement of principal repayment from June of 1994
to March of 1996 and a change in certain financial
covenants and other terms. Included in other expenses
is approximately $79 million in nonrecurring charges
associated with the McCaw Bank Credit Facilities.
Under the McCaw Bank Credit Facilities, interest is
payable at an applicable margin above the prevailing
prime, LIBOR or CD rate. Interest is fixed for a
period ranging from one month to twelve months,
depending on availability of the interest basis
selected, although if the Company selects a prime-based
loan, the interest rate will fluctuate during the
period as the prime rate fluctuates.
The Company does not expect its operations to generate
sufficient cash to meet its expenditure requirements
for the next few years. In order to meet its
substantial debt service obligations and to fund its
other operating and capital requirements, the Company
will have to borrow significant additional amounts
under the McCaw Bank Credit Facilities. There are
conditions in the McCaw Bank Credit Facilities which
must be satisfied before the banks will lend additional
amounts. If these conditions are not satisfied, the
banks may conclude it is not in their best interests to
lend additional amounts to the Company. Among these
conditions are ratios of senior debt and combined debt
to cash flow (as defined in the McCaw Bank Credit
Facilities) and cash flow to combined debt service.
(See Footnote 16 -- Merger with American Telephone and
Telegraph Company.)
Beginning March 31, 1996 and at the end of each fiscal
quarter thereafter until the maturity date (which will
be on or about March 31, 2000), the Company will be
required to make payments amortizing the amount<PAGE>
<PAGE> F-24 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
7. Long-term debt (continued):
(a) McCaw Bank Credit Facilities (continued):
outstanding under the McCaw Bank Credit Facilities on
December 31, 1995. In addition, the Company will be
required to apply cash proceeds from certain sales of
assets and, after January 1, 1996, its excess cash flow
(as defined in the McCaw Bank Credit Facilities), to
the prepayment of loans. At December 31, 1993, $2,550
million was outstanding under the $3,000 million
facility and $850 million was outstanding under the
$1,000 million facility. As of March 15, 1994, the
Company has borrowed net additional amounts of $80
million under its Bank Credit Facilities. The weighted
average interest rate was 4.85% for the $3,000 million
facility and 4.74% for the $1,000 million facility at
December 31, 1993. The McCaw Bank Credit Facilities
provide for annual fees of .5% of the unused
commitments.
At December 31, 1993, the Company has interest rate
protection in the form of a swap arrangement and
interest caps on LIBOR covering $100 million and $800
million, respectively, of the outstanding amounts on
the McCaw Bank Credit Facilities. These arrangements
expire between February 1994 and March 1996.
The book value of the amounts outstanding under the
McCaw Bank Credit Facilities at December 31, 1993
accrue interest at a variable rate plus an applicable
margin as described above. Since the borrowings are
repriced for periods ranging from one month to twelve
months based on changes in the market rates, the book
value of the amounts outstanding under the Bank Credit
Facilities at December 31, 1993 approximate fair value.
(b) LIN Bank Credit Facilities
LIN has arranged financing through two bank facilities.
LIN Cellular Network, Inc. (LCNI), a wholly owned
subsidiary of LIN (owning all of LIN's cellular
operations other than Philadelphia), has an aggregate
of $1,480 million outstanding and $240 million
available as of December 31, 1993 (the Cellular
Facility). LIN Television Corporation (LTC), a wholly
owned subsidiary of LIN (owning all of LIN's television
operations other than WOOD-TV), has $222 million
outstanding and no additional amounts available as of <PAGE>
<PAGE> F-25 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
7. Long-term debt (continued):
(b) LIN Bank Credit Facilities (continued):
December 31, 1993 (the Broadcast Facility),
(collectively the LIN Bank Credit Facilities).
During the second quarter of 1993, LIN renegotiated its
Cellular Facility. This resulted in an extension in
the commencement of amortization of the $400 million
revolving portion of the Cellular Facility from
September 1993 to March 1996 and a change in certain
financial covenants and other terms.
At December 31, 1993, $222 million was outstanding
under the Broadcast Facility and $1,476 million was
outstanding under the Cellular Facility. As of March
15, 1994, LIN has not borrowed additional amounts under
its Bank Credit Facilities.
Under the LIN Bank Credit Facilities, interest is
payable at the prevailing prime, LIBOR or CD rate, plus
an applicable margin. Interest is fixed for a period
ranging from one month to twelve months, depending on
availability of the interest basis selected, although
if LIN selects a prime-based loan, the interest rate
will fluctuate during the period as the prime rate
fluctuates. The applicable margin for each loan will
be determined each quarter on the basis of the
borrowing subsidiaries' ratio of adjusted senior debt
to cash flow (as defined in the LIN Bank Credit
Facilities).
There are conditions in the LIN Bank Credit Facilities
which must be satisfied before the banks will lend
additional amounts. If these conditions are not
satisfied, the banks may conclude it is not in their
best interest to lend additional amounts to LIN. Among
these conditions are ratios of senior debt and combined
debt to cash flow and cash flow to debt service or
fixed charges (as defined in the LIN Bank Credit
Facilities).
On March 31, 1991 and September 30, 1993, LTC and LCNI,
respectively, began making payments amortizing the
amounts outstanding under the LIN Bank Credit
Facilities. Quarterly payments will continue until
December 31, 1998 for LTC and June 30, 2000 for LCNI. <PAGE>
<PAGE> F-26 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
7. Long-term debt (continued):
(b) LIN Bank Credit Facilities (continued):
In addition, both LTC and LCNI will be required to
apply cash proceeds from certain sales of assets, not
reinvested in similar assets, and excess cash flow (as
defined in the LIN Bank Credit Facilities) to the
prepayment of loans. LIN has not guaranteed the
repayment of amounts under the LIN Bank Credit
Facilities.
The weighted average interest rate was 4.46% and 4.69%
for the Cellular and Broadcast Facilities,
respectively, at December 31, 1993. The Cellular and
Broadcast Facilities provide for annual fees of .5% of
the unused commitments. In order to manage interest
rate exposure, LIN has entered into interest rate swap
and cap agreements covering $50 million and $840
million of its outstanding debt, respectively, as of
December 31, 1993. The costs of the interest caps are
deferred and charged to interest expense over their
respective lives.
The book value of the amounts outstanding under the LIN
Bank Credit Facilities at December 31, 1993 accrue
interest at a variable rate plus an applicable margin
as described above. Since the borrowings are repriced
for periods ranging from one month to twelve months
based on the changes in the market rates, the book
value of the amounts outstanding at December 31, 1993
approximate fair value.
(c) On December 31, 1993, the Company redeemed for cash all
of its outstanding 12.75% senior notes of MCI, 13%
senior subordinated notes of MCI, 12.95% senior
subordinated debentures and 14% senior subordinated
debentures. The redemption price on the 12.75% senior
notes was 100% of the $125 million principal amount,
plus accrued interest. The redemption price on the 13%
senior subordinated notes was 103% of the $150 million
principal amount, plus accrued interest. The
redemption price of the 12.95% senior subordinated
debentures was 104.6% of the approximate $531 million
principal amount, plus accrued interest. The
redemption price on the 14% senior subordinated
debentures was 104.9% of the $400 million principal
amount, plus accrued interest. The Company paid<PAGE>
<PAGE> F-27 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
7. Long-term debt (continued):
premiums of approximately $48 million on the redemption
of the notes and charged to expense approximately $25
million in unamortized financing costs and original
issue discounts. All costs associated with the early
redemption, net of related income tax benefit, are
reflected as an extraordinary item in the accompanying
financial statements.
During 1991, the Company exchanged 2.4 million shares
of Class A Common Stock for $68.7 million principal
amount of outstanding 12.95% Senior Subordinated
debentures.
(d) On March 4, 1993, the Company announced the redemption
of all its outstanding 8% convertible senior
subordinated debentures and all its outstanding 11.5%
convertible senior subordinated discount debentures.
Between the announcement of the redemption and the
termination on March 31, 1993 of the right of holders
to convert, approximately $113.9 million of the 8%
debentures were converted into approximately 3.8
million shares of the Company s Class A Common Stock.
On April 5, 1993, the Company redeemed the remaining
$0.3 million of the 8% debentures and $285.5 million of
the 11.5% debentures for cash.
(e) Debt included in Other has interest rates that float
with the prime rate and reprices as the prime rate
changes; therefore, book value approximates fair value
at December 31, 1993.
Funds available under the McCaw Bank Credit Facilities can
only be utilized by the Company and certain of its
subsidiaries other than LIN. Proceeds from LIN s Credit
Facilities are only available to LIN and its subsidiaries.
The McCaw Bank Credit Facilities, the LIN Bank Credit
Facilities and certain of the other loan agreements
described above contain restrictions relating to (i)
investments in certain subsidiaries, (ii) the incurrence of
debt, (iii) distributions and dividends to stockholders,
(iv) mergers and sales of assets, (v) prepayments of
subordinated indebtedness, (vi) the creation of liens, and
(vii) the issuance of preferred stock. In addition, the
Company and its subsidiaries are required to maintain
compliance with certain financial covenants.<PAGE>
<PAGE> F-28 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
7. Long-term debt (continued):
Following is a schedule of maturities of long-term debt for
each of the next five years and thereafter:
Year Ending December 31, Maturities
(In thousands)
1994 $158,925
1995 198,749
1996 588,951
1997 970,137
1998 1,208,909
Thereafter 2,023,000
---------
$5,148,671
==========
The stock of substantially all subsidiaries of the Company
and of LIN and their ownership interests in entities holding
cellular licenses are pledged or encumbered as security for
the Company s and LIN s indebtedness.
The terms of various indebtedness incurred by the Company,
LIN and the Company s operating systems restrict dividends
or other distributions and loans by the Company, LIN and
such systems.
8. Redeemable preferred stock of a subsidiary:
On August 10, 1990, LIN completed its acquisition of
Metromedia Company s interest in the New York City A Block
licensee (the Metromedia Transaction). In addition to the
cash portion of the purchase price for the Metromedia
interests, LIN s subsidiary, LCH, issued $850 million of
newly issued Class A Redeemable Preferred Stock (the LCH
Preferred Stock) to Metromedia. Metromedia has subsequently
transferred the LCH Preferred Stock to a subsidiary of
Comcast Corporation.
The holder of the LCH Preferred Stock is entitled to appoint
two members of the LCH Board of Directors and will be
entitled to dividends if and when declared by the Board.
Under the terms of the Preferred Stock, LCH is accruing
dividends at the rate of 15.8% per year. LCH is not
required to declare or pay dividends in cash, but such
dividends are cumulative and must be paid in the event of
certain redemptions of the Preferred Stock.<PAGE>
<PAGE> F-29 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
8. Redeemable preferred stock of a subsidiary (continued):
LCH may redeem the Preferred Stock at any time at a price
equal, at its option, to either:
(1) delivery of all of the issued and outstanding capital
stock of LCH s subsidiary (LIN-Penn), which holds LIN's
ownership interest in the Philadelphia A Block cellular
system and its GuestInformant specialty publishing
business, plus cash equal to 15% of the fair market
value of all businesses (currently, only WOOD, formerly
WOTV, LIN's broadcast business in Grand Rapids-
Kalamazoo-Battle Creek, Michigan) then operated by LCH
(the "Operating Business Portion"); or
(2) a cash amount equal to the greater of (a) the fair
market value of the issued and outstanding capital
stock of LIN-Penn plus the Operating Business Portion
and (b) $850 million, plus, in each case, dividends
which would have accrued on the Preferred Stock from
the issuance date (to the extent not previously paid)
at the rate of 15.8% per year.
LCH is required to redeem the Preferred Stock in the year
2000 (if not redeemed prior to such time) at a price
comparable to that described above. In certain
circumstances, the holder of the LCH Preferred Stock may
require the corporate parent of LCH to purchase the LCH
Preferred Stock. The terms of the Stock Acquisition
Agreement executed pursuant to the issuance of the LCH
Preferred Stock contains numerous covenants pertaining to
LCH which, among other things, include restrictions on (i)
the incurrence of debt, (ii) liens, (iii) forgiveness of
debt, (iv) mergers, etc., (v) disposition of assets, and
(vi) dispositions of certain stock.
Management estimates the fair value of the Preferred Stock
at December 31, 1993 to be $554.8 million. This represents
the estimated fair value of the capital stock of LIN-Penn
plus 15% of the Operating Business Portion at December 31,
1993, based on various valuation approaches.
<PAGE>
<PAGE> F-30 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
9. Stockholders investment:
Stock option plans:
The Company's various stock option plans that were adopted
by the Company s Board of Directors are summarized below.
Equity Purchase Program:
The Amended and Restated Equity Purchase Program (EPP)
provides for the issuance of restricted stock and grants of
incentive stock options, non-qualified stock options and
stock appreciation rights (SARs). The maximum number of
shares of Class A Common Stock authorized for issuance under
the EPP is 12,000,000 shares.
1987 Stock Option Plan:
Under the 1987 Stock Option Plan, 319,000 shares of Class A
Common Stock are authorized for issuance on exercise of non-
qualified options. All options expire ten years and one day
from the date of grant. The options are considered
compensatory, and the Company recognized compensation
expense over the vesting period, which ended in 1989, based
on the excess of the fair market value of the Class A Common
Stock at the measurement date over $6.75 per share, the
exercise price of the option.
1983 Non-Qualified Stock Option Plan:
This plan provides for the grant of rights to purchase
shares of Class A and Class B Common Stock under a non-
qualified stock option plan and through SARs. Under the
terms of the amended plan, 15,000,000 shares in the
aggregate of Class A and Class B Common Stock are authorized
for grant. These options are exercisable at any time within
a period of fifteen years from the date of grant. The
options are considered compensatory, and the Company
recognizes compensation expense over the vesting period
based on the excess of the fair market value of the Class A
Common Stock at the measurement date over the exercise price
of the option.
<PAGE>
<PAGE> F-31 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
9. Stockholders' investment (continued):
Stock option plans (continued):
1992 Stock Option Plan for Non-Employee Directors:
The 1992 Stock Option Plan for Non-Employee Directors
(Director Plan) provides for the grant of options to acquire
up to a total of 100,000 shares of the Company's Class A
Common Stock, to be granted to each non-employee director
who was not elected or appointed to the Board by virtue of
their affiliation with BT USA. Grants of 1,000 shares per
director are automatically received annually. The exercise
price is equal to the fair market value of the stock on the
date of grant. The options are fully vested and immediately
exercisable on the date of grant. Options are exercisable
for ten years.
1992 Stock Option Plan for British Telecom Directorships:
This plan provides for the grant of options to acquire up to
a total of 25,000 shares of the Company's Class A Common
Stock. BT USA will automatically receive annual grants of
1,000 shares for each BT Director who is then serving on the
Board. The exercise price is equal to the fair market value
of the stock on the date of grant and the options are fully
vested and immediately exercisable on the date of grant.
Options are exercisable for ten years.
<PAGE>
<PAGE> F-32
<TABLE>
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
9. Stockholders' investment (continued):
Stock option plans (continued):
Activity of the plans is summarized as follows:
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Options outstanding,
beginning of year 11,188,747 12,390,747 10,864,261
Options granted 2,531,704 2,632,197 2,279,492
Options exercised (1,771,563) (3,752,483) (615,470)
Options canceled or forfeited (97,847) (81,714) (137,536)
---------- ---------- ----------
Options outstanding,
end of year 11,851,041 11,188,747 12,390,747
========== ========== ==========
Range of option prices are as follows:
Options exercised $1.00-$39.00 $0.41-$25.00 $2.29-$25.00
Options outstanding,
end of year $1.00-$50.50 $1.00-$39.00 $0.41-$39.00
</TABLE>
<PAGE>
<PAGE> F-33 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
9. Stockholders' investment (continued):
Stock option plans (continued):
At December 31, 1993, 6,120,853 options to purchase the
Company s Class A and Class B Common Stock were exercisable,
5,730,188 were exercisable subject to vesting and 5,637,754
shares were available for option grant.
Employee stock purchase plan:
The Employee Stock Purchase Plan (ESPP) provides for the
purchase of shares of Class A Common Stock through regular
payroll deductions. The total number of shares authorized
to be issued under the ESPP is 500,000. The ESPP expires in
August 1997, and restricts an employee to purchase no more
than $25,000 of stock in any calendar year under any
qualified employee stock purchase plan. Shares may be
issued to eligible employees on the last day of each
calendar month. The purchase price is 85% of the average of
the bid and asked price of the Class A Common Stock on such
a date. During 1993, 108,884 shares of Class A Common Stock
were purchased at prices ranging from $27.52 to $48.20 per
share.
Warrant repurchase:
On June 18, 1992, MCI, a wholly owned subsidiary of the
Company, called for the repurchase of all of the warrants
issued to purchase an aggregate of 2,250,000 shares of MCI
common stock effective July 1, 1992. These warrants
contained a mandatory redemption requirement in which MCI
was obligated to repurchase the warrants no later than July
1, 1997. The repurchase price at July 1, 1992 of $60.4523
per share represented the minimum value as set forth in the
warrant agreement. The final redemption of approximately
$89.9 million did not include the 762,495 warrants held by
the Company.
<PAGE>
<PAGE> F-34 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
10. Shareholders agreements:
Certain controlling shareholders of the Company have entered
into a shareholders agreement which, among other things,
contains provisions relating to the election of directors
and other voting agreements, procedures in the event of a
sale of the Company and certain restrictions on the
conversion, transfer or sale of common stock of the Company.
Certain controlling shareholders of the Company have also
entered into a shareholders agreement with British Telecom.
This agreement also contains provisions relating to the
election of directors, procedures in the event of a sale of
the Company and restrictions on the transfer or sale of
common stock of the Company.
Both agreements expire in 1999 and include renewal options
for an additional period not to exceed ten years. All
parties to the shareholders agreement and British Telecom
voted all their shares in favor of the Merger with AT&T (See
Footnote 16 -- Merger with American Telephone and Telegraph
Company).
<PAGE>
<PAGE> F-35 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
11. Income taxes:
Deferred taxes are determined based on the estimated future
tax effects of differences between the financial statement
and the tax basis of assets and liabilities given the
provisions of the enacted tax laws. The components of the
net deferred tax liability are as follows:
December 31,
1993 1992
---- ----
(In thousands)
Deferred tax liabilities:
Property and equipment,
licensing costs and
other intangibles $2,115,261 $1,967,690
Other 26,975 48,334
---------- ----------
Total deferred tax
liability 2,142,236 2,016,024
---------- ----------
Deferred tax assets:
Net operating loss
and alternative
minimum tax credit
carry forwards (130,485) (116,443)
Finance costs (30,189) --
Other (30,300) --
---------- ----------
(190,974) (116,443)
Valuation allowance 4,425 --
---------- ----------
Total deferred tax asset (186,549) (116,443)
---------- ----------
Net deferred tax liability $1,955,687 $1,899,581
========== ==========
<PAGE>
<PAGE> F-36 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
11. Income taxes (continued):
The components of income tax (expense) benefit exclusive of
the tax effect of the extraordinary item, are as follows:
Year Ended December 31,
1993 1992 1991
---- ---- ----
(In thousands)
Current:
Federal $(72,519) $(22,265) $(1,250)
State (7,869) (25,780) (18,944)
------- ------- -------
(80,388) (48,045) (20,194)
------- ------- -------
Deferred:
Federal 14,182 78,793 41,993
State (31,713) 4,244 5,018
------- ------- -------
(17,531) 83,037 47,011
------- ------- -------
$(97,919) $34,992 $26,817
========= ======= =======
At December 31, 1993, the Company, exclusive of LIN, has
approximately $172 million of regular tax operating loss
carry forwards which expire in the years 2007 and 2008.
The Company, exclusive of LIN, has alternative minimum tax
credits aggregating approximately $33 million, which carry
forward indefinitely for federal income tax purposes.
These credits can be used in the future to the extent that
the Company s regular tax liability exceeds their
liability calculated under the alternative minimum tax
system.
The Omnibus Budget Reconciliation Act of 1993 increased
the corporate tax rate to 35% from 34% effective January
1, 1993. Pursuant to Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," the
Company recorded an additional tax expense of $49.6
million, with a corresponding increase in deferred tax
liability.
The following table reconciles the amount which would be
provided by applying the 35% federal income tax rate in
1993, and the 34% federal income tax rate in 1992 and
1991, to income (loss) before (expense) benefit for income
taxes to the income taxes actually provided.<PAGE>
<PAGE> F-37 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
11. Income taxes (continued):
Year Ended December 31,
1993 1992 1991
---- ---- ----
(In thousands)
(Expense) benefit
assuming federal
statutory rates $(8,245) $57,783 $ 52,203
Amortization of goodwill (4,744) (5,875) (6,012)
State and local taxes,
net of federal tax
benefit (39,860) (14,214) (9,191)
Equity investments 2,019 4,169 3,770
Tax expense not
provided on minority
partners share
of income 4,126 4,734 3,343
Increase in federal
statutory rate (49,568) -- --
Other (1,647) (11,605) (17,296)
-------- -------- --------
$(97,919) $34,992 $26,817
========= ======= =======
12. Retirement benefits:
LIN has a contributory retirement plan covering certain
employees of LIN and its wholly owned television
subsidiaries who meet certain requirements, including
length of service and age. Pension benefits vest upon
completion of five years of service and are computed,
subject to certain adjustments, by multiplying 1.25% of
the employee's last three years average annual
compensation times the number of years of credited
service. Funding is based upon legal requirements and tax
considerations. No funding was required during the three
year period ended December 31, 1993.
<PAGE>
<PAGE> F-38
<TABLE>
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
12. Retirement benefits (continued):
The components of LIN's net pension expense for 1993, 1992 and 1991 are as follows:
1993 1992 1991
(In thousands)
<S> <C> <C> <C>
Service cost of current period $791 $583 $ 454
Interest cost on projected
benefit obligation 2,632 2,458 2,241
Actual return on plan assets (962) (2,053) (7,812)
Net amortization of unrecognized net
transition assets and deferral of
variance from actual return on assets (906) 466 6,494
------- ------- -------
Net pension expense $1,555 $1,454 $1,377
======= ======= =======
<PAGE>
<PAGE> F-39 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
12. Retirement benefits (continued):
The following table sets forth the LIN pension plans' funded status and amounts
recognized in the balance sheets at December 31, 1993 and 1992:
1993 1992
---------------------- ----------------------
Funded Unfunded Funded Unfunded
(In thousands)
<S> <C> <C> <C> <C>
Actuarial present value of
accumulated plan benefits
(including vested benefits
of $35,385 in 1993
and $31,247 in 1992) $36,668 $ 370 $32,165 $216
======== ======== ======== ========
Plan assets at fair value,
primarily publicly traded
stocks and bonds $37,593 $-- $ 37,783 $--
Less projected benefit obligation
for service rendered to date 38,896 641 33,394 360
-------- -------- -------- --------
Plan assets in excess of
(less than) projected
benefit obligation (1,303) (641) 4,389 (360)
Unrecognized prior service cost 6,603 76 7,831 90
Unrecognized net (gain) loss (2,005) 262 (7,182) 109
Unrecognized net transition asset
being recognized over 15 years (2,507) (130) (2,820) (146)
-------- -------- -------- --------
Prepaid (accrued) pension cost
included in balance sheet $788 $(433) $ 2,218 $(307)
======== ======== ======== ========<PAGE>
<PAGE> F-40 McCAW CELLULAR COMMUNICAT
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
12. Retirement benefits (continued):
The assumed weighted average discount rate was 7.0% for 1993
and 7.75% for 1992 and 1991. The rate of increase in future
compensation levels is assumed to be 5.5% for 1993 and 7.0%
for 1992 and 1991. The expected long-term rate of return on
assets is assumed to be 8.0% for 1993 and 8.5% for 1992 and
1991.
Due to a change in the Internal Revenue Service code section
415 limits in April 1992, plan benefit changes resulting
from the change in control of LIN that were expected to be
paid from the unfunded plan have been shifted to the funded
plan for the year ended 1992. As a result of this change,
$1.1 million of the accrued liability of the unfunded plan
was shifted to the funded plan during 1992.
13. Commitments and contingencies:
Lease commitments:
The Company is committed under operating leases principally
for facilities, cell sites and office space, and other
operating agreements with remaining terms from one to
twenty-three years with options for additional periods.
Certain leases provide for payment by the lessee of taxes,
maintenance and insurance.
Future minimum payments required under operating leases and
agreements that have an initial or remaining noncancellable
lease term in excess of one year at December 31, 1993 are
summarized below:
Year ending December 31,
1994 $51,030
1995 45,992
1996 39,649
1997 33,591
1998 27,626
Thereafter 161,377
--------
$359,265
========
Total rent expense amounted to approximately $53.9,
$46.6, and $36.9 million in 1993, 1992 and 1991,
respectively.
<PAGE>
<PAGE> F-41 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
13. Commitments and contingencies (continued):
Litigation:
In May 1990, a suit was filed in the United States District
Court for the District of Columbia against the Company by
the former owners (the Charisma Group) of cellular interests
which the Company acquired in 1986 and 1987 and some of
which the Company sold in its transaction with Contel
Cellular Inc. (the Charisma Litigation). The suit alleges
that the transaction with Contel breached an agreement that
would have required the Company to share with the Charisma
Group up to 25% of the net capital gains from such sale.
During the same period that the Company acquired cellular
interests from the Charisma Group in 1986 and 1987, the
Company also acquired similar interests from Maxcell Telecom
Plus, Inc. (Maxcell). On November 1, 1993, Maxcell and its
parent, Telecom Plus, Inc. (TPI) filed a suit in the Circuit
Court, Palm Beach County, Florida alleging that the Company
made certain oral representations to the former owners of
Maxcell that they would be treated identically to the
Charisma Group in connection with their sale of interests to
the Company, and that the alleged agreement made by the
Company with the Charisma Group violated that oral agreement
(the TPI Litigation). In an apparent response to
defendant's motion to dismiss, plaintiff filed an amended
complaint. Plaintiff s allegations in the amended complaint
include claims for fraud, breach of contract, breach of
implied contract, interference with contract, breach of
fiduciary duty, constructive trust, promissory estoppel,
breach of covenant of good faith and fair dealing,
conspiracy and concealment. Various types of relief
including rescission, reformation, damages and punitive
damages are sought. Former owners of Charisma are co-
defendants individually and as class defendants.
The Company believes that the Plaintiffs in both suits are
not entitled to the relief sought and is defending the
lawsuits vigorously. The Company initially filed a response
to the complaint denying the allegations in the Charisma
Litigation and asserting various affirmative defenses, and
has subsequently filed counter claims and third-party claims
in such litigation. The Company also filed two motions for
summary judgment dismissing the Charisma Litigation. The <PAGE>
<PAGE> F-42 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
13. Commitments and contingencies (continued):
Litigation (continued):
Court denied those summary judgment motions. Discovery in
the Charisma Litigation is proceeding; no trial date has
been set. In the TPI Litigation, defendant's motion to
dismiss is still pending. Management believes the results
of the Charisma Litigation and the TPI Litigation will not
have a material adverse impact on the financial position or
results of operations of the Company.
On August 15, 1993, the Company entered into a Memorandum of
Understanding which would result in the settlement of the
litigation entitled In re McCaw Cellular Communications,
Inc. Shareholders Litigation, Consolidated Civil Action No.
12793, described in the Company s Current Report on Form 8-
K, dated November 17, 1992. The settlement is subject to
approval by the court, consummation of the Company s
proposed merger with American Telephone and Telegraph
Company (AT&T) and other customary conditions. The
defendants have denied, and continue to deny, that they have
committed any violations of law and, as the Memorandum of
Understanding states, are entering into the settlement
solely to eliminate the burden and expense of further
litigation. If approved, the settlement will release all
claims of the Company s stockholders in connection with or
that arise out of the subject matter of the action, the
Company s proposed strategic alliance with AT&T (which was
abandoned when the proposed merger with AT&T was agreed to),
the proposed merger, the negotiation and consideration of
such transactions, and the fiduciary or disclosure
obligations of any of the defendants (or other persons to be
released) with respect to any of the foregoing. It is
expected that the Company s stockholders separately will be
provided a notice containing further information regarding
the proposed settlement and related proceedings, including a
settlement hearing to be scheduled by the court.
The Company is also party to certain litigation in the
ordinary course of business and to routine filings with the
FCC, state regulatory authorities and other proceedings
which management believes are immaterial to the Company.
<PAGE>
<PAGE> F-43
</TABLE>
<TABLE>
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
14. Segment information:
The operations of the Company are classified into three business segments -- cellular, broadcast and other
operations. Other operations primarily consist of air-to-ground and messaging operations. The cellular segment
incurs costs on behalf of the other segment primarily associated with accounting, information and legal services.
These costs have been identified and are allocated to the other segment.
Following is certain financial information for the segments at December 31, 1993, 1992 and 1991 and for each of the
years then ended. Identifiable assets by business segment include assets directly identified with those operations
and exclude intersegment investments, loans and advances. Intersegment sales are insignificant. Capital
expenditures include amounts allocated to property and equipment in acquisitions.
1993 Cellular Broadcast Other Corporate Total
---- -------- --------- ----- --------- -----
(In thousands)
<S> <C> <C> <C> <C> <C>
Net revenues $1,919,371 $145,533 $129,906 $-- $2,194,810
Depreciation and amortization 357,377 9,631 35,678 913 403,599
Valuation loss on equipment 123,559 -- -- -- 123,559
Income (loss) from operations 263,725 56,753 (37,144) (23,256) 260,078
Capital expenditures 483,930 8,276 106,171 406 598,783
Identifiable assets(1) 8,022,392 649,242 223,771 169,524 9,064,929
<PAGE>
<PAGE> F-44 McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
14. Segment information (continued):
1992(2) Cellular Broadcast Other Corporate Total
------- -------- --------- ----- --------- -----
(In thousands)
<S> <C> <C> <C> <C> <C>
Net revenues $1,486,193 $142,920 $ 114,223 $-- $1,743,336
Depreciation and amortization 344,873 8,758 30,768 800 385,199
Income (loss) from operations 230,004 58,011 (8,194) (20,329) 259,492
Capital expenditures 370,961 4,361 38,015 10,351 423,688
Identifiable assets(1) 7,909,090 655,655 148,331 242,369 8,955,445
1991 Cellular Broadcast Other Corporate Total
---- -------- --------- ----- --------- -----
(In thousands)
Net revenues $1,135,240 $129,481 $ 100,850 $-- $1,365,571
Depreciation and amortization 305,027 8,753 30,467 601 344,848
Income (loss) from operations 84,735 51,724 (3,554) (17,115) 115,790
Capital expenditures 496,827 5,693 12,989 736 516,245
Identifiable assets(1) 7,673,303 660,997 117,090 276,247 8,727,637
(1) Corporate assets consist principally of cash, cash equivalents and marketable securities.
(2) Certain reclassifications have been made in order to be consistent with current year presentation.<PAGE>
<PAGE> F-45
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
15. Quarterly results of operations (unaudited):
The financial information presented below reflects all adjustments (consisting of
normal recurring adjustments) which are, in the opinion of management, necessary to a
fair presentation of the results for the interim periods.
Summarized quarterly financial data for 1993 and 1992 is as follows:
1993 Quarter
First Second(1) Third Fourth
(In thousands)
<S> <C> <C> <C> <C>
Net revenues $479,968 $540,477 $562,616 $611,749
Operating and corporate expenses 302,868 329,820 354,087 420,799
Depreciation 50,286 52,564 56,684 65,705
Valuation loss on equipment -- 46,583 -- 76,976
Amortization of intangible assets 47,759 43,182 43,229 44,190
-------- -------- -------- --------
Income from operations 79,055 68,328 108,616 4,079
Other expense, net (93,064) (90,424) (137,320) (166,552)
-------- -------- -------- --------
Loss before extraordinary item (14,009) (22,096) (28,704) (162,473)
Extraordinary item: Loss on
early extinguishment of debt,
net of income tax benefit -- -- -- (45,034)
-------- -------- -------- --------
Net loss $(14,009) $(22,096) $ (28,704) $(207,507)
======== ======== ======== =========
Per share amounts:
Loss before extraordinary item $(0.07) $ (0.11) $(0.14) $ (0.78)
Extraordinary item:
Loss on early extinguishment
of debt, net of income
tax benefit -- -- -- (0.22)
-------- -------- -------- --------
Net loss $(0.07) $(0.11) $(0.14) $(1.00)
======== ======== ======== ======== <PAGE>
<PAGE> F-46
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
15. Quarterly results of operations (unaudited) (continued):
1992 Quarter
First Second Third Fourth
(In thousands)
<S> <C> <C> <C> <C>
Net revenues $374,747 $426,394 $447,961 $494,234
Operating and corporate expenses 251,873 260,523 270,805 315,444
Depreciation 38,160 45,480 46,288 49,819
Amortization of intangible assets 51,377 51,569 52,583 49,923
-------- -------- -------- --------
Income from operations 33,337 68,822 78,285 79,048
Other expense, net (132,397) (134,643) (136,264) (141,794)
-------- -------- -------- --------
Net loss $(99,060) $(65,821) $(57,979) $(62,746)
========= ========= ========= =========
Net loss per share $(0.56) $ (0.38) $(0.32) $ (0.34)
========= ========= ========= =========
Net loss per share is computed independently for each of the quarters presented.
Therefore, the sum of the quarterly net loss per share amounts will not necessarily
equal the total for the year.
(1) Certain reclassifications were made to conform to year-end presentation.
</TABLE>
<PAGE>
<PAGE> F-47
McCAW CELLULAR COMMUNICATIONS, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
16. Merger with American Telephone and Telegraph Company:
On August 16, 1993, the Company entered into an Agreement
and Plan of Merger (the Merger Agreement) with AT&T,
pursuant to which the Company would become a wholly owned
subsidiary of AT&T and each share of Class A Common Stock
and Class B Common Stock of the Company would be converted
into one AT&T common share, subject to certain adjustments.
Each outstanding option to purchase the Company s stock
would be assumed by AT&T and would be exercisable for a
proportionate number of AT&T common shares. The merger has
been approved by the respective Boards of Directors of AT&T
and the Company and the Company's stockholders, but is
subject to the satisfaction of several conditions, including
the receipt of necessary governmental consents.
Each party will have a right to terminate the Merger
Agreement if it has not closed by September 30, 1994.
Separately, AT&T has agreed to purchase at the Company s
option, exercisable in the event the Merger Agreement is
terminated, approximately 11.7 million newly issued shares
of the Company s Class A Common Stock at $51.25 per share,
for a total price of $600 million. This right will not be
exercisable if the merger is completed. Such transaction
would be subject to the receipt of necessary governmental
approvals, which have not yet been applied for or received.
Pursuant to the Merger Agreement, on February 8, 1994, the
Company, through a wholly owned subsidiary, entered into a
credit agreement with AT&T under which an aggregate of $350
million is available (the AT&T Credit Agreement). Under the
AT&T Credit Agreement, interest is payable quarterly at an
applicable margin in excess of the prevailing LIBOR rate and
is fixed for a period ranging from one month to twelve
months. Amounts outstanding under the AT&T Credit Agreement
are due and payable two years after the earlier of (i) the
closing under the Merger Agreement or (ii) the termination
of the Merger Agreement. The AT&T Credit Agreement provides
for fees of .5% per annum on the unused portion of the $350
million commitment. The assets of the wholly owned
subsidiary are pledged as security for this debt. As of
March 15, 1994, $67.5 million was outstanding and $282.5
million was available under the AT&T Credit Agreement.
Separately, on February 23, 1993, AT&T purchased
approximately 14.5 million newly issued shares of the
Company's Class A Common Stock at $27.625 per share, for a
total price of $400 million.<PAGE>
<PAGE> F-48
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
LIN Broadcasting Corporation
We have audited the accompanying combined balance sheets of LIN
Broadcasting Corporation's Unconsolidated Affiliates listed in
Note 1 (the Ventures) as of December 31, 1993 and 1992, and the
related combined statements of income, Ventures' equity, and cash
flows for each of the three years in the period ended December
31, 1993. Our audits also included the financial statement
schedules listed in the Index at Item 14(a). These financial
statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits. We did
not audit the 1993 and 1992 consolidated financial statements of
AWACS, Inc. and subsidiaries, which statements reflect total
assets constituting 24% and 20% as of December 31, 1993 and 1992,
respectively and net revenues constituting 19% and 17% for the
years then ended of the related combined totals. Those
statements were audited by other auditors whose report, which
also places reliance on other auditors, has been furnished to us,
and our opinion, insofar as it relates to data included for
AWACS, Inc. and subsidiaries, is based solely on the reports of
the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform our audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits and the reports of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the reports of other
auditors, the combined financial statements referred to above
present fairly, in all material respects, the combined financial
position of the Ventures at December 31, 1993 and 1992, and the
combined results of their operations and their cash flows for
each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also,
in our opinion, based on our audits and the reports of other
auditors, the related financial statement schedules, when
considered in relation to the basic financial statements taken as
a whole, present fairly, in all material respects, the
information set forth therein.
ERNST & YOUNG
Seattle, Washington
February 4, 1994<PAGE>
<PAGE> F-49
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
AWACS, Inc.
Wayne, Pennsylvania
We have audited the consolidated balance sheet of AWACS, Inc. and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of operations and retained earnings and
of cash flows for the years then ended (not presented separately
herein). 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
did not audit the financial statements of Garden State
Cablevision L.P. ("Garden State"), the Company's investment in
which is accounted for by the use of the equity method. The
Company's equity of $32,302,000 and $22,369,000 in Garden State's
deficit at December 31, 1993 and 1992, respectively, and of
$9,933,000 and $2,985,000 in that entity's net losses for the
years then ended are included in the accompanying consolidated
financial statements. The financial statements of Garden State
were audited by other auditors whose report has been furnished to
us, and our opinion, insofar as it relates to the amounts
included for Garden State, 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 financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall 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 financial position of AWACS, Inc.
and subsidiaries as of December 31, 1993 and 1992 and the results
of their operations and their cash flows for the years then ended
in conformity with generally accepted accounting principles.
As discussed in the notes to the consolidated financial
statements, the Company changed its method of accounting for
income taxes effective January 1,1993 to conform with Statement
of Financial Accounting Standards No. 109 "Accounting for Income
Taxes."
DELOITTE & TOUCHE
Philadelphia, Pennsylvania
February 18, 1994<PAGE>
<PAGE> F-50
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Garden State Cablevision L.P.:
We have audited the accompanying balance sheets of Garden State
Cablevision L.P. (a Delaware Limited Partnership) as of December
31,1993 and 1992, and the related statements of operations,
partners' (deficit) capital and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership'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 financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Garden State Cablevision L.P. as of December 31,1993 and 1992,
and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
that the Partnership will continue as a going concern. As
discussed in Note 2, the Partnership has obtained financing
proposals for the repayment of the Senior Debt and Subordinated
Debt which become due in 1994. As of the date of this report, the
Partnership has not received a written commitment for the
required financing and this raises substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to this matter are described in Note 2. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
ARTHUR ANDERSEN & CO.
Philadelphia, Pa.,
February 23, 1994 <PAGE>
<PAGE> F-51
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(Dollars in thousands)
ASSETS 1993 1992
- ----------------------------------------------------------------
Current assets:
Cash and cash equivalents $54,357 $40,815
Accounts receivable, less
allowance for doubtful
accounts (1993-$9,829;
1992-$14,440) 111,723 84,926
Prepaid expenses and other 17,497 11,812
- ----------------------------------------------------------------
Total current assets 183,577 137,553
- ----------------------------------------------------------------
Property and equipment, at
cost, less accumulated
depreciation 452,447 417,297
Other assets 2,108 1,143
Cellular FCC licenses, less
accumulated amortization
(1993-$506) 13,564 --
Organization costs, less
accumulated amortization
(1993-$6,785; 1992-$5,780) 3,265 4,270
Due from majority stockholder
of AWACS 16,387 --
Notes receivable, less allowance
for doubtful accounts
(1993-$150; 1992-$198) 281 966
- ----------------------------------------------------------------
Total assets $671,629 $561,229
================================================================
(continued)<PAGE>
<PAGE> F-52
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED BALANCE SHEETS (continued)
DECEMBER 31, 1993 AND 1992
(Dollars in thousands)
LIABILITIES AND EQUITY 1993 1992
- ----------------------------------------------------------------
Current liabilities:
Accounts payable $37,801 $22,378
Accrued expenses 39,180 27,889
Unearned revenues 27,610 16,818
Commissions payable 14,439 10,868
Notes payable 2,946 --
Other current liabilities 6,000 5,199
- ----------------------------------------------------------------
Total current liabilities 127,976 83,152
- ----------------------------------------------------------------
Notes payable to affiliates 63,126 93,827
Investment in affiliate 32,302 22,369
Deferred income taxes 4,236 13,434
Other long-term liabilities 1,286 1,302
Equity:
Contributed capital 78,690 63,817
Excess cost of limited
Current assets:
Cash and cash equivalents $54,357 $40,815
Accounts receivable, less
allowance for doubtful
accounts (1993-$9,829;
1992-$14,440) 111,723 84,926
Prepaid expenses and other 17,497 11,812
- ----------------------------------------------------------------
=============================================
See accompanying notes.
<PAGE>
<PAGE> F-53
<TABLE>
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
1993 1992 1991
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Revenues $704,550 $606,277 $494,549
Operating Costs and Expenses:
Direct operating 75,140 60,732 51,698
Selling, general and administrative 277,040 236,597 185,098
Depreciation and amortization 69,833 52,595 41,684
- --------------------------------------------------------------------------------------
422,013 349,924 278,480
- --------------------------------------------------------------------------------------
Operating Income 282,537 256,353 216,069
- --------------------------------------------------------------------------------------
Other Income (Expense):
Interest expense (8,138) (3,901) (2,558)
Investment income 2,578 1,685 2,245
Provision for loss on cellular
equipment -- (4,604) --
Litigation settlements (12,254) -- --
Equity in loss of affiliate (9,933) (2,985) --
- --------------------------------------------------------------------------------------
(27,747) (9,805) (313)
Income Before Provision for Income
Taxes and Cumulative Effect
of Accounting Changes 254,790 246,548 215,756
Provision for Income Taxes 11,247 8,464 7,977
- --------------------------------------------------------------------------------------
Income before Cumulative Effect
of Accounting Changes 243,543 238,084 207,779
Cumulative Effect of Accounting Changes 12,142 -- --
- --------------------------------------------------------------------------------------
Net Income $255,685 $238,084 $207,779
======================================================================================
See accompanying notes.<PAGE>
<PAGE> F-54
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF VENTURES' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
Excess Cost
of Limited
Contributed Partnership Retained Total
Capital Interest Earnings Equity
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1990 $61,137 $ -- $221,074 $282,211
Net income -- -- 207,779 207,779
Distributions to partners -- -- (122,350) (122,350)
Balance at December 31, 1991 61,137 -- 306,503 367,640
Net income -- -- 238,084 238,084
Distributions to partners -- -- (185,945) (185,945)
Acquisition of interest in
Garden State Cable -- (70,384) -- (70,384)
Acquisition of interest in
Galveston Cellular
Telephone Company 2,680 -- (4,930) (2,250)
- ------------------------------------------------------------------------------------------
Balance at December 31, 1992 63,817 (70,384) 353,712 347,145
Net income -- -- 255,685 255,685
Distributions to partners -- -- (175,000) (175,000)
Contributions 809 -- -- 809
In kind contribution of Cellular
FCC license 14,064 -- -- 14,064
- ------------------------------------------------------------------------------------------
Balance at December 31, 1993 $78,690 ($70,384) $434,397 $442,703
==========================================================================================
See accompanying notes.
<PAGE>
<PAGE> F-55
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
1993 1992 1991
- --------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income $255,685 $238,084 $207,779
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 69,833 52,595 41,684
Equity in loss of affiliate 9,933 2,985 --
Non-cash interest expense 6,006 1,403 --
Provision for losses on accounts
receivable 20,945 21,127 13,506
Provision for loss of cellular equipment -- 4,604 --
Cumulative effect of accounting changes (12,142) -- --
Changes in operating assets and
liabilities
Increase in accounts receivable (47,742) (29,300) (31,058)
Increase (decrease) in accounts payable 15,423 (6,129) 8,943
Increase in accrued expenses 11,295 5,467 1,536
Increase in unearned revenues 10,792 3,445 2,896
Increase in commissions payable 3,571 2,553 1,808
Increase in deferred income taxes 3,319 3,244 2,763
Other, net (5,093) (1,069) (3,684)
- --------------------------------------------------------------------------------------
Total adjustments 86,140 60,925 38,394
- --------------------------------------------------------------------------------------
Net cash provided by
operating activities 341,825 299,009 246,173
(continued)<PAGE>
<PAGE> F-56
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
1993 1992 1991
- --------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
<S> <C> <C> <C>
Advances to/from majority
stockholder of AWACS (16,387) 9,259 (710)
Capital expenditures (103,944) (112,573) (126,250)
- --------------------------------------------------------------------------------------
Net cash used for
investing activities (120,331) (103,314) (126,960)
FINANCING ACTIVITIES:
Proceeds from (repayment of)
revolving credit notes -- (3,800) 3,800
Proceeds from (repayment of)
notes payable to partners (33,761) 10,478 10,000
Contributions from partners 809 -- --
Distributions paid to partners (175,000) (185,945) (122,350)
- --------------------------------------------------------------------------------------
Net cash used for
financing activities (207,952) (179,267) (108,550)
- --------------------------------------------------------------------------------------
Net Increase in Cash and
Cash Equivalents 13,542 16,428 10,663
- --------------------------------------------------------------------------------------
Cash and Cash Equivalents at
Beginning of Year 40,815 24,387 13,724
- --------------------------------------------------------------------------------------
Cash and Cash Equivalents at
End of Year $54,357 $40,815 $24,387
=======================================================================================
(continued)<PAGE>
<PAGE> F-57
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
1993 1992 1991
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash paid for:
Income taxes $4,900 $6,600 $5,300
Interest
Partners 1,478 3,422 2,411
Others 242 540 414
Noncash investing and financing activities:
On September 30, 1992, an indirect subsidiary of AWACS issued a note for $51 million to
purchase from the majority stockholder of AWACS a 40% limited partnership interest in
Garden State Cablevision L.P. (see Note 5 to the combined financial statements).
In October 1992, a subsidiary of LIN, together with a third party, acquired an approximate
56% interest in the parent company of Galveston Cellular Telephone Company. In 1993, the
cost basis of of this acquisition was pushed-down to the books of Galveston Cellular
Telephone Company.
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> F-58
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1 -- Basis of Presentation
These combined financial statements have been prepared to comply
with the Securities and Exchange Commission's Regulation S-X
requirement, in connection with LIN Broadcasting Corporation's
("LIN") consolidated financial statements, which requires
separate or combined financial statements of significant
subsidiaries 50% or less controlled.
These combined financial statements include 100% of the accounts
of the operating ventures listed in the table below in which LIN
has voting interests of 50% or less (the "Ventures"). These
Ventures are included in LIN's consolidated financial statements
on the equity accounting method. During 1992, LIN acquired an
indirect interest in Galveston Cellular Telephone Company. As a
result of this acquisition, the results of the Galveston venture
are included in the combined financial statements from the date
of acquisition.
Voting/
Name and Location Equity Management
- -----------------------------------------------------------------
AWACS Inc., d/b/a
Comcast Metrophone Corporation 49.99% 49.99%
Philadelphia
Los Angeles Cellular
Telephone Co., Partnership 39.97% 50.00%
Los Angeles
Houston Cellular
Telephone Co., Partnership 56.25% 50.00%
Houston
Galveston Cellular
Telephone Co., Corporation 34.60% 50.00%
Galveston
NOTE 2 -- Significant Accounting Policies
The following are the Ventures' significant accounting policies:
CASH EQUIVALENTS: Certain highly liquid, short-term investments
which have a maturity of three months or less are considered cash
equivalents. Excess cash is primarily invested in U.S.
Government obligations.
PROPERTY AND EQUIPMENT: Cellular system equipment is recorded at
cost and is depreciated on a straight-line basis over an 8 or 10
year period. All other property and equipment, including
betterments to existing facilities, are recorded at cost and<PAGE>
<PAGE> F-59
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 2 -- Significant Accounting Policies (continued)
depreciated on a straight-line basis over their estimated useful
lives of three to twenty years. Beginning in 1993, AWACS revised
the useful lives used to compute depreciation for its cell site
equipment from 10 to 8 years and for its computer equipment from
5 to 3 years. The change had the effect of increasing
depreciation expense by approximately $4.4 million.
CELLULAR FCC LICENSES AND ORGANIZATION COSTS: Cellular FCC
Licenses represent costs to acquire cellular licenses authorized
by the Federal Communications Commission and are amortized using
the straight line method over 40 years. Organization costs,
consisting principally of legal fees, feasibility studies and
other costs related to obtaining required licenses and regulatory
approvals, are amortized using the straight-line method over a 10
year period.
INCOME TAXES: Accelerated depreciation methods are used for tax
purposes. AWACS, which is a corporation, provides deferred taxes
related to this and other timing differences. Effective January
1, 1993, AWACS adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes" (see Note 7). No provision is made for income taxes for
either the Los Angeles or Houston ventures as the income or loss
is includable in the tax returns of the respective partners of
these partnerships.
REVENUE RECOGNITION: Cellular airtime is recorded as revenue
when earned. Unearned revenues consist principally of amounts
billed to customers for access fees which are payable one month
in advance.
RECLASSIFICATIONS: Certain reclassifications have been made to
the prior years' combined financial statements in order to
conform to the 1993 presentation.
NOTE 3 -- Property and Equipment
The major classifications of property and equipment were as
follows:
December 31,
1993 1992
------------------
Land $1,379 $1,271
Buildings and improvements 6,583 5,084
Cellular equipment 576,655 511,993
Other 70,997 40,093
------- -------
655,614 558,441
Less accumulated depreciation 203,167 141,144
------- -------
$452,447 $417,297
======== ========<PAGE>
<PAGE> F-60
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 4 -- Notes Payable to Affiliates
The Houston venture has entered into agreements with the partners
under which it has borrowed $2,946 and $35,946 as of December 31,
1993 and 1992, respectively. The borrowings were made to fund
capital expenditures and to retire existing equipment vendor
financings. The notes to partners mature in June 1994, are
nonamortizing and bear interest at a rate of prime (6% as of
December 31, 1993) plus 1%. The Galveston venture also entered
into an agreement with an affiliate under which it has borrowed
$4,717 and $5,478 as of December 31, 1993 and December 31, 1992,
respectively. This note matures beginning in 1995 and bears
interest at prime plus 2%.
NOTE 5 -- Investment in Affiliate
On September 30, 1992, an indirect subsidiary of AWACS acquired
from the majority stockholder of AWACS a 40% limited partnership
interest in Garden State Cablevision L.P. ("Garden State").
Consideration consisted of a note with an initial principal
amount of $51,000 which is included in Notes payable to
affiliates. The note bears interest at a rate of 11% per annum.
Interest is payable on a quarterly basis to the extent of
available cash, with any unpaid interest added to principal. The
note is due September 30, 1997. AWACS anticipates there will be
no significant amount of cash available for payment of interest
on the note, and accordingly, interest accrued on the note during
1993 and 1992 of $6,006 and $1,403, respectively, was added to
principal.
AWACS' acquisition of the 40% interest in Garden State was
recorded as a negative investment in an affiliate of $19,384,
which represented the carryover basis from the majority
stockholder. AWACS' excess of purchase price over the carrying
value was recorded as a reduction of stockholders' equity in the
amount of $70,384. The investment is accounted for on the equity
method and under the terms of the partnership agreement, 49.5% of
the net losses of Garden State are allocated to AWACS. Such
losses, which amounted to $9,933 and $2,985 during 1993 and 1992,
respectively, were added to the investment in affiliate.
Summarized financial information for Garden State for the year
ended December 31, 1993 and the three months ended December 31,
1992 is as follows:<PAGE>
<PAGE> F-61
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 5 -- Investment in Affiliate (Continued)
Three Months
Year Ended Ended
December 31, December 31,
1993 1992
------------ -----------
(Unaudited)
Results of Operations
Revenues $90,824 $21,779
Costs and expenses 41,647 9,915
Depreciation and amortization 47,682 12,139
------- -------
Operating loss 1,495 (275)
Interest expense, net 20,904 5,755
------- -------
Loss before cumulative effect
of accounting change $(19,409) $(6,030)
Cumulative effect of
accounting change (657) --
------- -------
Net loss $(20,066) $(6,030)
======= ========
Equity in net loss $(9,933) $(2,985)
======= ========
Financial position at December 31, 1993 and 1992
Current assets $7,328 $15,861
Noncurrent assets 246,512 285,828
Current liabilities 294,325 23,198
Noncurrent liabilities 779 299,689
Garden State's Senior Loan Credit Agreement matures on March 30,
1994, but may be extended through December 31, 1999, upon the
satisfaction of certain conditions as specified by the agreement.
These conditions include, among other things, the refinancing of
the subordinated debt, which matures on June 30,1994, at terms
approved by the senior lenders. In connection therewith, Garden
State has obtained financing proposals for the repayment of the
senior debt ($196,475,000 at December 31, 1993) and subordinated
debt ($75,926,919 at December 31, 1993, including deferred
interest of $7,523,428). Management believes that Garden State
will be successful in obtaining the required financing. As of
February 18, 1994, Garden State had not received a written
commitment for the required financing. Garden State's ability to
continue as a going concern is dependent upon obtaining the
required financing.<PAGE>
<PAGE> F-62
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 5 -- Investment in Affiliate (Continued)
In November 1993, Garden State signed a letter of intent to
purchase the general partner's interest in Garden State. The
general partner has also retained its rights under the
Partnership Agreement that beginning August 15, 1994, for a
period of 90 days, it shall have the right to cause Garden State
to purchase all of its partnership interest. The purchase price
shall be equal to the greater of 150% of the general partner's
aggregate capital contributions or 120% of the general partner's
percentage of the system's fair market value as determined by an
independent appraisal.
During 1993 and 1994, the FCC adopted and modified various
regulations governing the rates charged to cable subscribers.
Because of these regulations, future revenue growth from cable
services will rely to a much greater extent that has been true in
the past on increased revenues from unregulated services and new
subscribers than from increases in previously unregulated rates.
NOTE 6 -- Equity
In accordance with the various partnership agreements, income of
the partnerships is allocated to each owner's respective capital
account in accordance with its respective equity interest.
Additional capital contributions may be called based on annual
construction and operating budgets submitted by the partnerships
and agreed upon by the operating committees of each partnership.
NOTE 7 -- Postretirement Benefits Other Than Pensions
Effective January 1, 1993, AWACS adopted SFAS No. 106. This
statement requires AWACS to accrue the estimated cost of retiree
benefits earned during the years the employee provides services.
AWACS previously expensed the cost of these benefits as claims
were incurred. AWACS recorded the cumulative effect of the
obligation for its allocated cost of such benefits in 1993.
AWACS' retiree benefit obligation is unfunded and all benefits
are paid by Comcast. The cumulative effect as of January 1, 1993
of the adoption of SFAS No. 106 was to reduce the AWACS net
income by approximately $375 (net of tax). The effect of SFAS
No. 106 on AWACS' income before cumulative effect of the
accounting changes was not significant to AWACS' results of
operations.
NOTE 8 -- Income Taxes
Effective January 1, 1993, AWACS adopted SFAS No. 109,
"Accounting for Income Taxes." As a result, AWACS recorded a
cumulative effect of accounting change of $12,517. The adoption
of SFAS No. 109 did not have a significant impact on the amount
of income tax expense recorded by AWACS during 1993.<PAGE>
<PAGE> F-63
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 8 -- Income Taxes (continued)
Income tax expense consists of the following:
Year Ended December 31,
1993 1992 1991
---- ---- ----
Current:
Federal $3,543 $3,179 $3,840
State 4,653 2,041 1,374
------ ------ ------
8,196 5,220 5,214
------ ------ ------
Deferred:
Federal 4,381 2,509 1,841
State (1,330) 735 922
------ ------ ------
3,051 3,244 2,763
------ ------ ------
$11,247 $8,464 $7,977
======= ======= ======
Total tax expense differs from the amount computed by multiplying
income before tax by the statutory federal tax rate primarily due
to non-deductible depreciation and amortization expense and state
income taxes.
Deferred taxes are attributable primarily to excess tax over book
depreciation and certain expenses not deductible for tax purposes
until paid.
NOTE 9 -- Related-Party Transactions
During the years ended December 31, 1993, 1992 and 1991, the two
partnerships recorded management fees payable to affiliates of
their partners of $4,200, $4,200 and $4,200, respectively, for
management consultation, legal services and various other
professional services.
AWACS is required to advance to its majority stockholder certain
amounts based on AWACS' cash flow (as defined) on a semiannual
basis. During 1993, AWACS advanced $15,970 to the majority
stockholder in the form of a note bearing interest at the prime
rate plus 1%. Pursuant to the terms of the note, unpaid interest
of $417 was capitalized and added to the principal outstanding.
For the year ended December 31, 1993, AWACS is required to
advance to the majority stockholder an additional $4,460 by April
30, 1994.
In addition to the transactions described above, the Ventures
routinely enter into transactions with the Company or other
affiliates of the Company (including McCaw), or other affiliates<PAGE>
<PAGE> F-64
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 9 -- Related-Party Transactions (continued)
of the partners. Such transactions include roaming agreements
and participation in the North American Cellular Network, among
other things. Such transactions are not separately disclosed in
the financial statements as they are carried out in the normal
course of business.
NOTE 10 -- Commitments
The Ventures lease office space, land and buildings for cell
sites and vehicles under operating leases which expire through
the year 2010. Total rent expense for the years ended December
31, 1993, 1992 and 1991 was $13,945, $11,909 and $8,788,
respectively. Some of the leases include escalation clauses
based on increases in the Consumer Price Index. Several of the
leases include options to extend the lease term.
Future minimum payments under noncancellable operating leases
with initial or remaining terms of one year or more at December
31, 1993 are:
1994 $14,286
1995 13,037
1996 10,841
1997 8,918
1998 6,811
1999 and beyond 10,809
--------
$64,702
========
NOTE 11 -- Contingencies
The Ventures are from time to time defendants in and are
threatened with various legal proceedings arising from their
regular business activities. The Ventures are also party to
routine filings with the FCC and state regulatory authorities and
customary regulatory proceedings pending in connection with
interconnection, rates, and practices and proceedings concerning
the telecommunications industry in general and other proceedings
which management does not expect to have a material adverse
effect on the financial position or results of operations of the
Ventures.
In August 1993 and in December 1993, two dealers for the Los
Angeles cellular partnership filed lawsuits against the
partnership and certain other parties in the California state
court, seeking injunctive relief and monetary damages. The
lawsuits allege various torts and statutory violations, including
price-fixing regarding cellular equipment and service, below-cost
sales of equipment, fraud, interference with economic
relationship, unfair competition, discrimination among agents,<PAGE>
<PAGE> F-65
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 11 -- Contingencies (continued)
and conspiracy. The lawsuits are in their early stages and
plaintiffs have made a motion to consolidate them. The
partnership intends to defend each lawsuit vigorously, believes
that it has meritorious defenses to the allegations contained in
the complaints, and does not expect that the ultimate results of
these legal proceedings will have a material adverse effect on
its financial position or results of operations.
In September 1993, a proposed class action lawsuit was filed by a
cellular subscriber in a District Court in Texas. The lawsuit
alleges that the renewal provisions and liquidated damages
provisions of the annual subscriber agreements of various
cellular carriers, including the Houston cellular partnership,
are void and unenforceable, and are contrary to public policy.
The plaintiffs also seek monetary damages. No class has yet been
certified. The partnership intends to defend the lawsuit
vigorously, believes that it has meritorious defenses to the
allegations contained in the complaint, and does not expect that
the ultimate results of this legal proceeding will have a
material adverse effect on its financial position or results of
operations.<PAGE>
<PAGE> F-66
<TABLE>
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
Deductions
Balance at ------------------------
Beginning of Amounts Amounts Balance at End of Year
Year Additions Collected Written Off Current Not current
- -----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Comcast Cellular
Communications, Inc. $ -- $16,387 $ -- $ -- $16,387 $ --
Promissory note,
bearing interest at prime plus 1%.
The note matures six months after a
Credit Agreement of CCCI is paid
in full, which is expected to be
in the year 2000.
Year Ended December 31, 1992
Metromedia Company $9,259 $ -- $9,259 $ -- $ -- $ --
Promissory note, bearing
interest at prime, due 9/30/94
if not previously called
Year Ended December 31, 1991
Metromedia Company $8,549 $710 $ -- $ -- $9,259 $ --
Promissory note, bearing
interest at prime, due
9/30/94 if not previously called
<PAGE>
<PAGE> F-67
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE IV - INDEBTEDNESS TO RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
Balance at
Beginning of Balance at
Year Additions Deductions End of Year
- ------------------------------------------------------------------------------------------
Year Ended December 31, 1993:
<S> <C> <C> <C> <C> <C>
LIN Cellular Communications $20,220 -- $18,563 $1,657 (1)
American Cellular
Communications 15,726 -- 14,437 1,289 (1)
Galveston Mobile Partnership 5,478 -- 761 4,717
Comcast Cellular 52,403 6,006 -- 58,409
- ------------------------------------------------------------------------------------------
Totals $93,827 $6,006 $33,761 $66,072
==========================================================================================
Year Ended December 31, 1992:
LIN Cellular Communications $17,407 $2,813 $ -- $20,220
American Cellular
Communications 13,539 2,187 -- 15,726
Galveston Mobile Partnership -- 5,478 -- 5,478
Comcast Cellular -- 52,403 -- 52,403
- ------------------------------------------------------------------------------------------
Totals $30,946 $62,881 $ -- $93,827
==========================================================================================
Year Ended December 31, 1991:
LIN Cellular Communications $11,782 $5,625 $ -- $17,407
American Cellular
Communications 9,164 4,375 -- 13,539
- ------------------------------------------------------------------------------------------
Totals $20,946 $10,000 $ -- $30,946
==========================================================================================
(1) Classified as short term.
See Notes 4 and 5 regarding terms of indebtedness.<PAGE>
<PAGE> F-68
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE V - PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
Balance at Balance at
Beginning of Retirements End of
Year Additions or Sales Reclassifications Year
- ----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993:
<S> <C> <C> <C> <C> <C>
Land $1,271 $168 $60 -- $1,379
Buildings and improvements 5,084 1,499 -- -- $6,583
Cellular equipment 511,993 71,081 6,419 -- $576,655
Other 40,093 32,770 1,866 -- $70,997
- ----------------------------------------------------------------------------------------------------------------------
Totals $558,441 $105,518 $8,345 -- $655,614
======================================================================================================================
Year Ended December 31, 1992:
Land $518 $753 $ -- $ -- $1,271
Buildings and improvements 3,321 1,763 -- -- 5,084
Cellular equipment 409,385 106,982 20,054 15,680 511,993
Other 46,970 13,932 5,129 (15,680) 40,093
- ----------------------------------------------------------------------------------------------------------------------
Totals $460,194 $123,430 $25,183 $0 $558,441
======================================================================================================================
Year Ended December 31, 1991:
Land $395 $123 $ -- $ -- $518
Buildings and improvements 1,487 2,161 327 -- 3,321
Cellular equipment 321,188 88,197 -- -- 409,385
Other 33,688 13,379 97 -- 46,970
- ----------------------------------------------------------------------------------------------------------------------
Totals $356,758 $103,860 $424 $ -- $460,194
======================================================================================================================
<PAGE>
<PAGE> F-69
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
Balance at Balance at
Beginning of Retirements End of
Year Additions or Sales Year
- ---------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993:
<S> <C> <C> <C> <C>
Buildings and improvements $1,200 $969 $6 $2,163
Cellular equipment 129,640 58,040 1,994 185,686
Other 10,304 6,301 1,287 15,318
- ---------------------------------------------------------------------------------------------------------
Totals $141,144 $65,310 $3,287 $203,167
=========================================================================================================
Year Ended December 31, 1992:
Buildings and improvements $633 $567 $ -- $1,200
Cellular equipment 93,219 47,272 10,851 129,640
Other 6,628 4,185 509 10,304
- ---------------------------------------------------------------------------------------------------------
Totals $100,480 $52,024 $11,360 $141,144
=========================================================================================================
Year Ended December 31, 1991:
Buildings and improvements $307 $377 $51 $633
Cellular equipment 56,192 37,027 -- 93,219
Other 3,711 2,970 53 6,628
- ---------------------------------------------------------------------------------------------------------
Totals $60,210 $40,374 $104 $100,480
=========================================================================================================
<PAGE>
<PAGE> F-70
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at Beginning of Year $14,638 $11,309 $10,387
Additions:
Charged to income 20,945 21,127 13,506
Recoveries 5,551 7,400 3,255
Deductions:
Accounts written off 31,155 25,198 15,839
- ------------------------------------------------------------------------------------------
Balance at End of Year $9,979 (1) $14,638 (2) $11,309
=========================================================================================
(1) Includes $150 classified as long-term.
(2) Includes $198 classified as long-term.
<PAGE>
<PAGE> F-71
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Taxes - other than payroll and income taxes:
Property $8,960 $13,322 $6,054
Other 1,866 1,578 1,150
Advertising 29,719 19,459 15,017
Other items are not presented as such amounts are less than 1% of net revenues.
</TABLE>
<PAGE>
<PAGE>
APPENDIX
OMITTED GRAPHICAL MATERIAL
Graphical material omitted from this EDGAR filing includes two pages
of maps. Such maps are described in the body of the Form 10-K under
Item 1 - "Business--Cellular Interests".
CREDIT AGREEMENT
between
AMERICAN TELEPHONE AND TELEGRAPH COMPANY
and
MCCI ACQUISITIONS, INC.
February 8, 1994<PAGE>
<PAGE> TABLE OF CONTENTS
Page
1. DEFINITIONS..........................................1
2. AMOUNT AND TERMS OF CREDIT..........................11
2.1 Credit...................................... 11
2.2 Manner of Borrowing......................... 12
2.3 Determination of Interest Period.............12
2.4 Reduction of Available Commitment............12
2.5 Repayment of Loan............................12
2.6 Prepayment...................................12
2.7 Payment of Interest..........................13
3. PAYMENTS............................................13
3.1 Manner of Payments...........................13
3.2 Extension of Payments........................13
3.3 Application of Payments......................14
3.4 Computation of Interest......................14
3.5 Commitment Fee...............................14
4. CONDITIONS PRECEDENT................................14
4.1 Conditions Precedent to Initial Loan.........14
4.2 Conditions Precedent to Each Loan............16
5. REPRESENTATIONS AND WARRANTIES......................16
5.1 Organization.................................16
5.2 Subsidiaries.................................17
5.3 Authorization................................18
5.4 Consents.....................................18
5.5 No Conflict..................................18
5.6 No Default...................................19
5.7 No Litigation................................19
5.8 Financial Statements.........................19
5.9 Absence of Certain Changes or Events.........19
5.10 Outstanding Indebtedness and Undisclosed
Liabilities; Investments.....................19
5.11 Compliance with ERISA........................20
5.12 Compliance with Environmental Laws...........20
5.13 Taxes........................................20
5.14 Regulation G.................................20
5.15 No Catastrophic Events.......................21
5.16 No Burdensome Agreements.....................21
5.17 Investment Company Act of 1940...............21
5.18 Public Utility Holding Company Act...........21
5.19 Capital Stock................................21
5.20 Ownership....................................22
5.21 Title to Property............................22
6. AFFIRMATIVE COVENANT................................22
6.1 Use of Proceeds..............................22
6.2 Reporting Obligations........................23
i<PAGE>
<PAGE>
6.3 Maintenance of Records.......................24
6.4 Right of Inspection..........................24
6.5 Preservation of Corporate Existence..........24
6.6 Compliance with Laws.........................25
6.7 Maintenance of Properties....................25
6.8 Payment of Taxes, Etc........................25
6.9 Maintenance of Insurance.....................25
7. NEGATIVE COVENANTS..................................25
7.1 Restricted Payments..........................25
7.2 Indebtedness.................................26
7.3 Mortgages, Liens, etc........................27
7.4 Transactions with Affiliates.................27
7.5 Mergers, Etc.................................27
7.6 Sales, Etc. of Assets........................27
7.7 Negative Pledge..............................28
7.8 Holding Company Status.......................28
8. FINANCIAL COVENANTS.................................28
8.1 Adjusted Debt to Pops Ratio..................28
8.2 Minimum Annual Revenue.......................29
8.3 Minimum Annual Cash Flow.....................29
9. DEFAULTS............................................29
9.1 Events of Default............................29
10. GENERAL PROVISIONS..................................31
10.1 No Third Party Beneficiaries.................31
10.2 Successors and Assigns.......................31
10.3 Costs and Expenses...........................31
10.4 Indemnification..............................32
10.5 No MCCI Guarantee, Etc.......................32
10.6 Further Assurances...........................33
10.7 Entire Agreement.............................33
10.8 Amendment; Waiver............................33
10.9 Notices......................................34
10.10 Counterparts.................................34
10.11 Headings.....................................35
10.12 Invalidity...................................35
10.13 Governing Law................................35
10.14 Knowledge....................................35
Schedule 1
Schedule 5.10
Schedule 5.11
Schedule 5.20
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Pledge Agreement
Exhibit C Form of Guarantee
ii<PAGE>
<PAGE>
CREDIT AGREEMENT, dated as of February 8, 1994,
between AMERICAN TELEPHONE AND TELEGRAPH COMPANY, a New York
corporation (the "Lender"), and MCCI ACQUISITIONS, INC., a
Delaware corporation (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Lender has agreed to provide
financing in accordance with the terms of and for the
purposes specified in Section 7.11.3 of the Agreement and
Plan of Merger, dated August 16, 1993 (the "Merger
Agreement"), among the Lender, Ridge Merger Corporation and
McCaw Cellular Communications, Inc. ("MCCI"); and
WHEREAS, the Lender is willing to extend credit
from time to time to the Borrower on the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereby agree as
follows:
1. DEFINITIONS
As used in this Agreement:
"Adjusted Debt" means, as of any date, the
Attributable Share of Indebtedness of the Borrower, less the
sum of (i) the value of the Borrower's attributable share of
Pops in (A) Sonora, Mexico and Sinaloa, Mexico calculated on
the basis of $10 per Pop, (B) Hong Kong calculated on the
basis of $35 per Pop and (C) any of the ten largest MSAs in
terms of population (as determined by the most recent
estimate at such time by the Donnelley Marketing Service or
such successor or replacement service as shall be generally
recognized in the cellular industry at such time) calculated
on the basis of $125 per Pop; (ii) 50% of the Market Price
of the Attributable Share of Marketable Securities of the
Borrower; and (iii) 100% of the Attributable Share of Cash
Equivalents of the Borrower.
"Affiliate" has the meaning set forth in Rule
12b-2 under the Securities Exchange Act of 1934, as amended.
"Agreement" means this Credit Agreement, as
amended or supplemented from time to time.
"Applicable Margin" means, for the purpose of
calculating the Interest Rate for each Loan during any
Interest Period, 2.5%; provided, however that, if MCCI
elects (in its sole discretion) to guarantee the obligations
of the Borrower under this Agreement and the other Loan
Documents in accordance with Section 10.5(b), the Applicable<PAGE>
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Margin shall be the "Applicable Margin" (as defined in the
MCCI Credit Agreement) that would be applicable to a "LIBO
Rate Advance" (as defined in the MCCI Credit Agreement)
commencing on the first day of the applicable Interest
Period or, if the MCCI Credit Agreement shall have
terminated, the "Applicable Margin" (as defined in the MCCI
Credit Agreement) that would be applicable to a "LIBO Rate
Advance" (as defined in the MCCI Credit Agreement)
calculated using the formula in effect on the date of such
termination.
"Attributable Share" means, for purposes of
determining the Pops, Indebtedness or other measured item of
the Borrower, the percentage ownership interest in such item
held directly or indirectly by the Borrower.
"Authority" means any nation or government, any
state or other political subdivision thereof, any
governmental body, agency or official, and any entity or
other Person exercising executive, legislative, regulatory
or administrative functions of or pertaining to a
governmental body.
"Available Commitment" means, at any time,
$350,000,000 less the aggregate amount of Loans previously
made to the Borrower.
"Borrower" has the meaning set forth in the
preamble.
"Business Day" means a day other than Saturday,
Sunday or any other day on which commercial banks in New
York City are authorized or required by law or executive
order to close and, if the applicable Business Day relates
to any determination of the LIBO Rate, on which dealings are
carried on in the London interbank market.
"Capital Lease" means any lease of property
which, in accordance with GAAP, should be capitalized on the
lessee's balance sheet or for which the amount of the asset
and liability thereunder as if so capitalized should be
disclosed in a note to such balance sheet.
"Cash Equivalents" means, to the extent owned
free and clear of Liens: (a) U.S. dollars on hand and in
insured demand deposit accounts; (b) obligations issued or
unconditionally guaranteed by the United States or any
agency thereof; (c) certificates of deposit or bankers'
acceptances that become payable within one year after the
date of issuance and that are issued by any commercial bank
organized under the laws of the United States or any state
thereof or any other country that is a member of the<PAGE>
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Organization for Economic Cooperation and Development or any
political subdivision of such country and having combined
capital and surplus of at least $1,000,000,000; (d)
commercial paper with a rating of at least "Prime-1" by
Moody's Investors Service, Inc. or "A-1" by Standard &
Poor's Corporation; and (e) repurchase and reverse
repurchase agreements with any securities dealer with
respect to securities of the types specified in clauses (a)
through (d) in respect of an aggregate principal amount of
securities not in excess of $50,000,000 and that are fully
collateralized by any of the securities specified in clauses
(a) through (d).
"Cash Flow" means, for any applicable fiscal
period, with respect to any Person, Net Income (Loss) of
such Person during such period, plus interest expenses,
charges for reserves for deferred taxes, depreciation and
amortization and other non-cash items, to the extent such
amounts were deducted in determining Net Income (Loss) of
such Person for such period.
"Cellular Entity" means a Cellular Licensee or
a Cellular Permittee.
"Cellular Interest" means a direct or indirect
ownership interest in any Cellular Entity.
"Cellular Licensee" means any Person that is
authorized by (i) the FCC to own, control and operate a
Cellular System in an MSA or an RSA or (ii) a Foreign
Authority to own, control and operate a Cellular System in a
specified area.
"Cellular Permittee" means a Person that is
authorized by (i) the FCC to construct a Cellular System in
an MSA or an RSA or (ii) a Foreign Authority to construct a
Cellular System in a specified area.
"Cellular System" means a domestic public
cellular radio telecommunications service system licensed
under Part 22 of the FCC's Rules or a cellular radio
telecommunications service system licensed under the
applicable laws and regulations of any nation, state or
territory other than the United States.
"Closing Price" means, on any day, the last
reported sale price of any Marketable Security.
"Code" means the Internal Revenue Code of 1986,
as amended, and all regulations promulgated thereunder, as
in effect from time to time.
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"Default" means any Event of Default and any
event which, with the passage of time or the giving of
notice, or both, will become an Event of Default.
"Default Rate" means, for each Loan, a rate of
interest per annum equal to the sum of the Interest Rate
with respect to the applicable Interest Period, plus 2%, but
in no event to exceed the maximum rate permitted under
applicable New York law.
"Environmental Law" means any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award relating to the environment, health
or safety or to the release of any materials into the
environment, including, without limitation, the Clean Air
Act, as amended, the Clean Water Act of 1977, as amended,
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, and the Resource
Conservation and Recovery Act of 1976, as amended.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Event" means (a) a reportable event,
within the meaning of Section 4043 of ERISA, unless the 30-
day notice requirement with respect thereto has been waived
by the PBGC; (b) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section
4041(e) of ERISA); (c) the cessation of operations at a
facility in the circumstances described in Section 4068(f)
of ERISA; (d) the withdrawal by the Borrower or any of its
Subsidiaries from a Multiemployer Plan during a plan year
for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (e) the failure by the Borrower
or any of its Subsidiaries to make a payment to a Plan
required under Section 302(f)(1) of ERISA which Section
imposes a lien for failure to make required payments; (f)
the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307
of ERISA; or (g) the institution by the PBGC of proceedings
to terminate a Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition that might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, a Plan.
"Event of Default" means any of the events
specified in Section 9.1.
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"FCC" means the Federal Communications
Commission.
"FCC License" means any mobile telephone,
cellular telephone, microwave or other communications
license, permit, certificate of compliance, franchise,
approval or authorization granted or issued by the FCC for
control, ownership, construction or operation of a Cellular
System.
"Foreign Authority" means, with respect to any
specified area outside of the United States, the Authority
having jurisdiction with respect to cellular radio
telecommunications service systems in such area.
"Foreign Cellular License" means any mobile
telephone, cellular telephone, microwave or other
communications license, permit, certificate of compliance,
franchise, approval or authorization granted or issued by a
Foreign Authority for control, ownership, construction or
operation of a Cellular System.
"GAAP" means generally accepted accounting
principles in the United States.
"Guarantee" means a guarantee in substantially
the form annexed hereto as Exhibit C.
"Guarantor" means McCaw Unrestricted Holdings,
Inc., a Delaware corporation.
"Hazardous Materials" means all materials
subject to any Environmental Law, including, without
limitation, materials listed in 49 C.F.R. Section 172.101,
materials defined as hazardous pursuant to Section 101(14)
of the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, flammable, explosive
or radioactive materials, hazardous or toxic wastes or
substances, petroleum or petroleum distillates or asbestos
or material containing asbestos.
"Indebtedness" of any Person means (without
duplication):
(i) all indebtedness of such Person for
borrowed money;
(ii) all obligations of such Person for the
deferred purchase price of capital assets;
(iii) all obligations of such Person evidenced
by notes, bonds, debentures or other similar
instruments (other than performance bonds, letters of
credit and similar undertakings in connection with the<PAGE>
<PAGE> 6
construction, development or operation of a business,
to the extent such undertakings do not secure an
obligation for borrowed money or the deferred purchase
price of property or services);
(iv) all indebtedness created or arising under
any conditional sale or other title retention
agreement with respect to property acquired by such
Person (even though the rights and remedies of the
seller or lender under such agreement in the event of
default are limited to repossession or sale of such
property);
(v) all obligations of such Person as lessee
under Capital Leases;
(vi) all obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or
similar facilities (to the extent not included in
clause (iii) above);
(vii) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of such person or any
warrants, rights or options to acquire such capital
stock, which obligations shall be valued, in the case
of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus
accrued and unpaid dividends and, in the case of other
such obligations, at the amount that, in light of all
the facts and circumstances existing at the time of
determination, can reasonably be expected to become
payable;
(viii) all Indebtedness referred to in clauses
(i) through (vii) above guaranteed directly or
indirectly by such Person, or in effect guaranteed
directly or indirectly by such Person through an
agreement (w) to pay or purchase such Indebtedness or
to advance or supply funds for the payment or purchase
of such Indebtedness, (x) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss,
(y) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for
property or services irrespective of whether such
property is received or such services are rendered) or
(z) otherwise to assure a creditor against loss; and
(ix) all Indebtedness referred to in clauses (i)
through (vii) above secured by (or for which the holder<PAGE>
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7
of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract
rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of
such Indebtedness.
"Interest Period" means, for each Loan, the
Interest Period selected by the Borrower pursuant to Section
2.3 in accordance with the provisions below.
(i) The duration of each such Interest Period
shall be one, two, three, six, nine or twelve months,
provided that the Interest Period ending on the
Repayment Date may be any period not exceeding 12
months that ends on the Repayment Date.
(ii) the Borrower may not select any Interest
Period for any Loan that ends after the Repayment
Date;
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day; provided, however, that if such
extension would cause the last day of such Interest
Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on
the next preceding Business Day; and
(iv) whenever the first day of any Interest
Period occurs on a day of an initial calendar month
for which there is no numerically corresponding day in
the calendar month that succeeds such initial calendar
month by the number of months equal to the number of
months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding
calendar month.
"Interest Rate" means, for each Loan, a rate of
interest per annum equal to the sum of the LIBO Rate with
respect to the applicable Interest Period, plus the
Applicable Margin; provided, however, that in no event shall
the interest rate exceed the maximum rate permitted under
applicable New York law.
"Investments" means, with respect to any
Person, (a) any loan or advance made by such Person to any
other Person, (b) any obligation guaranteeing or in effect
guaranteeing any obligation of any other Person, directly or
indirectly, in any manner whatsoever, and (c) any ownership
or similar interest in any Person; and the amount of any<PAGE>
<PAGE> 8
Investment shall be the original principal or capital amount
thereof, plus any additional capital contribution or advance
to or other investment in such Person, less all cash returns
of principal or equity thereof (and without adjustment by
reason of the financial condition of such other Person).
"LIBO Rate" means, with respect to any Interest
Period for each Loan, an interest rate per annum equal to
the rate per annum that appears on page 3750 with respect to
U.S. dollars on the Dow Jones Telerate Service (or such
other page as may replace page 3750 on such service or such
other service as may be nominated by the British Bankers'
Association for the purpose of displaying the London
Interbank rates of major banks with respect to U.S. dollars)
as of 11:00 a.m. (London time) two Business Days before the
first day of such Interest Period and for a period equal to
such Interest Period.
"Lien" means any lien, security interest or
other charge or encumbrance of any kind, or any other type
of preferential arrangement, including, without limitation,
the lien or retained security title of a conditional vendor
and any easement, right of way or other encumbrance on title
to real property, but not including any inchoate right of
set-off as such.
"Loan" has the meaning set forth in Section
2.1.
"Loan Documents" means this Agreement, the
Pledge Agreement, the Guarantee and each Notice of Borrowing
executed and delivered by the Borrower.
"Loan Party" means each of the Borrower and the
Guarantor and, in the event MCCI elects (in its sole
discretion) to guarantee the obligations of the Borrower
under this Agreement and the Loan Documents in accordance
with Section 10.5(b), the term "Loan Party" shall also mean
MCCI.
"Market Price" means the average Closing Price
for a share of any Marketable Security during the period of
the 20 most recent trading days ending on the tenth Business
Day prior to the date of calculation.
"Marketable Security" means any equity security
that is either listed on a national securities exchange or
for which a quotation is available through the National
Association of Securities Dealers Automated Quotation
System.
"Material Adverse Effect" means, with respect
to the Person specified, any effect or effects that<PAGE>
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individually or in the aggregate is or are materially
adverse to (i) the business, financial condition, results of
operations, properties, assets, liabilities or prospects of
such Person and its Subsidiaries taken as a whole or (ii)
the ability of such Person to perform any of its material
obligations under this Agreement or any of the other Loan
Documents to which it is a party.
"MCCI" has the meaning set forth in the first
recital.
"MCCI Credit Agreement" means the Credit
Agreement, dated as of February 26, 1990, among MCCI and the
lenders named therein, as amended or supplemented from time
to time.
"Merger Agreement" has the meaning set forth in
the first recital.
"MSA" means a "Metropolitan Statistical Area",
as such term is defined and modified by the FCC for purposes
of Cellular System licensing.
"Multiemployer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a)
is maintained for employees of the Borrower or any of its
Subsidiaries and at least one Person other than the Borrower
and its Subsidiaries or (b) was so maintained and in respect
of which the Borrower or any of its Subsidiaries could have
liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Net Income (Loss)" shall have its meaning
under GAAP, provided that there shall be specifically
excluded therefrom gains (or losses) arising from (i) the
sale of capital assets, (ii) extraordinary items, as defined
by GAAP, and (iii) write-ups or write-downs of assets.
"Notice of Borrowing" means a Notice of
Borrowing in substantially the form of Exhibit A hereto.
"PBGC" means the Pension Benefit Guaranty
Corporation or any successor agency or entity performing
substantially the same functions.
"Permitted Liens" means, with respect to any
Person, such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall
have commenced (unless otherwise provided in this
definition): (i) liens for taxes or governmental
assessments, charges or levies the payment of which is not
at the time required by the Loan Documents; (ii) liens
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imposed by law, such as liens of landlords, carriers,
warehousemen, mechanics and materialmen, arising in the
ordinary course of business for sums not yet due or being
contested by appropriate proceedings promptly initiated and
diligently conducted, provided such Person has set aside
proper amounts, determined in accordance with GAAP, for the
payment of all such sums; (iii) liens incurred in the
ordinary course of business in connection with worker's
compensation, unemployment insurance and other similar
programs, or to secure the performance of statutory
obligations and surety and appeal bonds (to the extent such
undertakings do not secure obligations for the payment of
money borrowed or the deferred purchase price of property or
services); (iv) liens in respect of judgments or awards with
respect to which such Person shall, in good faith, be
prosecuting an appeal or proceeding for review and with
respect to which a stay of execution upon such appeal or
proceeding for review shall have been obtained; (v) liens in
favor of the Lender or permitted by the Loan Documents; (vi)
liens deemed to arise under a Capital Lease as a matter of
law and not pursuant to an agreement or understanding; or
(vii) liens created in respect of property acquired by such
Person or existing in respect of property so acquired at the
time of acquisition thereof, provided that each such lien
shall at all times be confined solely to the item or items
of property so acquired.
"Person" means any individual or corporation,
company, partnership, trust, incorporated or unincorporated
association, joint venture or other entity of any kind.
"Plan" means a Single Employer Plan or a
Multiemployer Plan.
"Pledge Agreement" means a pledge agreement in
substantially the form annexed hereto as Exhibit B.
"Pops" means, (i) for each MSA and RSA for
which a Cellular Entity holds an FCC License, the number of
residents of such MSA or RSA as reflected in the Donnelly
Marketing Service population estimates for 1992, and (ii)
for each of the three areas outside of the United States
that is set forth on Schedule 1 for which a Cellular Entity
holds a Foreign Cellular License, the number of residents of
such area as set forth on Schedule 1.
"Repayment Date" means the date two years after
the earlier of (i) the closing under the Merger Agreement
and (ii) the termination of the Merger Agreement.
"Restricted Payment" means, with respect to any
Person, any dividend or distribution or return of capital in
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respect of, or any repurchase, redemption, retirement,
defeasance, or other acquisition for value of, any of the
capital stock of such Person or any warrants, rights or
options to acquire such capital stock.
"RSA" means a "Rural Service Area", as such
term is defined and modified by the FCC for purposes of
Cellular System licensing.
"Severable Equipment" means any additions,
modifications and improvements to the initial configuration
of any Cellular System that may be removed therefrom without
diminishing or impairing the function, utility, performance
or operating condition of the initial configuration as in
effect immediately prior to the making or installation of
such addition, modification or improvement.
"Single Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a)
is maintained for employees of the Borrower or any of its
Subsidiaries and no Person other than the Borrower and its
Subsidiaries or (b) was so maintained and in respect of
which the Borrower or any of its Subsidiaries could have
liability under Section 4069 of ERISA in the event such plan
has been or were to be terminated.
"Subscriber Equipment" means any cellular
mobile telephones, cellular portable telephones, speakers,
mounting hardware, subscriber test equipment and similar
subscriber equipment.
"Subsidiary" means, as to any Person, any other
Person of which more than 50% of the equity or voting
interests are owned, directly or indirectly, by such first
Person.
"Taxes" means any and all present and future
taxes, assessments, levies, imposts, duties, fees,
deductions, withholdings or charges of a similar nature
imposed or assessed by any country or any political
subdivision or taxing authority thereof, together with any
interest thereon and any penalties with respect thereto.
"Welfare Plan" means a welfare plan, as defined
in Section 3(1) of ERISA, maintained for employees of the
Borrower or any of its Subsidiaries.
2. AMOUNT AND TERMS OF CREDIT
2.1 Credit. The Lender agrees on the terms and
conditions herein set forth to make loans ("Loans") to the
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12
Borrower in an aggregate principal amount not to exceed the
Available Commitment.
2.2 Manner of Borrowing. At any time prior
to the Repayment Date, or, if earlier, the date the Merger
Agreement is terminated in accordance with its terms, the
Borrower may deliver to the Lender a Notice of Borrowing.
Subject to the terms and conditions set forth in this
Agreement, not later than 11:00 a.m. (New York City time) on
the second Business Day following delivery of such Notice,
the Lender will make the requested Loan available to the
Borrower in immediately available funds.
2.3 Determination of Interest Period. The
initial Interest Period with respect to each Loan shall be
set forth in the Notice of Borrowing delivered in respect of
such Loan. No later than 11:00 a.m. (New York City time) on
the second business day preceding the expiration date of the
Interest Period then in effect, the Borrower may set forth
the Interest Period for the period commencing on the day
after such expiration date in a notice to the Lender, which
notice shall identify the Loan for which such Interest
Period is being selected. In the event that the Borrower
does not send any such notice the Interest Period for such
subsequent period shall be three months.
2.4 Reduction of Available Commitment. The
Available Commitment shall be automatically and permanently
reduced by the principal amount of each Loan made hereunder.
2.5 Repayment of Loan. The unpaid principal
amount of the Loans, together with all accrued and unpaid
interest thereon, shall be due and payable on the Repayment
Date.
2.6 Prepayment. The Borrower may, upon at
least five Business Days' notice to the Lender stating the
proposed date and aggregate principal amount of the
prepayment, and, if such notice is given, the Borrower
shall, prepay the outstanding principal amount of the Loans
in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount
prepaid; provided that (i) each partial prepayment shall be
in an aggregate principal amount not less than $20,000,000
or an integral multiple of $10,000,000 in excess thereof and
(ii) if any such prepayment of principal is made other than
on the last day of the Interest Period for such Loan, the
Borrower shall, upon demand by the Lender, pay to the Lender
any amounts required to compensate the Lender for any
losses, costs or expenses that it may reasonably incur as a
result of any termination by the Lender of a corresponding<PAGE>
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LIBO contract it may have entered in connection with the
Loan being prepaid by the Borrower.
2.7 Payment of Interest.
(a) Interest. Interest shall accrue on the
unpaid principal amount of each Loan, from the date such
Loan is made until such Loan is paid in full, at a rate per
annum equal at all time during each Interest Period for each
Loan to the Interest Rate with respect to such Interest
Period. The Lender shall give prompt notice to the Borrower
of the Interest Rate determined by the Lender with respect
to each Interest Period for any Loan.
(b) Payment. The Borrower shall pay the
accrued and unpaid interest on all of the Loans quarterly in
arrears on the first day of January, April, July and October
in each year commencing April 1, 1994.
(c) Default Interest. If the Borrower shall
fail to make any payment when due (whether at maturity, on
acceleration or otherwise), of any principal amount or any
interest thereon owing under this Agreement, or if any Event
of Default should otherwise occur, then the Interest Rate
with respect to the Loan shall thereupon be the Default
Rate, and the Borrower shall pay interest on demand at a
rate equal to the Default Rate from time to time in effect
to the fullest extent permitted by law on the amount overdue
from the date of default until payment in full of such
overdue amount and all other Events of Default are cured.
3. PAYMENTS
3.1 Manner of Payments. Each payment of
principal and interest on the Loans and all other amounts
payable by the Borrower to the Lender under this Agreement
and the other Loan Documents shall be made no later than
11:00 a.m. (New York City time) on the day when due in
immediately available U.S. currency to the Lender at such
account as the Lender shall have notified the Borrower.
Each such payment shall be made without setoff or
counterclaim and free and clear of, and without deduction
for, any Taxes.
3.2 Extension of Payments. If any payment
from the Borrower to the Lender under this Agreement shall
become due on a day which is not a Business Day, the due
date thereof shall be extended to the next following day
which is a Business Day and such additional time shall be
included in the computation of interest.
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3.3 Application of Payments. The Lender
shall apply payments received by it with respect to the
Loans in the following order of priority:
(i) accrued and unpaid interest due pursuant
to Section 2.7(c),
(ii) amounts due in respect of the Loans and
not otherwise provided for in this
Section 3.3,
(iii accrued and unpaid interest due pursuant
to Section 2.7(b), and
(iv) the unpaid principal amount of the Loans.
3.4 Computation of Interest. All interest
accruing under this Agreement shall be computed on the basis
of a year of 365 days and the actual number of days elapsed.
3.5 Commitment Fee. In the event MCCI elects
(in its sole discretion) to guarantee the obligations of the
Borrower under this Agreement and the Loan Documents in
accordance with Section 10.5(b), from and after the date of
such guarantee, the Borrower shall pay to the Lender a
commitment fee on the average daily unused portion of the
Lender's commitment hereunder (it being understood that on
and after the date, if any, that the Merger Agreement is
terminated in accordance with its terms, such unused portion
shall be equal to zero), at the rate of 1/2 of 1% per annum,
payable (a) quarterly in arrears on each interest payment
date and (b) on the Repayment Date.
4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loan.
The obligation of the Lender to make the initial Loan to the
Borrower is subject to the condition that the Lender shall
have received, on or before the date of the initial Loan,
the following items in form and substance satisfactory to
the Lender:
(a) Notice of Borrowing. A Notice of
Borrowing duly executed by the Borrower.
(b) Pledge Agreements. (i) A Pledge
Agreement, duly executed by the Borrower, granting a
security interest in all of the outstanding capital stock of
each direct Subsidiary of the Borrower and (ii) a Pledge
Agreement, duly executed by the Guarantor, granting a
security interest in all of the outstanding capital stock of
the Borrower.
<PAGE>
<PAGE> 15
(c) Guarantee. A Guarantee, duly executed by
the Guarantor, guaranteeing the obligations of the Borrower
under this Agreement and the other Loan Documents.
(d) Certified Charters. A copy of the
charter of each Loan Party and each amendment thereto,
certified (as of a date reasonably near the date of the
initial Loan) by the Secretary of State of the State of
Delaware as being a true and correct copy thereof.
(e) Good-Standing Certificates. A copy of a
certificate of the Secretary of State of the State of
Delaware, dated reasonably near the date of the initial
Loan, listing the charter of each Loan Party and each
amendment thereto on file in his office and certifying that
(i) such amendments are the only amendments to such Loan
Party's charter on file in his office, (ii) such Loan Party
has paid all franchise taxes to the date of such certificate
and (iii) such Loan Party is duly incorporated and in good
standing under the laws of the State of Delaware.
(f) Officers' Certificates. A certificate of
each Loan Party, signed on behalf of such Loan Party by its
President or a Vice President and its Secretary or any
Assistant Secretary, dated the date of the initial Loan (the
statements made in which shall be true on and as of the date
of such certificate), certifying as to (i) the absence of
any amendments to the charter of such Loan Party since the
date of the applicable good-standing certificate referred to
in Section 4.1(f), (ii) a true and correct copy of the by-
laws of such Loan Party as in effect on the date of such
certificate, (iii) the due incorporation and good standing
of such Loan Party as a corporation organized under the laws
of the State of Delaware, and the absence of any proceeding
for the dissolution or liquidation of such Loan Party, (iv)
in the case of the Borrower, the truth in all material
respects of the representations and warranties contained in
the Loan Documents to which it is a party as though made on
and as of the date of such certificate, (v) a true and
correct copy of resolutions of the Board of Directors of
each Loan Party approving the Loan Documents to which it is
a party and the transactions contemplated thereby, and
certifying that such resolutions have not been amended or
rescinded and remain in full force and effect on the date of
such certificate, and (vi) the absence of any event
occurring and continuing, or resulting from the Loan to be
made on the date of such certificate, that constitutes a
Default.
(g) Secretary's Certificates. A certificate
of the Secretary or an Assistant Secretary of each Loan
Party certifying the names and true signatures of <PAGE>
<PAGE> 16
the officers of such Loan Party authorized to sign each Loan
Document to which it is a party and the other documents to
be delivered thereunder.
4.2 Conditions Precedent to Each Loan. The
obligation of the Lender to make each Loan (including the
initial Loan) hereunder shall be subject to the conditions
precedent that on the date of such Loan (a) the following
statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of such Loan shall constitute a
representation and warranty by the Borrower that on the
respective dates thereof such statements are true): (i) no
event has occurred and is continuing, or would result from
such Loan or from the application of the proceeds therefrom,
that constitutes a Default and such Loan has been duly
authorized by all necessary corporate action and (ii) the
representations and warranties contained in each Loan
Document are correct on and as of the date of such Loan,
before and after giving effect to such Loan and to the
application of the proceeds therefrom, as though made on and
as of such date, except to the extent that any such
representation or warranty by its terms relates to a
specified prior date; (b) the Merger Agreement shall not
have been terminated in accordance with its terms; and (c)
the Lender shall have received such other approvals,
opinions or documents as the Lender may reasonably request,
including but not limited to all certificates, financing
statements and other documents necessary to grant to the
Lender a first priority security interest in all of the
capital stock of the Borrower and each of the Borrower's
direct Subsidiaries in accordance with the Borrower's Pledge
Agreement and the Guarantor's Pledge Agreement, as the case
may be.
5. REPRESENTATIONS AND WARRANTIES
By delivering a Notice of Borrowing to the
Lender, the Borrower represents and warrants to the Lender,
as of the date of such Notice of Borrowing, that:
5.1 Organization. Each Loan Party is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
organization and has all requisite corporate power and
authority to own and operate its properties, to carry on its
business as now conducted and proposed to be conducted, to
enter into each Loan Document to which it is a party and to
carry out the provisions thereof and consummate the
transactions contemplated thereby. Each Loan Party is duly
qualified and in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature
<PAGE>
<PAGE> 17
of the business conducted by it makes such qualification
necessary and where the failure to be so qualified has or
would be reasonably expected (so far as can be foreseen at
the time) to have a Material Adverse Effect on such Loan
Party. The Borrower has obtained from the appropriate
Authorities (including, without limitation, the FCC or
appropriate Foreign Authority) all approvals and licenses
necessary for the conduct of its business and operations as
currently conducted, which approvals and licenses are valid
and remain in full force and effect, except where the
failure to have obtained such approvals or licenses or the
failure of such licenses and approvals to be valid and in
full force and effect does not have and would not be
reasonably expected (so far as can be foreseen at the time)
to have a Material Adverse Effect on the Borrower. The
Borrower is not subject to any order, complaint, proceeding
or investigation pending nor, to the knowledge of the
Borrower, threatened, which affects or would be reasonably
expected (so far as can be foreseen at the time) to affect
the validity of any such approvals or licenses or impair the
renewal thereof, except where the invalidity of any such
approvals or licenses or the non-renewal thereof does not
have and would not be reasonably expected (so far as can be
foreseen at the time) to have a Material Adverse Effect on
the Borrower.
5.2 Subsidiaries. Each Subsidiary of the
Borrower (a) is a corporation or other legal entity duly
organized, validly existing and (if applicable) in good
standing under the laws of the jurisdiction of its
organization and has the full power and authority to own its
properties and conduct its business and operations as
currently conducted, except where the failure to be duly
organized, validly existing and in good standing does not
have, and would not be reasonably expected (so far as can be
foreseen at the time) to have, a Material Adverse Effect on
the Borrower, (b) is duly qualified and in good standing in
each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure
to be so qualified does not have and would not be reasonably
expected (so far as can be foreseen at the time) to have a
Material Adverse Effect on the Borrower, (c) has obtained
from the appropriate Authorities (including, without
limitation, the FCC or appropriate Foreign Authority) all
approvals and licenses necessary for the conduct of its
business and operations as currently conducted, which
licenses and approvals are valid and remain in full force
and effect, except where the failure to have obtained such
approvals and licenses or the failure of such licenses and
approvals to be valid and in full force and effect does not
have and would not be reasonably expected (so far as can be
<PAGE>
<PAGE> 18
foreseen at the time) to have a Material Adverse Effect on
the Borrower, and (d) is subject to no order, complaint,
proceeding or investigation pending or, to the knowledge of
the Borrower, threatened which would be reasonably expected
(so far as can be foreseen at the time) to affect the
validity of any such approvals or licenses or impair the
renewal thereof, except where the invalidity of any such
approvals or licenses or the non-renewal thereof does not
have and would not be reasonably expected (so far as can be
foreseen at the time) to have a Material Adverse Effect on
the Borrower.
5.2 Authorization. This Agreement, each
Pledge Agreement, the Guarantee and the other Loan Documents
to which any Loan Party is a party have been duly executed
and delivered by a duly authorized officer of such Loan
Party and constitute valid and binding agreements of such
Loan Party, enforceable against such Loan Party in
accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application
which may affect the enforcement of creditors' rights
generally and by general equitable principles.
5.4 Consents. All consents, authorizations,
approvals of or declarations, filings or registrations with
any commission, board, agency, court or other Authority,
Person or entity of any kind necessary in connection with
the valid execution, delivery or performance by the Borrower
of this Agreement, each Pledge Agreement, the Guarantee and
the other Loan Documents to which any Loan Party is a party
and of any other document required to be executed and
delivered under, or in connection with any other transaction
contemplated by, this Agreement have been obtained or
effected and are in full force and effect.
5.5 No Conflict. The execution, delivery and
performance by any Loan Party of this Agreement, each Pledge
Agreement, the Guarantee and the other Loan Documents to
which it is a party will not result in any violation of or
conflict with, constitute a default under, or require any
consent under any term of the charter, by-laws or other
organizational document of such Loan Party (or any of its
Subsidiaries) or any such agreement, instrument, law,
ordinance, rule, regulation, order, judgment or decree or
result in the creation of (or impose any obligation on such
Loan Party or any of its Subsidiaries to create) any
mortgage, lien, charge, security interest or other
encumbrance upon any of the properties or assets of such
Loan Party or any of its Subsidiaries pursuant to any such
term, except where such violation, conflict or default, or
the failure to obtain such consent, individually or in the<PAGE>
<PAGE> 19
aggregate, does not have and would not be reasonably
expected (so far as can be foreseen at the time) to have a
Material Adverse Effect on any Loan Party.
5.6 No Default. Neither Loan Party nor any
Subsidiary of any Loan Party is in violation of any term of
(a) its charter, by-laws or other organizational documents,
(b) any agreement or instrument related to indebtedness for
borrowed money or any other agreement to which it is a party
or by which it is bound, (c) any applicable law, ordinance,
rule or regulation of any Authority, or (d) any applicable
order, judgment or decree of any court, arbitrator or
Authority, the consequences of which violation have or would
be reasonably expected (so far as can be foreseen at the
time) to have a Material Adverse Effect on such Loan Party.
5.7 No Litigation. There are no actions,
suits, investigations or proceedings (adjudicatory,
rulemaking or otherwise) pending or, to the knowledge of the
Borrower, threatened against the Borrower or any of its
Subsidiaries, or any property of the Borrower or any such
Subsidiary, in any court or before any arbitrator of any
kind or before or by any Authority, except actions, suits,
investigations or proceedings which do not have and would
not be reasonably expected (so far as can be foreseen at the
time) to have a Material Adverse Effect on the Borrower.
5.8 Financial Statements. The financial
statements delivered pursuant to Section 6.2 fairly present
the financial condition of the Borrower and its Subsidiaries
for the periods covered by such statements, all in
accordance with GAAP consistently applied (subject to normal
year-end adjustments in the case of the interim financial
statements).
5.9 Absence of Certain Changes or Events.
During the period since the date of the most recent
financial statements of the Borrower delivered to the Lender
pursuant to Section 6.2 (if any), (a) the business of the
Borrower and its Subsidiaries has been conducted only in the
ordinary course, consistent with past practice, (b) neither
the Borrower nor any Subsidiary has entered into any
material transaction other than in the ordinary course,
consistent with past practice, and (c) there has not been
any material adverse change in the business, financial
condition, results of operations, properties, assets,
liabilities or prospects of the Borrower and its
Subsidiaries taken as a whole.
5.10 Outstanding Indebtedness and Undisclosed
Liabilities; Investments. Each of the Borrower and its
Subsidiaries has no Indebtedness or liability, absolute or
contingent, known or unknown, liquidated or unliquidated,
<PAGE>
<PAGE> 20
which is not set forth on Schedule 5.10, except Indebtedness
and liabilities incurred in the ordinary course of business.
Except as provided in this Agreement, none of the Borrower
or its Subsidiaries is directly or indirectly liable upon or
with respect to (by discount, repurchase agreements or
otherwise), or obligated in any other way to provide funds
in respect of, or to guarantee or assume any Indebtedness,
obligation or dividend of any Person, except endorsements in
the ordinary course of business in connection with the
deposit of items for collection.
5.11 Compliance with ERISA. (a) Schedule 5.11
sets forth a complete and accurate list, as of the date of
this Agreement of all Plans, Multiemployer Plans and Welfare
Plans with respect to any employees of the Borrower or any
of its Subsidiaries.
(b) No ERISA Event has occurred or is
reasonably expected to occur with respect to any Plan.
(c) Neither the Borrower nor any of its
Subsidiaries is, as of the date hereof, required to file
with the Internal Revenue Service a Schedule B (Actuarial
Information) (Form 5500 Series) for any Plan.
5.12 Compliance with Environmental Laws. The
operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all
Environmental Laws, and neither utilize, contain nor are
affected by any Hazardous Materials except in the ordinary
course of business in a manner consistent with all
applicable Environmental Laws, and neither the Borrower nor
any of its Subsidiaries has any material liability,
contingent or otherwise under any Environmental Law.
5.13 Taxes. The Borrower and its Subsidiaries
have filed all federal, state, county, local and foreign tax
returns required to be filed by them, and have paid all
taxes shown to be due thereon, other than taxes appropriate
reserves for which have been made in the Borrower's
financial statements. There are no assessments or
adjustments that have been asserted in writing against the
Borrower or its Subsidiaries for any period for which the
Borrower has not made appropriate reserves in the Borrower's
financial statements.
5.14 Regulation G. The Borrower is not engaged
in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of
Regulation G issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to
<PAGE>
<PAGE> 21
others for the purpose of purchasing or carrying any margin
stock, in violation of Regulation G.
5.15 No Catastrophic Events. Neither the
business nor the properties of the Borrower or any of its
Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy
or other casualty (whether or not covered by insurance) that
could have a Material Adverse Effect on the business,
condition (financial or otherwise), operations, properties
or prospects of the Borrower and its Subsidiaries taken as a
whole.
5.16 No Burdensome Agreements. Neither the
Borrower nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or
corporate restriction that could have a Material Adverse
Effect on (i) the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and its Subsidiaries taken as a whole, (ii) the
rights and remedies of the Lender under any Loan Document or
(iii) the ability of the Borrower to carry out its
obligations under any Loan Document.
5.17 Investment Company Act of 1940. Neither
the Borrower nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of
1940, as amended. Neither the making of any Loans nor the
application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions
contemplated hereby, will violate any provision of such Act
or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
5.18 Public Utility Holding Company Act. The
Borrower is not a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
5.19 Capital Stock. On the date of this
Agreement, the authorized capital stock of the Borrower
consists of 50,000 shares of common stock, par value $1.00
per share, of which 200 shares are issued and outstanding.
On the date of this Agreement, there are no commitments by
the Borrower for the sale or other disposition of, and no
outstanding options to purchase, any shares of its capital
<PAGE>
<PAGE> 22
stock. Neither the Borrower nor any of its Subsidiaries is
subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its
capital stock.
5.20 Ownership. Schedule 5.20 sets forth as
of the date of this Agreement a complete and correct list of
(a) each Cellular Entity in which the Borrower or any
Subsidiary of the Borrower has a direct or indirect interest
and whether such Entity is a Cellular Licensee or Cellular
Permittee, (b) the name of the direct Subsidiary of the
Borrower (if any) that owns any such Cellular Interest, (c)
the direct or indirect percentage ownership and voting
interest of the Borrower in such Cellular Entity, (d) each
MSA, RSA or other area that such Cellular Entity is
authorized to serve, (e) the number of Pops in each such
MSA, RSA or other area and (f) the Attributable Share of the
Pops of the Borrower in each such Cellular Entity.
5.21 Title to Property. The Borrower and its
Subsidiaries have good and sufficient title to their
respective properties and assets free and clear of all Liens
(other than Permitted Liens).
6. AFFIRMATIVE COVENANTS
So long as any Loan or any part thereof is
outstanding and until the performance of all obligations of
the Borrower under this Agreement, the Borrower will, unless
the Lender shall otherwise consent in writing:
6.1 Use of Proceeds. Apply any and all
amounts advanced by the Lender to the Borrower hereunder (a)
to the pursuit of the Opportunities referred to in
paragraphs (a), (b) and (d) of Item 9 of Section 7.1 of the
Company Disclosure Statement (as such terms are defined in
the Merger Agreement) together with costs and expenses
incurred by the Borrower or any of its Subsidiaries in
acquiring (or refinancing), owning and operating the
Wireless Service Interests or Resale Service Interests or
interests in a Joint Venture (as such terms are defined in
the Merger Agreement) to be acquired (or refinanced), owned
and operated with the proceeds of the Loans as specified in
paragraph (4) of the applicable Notice of Borrowing or (b)
to the payment of dividends or other distributions to its
stockholder and applied by such stockholder or its
Affiliates, which stockholder or Affiliates are wholly owned
Subsidiaries of MCCI, for the purposes described in clause
(a) above, provided that any such dividend or distribution
shall be in compliance with the other covenants set forth
herein (including without limitation in Section 7.1).
<PAGE>
<PAGE> 23
6.2 Reporting Obligations. Deliver to the
Lender:
(a) Quarterly Statements. As soon as
available and in any event within 60 days after the end of
each fiscal quarter of the Borrower (excluding the final
fiscal quarter of each fiscal year), a consolidated and
consolidating balance sheet, income statement and cash flow
statement of the Borrower and its Subsidiaries, prepared in
form satisfactory to the Lender, together with (i) a
certificate of a financial officer of the Borrower,
certifying that such financial statements present fairly in
all material respects the financial condition of the
Borrower and its Subsidiaries as of the end of such quarter
and the results of operations for the period then ended,
subject to normal year-end adjustments, (ii) a Schedule
setting forth as of the end of such fiscal quarter all of
the information required by the terms of Section 5.20,
unless there has been no material change to such information
since the later of the date hereof or the end of the prior
fiscal quarter, (iii) a certificate of such financial
officer stating that no Default or Event of Default has
occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has
taken and proposes to take with respect thereto, and (iv) a
certificate of such financial officer certifying compliance
with the ratio set forth in Section 8.1, together with
information sufficient to enable the Lender to verify the
calculations therein.
(b) Annual Statements. As soon as available
and in any event within 120 days of the end of each fiscal
year of the Borrower, commencing with the fiscal year ending
December 31, 1994, a consolidated and consolidating balance
sheet, income statement and cash flow statement of the
Borrower and its Subsidiaries, prepared in accordance with
GAAP consistently applied, and reviewed and certified in a
manner acceptable to the Lender, by its independent
certified public accountants acceptable to the Lender,
together with (i) a certificate of a financial officer of
the Borrower, certifying that no Default or Event of Default
has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, describing the same
and the action the Borrower or such Subsidiary is taking
with respect thereto, (ii) a Schedule setting forth as of
the end of such fiscal year all of the information required
by the terms of Section 5.20, unless there has been no
material change to such information since the later of the
date hereof or the end of the prior fiscal year, and (iii) a
certificate of such financial officer certifying compliance
with the covenants contained in Article 8, together with
<PAGE>
<PAGE> 24
information sufficient to enable the Lender to verify the
calculations therein.
(c) As soon as possible and in any event
within two days after the occurrence of each Default
continuing on the date of such statement, a statement of a
financial officer of the Borrower setting forth details of
such Default and the action that the Borrower has taken and
proposes to take with respect thereto.
(d) Promptly after the Borrower obtains
knowledge thereof, a statement of a financial officer
describing in reasonable detail any (i) refusal or failure
by any instrumentality to renew or extend any material
permit or license (including but not limited to an FCC
License or Foreign Cellular License) with respect to a
Cellular System in which the Borrower has a direct or
indirect interest, or (ii) proposed abandonment or proposed
or actual revocation, termination or materially adverse
modification of any material permit or license (including
but not limited to an FCC License or Foreign Cellular
License) or any material dispute related thereto, or (iii)
denial or threatened denial or revocation or material
modification by any Authority of any material permit or
license (including but not limited to an FCC License or
Foreign Cellular License), or (iv) notice from any Authority
of the imposition of any material fines, penalties or
forfeitures.
(e) Other Information. Promptly after a
request therefor, such other information, financial or
otherwise, with respect to the business, properties or
condition of the Borrower or any of its Subsidiaries as the
Lender may reasonably from time to time request.
6.3 Maintenance of Records. Keep, and cause
each of its Subsidiaries to keep, adequate records and books
of account, in which complete entries will be made in
accordance with GAAP consistently applied, reflecting all
financial transactions of the Borrower or such Subsidiary,
as the case may be.
6.4 Right of Inspection. At any reasonable
time and from time to time, permit, and cause each of its
Subsidiaries to permit, the Lender, or any agent or
representative thereof, to examine and make copies of and
abstracts from its records and books of account, and visit
its properties to discuss its affairs, finances and accounts
with any of its officers, directors and independent
accountants.
6.5 Preservation of Corporate Existence. Do
or cause to be done, and cause each of its Subsidiaries to<PAGE>
<PAGE> 25
do or cause to be done, all things necessary on its part to
preserve and keep in full force and effect its existence.
6.6 Compliance with Laws. Comply, and cause
each of its Subsidiaries to comply, with all applicable
laws, rules and regulations and orders of any Authority,
noncompliance with which would have a Material Adverse
Effect on the Borrower.
6.7 Maintenance of Properties. Maintain,
keep and preserve, and cause each of its Subsidiaries to
maintain, keep and preserve, all of its properties (tangible
and intangible) necessary or useful for the proper conduct
of its business in good working order and condition,
ordinary wear and tear excepted.
6.8 Payment of Taxes, Etc. Pay and
discharge, and cause each of its Subsidiaries to pay and
discharge, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (b) all lawful
claims that, if unpaid, might by law become a Lien upon its
property; provided that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in
good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
6.9 Maintenance of Insurance. Maintain, and
cause each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
7. NEGATIVE COVENANTS
So long as any Loan or any part thereof is
outstanding and until the performance of all obligations of
the Borrower under this Agreement, the Borrower will not,
unless the Lender shall otherwise consent in writing:
7.1 Restricted Payments. Make, or permit any
Subsidiary to make, any Restricted Payments, unless after
giving effect thereto and to any other transactions effected
concurrently therewith, (a) the Borrower is in compliance
with the ratio set forth in Section 8.1 and such ratio is no
greater than such ratio immediately prior to such
transactions and (b) the Borrower is not otherwise in
Default hereunder. MCCI shall cause the Borrower to comply
with the terms of the preceding sentence.
<PAGE>
<PAGE> 26
7.2 Indebtedness. Create, incur, assume or
become or remain liable in respect of, or permit any
Subsidiary to create, incur, assume or become or remain
liable in respect of, any Indebtedness, except:
(a) current liabilities of the Borrower or
such Subsidiary, as the case may be (other than for borrowed
money) incurred in the ordinary course of its business and
in accordance with customary trade practices;
(b) Indebtedness which is existing on the
date of any Loan and approved in writing by the Lender;
(c) Indebtedness constituting amounts due the
Lender under this Agreement;
(d) Indebtedness of the Borrower or such
Subsidiary secured as permitted by Section 7.3;
(e) Indebtedness of the Borrower or such
Subsidiary, not in excess of $50,000,000 owing to MCCI or
any of its Subsidiaries, which Indebtedness is unsecured and
is subordinated to the obligations of the Borrower under
this Agreement and the Loan Documents (it being understood
that the maturity of such inter-company indebtedness may be
earlier than the Repayment Date);
(f) Indebtedness of the Borrower or such
Subsidiary to the seller of any Cellular Interests, which
Indebtedness shall be subordinated to the obligations of the
Borrower hereunder on terms reasonably satisfactory to the
Lender;
(g) Indebtedness incurred to finance Severable
Equipment in an aggregate outstanding amount for any
Cellular System not to exceed the greater of (x) $25,000 in
any Cellular System and (y) 10 cents for each Pop in such
Cellular System;
(h) Indebtedness incurred to finance
Subscriber Equipment in an aggregate outstanding amount for
any Cellular System not to exceed 50 cents for each Pop in
such Cellular system;
(i) Indebtedness of a Person that was
outstanding at the time such Person becomes a Subsidiary
(provided that such Indebtedness was not incurred in
anticipation of becoming a Subsidiary) and refinancings
thereof on terms (other than interest rate, prepayment
premiums, fees and other similar financial terms) no less
favorable to the Borrower and such Subsidiary than such<PAGE>
<PAGE> 27
outstanding Indebtedness and that has a weighted average
life to maturity at least equal to the then remaining
average life of such outstanding Indebtedness; and
(j) Indebtedness attributable to a Subsidiary
by reason of its holding or owning an interest in any Person
other than a Subsidiary unless the partnership or other
agreement pursuant to which such Subsidiary holds or owns
its interest in such Person permits the Borrower or such
Subsidiary to prohibit (without penalty or cost to the
Borrower or such Subsidiary) the incurrence of such
Indebtedness.
7.3 Mortgages, Liens, etc. Create, incur,
assume or suffer to exist, or permit any Subsidiary to
create, incur, assume or suffer to exist, directly or
indirectly, any Lien with respect to any property or asset
now owned or leased or hereafter acquired or leased, except
Permitted Liens and liens imposed in connection with
Indebtedness permitted under paragraph (g) through (j) of
Section 7.2. MCCI shall cause the Borrower to comply with
the terms of the preceding sentence.
7.4 Transactions with Affiliates. Enter
into, or permit any Subsidiary to enter into, any
transaction, including, without limitation, the purchase,
lease, sale or exchange of any property to, from or with, or
the rendering or purchase of any service to or from, any
Affiliate, except in the ordinary course and pursuant to the
reasonable requirements of such Affiliate's business and
upon fair and reasonable terms no less favorable to such
Affiliate than would obtain in a comparable arms' length
transaction with a non-Affiliate.
7.5 Mergers, Etc. Merge with or into, or
consolidate with or into, or permit any Subsidiary to merge
with or into, or consolidate with or into, any other Person,
unless (a) immediately after giving effect thereto, no event
shall occur and be continuing that constitutes a Default,
(b) if the surviving entity is not a Subsidiary of the
Borrower, the disposition of such Subsidiary shall otherwise
have been permitted under Section 7.6, and (c) after giving
effect thereto, the Borrower is in compliance with the ratio
set forth in Section 8.1.
7.6 Sales, Etc. of Assets. Sell, lease,
transfer or otherwise dispose of, or permit any Subsidiary
to sell, lease, transfer or otherwise dispose of, any of its
assets, including, without limitation, substantially all
assets constituting the business of a division, branch or
other unit operation, except:
<PAGE>
<PAGE> 28
(a) dispositions of any assets (including,
without limitation, Cellular Interests) if, after giving
effect thereto, the Borrower is in compliance with the ratio
set forth in Section 8.1 and is not otherwise in Default
hereunder; and
(b) dispositions of any assets (including,
without limitation, Cellular Interests) if the net cash
proceeds thereof are applied to prepay in full all amounts
payable by the Borrower under this Agreement and the other
Loan Documents.
7.7 Negative Pledge. (a) Enter into or
suffer to exist any agreement (other than an agreement with
the Lender) prohibiting the creation or assumption of any
Lien upon any of its properties or assets; or (b) permit any
Subsidiary to enter into or suffer to exist any agreement
prohibiting the creation or assumption of any Lien upon any
of the properties or assets of such Subsidiary other than in
connection with (i) any Indebtedness existing on the date
hereof and any Indebtedness outstanding on the date such
Person first becomes a Subsidiary, (ii) any Indebtedness
permitted by paragraphs (g) through (j) of Section 7.3 and
(iii) any partnership agreements or other similar agreements
to which such Subsidiary is subject on the date hereof.
7.8 Holding Company Status. Own directly or
acquire any assets other than shares of capital stock of
wholly owned direct Subsidiaries and immaterial amounts of
other assets.
8. FINANCIAL COVENANTS
So long as any Loan or any part thereof is
outstanding and until performance of all obligations of the
Borrower under this Agreement, the Borrower will, unless the
Lender shall otherwise consent in writing:
8.1 Adjusted Debt to Pops Ratio. Maintain
sufficient assets and limit Indebtedness so that at all
times the ratio of Adjusted Debt to the Attributable Share
of Pops of the Borrower shall not exceed 75 to 1. For the
purpose of calculating the foregoing ratio, Pops in the
three areas set forth on Schedule 1 and in any of the ten
largest MSAs in terms of population (as determined by the
most recent estimate at such time by the Donnelley Marketing
Service or such successor or replacement service as shall be
generally recognized in the cellular industry at such time)
shall be excluded from the calculation of the Attributable
Share of Pops of the Borrower.
<PAGE>
<PAGE> 29
8.2 Minimum Annual Revenue. Maintain for
each year set forth below the following levels of revenue,
as determined in accordance with GAAP:
Year Revenue
($000)
1994 10,000
1995 15,000
1996 20,000
8.3 Minimum Annual Cash Flow. Maintain for
each year set forth below the following levels of Cash Flow:
Year Revenue
($000)
1995 0
1996 5,000
9. DEFAULTS
9.1 Events of Default. If any of the
following events shall occur and be continuing:
(a) the Borrower shall fail to pay when due
any amount (whether of principal, interest, fees or
otherwise), whether at maturity, by acceleration or
otherwise, payable to the Lender under this Agreement or the
other Loan Documents to which the Borrower is a party; or
(b) the Borrower or Guarantor shall fail to
perform or observe any obligation or covenant or term
contained in this Agreement or the other Loan Documents to
which it is a party, unless such breach is cured within 30
days after the Borrower's knowledge of the occurrence
thereof; or
(c) any representation or warranty made by
the Borrower in any of the Loan Documents to which it is a
party, or any statement in any certificate or notice
delivered or made pursuant thereto or in connection
therewith, shall prove to be false or misleading in any
material respect when made; or
(d) the Borrower or any of its Subsidiaries
shall default beyond applicable notice and grace periods, if
any, in the payment of any principal of or premium (if any)
or interest on any of their respective indebtedness for
borrowed money in excess of $10,000,000 or with respect to
the performance or observance of any terms of any instrument
pursuant to which any such indebtedness was created or of
any mortgage, indenture or other agreement relating thereto,
and the principal amount thereof is accelerated in
<PAGE>
<PAGE> 30
accordance with the terms thereof and such acceleration
shall not have been rescinded pursuant thereto; or
(e) any final judgment or settlement in
excess of $10,000,000 shall be entered against the Borrower
or any of its Subsidiaries and shall not be paid, vacated or
stayed for a period of 60 days; or
(f) any Material Adverse Effect with respect
to the Borrower and its Subsidiaries taken as a whole; or
(g) any of the Loan Documents shall, at any
time after its execution and delivery and for any reason
cease to be in full force and effect or shall be declared
null and void, or the validity or enforceability thereof
shall be contested by any party thereto, including, without
limitation, that the Pledge Agreement shall fail to maintain
in effect a perfected first priority security interest in
the collateral thereunder; or
(h) MCCI shall cease to own, directly or
indirectly, all of the outstanding capital stock of the
Borrower; or
(i) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter
in effect shall be commenced against MCCI, the Borrower or
any of the Borrower's Subsidiaries, or a court shall enter a
decree or order appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official)
of MCCI, the Borrower or any of the Borrower's Subsidiaries,
or for any substantial part of any of its properties, or
ordering the winding-up or liquidation of any of its
affairs, and such case shall not be dismissed in 60 days, or
such decree or order shall remain unstayed and in effect for
a period of 30 consecutive days; or
(j) MCCI, the Borrower or any of the
Borrower's Subsidiaries shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, shall consent to the entry
of an order for relief in an involuntary case under any such
law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of MCCI,
the Borrower, any of the Borrower's Subsidiaries, or for all
or any substantial part of any of their respective
properties, or shall make any general assignment for the
benefit of creditors, or shall fail generally to pay their
debts as they become due, or shall take any corporate action
in furtherance of any of the foregoing;
<PAGE>
<PAGE> 31
then in the case of any of the events specified in
paragraphs (i) and (j), the Loans and all other amounts
payable by the Borrower to the Lender under this Agreement
shall be immediately due and payable without any action on
the part of the Lender, the Borrower or any other Person,
and, in the case of any of the other events specified above,
the Lender may by notice to the Borrower declare the Loans
and all other amounts payable by the Borrower to the Lender
under this Agreement to be immediately due and payable,
whereupon the same shall become forthwith due and payable.
10. GENERAL PROVISIONS
10.1 No Third Party Beneficiaries. This
Agreement is not intended to be for the benefit of and shall
not be enforceable by any Person or entity who or which is
not a party hereto, except for the indemnification
provisions contained in Section 10.4, which provisions may
be enforced by any Indemnified Party referred to therein.
10.2 Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the
Borrower, the Lender and their respective successors and
assigns, provided that (i) the Borrower may not assign or
transfer any of its rights or obligations hereunder without
the prior written consent of the Lender and (ii) the Lender
may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Borrower,
except to the extent permitted by the next succeeding
sentence. The Lender may assign any of its rights hereunder
to any of its wholly owned Subsidiaries or any financial
institution reasonably acceptable to MCCI; provided, that in
the event of any such assignment to a wholly owned
Subsidiary, the Lender signatory hereto shall remain liable
for the performance of all of the Lender's obligations
hereunder. In the event of any such assignment, all
references herein to the Lender shall, after notice thereof
to the Borrower, be deemed a reference to the assignee to
the extent of its interest.
10.3 Costs and Expenses. The Borrower agrees
to pay on demand (i) the reasonable costs and expenses of
the Lender in connection with the preparation, execution,
delivery, administration, modification and amendment of the
Loan Documents (including, without limitation, the
reasonable fees and expenses of counsel for the Lender with
respect thereto) and (ii) all costs and expenses of Lender
in connection with the enforcement of the Loan Documents
whether in any action, suit or litigation, any bankruptcy,
insolvency or other similar proceeding affecting creditors'
rights generally or otherwise (including, without
<PAGE>
<PAGE> 32
limitation, the reasonable fees and expenses of counsel for
the Lender with respect thereto).
10.4 Indemnification. The Borrower agrees to
indemnify, reimburse, defend and hold harmless the Lender
and its Affiliates and their respective officers, directors,
employees, agents and advisors (each, an "Indemnified
Party") for, from and against any and all demands, claims,
actions or causes of action, damages, losses, liabilities,
costs and expenses (including, without limitation,
reasonable fees and expenses of counsel for any such
Indemnified Party) that may be incurred by, asserted or
awarded against, resulting to or imposed on, any Indemnified
Party, directly or indirectly, in each case arising out of
or in connection with, or by reason of, or in connection
with the preparation for a defense of, any investigation,
litigation or proceeding arising out of the Lender's acting
as lender to the Borrower under this Agreement or as pledgee
under the Pledge Agreement, except to the extent such claim,
damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction
to have resulted from such Indemnified Party's gross
negligence or willful misconduct. The Borrower shall not
settle or compromise any claim, suit or proceeding with
respect to any Indemnified Party, or consent to the entry of
any judgment with respect thereto without the prior written
consent of the Lender.
10.5 No MCCI Guarantee, Etc. (a) The Lender
acknowledges that, unless MCCI elects (in its sole
discretion) to deliver a guarantee pursuant to paragraph (b)
below, MCCI is not a guarantor of, and shall not be deemed
to guarantee, any payment or other obligation under any Loan
extended to the Borrower hereunder or otherwise in respect
of this Agreement, except that MCCI is required to cause the
Borrower to comply with the negative covenants set forth in
Sections 7.1 and 7.3.
(b) MCCI at any time may, but shall have no
obligation to, guarantee the obligations of the Borrower
hereunder by delivering to the Lender a guarantee in
substantially the form of Exhibit C hereto. After delivery
of such guarantee, MCCI may not terminate such guarantee.
The effectiveness of MCCI's guarantee shall be subject to
the conditions precedent that (i) the Lender shall have
received the items referred to in paragraphs (d) through (g)
of Section 4.1 with respect to MCCI and (ii) the
representations and warranties contained in the first two
sentences of Section 5.1 and Sections 5.3 through 5.6 shall
be true and correct in all material respects as to MCCI, and
by delivering such guarantee, MCCI shall be deemed to have
<PAGE>
<PAGE> 33
made such representations and warranties as to MCCI to the
Lender on and as of the date of such delivery.
(c) The obligations of the parties and their
respective Affiliates under this Agreement and the other
Loan Documents are independent of any obligations that the
parties or their respective Affiliates may have to one
another under any other agreement or arrangement. Neither
the parties nor their respective Affiliates shall have any
right to set-off or reduce any amounts owing under this
Agreement or any other Loan Document by any amounts at any
time owing (or claimed to be owing) under any other
agreement or arrangement.
10.6 Further Assurances. The Borrower agrees
that at any time and from time to time upon the written
request of the Lender, the Borrower will execute and deliver
such further documents and do such further acts and things
as the Lender may reasonably request consistent with the
provisions hereof in order to effect the intent and purposes
of this Agreement.
10.7 Entire Agreement. This Agreement and the
other Loan Documents embody the entire agreement and
understanding between the parties relating to the subject
matter hereof and supersedes all prior agreements and
understandings relating to such subject matter; provided
that Section 7.11.3 of the Merger Agreement shall remain in
full force and effect. There are no representations,
warranties or covenants by the parties hereto relating to
such subject matter other than those expressly set forth in
this Agreement and any writings expressly required hereby.
10.8 Amendment; Waiver. This Agreement may
not be amended, changed, supplemented, waived or otherwise
modified except by an instrument in writing signed by the
party (or, in the case of Section 10.4, the Indemnified
Party) against whom enforcement is sought. The failure of
any party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations
hereunder, and any custom or practice of the parties at
variance with the terms hereof, shall not constitute a
waiver by such party of its right to exercise any such or
other right, power or remedy or to demand such compliance.
All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the
exercise or beginning of the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
<PAGE>
<PAGE> 34
10.9 Notices. All notices, requests, demands
or other communications required by or otherwise with
respect to this Agreement shall be in writing and shall be
deemed to have been duly given to any party when delivered
personally (by courier service or otherwise), when delivered
by telecopy and confirmed by return telecopy, or seven days
after being mailed by first-class mail, postage prepaid and
return receipt requested in each case to the applicable
addresses set forth below:
If to the Borrower:
MCCI Acquisitions, Inc.
c/o McCaw Cellular Communications, Inc.
5400 Carillon Point
Kirkland, Washington 98033
Attn: Mr. Tom A. Alberg
Telecopy: (206) 828-1835
and
McCaw Cellular Communications, Inc.
1150 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attn: Andrew A. Quartner, Esq.
Telecopy: (202) 223-9095
If to the Lender:
American Telephone and Telegraph Company
One Oak Way
Berkeley Heights, NJ 07922
Attn: Mr. Peter Rosoff
Telecopy: (908) 771-3540
and
American Telephone and Telegraph Company
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attn: H. John Hokenson, Esq.
Telecopy: (908) 221-7657
or to such other address as such party shall have designated
by notice so given to each other party.
10.10 Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall
be deemed to be an original, but all of which together shall
constitute one instrument. Each counterpart may consist of
<PAGE>
<PAGE> 35
a number of copies each signed by less than all, but
together signed by all, the parties hereto.
10.11 Headings. The name assigned this
Agreement and the section captions used herein are for
convenience of reference only and shall not affect the
interpretation or construction hereof. Unless otherwise
specified, (a) the terms "hereof", "herein" and similar
terms refer to this Agreement as a whole and (b) references
herein to Sections refer to sections of this Agreement.
10.12 Invalidity. If any part of this
Agreement is contrary to, prohibited by, or deemed invalid
under applicable laws or regulations, such provision shall
be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, but the remainder hereof
shall not be invalidated thereby and shall be given effect
so far as possible.
10.13 Governing Law. This Agreement and all
disputes hereunder shall be governed by and construed and
enforced in accordance with the internal laws of the State
of New York, without regard to principles of conflict of
laws. Each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court
for the Southern District of New York or any court of the
State of New York located in the City of New York in any
action, suit or proceeding arising in connection with this
Agreement, and agrees that any such action, suit or
proceeding shall be brought only in such court (and waives
any objection based on forum non conveniens or any other
objection to venue therein); provided, however, that such
consent to jurisdiction is solely for the purpose referred
to in this section and shall not be deemed to be a general
submission to the jurisdiction of said Courts or in the
State of New York other than for such purpose. The parties
hereby waive any right to a trial by jury in connection with
any such action, suit or proceeding.
10.14 Knowledge. The term "knowledge" or "best
knowledge" and any derivatives thereof when applied to any
party to this Agreement shall refer only to the actual
knowledge of that party (or in the case of a corporation,
partnership or other entity, the actual knowledge of its
executive officers), but no information known by any other
employee, or any attorney, accountant or other
representative, of such party shall be imputed to such
party.
<PAGE>
<PAGE> 36
IN WITNESS WHEREOF, the Lender and the Borrower
have executed this Agreement as of the date first above
written.
AMERICAN TELEPHONE AND
TELEGRAPH COMPANY
S.L. PRENDERGAST
By____________________________
Name: S.L. Prendergast
Title: Vice President & Treasurer
MCCI ACQUISITIONS, INC.
DONALD GUTHRIE
By_____________________________
Name: Donald Guthrie
Title: Senior Vice President
Agreed to, solely with
respect to Sections 7.1,
7.3 and 10.5:
McCAW CELLULAR
COMMUNICATIONS, INC.
DONALD GUTHRIE
By:____________________________
Name: Donald Guthrie
Title: Senior Vice President
EXECUTION COPY
$1,000,000,000
CREDIT AGREEMENT
Dated as of December 3, 1993
Among
McCAW CELLULAR COMMUNICATIONS, INC.
as Borrower
and
THE LENDERS NAMED HEREIN
as Lenders
and
TORONTO DOMINION (TEXAS), INC.
as Administrative Agent
and
THE TORONTO-DOMINION BANK,
PNC BANK NATIONAL ASSOCIATION,
and
BARCLAYS BANK PLC
as Arranging Agents
and
TORONTO DOMINION (TEXAS), INC.
as Collateral Agent
<PAGE>
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms................ 1-1
1.02 Computation of Time Periods.......... 1-37
1.03 Accounting Terms and Computations.... 1-37
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01 The Advances......................... 2-1
2.02 Making the Advances.................. 2-1
2.03 Fees................................. 2-4
2.04 Reduction of the Commitments;
Unavailable Commitments............ 2-4
2.05 Repayment............................ 2-7
2.06 Interest............................. 2-7
2.07 Prepayments.......................... 2-8
2.08 Interest Rate Determination.......... 2-10
2.09 Increased Costs, Etc................. 2-10
2.10 Payments and Computations............ 2-11
2.11 Taxes................................ 2-13
2.12 Sharing of Payments, Etc............. 2-15
2.13 Use of Proceeds...................... 2-16
2.14 Evidence of Indebtedness............. 2-17
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial
Borrowing.......................... 3-1
3.02 Conditions Precedent to Each
Borrowing.......................... 3-6
3.03 Conditions Precedent to Certain
Borrowings......................... 3-7
3.04 Determinations Under Sections 3.01,
3.02 and 3.03...................... 3-7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the
Borrower........................... 4-1<PAGE>
<PAGE> ii
Section Page
(a) Organization of the Borrower.... 4-1
(b) Organization of the Subsidiaries
of the Borrower and
Minority Entities............. 4-1
(c) Compliance with Law............. 4-2
(d) Approvals....................... 4-3
(e) Legal Effect.................... 4-3
(f) Financial Information........... 4-3
(g) Disclosure...................... 4-4
(h) Material Litigation............. 4-4
(i) Regulation U.................... 4-5
(j) ERISA Plans..................... 4-5
(k) No Reportable Event............. 4-5
(l) Plan Funding.................... 4-5
(m) Welfare Plan Costs.............. 4-5
(n) No Catastrophic Events.......... 4-6
(o) Compliance with Environmental
Law........................... 4-6
(p) No Burdensome Agreements........ 4-6
(q) Taxes........................... 4-6
(r) Investment Company Act of 1940.. 4-6
(s) Solvency........................ 4-7
(t) Condition of System............. 4-7
(u) Fees............................ 4-7
(v) Public Utility Holding Company
Act........................... 4-7
(w) Capital Stock................... 4-7
(x) No Limitations on Dividends..... 4-8
(y) Licenses........................ 4-8
(z) Regulation of the Lenders....... 4-9
(aa) Existing Indebtedness........... 4-9
(bb) Material Agreements............. 4-9
(cc) Ownership....................... 4-9
(dd) Title to Property............... 4-10
(ee) Calculations.................... 4-10
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants................ 5-1
(a) Compliance with Laws, Etc....... 5-1
(b) Payment of Taxes, Etc........... 5-1
(c) Maintenance of Insurance........ 5-1
(d) Preservation of Corporate
Existence, Etc................ 5-2<PAGE>
<PAGE> iii
Section Page
(e) Visitation Rights............... 5-2
(f) Keeping of Books................ 5-2
(g) Maintenance of Properties, Etc.. 5-2
(h) Performance of Material
Agreements.................... 5-3
(i) Transactions with Affiliates.... 5-3
(j) Interest Rate Hedging........... 5-4
(k) Simultaneous Borrowings,
Prepayments and Commitment
Reductions ................... 5-4
(l) Reporting Requirements.......... 5-4
(m) Maintenance of Corporate
Separateness.................. 5-9
(n) Ownership of Unrestricted
Subsidiaries.................. 5-10
5.02 Negative Covenants................... 5-10
(a) Liens, Etc...................... 5-10
(b) Indebtedness.................... 5-11
(c) Mergers, Etc.................... 5-13
(d) Sales, Etc. of Assets........... 5-14
(e) Investments in Other Persons.... 5-15
(f) Dividends, Etc.................. 5-18
(g) Change in Nature of Business.... 5-19
(h) Compliance with ERISA........... 5-20
(i) Plan Amendments................. 5-20
(j) Accounting Changes.............. 5-20
(k) Prepayments, Amendments,
Etc. of Debt.................. 5-20
(l) Amendments, Etc. ............... 5-20
(m) Transfer of LIN Shares.......... 5-21
(n) Negative Pledge................. 5-21
(o) Preferred Stock................. 5-22
(p) Tax Consolidation............... 5-22
(q) Management Fees................. 5-22
(r) Holding Company Status.......... 5-23
(s) Minority Entities............... 5-23
(t) Unrestricted Subsidiaries....... 5-24
5.03 Financial Covenants.................. 5-24
(a) Debt-to-Pops Ratio.............. 5-24
(b) Cash Flow to
Debt Service Ratio............ 5-24
(c) Debt to Cash Flow Ratio......... 5-25
(d) Incurrence Test................. 5-26
<PAGE>
<PAGE> iv
Section Page
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default.................... 6-1
ARTICLE VII
THE AGENTS
7.01 Authorization and Action............. 7-1
7.02 Agents' Reliance, Etc................ 7-1
7.03 TD (Texas), Toronto-Dominion,
PNC and Barclays and Affiliates.... 7-2
7.04 Lender Credit Decision............... 7-2
7.05 Indemnification...................... 7-3
7.06 Successor Collateral Agent or
Administrative Agent; Successor
Arranging Agents................... 7-4
7.07 The Managing Agents and Lead
Managers........................... 7-5
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc...................... 8-1
8.02 Notices, Etc......................... 8-2
8.03 No Waiver; Remedies.................. 8-3
8.04 Costs; Expenses...................... 8-3
8.05 Right of Set-off..................... 8-5
8.06 Binding Effect; Survival............. 8-5
8.07 Assignments and Participations....... 8-6
8.08 Governing Law........................ 8-10
8.09 Execution in Counterparts............ 8-10
8.10 Confidentiality of Financial
Information........................ 8-10
8.11 Waiver of Jury Trial................. 8-11
<PAGE>
<PAGE> v
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Existing Indebtedness
Schedule III - Subsidiaries, Minority Entities and Cellular
Entities
Schedule IV - Material Agreements
Schedule V - Terms of Subordination
Schedule VI - Disclosed Litigation
Schedule VII - Approvals
Schedule VIII - ERISA Plans
Schedule IX - Limitations on Dividends
Schedule X - Existing Liens
<PAGE>
<PAGE> vi
EXHIBITS
Exhibit A - Form of Notice of Borrowing
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Pledge Agreement
Exhibit E - Form of Amendment
Exhibit F - Form of Intercreditor Agreement
Exhibit G - Form of Solvency Certificate
Exhibit H - Form of Opinion of Senior Vice President
Law to the Borrower
Exhibit I - Form of Opinion of FCC counsel to the
Borrower
Exhibit J-1 - Form of Opinion of Regulatory counsel to
the Borrower
Exhibit J-2 - Form of Opinion of Regulatory counsel to
the Borrower
Exhibit K - Form of Opinion of special counsel to the
Agents
<PAGE>
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 3, 1993 among
McCAW CELLULAR COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower"), the banks and financial institutions (the
"Lenders") listed on the signature pages hereof, TORONTO
DOMINION (TEXAS), INC. ("TD (Texas)"), as administrative agent
(together with any successor appointed pursuant to Article
VII, the "Administrative Agent") for the Lenders hereunder,
THE TORONTO-DOMINION BANK ("Toronto-Dominion"), PNC BANK
NATIONAL ASSOCIATION ("PNC") and BARCLAYS BANK PLC
("Barclays"), as arranging agents (together with any
successors appointed pursuant to Article VII, the "Arranging
Agents") for the Lenders hereunder, and TD (TEXAS), as
collateral agent (together with any successors appointed
pursuant to Article VII, the "Collateral Agent"). Capitalized
terms used in this Agreement are defined in Article I.
PRELIMINARY STATEMENTS
(1) The Borrower intends to redeem and repay in full
the Subject Debt.
(2) The Borrower also intends, from time to time, to
finance the acquisition of entities whose principal assets
consist of MSA Franchise Interests and/or RSA Franchise
Interests, to construct plant and operating systems for
Cellular Systems or RCC Systems and to purchase RCC Assets or
to make loans to MSA Franchise Interests or
Geographically-Related RSA Franchise Interests, all as more
fully set forth herein.
(3) The Borrower has requested that the Lenders lend
up to $1,000,000,000 to the Borrower to enable the Borrower to
redeem and repay in full the Subject Debt and to accomplish
the acquisitions, refinancings and permitted activities
described herein. The Lenders have indicated their
willingness to lend such amounts on the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein, the
parties hereto hereby agree as follows:
<PAGE>
<PAGE> 1-1
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in
this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Adjusted CD Rate" means, for any Interest Period for
each Adjusted CD Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the sum of:
(a) the rate per annum obtained by dividing (i)
the rate of interest determined by the Administrative
Agent to be the average (rounded upward to the
nearest whole multiple of 1/100 of 1% per annum, if
such average is not such a multiple) of the consensus
bid rate determined by each of the Reference Lenders
for the bid rates per annum, at 9:00 A.M. (New York
City time) (or as soon thereafter as practicable) on
the first day of such Interest Period, of New York
certificate of deposit dealers of recognized standing
selected by such Reference Lender for the purchase at
face value of certificates of deposit of such
Reference Lender in an amount substantially equal to
such Reference Lender's Adjusted CD Rate Advance
comprising part of such Borrowing and with a maturity
equal to such Interest Period, by (ii) a percentage
equal to 100% minus the Adjusted CD Rate Reserve
Percentage (as defined below) for such Interest
Period, plus
(b) the Assessment Rate (as defined below) for
such Interest Period.
"Adjusted CD Rate Advance" means an Advance that
bears interest as provided in Section 2.06(b).
"Adjusted CD Rate Reserve Percentage" for the
Interest Period for each Adjusted CD Rate Advance
comprising part of the same Borrowing means the reserve
percentage applicable on the first day of such Interest
Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve <PAGE>
<PAGE> 1-2
System in New York City with deposits exceeding one
billion Dollars with respect to liabilities consisting of
or including (among other liabilities) Dollar nonpersonal
time deposits in the United States with a maturity equal
to such Interest Period. The "Assessment Rate" for the
Interest Period for each Adjusted CD Rate Advance
comprising part of the same Borrowing means the annual
assessment rate estimated by the Administrative Agent on
the first day of such Interest Period for determining the
then current annual assessment payable by PNC to the
Federal Deposit Insurance Corporation (or any successor)
for insuring Dollar deposits of PNC in the United States.
The Adjusted CD Rate for each Interest Period for each
Adjusted CD Rate Advance comprising part of the same
Borrowing shall be determined by the Administrative Agent
on the basis of applicable rates furnished to and received
by the Administrative Agent from the Reference Lenders on
the first day of such Interest Period, subject, however,
to the provisions of Sections 2.02(b) and 2.08.
"Adjusted Combined Cash Flow" or "ACCF" means, as of
any date, unless otherwise provided in this Agreement,
Combined Cash Flow for the two most recent fiscal quarters
ended on or prior to such date, as set forth in the
Compliance Certificate for such most recent fiscal
quarter, multiplied by two, adjusted to
(a) include (without duplication):
(i) the Attributable Share (measured as of
the last day of the second such fiscal quarter)
of the Cash Flow for such two fiscal quarters of
each Cellular Business that was either a
Restricted Subsidiary or a Qualified Minority
Entity on the last day of such second fiscal
quarter; and
(ii) the Attributable Share (measured as of
the last day of the second such fiscal quarter)
of the Cash Flow for such two fiscal quarters of
any other business or assets that were acquired
by the Borrower or by a Restricted Subsidiary
(so long as such business or assets are not
designated as an Unrestricted Subsidiary) during
such two fiscal quarters; and
(b) exclude (without duplication) the Cash Flow
attributable to any interest in a Restricted
Subsidiary or a Qualified Minority Entity, or any <PAGE>
<PAGE> 1-3
other business or asset, that was disposed of by the
Borrower or a Restricted Subsidiary during such two
fiscal quarters.
"Adjusted Combined Debt" or "ACD" means, for any date
of determination, Combined Debt on such date less the
product of RCC Operating Cash Flow of the Borrower and the
Restricted Subsidiaries for the two fiscal quarters set
forth in the most recent Compliance Certificate delivered
by the Borrower, multiplied by ten.
"Administrative Agent" has the meaning specified in
the recital of parties to this Agreement.
"Administrative Agent's Account" means the account of
the Administrative Agent specified in Schedule I or as
otherwise designated in a written notice by the
Administrative Agent to the Borrower, the Lenders and the
Agents.
"Advance" has the meaning specified in Section 2.01.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by
or is under common control with, such Person or is a
spouse of or any other relative (by blood, adoption or
marriage) of such Person within the third degree or is a
partner, member, director, officer or employee of such
Person. For purposes of this definition, the term
"control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10%
or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such
Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agents" means the Administrative Agent, the
Arranging Agents and the Collateral Agent.
"Agreement Value" has the meaning specified in the
Pledge Agreement.
"Amendment" has the meaning specified in Section
3.01(f)(vii).
"Amortization Commencement Date" means December 31,
1995.
<PAGE>
<PAGE> 1-4
"Amortization Date" has the meaning specified in
Section 2.04(b)(i).
"Applicable Lending Office" means, for each Lender,
such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the
case of an Adjusted CD Rate Advance, and such Lender's
LIBO Lending Office in the case of a LIBO Rate Advance.
"Applicable Margin" means, for each Advance, a
percentage per annum determined by the ratio of
(a) Combined Debt (CD) less Cash Equivalents (determined
as set forth below) to (b) Adjusted Combined Cash Flow
(ACCF) set forth below:
LIBO Adjusted Base
Rate CD Rate Rate
Ratio of CD/ACCF Advances Advances Advances
6.0 to 1 (or greater) 1-5/8 1-3/4 5/8
5.5 to 1 to 6.0 to 1 1-1/2 1-5/8 1/2
5.0 to 1 to 5.5 to 1 1-1/4 1-3/8 3/8
4.5 to 1 to 5.0 to 1 1-1/8 1-1/4 1/8
less than 4.5 to 1 7/8 1 -
The Applicable Margin will be determined by reference to
the amount of Adjusted Combined Cash Flow set forth in the
most recent Compliance Certificate delivered by the
Borrower from time to time and by reference to the amounts
of Combined Debt and Cash Equivalents set forth in the
most recent certificate of a Financial Officer of the
Borrower containing such information delivered to the
Administrative Agent not less than three days before any
date of determination. For purposes of this definition,
Cash Equivalents shall mean the sum of (a) Cash
Equivalents owned by the Borrower and the wholly-owned
Restricted Subsidiaries plus (b) the Attributable Share of
the Cash Equivalents of each other Restricted Subsidiary
plus (c) the Attributable Share of the aggregate Cash
Equivalents of the Qualified Minority Entities, but only
to the extent that such amount of Cash Equivalents does
not exceed the Attributable Share of the Combined Debt of
the Qualified Minority Entities.
"Approved Accountants" means any of Arthur Andersen &
Co., Price Waterhouse, KPMG Peat Marwick, Deloitte &
Touche, Coopers & Lybrand and Ernst & Young.
<PAGE>
<PAGE> 1-5
"Approved Asset Sales" means all sales, transfers and
other dispositions of assets that have been approved in
writing by the Lenders and the 1990 Lenders.
"Approved Cellular Assets" means (a) any Franchise
Interest (i) with respect to an MSA or RSA in which the
Borrower or LIN had, on February 26, 1990, a Franchise
Interest, if the Cellular Entity in which such Franchise
Interest is being acquired is (or would become after
giving effect to the acquisition of such Franchise
Interest) a Restricted Subsidiary; (ii) with respect to
any of the 25 largest MSAs (measured at the time of
acquisition), if the Cellular Entity serving such MSA is
(or would become after giving effect to the acquisition of
such Franchise Interest) a Restricted Subsidiary; (iii)
with respect to an MSA or RSA that is located adjacent to
an MSA in which the Borrower or LIN had, on February 26,
1990, a Franchise Interest, if the Cellular Entity serving
such MSA or RSA is (or would become after giving effect to
the acquisition of such Franchise Interest) a Restricted
Subsidiary; (iv) with respect to any MSA or RSA in a group
of adjacent MSAs and RSAs that have an aggregate number of
MSA Pops at least equal to the number of MSA Pops for the
15th largest MSA (measured at the time of acquisition), if
after giving effect to any such acquisition the Borrower
and its Restricted Subsidiaries would own at least 50% of
the equity interests having the power to vote to elect the
Board of Directors or other governing body of each
Cellular Entity in such group; or (v) with respect to MSAs
and RSAs that are part of a Cellular Group, if Cellular
Entities representing at least 80% of the Total Cellular
Group Pops for such Cellular Group are (or would become
after giving effect to the acquisition of such Franchise
Interest) Restricted Subsidiaries; and (b) cellular
equipment acquired by any Cellular Entity or Cellular
Group referred to in clauses (a)(ii)-(v) above, to the
extent acquired in connection with the acquisition of such
Franchise Interests.
"Arranging Agents" has the meaning specified in the
recital of parties to this Agreement.
"Asset Sale Balance" means the sum of
(a) $33,846,396.75 and (b) 25% of the amount by which the
aggregate Net Cash Proceeds of all Permitted Dispositions
that occur after the date hereof exceed the aggregate
purchase price of all Approved Cellular Assets acquired by
the Borrower and the Restricted Subsidiaries after the
date hereof.
<PAGE>
<PAGE> 1-6
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit B hereto.
"AT&T" means American Telephone and Telegraph
Company.
"AT&T Merger Agreement" means the Agreement and Plan
of Merger dated August 16, 1993 among AT&T, Ridge and the
Borrower, as in effect on the date hereof.
"Attributable Share" means, for purposes of
determining the Pops, income, Indebtedness or other
measured characteristic of any Person, the percentage
ownership interest in such Person held directly or
indirectly by the Borrower (other than any such ownership
interest held by an Unrestricted Subsidiary).
"Available Commitment" means, for any Lender, the
amount by which such Lender's Commitment exceeds such
Lender's Unavailable Commitment.
"Bank Credit Facilities" means this Agreement and the
1990 Credit Agreement.
"Barclays" has the meaning specified in the recital
of parties to this Agreement.
"Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate
per annum shall at all times be equal to the rate of
interest announced publicly by Toronto-Dominion in New
York, New York, from time to time, as its prime rate;
provided that, with respect to any Advance that is made
during the period from December 15th of any year through
January 15th of the following year, such rate per annum
for such Advance during such period (regardless of whether
the Interest Period for such Advance shall extend beyond
such period) shall at all times be equal to the higher of
such prime rate and a rate equal to 1/2 of 1% per annum
above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears
interest as provided in Section 2.06(c) and each payment
or advance made by any Agent or any Lender under Section
8.04(d).
<PAGE>
<PAGE> 1-7
"Board of Directors" of any Person means the board of
directors of such Person or any duly authorized committee
of such board.
"Borrower" has the meaning specified in the recital
of parties to this Agreement.
"Borrower's Account" means the account of the
Borrower at a depository of the Borrower's choosing and
otherwise as designated by the Borrower in a written
notice to the Administrative Agent.
"Borrowing" means a borrowing consisting of Advances
of the same Type made on the same day by the Lenders.
"BT" means British Telecom USA Holdings, Inc.
"BT Purchase Agreement" means the Purchase Agreement
dated January 19, 1989 between the Borrower and BT, as
amended from time to time.
"BT Shareholders Agreement" means the Shareholders
Agreement dated as of June 20, 1989 among the Borrower,
BT, Craig O. McCaw, John E. McCaw, Jr., Bruce R. McCaw and
Keith W. McCaw, as amended from time to time.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City
and, if the applicable Business Day relates to any LIBO
Rate Advances, on which dealings are carried on in the
London interbank market.
"Capital Expenditures" means, for any period, the sum
of (without duplication) (a) all expenditures during such
period for real property or improvements and equipment
utilized in a Cellular Business and other business
operations, or for replacements or substitutions therefor
or additions thereto, that have a useful life of more than
one year plus (b) the entire principal amount of any
Indebtedness assumed or incurred in connection with any
such expenditures.
"Capitalized Leases" has the meaning specified in
clause (e) of the definition of Indebtedness.
"Cash Equivalents" means, to the extent owned free
and clear of all Liens: (a) Dollars on hand and in <PAGE>
<PAGE> 1-8
insured demand deposit accounts; (b) obligations issued or
unconditionally guaranteed by the United States or any
agency thereof; (c) certificates of deposit or bankers'
acceptances that become payable within one year after the
date of issuance and that are issued by (i) any Lender or
(ii) any other commercial bank organized under the laws of
the United States or any state thereof or any other
country that is a member of the OECD or any political
subdivision of such country and having combined capital
and surplus of at least $1,000,000,000; (d) commercial
paper with a rating of at least "Prime-1" by Moody's
Investors Service, Inc. or "A-1" by Standard & Poor's
Corporation; and (e) repurchase and reverse repurchase
agreements with any securities dealer with respect to
securities of the types specified in clauses (a) through
(d) in respect of an aggregate principal amount of
securities not in excess of $50,000,000 and that are fully
collateralized by any of the securities specified in
clauses (a) through (d).
"Cash Flow" or "CF" means, for any Person for any
period, the sum of:
(a) the Net Income of such Person for such
period; and
(b) the sum of the following (to the extent
deducted in the computation of such Net Income):
(i) depreciation expense;
(ii) amortization expense;
(iii) Interest Expense;
(iv) charges for reserves for deferred
taxes; and
(v) other non-cash items.
"CD Lending Office" means, for any Lender, the office
of such Lender specified as its "CD Lending Office"
opposite its name in Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a
Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as
such Lender may from time to time specify to the Borrower
and the Administrative Agent.
<PAGE>
<PAGE> 1-9
"Cellular Assets" means each Cellular System or
Franchise Interest owned directly or indirectly by the
Borrower or any Restricted Subsidiary.
"Cellular Business" means the business of operating
one or more Cellular Systems and other businesses directly
related thereto.
"Cellular Entity" means a Cellular Licensee, Cellular
Permittee or a Cellular Tentative Selectee.
"Cellular Group" means any group of MSAs and RSAs
that is operated as a single cellular cluster on a basis
comparable to the basis on which the Borrower has operated
its cellular clusters prior to the date hereof and that
has Total Cellular Group Pops at least equal to the number
of MSA Pops for the 15th largest MSA (measured at the time
of acquisition), if either each MSA and RSA within such
group is within 25 miles of another MSA or RSA in such
group or the Borrower demonstrates to the satisfaction of
the Arranging Agents that it will operate such cellular
group as a single cellular cluster.
"Cellular Licensee" means any Person that is
authorized by the FCC to own, control and operate a
Cellular System in an MSA or an RSA.
"Cellular Permittee" means a Person that is
authorized by the FCC to construct a Cellular System in an
MSA or an RSA.
"Cellular System" means a domestic public cellular
radio telecommunications service system licensed under
Part 22 of the FCC's Rules.
"Cellular Tentative Selectee" means a Person
designated in a public notice issued by the FCC to become
a Cellular Permittee unless and until such designation
shall have been reversed or revoked by the FCC.
"Class A Shares" has the meaning specified in
Section 4.01(w).
"Class B Shares" has the meaning specified in
Section 4.01(w).
"Code" means the Internal Revenue Code of 1986, as
amended.
<PAGE>
<PAGE> 1-10
"Collateral" means all "Collateral" referred to in
the Pledge Agreement and all other property that is
subject to any Lien in favor of the Agents or the Lenders.
"Collateral Agent" has the meaning specified in the
recital of parties to this Agreement.
"Combined Cash Flow" or "CCF" means, for any period,
the sum of (without duplication):
(a) Consolidated Cash Flow of the Borrower and
the wholly-owned Restricted Subsidiaries for such
period; and
(b) the Attributable Share of the Cash Flow of
each other Restricted Subsidiary and each Qualified
Minority Entity for such period.
"Combined Debt" means, for any date of determination,
the sum of (without duplication):
(a) Indebtedness of the Borrower; and
(b) the Attributable Share of the Indebtedness
of each Restricted Subsidiary and each Qualified
Minority Entity; provided that Indebtedness owing by
a Restricted Subsidiary or a Qualified Minority
Entity to the Borrower or another Restricted
Subsidiary or by the Borrower to a Restricted
Subsidiary shall not be included in this calculation.
"Commitment" means for each Lender the amount set
forth opposite such Lender's name in Schedule I hereto
under the caption "Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set
forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c), as the
same may be reduced pursuant to Section 2.04(a) or (b).
"Communications Assets" means Cellular Assets, RCC
Assets and other telephone or telecommunications assets.
"Compliance Certificate" means a certificate of a
Financial Officer of the Borrower, in substantially the
form of Exhibit C hereto, to be delivered pursuant to
Section 5.01(l)(iii) and (iv).
<PAGE>
<PAGE> 1-11
"Consolidated", with respect to any Person and any
specified Subsidiaries, refers to the consolidation of
financial statements of such Person and such Subsidiaries
in accordance with GAAP.
"Core Properties" means each of the Restricted
Subsidiaries that owns Franchise Interests in the
following MSAs: Seattle, Washington; Tacoma, Washington;
Portland, Oregon; Tampa, Florida; Jacksonville, Florida;
Orlando, Florida; West Palm Beach, Florida; and Miami,
Florida.
"Default" means any Event of Default or any event
that would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
"Designated Party" has the meaning specified in the
Shareholders Agreement as in effect on February 26, 1990.
"Disclosed Litigation" has the meaning specified in
Section 3.01(c).
"Dollars" and the sign "$" each mean lawful money of
the United States of America.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its
"Domestic Lending Office" set forth opposite its name in
Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"Economic Ownership" means for purposes of
determining the percentage of Voting Stock legally and
beneficially owned by AT&T (a) all Voting Stock of which
AT&T is the sole legal and beneficial owner and (b) a
portion of the Voting Stock legally and beneficially owned
by a Majority Entity equal to the percentage ownership
interest that AT&T holds directly or indirectly in such
Majority Entity. Notwithstanding any other provision set
forth herein, Voting Stock legally or beneficially owned
by an entity that is not a Majority Entity (other than
AT&T) shall not be included in the determination of
Economic Ownership.
"Eligible Assignee" means (a) a commercial bank
organized under the laws of the United States, or any
state thereof, and having total assets in excess of
$500,000,000 and a combined capital and surplus of at
least $100,000,000; (b) a savings and loan association or <PAGE>
<PAGE> 1-12
savings bank organized under the laws of the United
States, or any state thereof, and having total assets in
excess of $500,000,000 and a combined capital and surplus
of at least $100,000,000; (c) a commercial bank organized
under the laws of any other country that is a member of
the OECD or has concluded special lending arrangements
with the International Monetary Fund associated with its
General Arrangements to Borrow or of the Cayman Islands,
or a political subdivision of any such country, and having
total assets in excess of $500,000,000 and a combined
capital and surplus of at least $100,000,000; provided
that such bank is acting through a branch or agency
located in the United States; (d) the central bank of any
country that is a member of the OECD; (e) a finance
company, insurance company or other financial institution
or fund (whether a corporation, partnership or other
entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of
its business, and having total assets in excess of
$500,000,000 and (other than in the case of a fund) a
combined capital and surplus of at least $100,000,000; and
(f) any Affiliate of any Lender acceptable to the
Borrower; provided that such acceptance by the Borrower
shall not be unreasonably withheld (and shall be deemed to
be given if the Borrower fails to respond to a written
request therefor within ten Business Days after its
receipt thereof).
"Environmental Law" means any law, rule, regulation,
order, writ, judgment, injunction, decree, determination
or award relating to the environment, health or safety or
to the release of any materials into the environment,
including, without limitation, the Clean Air Act, as
amended, the Clean Water Act of 1977, as amended, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, and the Resource
Conservation and Recovery Act of 1976, as amended.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" of any Person means any other
Person that for purposes of Title IV of ERISA is a member
of such Person's controlled group, or under common <PAGE>
<PAGE> 1-13
control with such Person, within the meaning of Section
414 of the Code and the regulations promulgated and
rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day
notice requirement with respect thereto has been waived by
the PBGC; (b) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to
in Section 4041(e) of ERISA); (c) the cessation of
operations at a facility in the circumstances described in
Section 4068(f) of ERISA; (d) the withdrawal by the
Borrower or an ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (e)
the failure by the Borrower or any ERISA Affiliate to make
a payment to a Plan required under Section 302(f)(1) of
ERISA which Section imposes a lien for failure to make
required payments; (f) the adoption of an amendment to a
Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution
by the PBGC of proceedings to terminate a Plan, pursuant
to Section 4042 of ERISA, or the occurrence of any event
or condition that might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment
of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned
to that term in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to
time.
"Events of Default" has the meaning specified in
Section 6.01.
"Excess Cash Flow" means, for any fiscal year,
Combined Cash Flow for such fiscal year less (without
duplication) (a) Pro Forma Combined Debt Service for the
next succeeding fiscal year determined on the basis of the
outstanding principal balance of Combined Debt as of the
first day of such next succeeding fiscal year, (b)
projected Capital Expenditures, projected costs to be
incurred in connection with any permitted acquisition of
Franchise Interests and RCC Assets and loans that are
permitted by Section 5.02(e) that the Borrower expects to
incur during the next succeeding fiscal year (projected in
good faith by a Financial Officer of the Borrower and <PAGE>
<PAGE> 1-14
set forth in a certificate delivered to the Lenders
pursuant to Section 5.01(l)(iv)), (c) the amount reserved
for deferred taxes during such fiscal year,
(d) expenditures for, or cash losses with respect to,
extraordinary items during such fiscal year and (e)
$100,000,000.
"Excluded Sale" has the meaning assigned in Section
2.04(b)(iii).
"Existing Indebtedness" means the Indebtedness of the
Borrower and the Restricted Subsidiaries as of the date
hereof, as set forth in Schedule II hereto.
"Facility" means the aggregate amount of the Lenders'
Commitments.
"FCC" means the Federal Communications Commission, or
any successor agency or entity performing substantially
the same functions.
"FCC License" means any mobile telephone, cellular
telephone, microwave or other communications license,
permit, certificate of compliance, franchise, approval or
authorization granted or issued by the FCC for control,
ownership, construction or operation of a Cellular System.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the
average of the quotations for such day for such
transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing
selected by it.
"Final Maturity Date" means the earliest of (a) March
31, 2000, (b) the final maturity date of the 1990 Credit
Agreement and (c) the date on which the Commitments of the
Lenders have been reduced to zero.
"Final Order" means an order, license, permit,
consent, approval or other authorization of a Regulatory
Authority that is no longer subject to reconsideration or <PAGE>
<PAGE> 1-15
review by such Regulatory Authority or by any court or
administrative body.
"Financial Information" has the meaning specified in
Section 8.10.
"Financial Officer" means, as to any Person, the
chief executive officer, the chief financial officer, any
senior vice president of finance, the treasurer or the
controller of that Person.
"First-Tier Restricted Subsidiary" means any
Restricted Subsidiary any of the equity interests in which
are registered in the name of the Borrower or otherwise
directly owned by the Borrower.
"Franchise" means a franchise, permit or license
(including, without limitation, an FCC License),
designation (including, without limitation, as a Cellular
Tentative Selectee) or certificate granted by the United
States or any other country or state or a city, town,
county or other municipality (to the extent subject to
regulation thereby), public utility commission or public
service commission, power company or any other regulatory
authority pursuant to which a Person has the right to own,
control, construct or operate a Cellular System or RCC
System.
"Franchise Interest" means a direct or indirect
ownership interest in any Person that is a Cellular
Entity.
"GAAP" has the meaning specified in Section 1.03.
"Geographically-Related RSA" means an RSA located
adjacent to or within 25 miles of an MSA Cellular System
controlled by the Borrower or a Subsidiary.
"Hazardous Materials" means all materials subject to
any Environmental Law, including, without limitation,
materials listed in 49 C.F.R. Section 172.101, materials defined
as hazardous pursuant to Section 101(14) of the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, flammable, explosive or
radioactive materials, hazardous or toxic wastes or
substances, petroleum or petroleum distillates or asbestos
or material containing asbestos.
<PAGE>
<PAGE> 1-16
"Hedge Agreement" means interest rate swap, cap,
collar, ceiling, hedge or other interest rate protection
agreement designed to hedge against fluctuations in
interest rates.
"Holdings" means MMM Holdings, Inc., a Delaware
corporation and a direct wholly-owned Subsidiary of the
Borrower.
"Indebtedness" of any Person means (without
duplication):
(a) all indebtedness of such Person for
borrowed money;
(b) all obligations of such Person for the
deferred purchase price of capital assets (including
amounts owed to sellers of Franchise Interests,
Cellular Systems, RCC Franchise Interests or RCC
Systems for the acquisition thereof);
(c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments
(other than performance bonds, letters of credit and
similar undertakings in connection with the
construction, development or operation of a business,
to the extent such undertakings do not secure an
obligation for borrowed money or the deferred
purchase price of property or services);
(d) all indebtedness created or arising under
any conditional sale or other title retention
agreement with respect to property acquired by such
Person (even though the rights and remedies of the
seller or lender under such agreement in the event of
default are limited to repossession or sale of such
property);
(e) all obligations of such Person as lessee
under leases that have been or should be, in
accordance with GAAP, recorded as capital leases
("Capitalized Leases"), to the extent properly
classified as a liability on the balance sheet of
such Person;
(f) all obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or
similar facilities (to the extent not included in
clause (c) above);
<PAGE>
<PAGE> 1-17
(g) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for
value any capital stock of such Person or any
warrants, rights or options to acquire such capital
stock, which obligations shall be valued, in the case
of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus
accrued and unpaid dividends and, in the case of
other such obligations, at the amount that, in light
of all the facts and circumstances existing at the
time of determination, can reasonably be expected to
become payable;
(h) all Indebtedness referred to in clauses (a)
through (g) above guaranteed directly or indirectly
by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to
pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss,
(iii) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay
for property or services irrespective of whether such
property is received or such services are rendered)
or (iv) otherwise to assure a creditor against loss;
and
(i) all Indebtedness referred to in clauses (a)
through (g) above secured by (or for which the holder
of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts
and contract rights) owned by such Person, even
though such Person has not assumed or become liable
for the payment of such Indebtedness.
"Indemnified Party" has the meaning specified in
Section 8.04(b).
"Insufficiency" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within
the meaning of Section 4001(a)(18) of ERISA.
"Intercreditor Agreement" has the meaning specified
in Section 3.01(f)(viii).
<PAGE>
<PAGE> 1-18
"Interest Expense" means, for any period, interest
expense for such period, including, without limitation,
imputed interest on Capitalized Leases.
"Interest Period" means, for each Advance comprising
part of the same Borrowing, the period commencing on the
date of such Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing
on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected
by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be (a) in the
case of a LIBO Rate Advance, one, two, three or six
months, and, subject to clause (v) below, nine or twelve
months, (b) in the case of an Adjusted CD Rate Advance,
30, 60, 90 or 180 days and (c) in the case of a Base Rate
Advance, any period up to 30 days (or, in the case of any
payment or advance made by any Agent or any Lender under
Section 8.04(d), a period equal to 30 days), as the
Borrower may, upon notice received by the Administrative
Agent not later than 11:00 A.M. (New York City time) on
the third Business Day (in the case of a LIBO Rate Advance
having an Interest Period of six months or less), the
fifth Business Day (in the case of a LIBO Rate Advance
having an Interest Period of nine months or twelve
months), the second Business Day (in the case of an
Adjusted CD Rate Advance) or the Business Day (in the case
of a Base Rate Advance) prior to the first day of such
Interest Period, select; provided, however, that:
(i) the Borrower may not select any Interest
Period for any Advance that ends after any
Amortization Date unless, after giving effect to such
selection, the aggregate unpaid principal amount of
Advances owing to each Lender and having Interest
Periods that end on or after such Amortization Date
shall be equal to or less than the amount to which
the Commitment of such Lender is automatically
reduced on such Amortization Date pursuant to Section
2.04(b)(i) and the principal amount of Advances due
and payable on and prior to such Amortization Date;
(ii) the Borrower may, subject to Section
2.02(b)(i), make more than one Borrowing on any
Business Day, but Interest Periods commencing on the
same date for Advances comprising part of the same
Borrowing shall be of the same duration;
<PAGE>
<PAGE> 1-19
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day; provided, however, that, in the case of
any Interest Period for a LIBO Rate Advance, if such
extension would cause the last day of such Interest
Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on
the next preceding Business Day;
(iv) whenever the first day of any Interest
Period occurs on a day of an initial calendar month
for which there is no numerically corresponding day
in the calendar month that succeeds such initial
calendar month by the number of months equal to the
number of months in such Interest Period, such
Interest Period shall end on the last Business Day of
such succeeding calendar month; and
(v) with respect to LIBO Rate Advances, the
Borrower shall not be entitled to elect an Interest
Period having a duration of nine months or twelve
months if, by close of business (New York City time)
on the third Business Day prior to the first day of
such Interest Period, any Lender notifies the
Administrative Agent (which shall deliver a copy of
such notice to the Borrower) that such Lender would
be unable to obtain funding for, or that the LIBO
Rate will not reflect the cost to such Lender of
funding or maintaining, the LIBO Rate Advance to be
made by such Lender for the period selected by the
Borrower and any such Advances made by the Lenders on
such first day of the Interest Period shall be Base
Rate Advances; following receipt of such notice the
Borrower's right to select Interest Periods for LIBO
Rate Advances having a duration of nine months or
twelve months shall be suspended until such Lender
subsequently notifies the Administrative Agent that
the circumstances causing such suspension no longer
exist.
"Investment" in any Person means any loan or advance
to, any purchase or other acquisition of any capital
stock, warrants, rights, options, obligations or other
securities of, any capital contribution to or any other
investment in such Person, including, without limitation,
any arrangement pursuant to which the investor incurs
Indebtedness of the types referred to in clauses (h) and <PAGE>
<PAGE> 1-20
(i) of the definition of "Indebtedness" in respect of such
Person.
"Lenders" means the banks and financial institutions
listed on the signature pages hereof and each Eligible
Assignee that shall become a party hereto pursuant to
Section 8.07.
"LIBO Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "LIBO
Lending Office" set forth opposite its name in Schedule I
hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is
specified, its Domestic Lending Office), or such other
office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"LIBO Rate" means, for any Interest Period for each
LIBO Rate Advance comprising part of the same Borrowing,
an interest rate per annum equal to the rate per annum
obtained by dividing (a) the average (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum, if
such average is not such a multiple) of the rate per annum
at which deposits in Dollars are offered to the Reference
Lenders by leading banks in the London interbank market at
11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount
substantially equal to such Reference Lender's LIBO Rate
Advance comprising part of such Borrowing to be
outstanding during such Interest Period and for a period
equal to such Interest Period by (b) a percentage equal to
100% minus the LIBO Rate Reserve Percentage for such
Interest Period. The LIBO Rate for each Interest Period
for each LIBO Rate Advance comprising part of the same
Borrowing shall be determined by the Administrative Agent
on the basis of applicable rates furnished to and received
by the Administrative Agent from the Reference Lenders two
Business Days before the first day of such Interest
Period, subject, however, to the provisions of Sections
2.02(b) and 2.08.
"LIBO Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a).
"LIBO Rate Reserve Percentage" for the Interest
Period for each LIBO Rate Advance comprising part of the
same Borrowing means the reserve percentage applicable two
Business Days before the first day of such Interest Period
under regulations issued from time to time by the <PAGE>
<PAGE> 1-21
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City
with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by
reference to which the interest rate on LIBO Rate Advances
is determined) having a term equal to such Interest
Period.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement of any kind, including, without
limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other
encumbrance on title to real property, but not including
any inchoate right of set-off as such.
"LIN" means LIN Broadcasting Corporation, a Delaware
corporation.
"LIN Shares" means each issued and outstanding share
of LIN common stock, together with the Rights associated
with such share of common stock.
"Loan Documents" means this Agreement and the Pledge
Agreement.
"Los Angeles Contribution" means the transfer by the
Borrower to LIN, as a contribution to capital or otherwise
without consideration, of the Borrower's 4.9725% ownership
interest in the non-wireline cellular licensee serving the
Los Angeles market.
"Majority Entity" means, with respect to AT&T, any
Person of which AT&T legally and beneficially owns more
than 50% of the combined voting power of all of such
Person's Voting Stock.
"Majority Lenders" means, at any time, Lenders having
more than 50% of the aggregate unpaid principal amount of
the Advances, or if no such principal amount is then
outstanding, Lenders having more than 50% of the
Commitments.
"Marketable Security" means any debt or equity
security that is either listed on a national securities
exchange or for which a quotation is available through the
National Association of Security Dealers Automated <PAGE>
<PAGE> 1-22
Quotation System; provided that Marketable Security shall
not include (a) any security that belongs to a class of
securities of which the Borrower and the Restricted
Subsidiaries own, in the aggregate, 20% or more of all
issued and outstanding securities and (b) any security
that is subject, in the good faith judgment of the
Arranging Agents, to material restrictions on resale.
"Material Agreement" means each agreement that is
material to the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole.
"Material Restricted Subsidiary" means each of the
Core Properties and any Restricted Subsidiary or group of
Restricted Subsidiaries that, in the aggregate, owns or
holds the lesser of (a) 500,000 Pops or (b) at least 1% of
all Pops then owned or held by the Borrower and the
Restricted Subsidiaries.
"McCaw Family" has the meaning specified in the
Shareholders Agreement as in effect on the date hereof.
"McCaw Stock Sale" means the sale by the Borrower in
March of 1990 to LIN, for cash in the amount of
$425,000,000, of a number of Class A Shares that, at the
time of such sale, had a fair market value equal to such
amount.
"MCI" means McCaw Cellular, Inc., a Washington
corporation.
"MCI Debt" means the 12-3/4% Senior Notes of MCI due
January 1, 1994 issued pursuant to an Indenture dated as
of July 1, 1986 between MCI and Bankers Trust Company, as
trustee and the 13% Senior Subordinated Notes due July 1,
1996 issued pursuant to an Indenture dated as of July 1,
1986 between MCI and Bankers Trust Company, as trustee.
"Merger" means the merger of Ridge with and into the
Borrower with the Borrower as the surviving corporation in
accordance with the terms set forth in the AT&T Merger
Agreement.
"Minority Entity" means any Person that owns or
operates a Cellular Business, other than a Subsidiary of
the Borrower, in which any Restricted Subsidiary holds an
equity or other ownership interest.
"MSA" means a "Metropolitan Statistical Area", as
such term is defined and modified by the FCC for purposes
of Cellular System licensing.<PAGE>
<PAGE> 1-23
"MSA Pops" means, for each MSA for which a Cellular
Licensee or Cellular Permittee holds an FCC License, the
number of residents of such MSA as reflected in the
Donnelly Marketing Service population estimates for 1989.
"Multiemployer Plan" means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which the
Borrower or any of its ERISA Affiliates is making or
accruing an obligation to make contributions, or has
within any of the preceding five plan years made or
accrued an obligation to make contributions, such plan
being maintained pursuant to one or more collective
bargaining agreements.
"Multiple Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a)
is maintained for employees of the Borrower or any of its
ERISA Affiliates and at least one Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained
and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, for any sale, lease,
transfer or other disposition of any asset, or for any
sale or issuance of any security, by any Person, the
aggregate amount of cash received by or on behalf of such
Person for such asset or security (whether as initial
consideration or through payment or disposition of
deferred consideration) after deducting therefrom (a) the
amount of such proceeds required to be applied to repay
Indebtedness of any Subsidiary or Minority Entity or
Indebtedness secured by any asset so disposed of,
(b) brokerage commissions, legal fees, finder's fees and
other similar fees and commissions, (c) taxes currently
payable in connection with or as a result of such
transaction, and (d) other out-of-pocket costs incurred in
connection therewith, in the case of each of clauses (a),
(b), (c) and (d) above to the extent, but only to the
extent, that the amounts so deducted are, at the time of
receipt of such cash, paid to a Person that is not an
Affiliate of such Person (or, if paid to such an
Affiliate, to the extent the terms of such payment are no
more favorable to such Affiliate than such terms would be
in an arm's-length transaction) and are properly
attributable to such transaction or to the asset or
security that is the subject thereof.
<PAGE>
<PAGE> 1-24
"Net Income" means, for any Person and for any
period, the net income (or net loss) of such Person for
such period; provided that such amount shall be adjusted
to exclude (to the extent otherwise included therein):
(a) any restoration to income of any
contingency reserve, except to the extent that
provision for such reserve was made out of income
accrued during such period and except for normal
accruals and reversals in the ordinary course of
business;
(b) any write-up or write-down of any asset;
(c) any net gain from the collection of the
proceeds of life insurance policies;
(d) any gain arising from the acquisition of
any securities or Indebtedness of such Person and any
net loss arising from the exercise of any warrant of
such Person;
(e) any deferred credit representing the excess
of equity in any Person at the date of acquisition
over the cost of the investment in such Person;
(f) any aggregate net gain (or loss) during
such period arising from the sale, exchange or other
disposition of capital assets (such term to include
all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of
fixed assets, and all securities) other than (i) any
sale, exchange or other disposition in the ordinary
course of business and (ii) any sale, exchange or
disposition of equipment utilized in the business of
such Person, the pro rata share of Net Income of
which is included herein;
(g) all extraordinary items; and
(h) any net income that is attributable to an
entity that is neither a Restricted Subsidiary nor a
Qualified Minority Entity, other than amounts
actually received by a Restricted Subsidiary as a
distribution or dividend.
<PAGE>
<PAGE> 1-25
"1990 Administrative Agent" means the "Administrative
Agent", as such term is defined in the 1990 Credit
Agreement.
"1990 Advance" means each "Advance", as such term is
defined in the 1990 Credit Agreement.
"1990 Agent" means each "Agent", as such term is
defined in the 1990 Credit Agreement.
"1990 Agreement Value" means the "Agreement Value",
as such term is defined in the 1990 Credit Agreement.
"1990 Commitments" means the "Commitments", as such
term is defined in the 1990 Credit Agreement.
"1990 Credit Agreement" means the $3,000,000,000
Credit Agreement dated as of February 26, 1990 among the
Borrower, the Lenders party thereto, Morgan Guaranty Trust
Company of New York, as Administrative Agent,
Toronto-Dominion, PNC and Kansallis-Osake-Pankki, as
Agents and Toronto-Dominion (Texas), Inc. (formerly known
as The Toronto-Dominion Bank Trust Company), as Collateral
Agent, as amended by Amendment No. 1 dated as of November
27, 1990 and Amendment No. 2 dated as of the date hereof
and thereafter from time to time in accordance with the
terms of the Intercreditor Agreement.
"1990 Hedge Lender" means each "Hedge Lender", as
such term is defined in the 1990 Pledge Agreement.
"1990 Lender" means each "Lender", as such term is
defined in the 1990 Credit Agreement.
"1990 Loan Documents" means the 1990 Credit Agreement
and the 1990 Pledge Agreement.
"1990 Pledge Agreement" has the meaning specified in
the Pledge Agreement.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Obligation" means, with respect to any Person, any
obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim,
whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or <PAGE>
<PAGE> 1-26
otherwise affected by any proceeding referred to in
Section 6.01(e). Without limiting the generality of the
foregoing, the Obligations of the Borrower under the Loan
Documents and the 1990 Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and
other amounts payable by the Borrower under any Loan
Document or any 1990 Loan Document and (b) the obligation
to reimburse any amount in respect of any of the foregoing
that any Lender or 1990 Lender, in its sole discretion,
may elect to pay or advance on behalf of the Borrower
pursuant to Section 8.04(d) of this Agreement or the 1990
Credit Agreement.
"OECD" means the Organization for Economic
Cooperation and Development.
"Operating Cash Flow" or "OCF" means, for any Person
for any period, Cash Flow of such Person for such period
plus Variable Marketing Expenses of such Person for such
period.
"Other Taxes" has the meaning specified in Section
2.11(b).
"PBGC" means the Pension Benefit Guaranty
Corporation, or any successor agency or entity performing
substantially the same functions.
"Permitted Cellular Asset Swap" means any
disposition followed by an acquisition, or other similar
exchange, of Cellular Assets (other than any of the Core
Properties) by the Borrower or any Restricted Subsidiary
meeting the following criteria: (a) within 150 days
after the consummation of such disposition, a Financial
Officer of the Borrower shall have delivered a
certificate to the Administrative Agent stating that the
Borrower or a Restricted Subsidiary has acquired or has
entered into one or more binding and enforceable
agreements to acquire other Cellular Assets having an
aggregate fair market value substantially equal to the
value of the Cellular Assets disposed of (such
determination to be made in the good faith judgment of a
Financial Officer of the Borrower and so stated in such
certificate) and (b) within 365 days after the date on
which such binding agreement or agreements have been
executed and delivered by the parties thereto, a Financial
Officer of the Borrower shall have delivered a certificate
to the Administrative Agent stating that the Borrower or a
Restricted Subsidiary has consummated such acquisition;
provided that (i) the Cellular Assets acquired by the
Borrower or a Restricted Subsidiary shall <PAGE>
<PAGE> 1-27
not be designated as an Unrestricted Subsidiary and
(ii) if the Borrower or a Restricted Subsidiary has not
acquired or entered into one or more agreements to acquire
Cellular Assets that are substantially equal in value to
the Cellular Assets disposed of, a Permitted Cellular
Asset Swap shall be deemed to have occurred to the extent
of the value of the Cellular Assets actually acquired or
to which such agreements apply, as the case may be (such
determinations of value to be made in the good faith
judgment of a Financial Officer of the Borrower and so
stated in the certificates of such Financial Officer
referred to in clauses (i) and (ii) above).
"Permitted Disposition" has the meaning specified in
Section 2.04(b)(iii)(E).
"Permitted Liens" means such of the following as to
which no enforcement, collection, execution, levy or
foreclosure proceeding shall have been commenced (unless
otherwise provided in this definition):
(a) Liens for taxes, assessments and
governmental charges or levies to the extent not
required to be paid by the Borrower or any Restricted
Subsidiary under Section 5.01(b);
(b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and
repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations
that are not overdue for a period of more than 60
days;
(c) Liens (other than any Lien imposed by
ERISA) or deposits made in the ordinary course of
business to secure obligations under workers'
compensation, unemployment insurance and other types
of social security, statutory obligations, surety and
appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other
similar obligations (to the extent such undertakings
do not secure obligations for the payment of borrowed
money or the deferred purchase price of property or
services);
(d) easements, rights of way and other
encumbrances on title to real property that do not
render title to the property encumbered thereby
unmarketable or materially adversely affect the use
of such property for its present purposes; and
<PAGE>
<PAGE> 1-28
(e) judgment Liens that in the aggregate do not
exceed $5,000,000, each of which has not been in
existence for a period of more than 60 days or the
execution of each of which has been stayed pending
appeal.
"Permitted RCC Asset Swap" means any disposition of
RCC Assets followed by an acquisition of Communications
Assets, or other similar exchange of such assets, or
followed by an Investment in the Restricted Subsidiaries,
by the Borrower or any Restricted Subsidiary meeting the
following criteria: (a) the fair market value (determined
in good faith by a Financial Officer of the Borrower and
set forth in the certificates of such Financial Officer
described in clause (b) below) of all such RCC Assets
disposed of after February 26, 1990 shall not exceed
$250,000,000; and (b) (i) within 150 days after the
consummation of such disposition, a Financial Officer of
the Borrower shall have delivered a certificate to the
Administrative Agent stating that a Restricted Subsidiary
or the Borrower (so long as such assets are not designated
as an Unrestricted Subsidiary) has acquired or has entered
into one or more binding and enforceable agreements to
acquire Communications Assets having a fair market value
substantially equal to the value of the RCC Assets
disposed of (such determination to be made in the good
faith judgment of a Financial Officer of the Borrower and
so stated in such certificate) or an amount equal to such
fair market value has been or will be invested in a
Restricted Subsidiary or Restricted Subsidiaries and
(ii) within 365 days after the date on which the parties
thereto executed and delivered such binding agreement or
agreements, a Financial Officer of the Borrower shall have
delivered a certificate to the Administrative Agent
stating that the Borrower or a Restricted Subsidiary has
consummated such acquisition of Communications Assets or
has invested such amount in a Restricted Subsidiary or
Restricted Subsidiaries; provided that, if the Borrower or
a Restricted Subsidiary has not acquired or entered into
one or more agreements to acquire Communications Assets
that are substantially equal in value to the RCC Assets
disposed of or made an Investment in Restricted
Subsidiaries in substantially such amount, a Permitted RCC
Asset Swap shall be deemed to have occurred to the extent
of the value of the RCC Assets actually acquired or to
which such agreements apply or to the extent of the amount
actually so invested, as the case may be (such
determinations of value to be made in the good faith <PAGE>
<PAGE> 1-29
judgment of a Financial Officer of the Borrower and so
stated in the certificates referred to in clause (b)
above).
"Person" means an individual, partnership,
corporation (including a business trust), joint stock
company, trust, unincorporated association, joint venture
or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pledge Agreement" has the meaning specified in
Section 3.01(f)(vi).
"Pledged Debt" has the meaning specified in the
Pledge Agreement.
"Pledged Shares" has the meaning specified in the
Pledge Agreement.
"PNC" has the meaning specified in the recital of
parties to this Agreement.
"Pops" means (a) MSA Pops and (b) up to 4,500,000 RSA
Pops.
"Private Market Value Guarantee" means the Private
Market Value Guarantee dated December 11, 1989 between the
Borrower and LIN.
"Pro Forma Combined Debt Service" or "PCDS" means the
sum of all amounts scheduled to be paid during the current
fiscal quarter and the three consecutive fiscal quarters
following such fiscal quarter by the Borrower, each
Restricted Subsidiary and each Qualified Minority Entity
to any other Person with respect to:
(a) the principal of Combined Debt outstanding
(other than repayment of Advances pursuant to Section
2.05, but including reduction of the Commitments
pursuant to Section 2.04(b)(i));
(b) interest on such Combined Debt (excluding
amortization of debt discount and expense, but
including imputed interest on Capitalized Leases, and
assuming, in the case of fluctuating interest <PAGE>
<PAGE> 1-30
rates that cannot be determined in advance, that the
rate in effect will remain in effect throughout such
period);
(c) commitment, agency or other fees with
respect to such Combined Debt;
(d) dividends and other amounts scheduled to be
paid with respect to capital stock (other than
dividends payable in additional shares of such
capital stock), in each case with respect to such
Combined Debt and capital stock outstanding, after
giving effect to any such Combined Debt and capital
stock proposed on such day to be created or assumed
and to the concurrent retirement of any other
Combined Debt and capital stock on such day; and
(e) amounts scheduled to be paid under all
Hedge Agreements outstanding or required to be put in
place during such period, less amounts, if any,
scheduled to be received under such Hedge Agreements;
such calculation to assume that the reference rate
under each such Hedge Agreement in effect remains in
effect throughout such period;
provided that principal and interest in respect of any
guarantee for borrowed money shall be deemed to be payable
as if (A) the principal amount of such guarantee were
subject to the same rate of repayment as the Indebtedness
guaranteed and (B) interest in respect thereof was payable
at the same rate as the Indebtedness guaranteed.
"Pro Forma Senior Debt Service" or "PSDS" means the
sum of all amounts scheduled to be paid during the current
fiscal quarter and the three consecutive fiscal quarters
following such fiscal quarter by the Borrower, each
Restricted Subsidiary and each Qualified Minority Entity
with respect to:
(a) the principal of Senior Debt outstanding
(other than repayments of Advances pursuant to
Section 2.05, but including reduction of the
Commitments pursuant to Section 2.04(b)(i));
(b) interest on such Senior Debt (excluding
amortization of debt discount and expense and
assuming, in the case of fluctuating interest rates <PAGE>
<PAGE> 1-31
that cannot be determined in advance, that the rate
in effect will remain in effect throughout such
period);
(c) commitment, agency or other fees with
respect to such Senior Debt;
(d) dividends and other amounts scheduled to be
paid with respect to capital stock (other than
dividends payable in additional shares of such
capital stock), in each case with respect to such
Senior Debt and capital stock outstanding, after
giving effect to any such Senior Debt and capital
stock proposed on such day to be created or assumed
and to the concurrent retirement of any other Senior
Debt and capital stock on such day; and
(e) amounts scheduled to be paid under all
Hedge Agreements outstanding or required to be put in
place during such period, less amounts, if any,
scheduled to be received under such Hedge Agreements;
such calculation to assume that the reference rate
under each such Hedge Agreement in effect remains in
effect throughout such period;
provided that principal and interest in respect of any
guarantee for borrowed money shall be deemed to be payable
as if (A) the principal amount of such guarantee were
subject to the same rate of repayment as the Indebtedness
guaranteed and (B) interest in respect thereof were
payable at the same rate as the Indebtedness guaranteed.
"PUC" means any state regulatory agency or body that
exercises jurisdiction over the ownership, construction or
operation of Cellular Systems or RCC Systems.
"Qualified Minority Entity" means any Minority Entity
so designated by a Financial Officer of the Borrower in a
written notice to the Administrative Agent; provided that
(i) any such designation may not be subsequently
withdrawn, (ii) no Minority Entity that has issued equity
securities registered under the Securities Exchange Act of
1934 may be so designated and (iii) the Minority Entities
designated under this Agreement as "Qualified Minority
Entities" shall be the same as those designated under the
1990 Credit Agreement.
<PAGE>
<PAGE> 1-32
"RCC Assets" means each RCC Business or RCC System
owned directly or indirectly by the Borrower or any
Restricted Subsidiary.
"RCC Business" means the business of operating one or
more RCC Systems.
"RCC Franchise Interest" means a direct or indirect
ownership interest in any Person that owns or operates an
RCC Business.
"RCC Operating Cash Flow" means, for any Person for
any period, the Operating Cash Flow of such Person for
such period attributable to RCC Assets.
"RCC System" means a radio common carrier system that
includes one or more of the following: (a) a radio paging
system licensed under Part 22 of the FCC's Rules; (b) a
conventional mobile telephone system licensed under Part
22 of the FCC's Rules and (c) a specialized mobile radio
system or private radio system licensed under Part 90 of
the FCC's Rules.
"Reference Lenders" means Toronto-Dominion, Barclays
and PNC.
"Refinancing" has the meaning specified in Section
2.13(b).
"Register" has the meaning specified in Section
8.07(c).
"Regulatory Authority" means the FCC, each PUC and
any other state or local authority that has jurisdiction
over the control, ownership, licensing, construction or
operation of all or any part of any Cellular System or RCC
System or the provision of service or the charges for such
service in any Cellular System or RCC System.
"Required Lenders" means, at any time following the
initial Borrowing hereunder and prior to the payment in
full of the 1990 Advances and the expiration or
termination of the 1990 Commitments, Lenders and 1990
Lenders having more than 50% of the aggregate unpaid
principal amount of the sum of the Advances and the 1990
Advances, or, if no such principal amount is then
outstanding, Lenders and 1990 Lenders having more than 50%
of the sum of the Commitments and the 1990 Commitments
and, at any other time, Lenders having more <PAGE>
<PAGE> 1-33
than 50% of the aggregate unpaid principal amount of the
Advances or, if no such principal amount is then
outstanding, Lenders having more than 50% of the
Commitments.
"Required Secured Lenders" has the meaning specified
in the Pledge Agreement.
"Restricted Subsidiaries" means (a) all Subsidiaries
of the Borrower set forth in Part A of Schedule III; (b)
any Subsidiary of the Borrower organized or acquired after
the date hereof, unless designated in a written notice by
a Financial Officer of the Borrower as an Unrestricted
Subsidiary prior to its organization or acquisition (or
within 15 Business Days after its organization or
acquisition if, at the time of its organization or
acquisition, such Subsidiary could have been organized or
acquired as an Unrestricted Subsidiary); and (c) any
Unrestricted Subsidiary that is redesignated by a
Financial Officer of the Borrower as a Restricted
Subsidiary; provided that no Restricted Subsidiary may be
redesignated as an Unrestricted Subsidiary.
"Ridge" means Ridge Merger Corporation, a Delaware
corporation wholly owned by AT&T.
"Rights" means, with respect to any outstanding share
of LIN's common stock, the preferred stock purchase rights
associated with such share pursuant to the Rights
Agreement dated as of May 2, 1988, as amended, between LIN
and Manufacturers Hanover Trust Company, as rights agent.
"RSA" means a "Rural Service Area", as such term is
defined and modified by the FCC for purposes of Cellular
System licensing.
"RSA Pops" means, for each RSA for which a Cellular
Licensee or Cellular Permittee holds an FCC License, the
number of residents of such RSA as reflected in the
Donnelly Marketing Service population estimates for 1989.
"Secured Hedge Agreement" has the meaning specified
in the Pledge Agreement.
"Senior Debt" or "SD" means Combined Debt, other than
Subordinated Debt.
<PAGE>
<PAGE> 1-34
"Senior Subordinated Debentures" means the Borrower's
$400,000,000 14% Senior Subordinated Debentures due June
15, 1998, issued under an Indenture dated as of June 15,
1988 between the Borrower and Seattle-First National Bank,
as trustee.
"Severable Equipment" means any additions,
modifications and improvements to the initial
configuration of any Cellular System that may be removed
therefrom without diminishing or impairing the function,
utility, performance or operating condition of the initial
configuration as in effect immediately prior to the making
or installation of such addition, modification or
improvement.
"Shareholders Agreement" means the Shareholders
Agreement dated as of May 31, 1989 among the Borrower, the
Trustees under the will of the late Eben D. Jordan, the
Trustees of the Taylor Voting Trust, the holders of
certain units of the Taylor Voting Trust, Craig O. McCaw,
John E. McCaw, Jr., Bruce R. McCaw and Keith W. McCaw, and
the other parties named therein, as amended from time to
time.
"Single Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of the Borrower or any of its
ERISA Affiliates and no Person other than the Borrower and
its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be
terminated.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the
fair value of the property of such Person is greater than
the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b)
the present fair salable value of the assets of such
Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts
as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature and (d) such Person
is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably <PAGE>
<PAGE> 1-35
small capital. In computing the amount of contingent
liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in light
of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subject Debt" means (a) the 12.95% Senior
Subordinated Debentures; (b) the Senior Subordinated
Debentures; and (c) the MCI Debt.
"Subordinated Debt" means all Indebtedness of the
Borrower that is subordinated to the obligations of the
Borrower under or in respect of the Loan Documents on
terms of subordination no less favorable to the Lenders
than the terms set forth in Schedule V hereto, or as the
Required Lenders may otherwise agree, that provides for
the amortization of no more than 5% of the principal
amount thereof in each of 1999 and 2000 and that otherwise
contains terms and conditions satisfactory to the Required
Lenders.
"Subscriber Equipment" means any cellular mobile
telephones, cellular portable telephones, speakers,
mounting hardware, subscriber test equipment and similar
subscriber equipment.
"Subsidiary" of any Person means (a) any corporation
of which more than 50% of the issued and outstanding
capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person's
other Subsidiaries and (b) any partnership, joint venture
or other association of which more than 50% of the equity
interests having the power to vote to direct or control
the management of such partnership, joint venture or other
association is at the time owned or controlled by such
Person, by such Person and one or more of the other
Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Targeted Acquisitions" means the acquisition of
Franchise Interests with respect to any MSA, any
Geographically Related RSA, any other RSA in which the
Borrower or any Subsidiary had, on February 26, 1990, a
Franchise Interest or Hawaii, Kauai or Maui, Hawaii.
"Taxes" has the meaning specified in Section 2.11(a).<PAGE>
<PAGE> 1-36
"Tender Offer" means the offer by the Borrower and
Holdings to acquire LIN Shares for cash pursuant to the
Offer to Purchase dated June 8, 1989, as amended.
"TD (Texas)" has the meaning specified in the recital
of parties to this Agreement.
"Toronto-Dominion" has the meaning specified in the
recital of parties to this Agreement.
"Total Cellular Group Pops" with respect to any
Cellular Group, means the aggregate number of MSA Pops for
all MSAs in such Cellular Group; provided, however, that
for each Cellular Entity in such Cellular Group that is
not a Restricted Subsidiary, the Attributable Share of the
MSA Pops of such MSA shall be used for this calculation.
"12.95% Senior Subordinated Debentures" means the
Borrower's $600,000,000 12.95% Senior Subordinated
Debentures due August 15, 1999 issued under an Indenture
dated as of August 15, 1987 between the Borrower and
Seattle-First National Bank, as trustee.
"Type" refers to the distinction between Advances
bearing interest at the Base Rate, Advances bearing
interest at the LIBO Rate and Advances bearing interest at
the Adjusted CD Rate.
"Unavailable Commitment" has the meaning specified in
Section 2.04(c).
"United States" means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of the
Borrower that is not a Restricted Subsidiary.
"Variable Marketing Expenses" means, for any Person
and for any period, the aggregate amount of expenses that
are properly attributable to a Cellular Business owned or
operated by such Person incurred by such Person during
such period for advertising, sales and marketing.
"Voting Stock" means capital stock issued by a
corporation, or equivalent interests in any other Person,
the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of
such Person, even though the right to vote has been
suspended by the happening of such a contingency.
<PAGE>
<PAGE> 1-37
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, maintained for employees of the
Borrower or any of its ERISA Affiliates.
"Withdrawal Liability" has the meaning given such
term under Part 1 of Subtitle E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms and Computations.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of
the financial statements referred to in Section 4.01(f)
("GAAP"). Unless otherwise provided herein, all computations
and calculations to be made under this Agreement, including,
without limitation, computations under Section 5.03, shall be
made in accordance with GAAP.
<PAGE>
<PAGE> 2-1
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to
make advances ("Advances") to the Borrower from time to time
on any Business Day during the period from the date hereof
until the Final Maturity Date in an aggregate amount not to
exceed at any time outstanding such Lender's Available
Commitment. Each Borrowing shall be in an aggregate amount
not less than $10,000,000 or an integral multiple of
$2,500,000 in excess thereof and shall be in such amount as
shall be necessary to give effect to the condition to funding
in Section 3.02(b) and shall consist of Advances of the same
Type made on the same day by the Lenders ratably according to
their Commitments. Within the limits of each Lender's
Available Commitment, the Borrower may borrow under this
Section 2.01, repay pursuant to Section 2.05 or prepay
pursuant to Section 2.07(a), and reborrow under this Section
2.01.
SECTION 2.02. Making the Advances. (a) Each
Borrowing shall be made on notice, given not later than 11:00
A.M. (New York City time) on the third Business Day (in the
case of a LIBO Rate Advance having an Interest Period of six
months or less), the fifth Business Day (in the case of a LIBO
Rate Advance having an Interest Period of nine months or
twelve months), the second Business Day (in the case of an
Adjusted CD Rate Advance), or the Business Day (in the case of
a Base Rate Advance) prior to the date of the proposed
Borrowing by the Borrower to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telex,
telecopier or cable. Each such notice of a Borrowing
(a "Notice of Borrowing") shall be by telecopier, confirmed
immediately in writing, in substantially the form of Exhibit A
hereto, specifying therein the requested (i) date of such
Borrowing, (ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing, (iv) purpose or
purposes for which the proceeds of such Borrowing will be used
and (v) Interest Period for each such Advance. Each Lender
shall, before 12:30 P.M. (New York City time) on the date of
such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such
Lender's ratable portion of such Borrowing. After the
Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available
to the Borrower by crediting the Borrower's Account.
<PAGE>
<PAGE> 2-2
(b) Notwithstanding the foregoing:
(i) the Borrower shall not be entitled to make a
Borrowing if, after giving effect to such Borrowing, there
would be outstanding more than ten different Borrowings
that bear interest at the LIBO Rate or the Adjusted CD
Rate;
(ii) if any Lender shall, at least one Business Day
before the date of any requested Borrowing to bear
interest at the LIBO Rate, notify the Administrative Agent
that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful,
or that any central bank or other governmental authority
asserts that it is unlawful, for such Lender or its LIBO
Lending Office to perform its obligations hereunder to
make LIBO Rate Advances or to fund or maintain LIBO Rate
Advances hereunder, the right of the Borrower to select
LIBO Rate Advances for such Borrowing or any subsequent
Borrowing shall be suspended until such Lender shall
notify the Administrative Agent that the circumstances
causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance;
(iii) if fewer than two Reference Lenders furnish
timely information to the Administrative Agent for
determining the Adjusted CD Rate for any Adjusted CD Rate
Advances, or the LIBO Rate for any LIBO Rate Advances,
comprising any requested Borrowing:
(A) the Administrative Agent shall promptly
notify the Borrower and the Lenders that the interest
rate cannot be determined for such Adjusted CD Rate
Advances or LIBO Rate Advances (as the case may be);
(B) the right of the Borrower to select
Adjusted CD Rate Advances or LIBO Rate Advances (as
the case may be) for such Borrowing or any subsequent
Borrowing shall be automatically suspended until the
Administrative Agent shall notify the Borrower and
the Lenders that the circumstances causing such
suspension no longer exist;
(C) each Advance comprising such Borrowing
shall be a Base Rate Advance; and
<PAGE>
<PAGE> 2-3
(iv) if the Required Lenders shall, at least one
Business Day before the date of a requested Borrowing,
notify the Administrative Agent that the LIBO Rate for
LIBO Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Lenders of making,
funding or maintaining their respective LIBO Rate Advances
for such Borrowing, the right of the Borrower to select
LIBO Rate Advances for such Borrowing or any subsequent
Borrowing shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be a Base
Rate Advance.
(c) Each Notice of Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Borrowing
that the related Notice of Borrowing specifies is to be
comprised of Adjusted CD Rate Advances or LIBO Rate Advances,
the Borrower shall indemnify each Lender against any loss,
cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part
of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative
Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02, and the Administrative
Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such
ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the
date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, the interest rate applicable
at the time to Advances comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such <PAGE>
<PAGE> 2-4
Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute
such Lender's Advance as part of such Borrowing for purposes
of this Agreement.
(e) If the Lenders make Advances on a day on which
the Borrower is required to repay all or any part of the
Advances then outstanding, each Lender shall apply the
proceeds of the Advances to be made by it to make the
repayment due to such Lender and shall deliver to the
Administrative Agent an amount equal to the difference (if
positive) between the amount of such Lender's Advances and the
amount required to be repaid to such Lender.
(f) The failure of any Lender to make the Advance to
be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The
Borrower agrees to pay to the Administrative Agent for the
account of the Lenders a commitment fee on the average daily
unused portion of each Lender's Commitment (including for
purposes of calculating such commitment fee such Lender's
Unavailable Commitment) from, and including, the date hereof
in the case of each Lender that is a signatory hereto and from
the effective date specified in the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other
Lender until the Final Maturity Date at the rate of 1/2 of 1%
per annum, payable quarterly in arrears on the last Business
Day of each March, June, September and December commencing
with December 31, 1993 and on the Final Maturity Date.
(b) Collateral Agent's, Administrative Agent's and
Arranging Agents' Fees. The Borrower shall pay to the
Collateral Agent, the Administrative Agent and the Arranging
Agents for their own accounts such fees as may from time to
time be agreed between the Borrower and the Collateral Agent,
the Administrative Agent and the Arranging Agents,
respectively.
SECTION 2.04. Reduction of the Commitments;
Unavailable Commitments. (a) Optional. The Borrower shall
have the right, subject to Section 5.01(k), upon at least <PAGE>
<PAGE> 2-5
three Business Days' notice to the Administrative Agent, to
terminate in whole or reduce ratably in part the unused
portions of the Commitments of the Lenders; provided that each
partial reduction of the Commitments shall be in the minimum
aggregate amount of $15,000,000 or an integral multiple of
$5,000,000 in excess thereof and shall be in such amount as
shall be necessary for the Borrower to comply with Section
5.01(k).
(b) Mandatory. (i) Amortization. On each day on
or after the Amortization Commencement Date on which the
Commitment of any Lender shall be (without giving effect to
any automatic reduction of such Commitment on such day)
greater than the aggregate principal amount of the Advances
owing to such Lender on such day, the Commitment of such
Lender shall automatically permanently reduce to an amount
equal to such aggregate principal amount, and, on the
Amortization Commencement Date, the Unavailable Commitment of
each Lender shall be extinguished. In addition, on the last
day of each calendar quarter in each year (each such date
being an "Amortization Date") commencing on the first such
date to occur after the Amortization Commencement Date and
ending on the seventeenth Amortization Date, the Commitment of
each Lender shall automatically reduce by the amount obtained
by multiplying the percentage set opposite the applicable
Amortization Date below (as such percentage may be reduced
pursuant to clauses (ii) and (iii) below) times the aggregate
principal amount of the Advances owing to such Lender
outstanding on the Amortization Commencement Date:
Quarter Following
Amortization
Commencement Date Percentage
First through Fourth 2.50%
Fifth through Eighth 5.00%
Ninth through Twelfth 6.25%
Thirteenth through Sixteenth 7.50%
Seventeenth 15.00%
(ii) Excess Cash Flow. In the event that the
Borrower has Excess Cash Flow for any fiscal year (beginning
with the fiscal year ending December 31, 1996), the Facility
shall be permanently reduced by an amount equal to 25% of such
Excess Cash Flow and the percentage by which each Lender's
Commitment is to be reduced on each Amortization Date shall be
reduced by a fraction the numerator of which is <PAGE>
<PAGE> 2-6
the amount by which the Facility has been reduced as a result
of such Excess Cash Flow and the denominator of which is the
aggregate principal amount of the Advances owing to all
Lenders outstanding on the day such reduction shall occur
(without giving effect to any reduction to be made on such
day). Such reduction in the Facility shall occur on the date
on which the certificate of a Financial Officer of the
Borrower setting forth Excess Cash Flow is required to be
delivered to the Lenders under Section 5.01(l)(iv).
(iii) Sales of Assets. The Facility shall be
permanently reduced upon any sale, lease, transfer or other
disposition of assets of the Borrower or any Restricted
Subsidiary by an amount equal to 25% of the Net Cash Proceeds
of the assets so sold, transferred or otherwise disposed of,
other than (each of the following, to the extent otherwise
permitted under this Agreement, being an "Excluded Sale"):
(A) dispositions of assets (other than Franchise
Interests) in the ordinary course of business;
(B) Permitted Cellular Asset Swaps and Permitted RCC
Asset Swaps;
(C) dispositions of Unrestricted Subsidiaries;
(D) dispositions permitted by Section 5.02(d)(vii);
and
(E) other dispositions of assets of the Borrower or
any Restricted Subsidiary exclusively for cash before the
Amortization Commencement Date to the extent that the
aggregate Net Cash Proceeds of all such dispositions after
February 26, 1990 does not exceed $1,000,000,000 and as to
which (a) within 150 days after the consummation of each
such disposition, the Borrower shall have delivered to the
Lenders a certificate of a Financial Officer of the
Borrower describing in reasonable detail the asset that
has been disposed of and setting forth the Net Cash
Proceeds received by the Borrower or such Restricted
Subsidiary in connection therewith and the computation of
such Net Cash Proceeds and (b) the Borrower shall have
made the prepayment, if any, required by Section
2.07(b)(ii) (each such disposition referred to in this
subclause (E) being a "Permitted Disposition");
<PAGE>
<PAGE> 2-7
and, with respect to any such reduction of the Facility
occurring after the Amortization Commencement Date, the
percentage by which each Lender's Commitment is to be reduced
on each Amortization Date shall be reduced by a fraction the
numerator of which is the amount by which the Facility has
been reduced as a result of such sale or other disposition of
assets and the denominator of which is the aggregate principal
amount of the Advances owing to all Lenders outstanding on the
day such reduction shall occur (without giving effect to any
reduction to be made on such day).
(c) Unavailable Commitment. On the date hereof and
on the 150th day following the consummation of each Permitted
Disposition that occurs after the date hereof, a portion of
the Commitment of each Lender equal to such Lender's ratable
portion of the Asset Sale Balance on such day shall be deemed
and become unavailable for Borrowings hereunder (such Lender's
"Unavailable Commitment"). Upon the consummation of any
acquisition by the Borrower or any Restricted Subsidiary of
Approved Cellular Assets before the Amortization Commencement
Date, the Unavailable Commitment of each Lender shall be
reduced to an amount equal to such Lender's ratable portion of
the Asset Sale Balance on such day (after giving effect to
such acquisition). Upon (i) the 150th day following the
consummation of each Permitted Disposition and (ii) the date
on which the Borrower or any Restricted Subsidiary has
consummated the acquisition of Approved Cellular Assets, a
Financial Officer of the Borrower shall deliver to the Lenders
a certificate describing in reasonable detail the assets so
disposed of or acquired (as the case may be) and setting forth
the Asset Sale Balance as of such day (after giving effect to
any such disposition or acquisition) and the change in the
Unavailable Commitments of the Lenders, together with
information sufficient to enable the Lenders to verify the
calculation thereof.
SECTION 2.05. Repayment. The Borrower shall repay
to the Administrative Agent for the account of the Lenders the
outstanding principal amount of each Advance on the last day
of the Interest Period for such Advance.
SECTION 2.06. Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing
to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates
per annum:
<PAGE>
<PAGE> 2-8
(a) LIBO Rate Advances. If such Advance is a LIBO
Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of
(i) the LIBO Rate for such Interest Period for such
Advance plus (ii) the Applicable Margin in effect from
time to time during such Interest Period, payable on the
last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each
day that occurs during such Interest Period every three
months from the first day of such Interest Period (or, if
there is no numerically corresponding day in such third
month, the last day of such month).
(b) Adjusted CD Rate Advances. If such Advance is
an Adjusted CD Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the
sum of (i) the Adjusted CD Rate for such Interest Period
for such Advance plus (ii) the Applicable Margin in effect
from time to time during such Interest Period, payable on
the last day of such Interest Period and, if such Interest
Period has a duration of more than 90 days, on each day
that occurs during such Interest Period every 90 days from
the first day of such Interest Period.
(c) Base Rate Advances. If such Advance is a Base
Rate Advance, a rate per annum equal at all times to the
sum of (i) the Base Rate in effect from time to time plus
(ii) the Applicable Margin in effect from time to time
during such Interest Period, payable on the last day of
such Interest Period.
(d) Default Interest. Upon the occurrence and
during the continuance of a Default, the Borrower shall
pay interest on the unpaid principal amount of each
Advance owing to each Lender, payable on demand, at a rate
per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance
pursuant to clause (a), (b) or (c) above.
SECTION 2.07. Prepayments. (a) Optional. The
Borrower may, subject to Section 5.01(k), upon at least one
Business Day's notice in the case of a Base Rate Advance or
five Business Days' notice in the case of a LIBO Rate Advance
or an Adjusted CD Rate Advance to the Administrative Agent
stating the proposed date and aggregate principal amount of
the prepayment, and, if such notice is given, the Borrower
shall, prepay the outstanding principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in
part, together with accrued interest to the date <PAGE>
<PAGE> 2-9
of such prepayment on the principal amount prepaid; provided
that (i) each partial prepayment shall be in an aggregate
principal amount not less than $15,000,000 or an integral
multiple of $5,000,000 in excess thereof and shall be in such
amount as shall be necessary for the Borrower to comply with
Section 5.01(k) and (ii) in the event any prepayment of a LIBO
Rate Advance or an Adjusted CD Rate Advance shall be made on
any day other than on the last day of the Interest Period
therefor, the Borrower shall reimburse the Lenders in respect
thereof pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, on each
Business Day, prepay an aggregate principal amount of the
Advances comprising part of the same Borrowing equal to the
amount by which the aggregate principal amount of all Advances
exceeds the Available Commitments.
(ii) The Borrower shall, on or before the 30th day
following any sale, lease, transfer or other disposition of
assets by the Borrower or any Restricted Subsidiary (other
than any disposition described in Sections 2.04(b)(iii)(A) and
(C)), prepay an aggregate principal amount of the Advances
comprising part of the same Borrowing equal to 25% of the Net
Cash Proceeds of such disposition and apply the balance of
such Net Cash Proceeds to the prepayment of the 1990 Advances
pursuant to the 1990 Credit Agreement; provided that (A) in
the event that such Net Cash Proceeds are less than
$30,000,000, no such prepayment shall be required until the
30th day following the date on which the aggregate unpaid
amount of such Net Cash Proceeds equals or exceeds
$30,000,000, and (B) no such prepayment shall be required if,
on or before such 30th day the Borrower or a Restricted
Subsidiary has entered into a contract to acquire assets or,
with respect to a disposition of RCC Assets, has made
investments such that such disposition constitutes part of a
Permitted Cellular Asset Swap or a Permitted RCC Swap (as the
case may be); and provided further that with respect to any
disposition of assets owned directly by the Borrower, the
Borrower shall, on or before the ninth day following such
disposition, (A) prepay an aggregate principal amount of the
Advances comprising part of the same Borrowing equal to 25% of
the Net Cash Proceeds of such disposition and apply the
balance of such Net Cash Proceeds to the prepayment of the
1990 Advances pursuant to the 1990 Credit Agreement or (B)
invest an amount equal to such Net Cash Proceeds in one or
more Restricted Subsidiaries. Any such prepayment made by the
Borrower under the foregoing further proviso shall reduce the
amount otherwise required to be paid on such 30th day
following the relevant disposition. In connection with any
dispositions of assets pursuant to which the Borrower or any
Restricted Subsidiary receives Net Cash Proceeds equal to or <PAGE>
<PAGE> 2-10
in excess of $30,000,000, the Borrower shall deliver to the
Lenders on or before the 30th day following such disposition a
certificate of a Financial Officer of the Borrower setting
forth (x) the Net Cash Proceeds of such disposition, (y) the
amount of the prepayment required to be made in connection
with such disposition (after giving effect to any reduction in
the amount required to be prepaid resulting from Permitted
Cellular Asset Swaps or a Permitted RCC Swap) and (z) the
aggregate amount prepaid in connection with such disposition
prior to such 30th day.
(iii) All prepayments under this Section 2.07 shall be
made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Interest Rate Determination.
(a) Each Reference Lender agrees to furnish to the
Administrative Agent timely information for the purpose of
determining each Adjusted CD Rate or LIBO Rate, as applicable.
Subject to Section 2.02(b)(iii), if any one or more of the
Reference Lenders shall not furnish such timely information to
the Administrative Agent for the purpose of determining any
such interest rate, the Administrative Agent shall determine
such interest rate on the basis of timely information
furnished by the remaining Reference Lenders.
(b) The Administrative Agent shall give prompt
notice to the Borrower and the Lenders of the applicable
interest rate determined by the Administrative Agent for
purposes of Section 2.06(a), (b) or (c), and the applicable
rate, if any, furnished by each Reference Lender for the
purpose of determining the applicable interest rate under
Section 2.06(a) or (b).
SECTION 2.09. Increased Costs, Etc. (a) If, due to
either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve
requirements included in the Adjusted CD Rate Reserve
Percentage or the LIBO Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other
governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Adjusted CD
Rate Advances or LIBO Rate Advances (as the case may be), then
the Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A <PAGE>
<PAGE> 2-11
certificate as to the amount of such increased cost, submitted
to the Borrower by such Lender, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with
any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender
or any corporation controlling such Lender and that the amount
of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder (or similar
contingent obligations), then, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account
of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the
light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend
hereunder. A certificate as to such amounts submitted to the
Borrower by such Lender shall be conclusive and binding for
all purposes, absent manifest error.
SECTION 2.10. Payments and Computations. (a) The
Borrower shall make each payment hereunder not later than
11:00 A.M. (New York City time) on the day when due in Dollars
to the Administrative Agent at the Administrative Agent's
Account in same day funds. The Administrative Agent will
promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or commitment
fees under or in respect of the Facility ratably (other than
amounts payable pursuant to Section 2.09, 2.11 or 8.04(c) or
with respect to payments under 8.04(d) that are deemed to be
Base Rate Advances) to the Lenders for the account of their
Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.07(d), from and after
the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder in
respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly
between themselves.
<PAGE>
<PAGE> 2-12
(b) The Borrower hereby authorizes each Lender, if
and to the extent payment owed to such Lender is not made when
due hereunder, to charge from time to time against any or all
of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base
Rate and of commitment fees shall be made by the
Administrative Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of interest
based on the Adjusted CD Rate, the LIBO Rate or the Federal
Funds Rate shall be made by the Administrative Agent on the
basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees
are payable. Each determination by the Administrative Agent
of an interest rate or fee hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated
to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of payment of interest or commitment fee (as the
case may be); provided, however, if such extension would cause
payment of interest on or principal of LIBO Rate Advances to
be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which
any payment is due to any Lenders hereunder that the Borrower
will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to
the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender on such due date an amount
equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender shall repay
to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
<PAGE>
<PAGE> 2-13
SECTION 2.11. Taxes. (a) Any and all payments by
the Borrower hereunder shall be made, in accordance with
Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and each Agent,
taxes measured by its net income that are imposed on it by the
jurisdiction under the laws of which such Lender or such Agent
(as the case may be) is organized or qualified to do business
or any political subdivision thereof and, in the case of each
Lender, by the jurisdiction of such Lender's Applicable
Lending Office or any political subdivision thereof and
excluding any gross receipts tax imposed on an Agent or Lender
(as the case may be) in lieu of a net income tax by a
jurisdiction (other than the United States) under the laws of
which such Agent or Lender is organized, is qualified to do
business or has its Applicable Lending Office or any political
subdivision of any such jurisdiction (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender or any
Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.11) such Lender or such Agent (as the
case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise
from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and each
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.11) paid
by such Lender and such Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or such Agent
(as the case may be) makes written demand therefor.
<PAGE>
<PAGE> 2-14
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative Agent,
at its address referred to in Section 8.02, the original or a
certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment hereunder, the
Borrower will furnish to the Administrative Agent, at such
address, a certificate from each appropriate taxing authority,
or an opinion of counsel acceptable to the Administrative
Agent, in either case stating that such payment is exempt from
or not subject to Taxes.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the
case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower (but only so long as such
Lender remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States
is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the
form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding
tax at such rate shall be considered excluded from "Taxes" as
defined in Section 2.11(a).
(f) For any period with respect to which a Lender
has failed to provide the Borrower with the appropriate form
described in Section 2.11(e) (other than if such failure is
due to a change in law occurring subsequent to the date on
which a form originally was required to be provided, or if
such form otherwise is not required under the preceding
sentence), such Lender shall not be entitled to
indemnification under Section 2.11(a) with respect to Taxes
imposed by the United States; provided that should a Lender
become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as
the Lender shall reasonably request to assist the Lender to
recover such Taxes.
<PAGE>
<PAGE> 2-15
(g) Notwithstanding any contrary provisions of this
Agreement, in the event that a Lender that originally provided
such form as may be required under Section 2.11(e) thereafter
ceases to qualify for complete exemption from United States
withholding tax, such Lender may assign its interest under
this Agreement to any assignee and such assignee shall be
entitled to the same benefits under this Section 2.11 as the
assignor provided that the rate of United States withholding
tax applicable to such assignee shall not exceed the rate then
applicable to the assignor.
(h) Any Lender claiming any additional amounts
payable pursuant to this Section 2.11 shall use its best
efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would
avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.12. Sharing of Payments, Etc. If any
Lender shall obtain at any time any payment (whether
voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) (a) on account of the Obligations due
and payable to such Lender hereunder at such time in excess of
its ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Lender at
such time to (ii) the aggregate amount of the Obligations due
and payable to all Lenders hereunder and all 1990 Lenders
under the 1990 Credit Agreement at such time) of payments on
account of the Obligations due and payable to all Lenders
hereunder and all 1990 Lenders under the 1990 Credit Agreement
at such time obtained by all the Lenders and 1990 Lenders at
such time or (b) on account of the Obligations owing (but not
due and payable) to such Lender hereunder at such time in
excess of its ratable share (according to the proportion of
(i) the amount of such Obligations owing (but not due and
payable) to such Lender at such time to (ii) the aggregate
amount of the Obligations owing (but not due and payable) to
all Lenders hereunder and all 1990 Lenders under the 1990
Credit Agreement at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lenders
hereunder and all 1990 Lenders under the 1990 Credit Agreement
at such time obtained by all the Lenders and 1990 Lenders at
such time, such Lender shall forthwith purchase from the other
Lenders and the 1990 Lenders such participations in the
Obligations due and payable or owing to them, as the case may
be, as shall be necessary to cause such <PAGE>
<PAGE> 2-16
purchasing Lender to share the excess payment ratably with
each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each other Lender and
each 1990 Lender shall be rescinded and such other Lender or
1990 Lender shall repay to the purchasing Lender the purchase
price to the extent of such other Lender's or 1990 Lender's
ratable share (according to the proportion of (i) the purchase
price paid to such other Lender or 1990 Lender to (ii) the
aggregate purchase price paid to all Lenders and 1990 Lenders)
of such recovery together with an amount equal to such other
Lender's or 1990 Lender's ratable share (according to the
proportion of (i) the amount of such other Lender's or 1990
Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender or
1990 Lender pursuant to this Section 2.12 may, to the fullest
extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such
participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.13. Use of Proceeds. The proceeds of the
Advances shall be available (and the Borrower agrees that it
shall use such proceeds) solely for the following purposes:
(a) to pay transaction costs and expenses;
(b) to redeem and repay in full the Subject Debt
(the "Refinancing");
(c) to make payments with respect to Indebtedness;
(d) to make Targeted Acquisitions or to make capital
contributions to Restricted Subsidiaries to enable such
Restricted Subsidiaries to make Targeted Acquisitions;
(e) to provide working capital for the Borrower, the
Restricted Subsidiaries and Qualified Minority Entities;
(f) to construct plant and operating systems for,
and to make capital improvements to, Cellular Systems or
RCC Systems or to satisfy Indebtedness incurred by a
Restricted Subsidiary for the construction or operation <PAGE>
<PAGE> 2-17
of or capital improvements to RCC Systems or Cellular
Systems owned or operated by any RCC Business or Cellular
Entity (as the case may be) in which a Restricted
Subsidiary owns an RCC Franchise Interest or a Franchise
Interest;
(g) to make one or more Investments in Unrestricted
Subsidiaries, in an aggregate amount for all such
Investments made after February 26, 1990 not to exceed
$100,000,000; and
(h) to purchase RCC Assets in an aggregate amount
for all such RCC Assets purchased after February 26, 1990
not to exceed $200,000,000; provided that an amount not to
exceed $50,000,000 thereof may be used by First-Tier
Restricted Subsidiaries to make loans that are permitted
under Section 5.02(e)(vi) (in one or more transactions) to
a Cellular Entity owning an MSA Franchise or
Geographically-Related RSA Franchise.
SECTION 2.14. Evidence of Indebtedness. (a) Each
Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the
Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(b) The Register maintained by the Administrative
Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made, the Type of Advances comprising
such Borrowing and any Interest Period applicable thereto,
(ii) the terms of each Assignment and Acceptance delivered to
and accepted by it, (iii) the amount of any principal or
interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iv) the amount of any
sum received by the Administrative Agent from the Borrower
hereunder and each Lender's share thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest
error.
<PAGE>
<PAGE> 3-1
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make an Advance
on the occasion of the initial Borrowing is subject to the
following conditions precedent:
(a) The Lenders shall be satisfied with all
documentation relating to the charter and by-laws of the
Borrower and its corporate Subsidiaries and the
partnership, joint venture and other similar agreements of
its non-corporate Subsidiaries.
(b) There shall have occurred no material adverse
change in the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole
or in the cellular industry generally since September 30,
1993.
(c) There shall exist no action, suit,
investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries pending or threatened
before any court, governmental agency or arbitrator that
could, in the good faith judgment of the Lenders, have a
material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole or that could, in the good faith judgment
of the Lenders, have a material adverse effect on (i) the
rights and remedies of the Agents or the Lenders under any
Loan Document or under the Intercreditor Agreement or the
1990 Agents or 1990 Lenders under any 1990 Loan Document
or the Intercreditor Agreement or (ii) the ability of the
Borrower to perform its obligations under any Loan
Document or any 1990 Loan Document, or that purports to
affect the legality, validity or enforceability of this
Agreement, any other Loan Document, the Intercreditor
Agreement or any 1990 Loan Document or the consummation of
the transactions contemplated hereby and thereby,
including, without limitation, the Refinancing or the
Amendment (other than the matters set forth in Schedule VI
(the "Disclosed Litigation")) and there shall have been no
adverse change in the status of, or financial effect on
the Borrower and the Restricted Subsidiaries taken as a
whole, of the Disclosed Litigation.
<PAGE>
<PAGE> 3-2
(d) The Borrower shall have paid all accrued fees
and expenses of the Agents and the Lenders (including the
accrued fees and disbursements of counsel to the Arranging
Agents).
(e) All governmental consents and approvals and
third party consents and approvals necessary in connection
with the Loan Documents and the transactions contemplated
thereby (including, without limitation, the Refinancing
and the Amendment) shall have been obtained (without the
imposition of any conditions or contingencies that are not
acceptable to the Lenders) and shall remain in effect, and
all applicable waiting periods shall have expired without
any action being taken by any competent authority and no
law or regulation shall be applicable that, in the good
faith judgment of the Lenders, restrains, prevents or
imposes materially adverse conditions upon the Loan
Documents, the Intercreditor Agreement, the 1990 Loan
Documents or any of the transactions contemplated thereby.
(f) The Administrative Agent shall have received on
or before the day of the initial Borrowing (unless
otherwise specified) the following, each dated (unless
otherwise specified) on such date of delivery, in form and
substance satisfactory to the Lenders (unless otherwise
specified) and in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this
Agreement, each other Loan Document and of all
documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to
this Agreement and each other Loan Document.
(ii) A copy of the charter of the Borrower and
each amendment thereto, certified (as of a date
reasonably near the date of the initial Borrowing
hereunder) by the Secretary of State of the State of
Delaware as being a true and correct copy thereof.
(iii) A copy of a certificate of the Secretary of
State of the State of Delaware, dated reasonably near
the date of the initial Borrowing hereunder, listing
the charter of the Borrower and each amendment
thereto on file in his office and certifying that
(A) such amendments are the only amendments to the
Borrower's charter on file in his <PAGE>
<PAGE> 3-3
office, (B) the Borrower has paid all franchise taxes
to the date of such certificate and (C) the Borrower
is duly incorporated and in good standing under the
laws of the State of Delaware.
(iv) A certificate of the Borrower, signed on
behalf of the Borrower by its President or a Vice
President and the Secretary or any Assistant
Secretary, dated the date of the initial Borrowing
(the statements made in which shall be true on and as
of the date of such certificate), certifying as to
(A) the absence of any amendments to the charter of
the Borrower since the date of the Secretary of
State's certificate referred to in Section
3.01(f)(iii), (B) a true and correct copy of the
by-laws of the Borrower as in effect on the date of
such certificate, (C) the due incorporation and good
standing of the Borrower as a corporation organized
under the laws of the State of Delaware, and the
absence of any proceeding for the dissolution or
liquidation of the Borrower, (D) the truth of the
representations and warranties contained in the Loan
Documents as though made on and as of the date of
such certificate and (E) the absence of any event
occurring and continuing, or resulting from the
Borrowing to be made on the date of such certificate,
that constitutes a Default.
(v) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the
names and true signatures of the officers of the
Borrower authorized to sign this Agreement, each
other Loan Document and the other documents to be
delivered hereunder and thereunder.
(vi) A pledge agreement, in substantially the
form of Exhibit D hereto (as amended from time to
time in accordance with its terms, the "Pledge
Agreement"), duly executed by the Borrower, together
with evidence satisfactory to the Lenders that the
Collateral Agent shall have received:
(A) certificates and instruments
representing the Pledged Shares and the Pledged
Debt referred to therein accompanied by duly
executed instruments of transfer or assignment
in blank, in form and substance satisfactory to
the Collateral Agent;
<PAGE>
<PAGE> 3-4
(B) acknowledgment copies or stamped
receipt copies of proper financing statements,
duly filed on or before the day of the initial
Borrowing under the Uniform Commercial Code of
all jurisdictions that the Collateral Agent may
deem necessary or desirable to perfect and
protect the Liens created by the Pledge
Agreement, covering the Collateral described in
the Pledge Agreement;
(C) completed requests for information,
dated on or before the date of the initial
Borrowing, listing the financing statements
referred to in clause (B) above and all other
effective financing statements filed in the
jurisdictions referred to in clause (B) above
that name the Borrower as debtor, together with
copies of such other financing statements;
(D) evidence of the completion of all
other recordings and filings of or with
respect to the Pledge Agreement that the Collateral Agent may
deem necessary or desirable in order to perfect and protect
the Liens created thereby; and
(E) evidence that all other action that
the Collateral Agent may deem necessary or
desirable in order to perfect and protect the
Liens created by the Pledge Agreement has been
taken;
provided that delivery of certificates and
instruments representing Pledged Shares and Pledged
Debt accompanied by executed instruments of transfer
or assignment in blank to the Collateral Agent in
accordance with the terms of the 1990 Credit
Agreement and receipt by the Administrative Agent of
copies of UCC-1 financing statements made in
connection with the 1990 Credit Agreement on file in
all jurisdictions that the Collateral Agent may deem
necessary or desirable to perfect and protect the
Liens created by the Pledge Agreement, to the extent
the same remain in full force and effect, shall be
deemed to be performance by the Borrower of clauses
(A), (B) and (D).
(vii) A copy of an amendment to the 1990 Credit
Agreement (the "Amendment"), in substantially the <PAGE>
<PAGE> 3-5
form of Exhibit E hereto, duly executed by the
Borrower and each of the 1990 Agents and the 1990
Lenders.
(viii) The Intercreditor Agreement dated as of
December 3, 1993 (as amended from time to time in
accordance with its terms, the "Intercreditor
Agreement"), duly executed by each of the 1990 Agents
and the 1990 Lenders and accepted and agreed to by
the Borrower.
(ix) Such financial, business and other
information regarding the Borrower and its
Subsidiaries as the Lenders shall have requested,
including, without limitation, information as to
possible contingent liabilities, tax information,
environmental information, obligations under ERISA,
collective bargaining agreements and other
arrangements with employees, annual financial
statements dated December 31, 1992 and interim
financial statements dated the end of the most recent
fiscal quarter for which financial statements are
available.
(x) A certificate from the chief financial
officer of the Borrower, in substantially the form of
Exhibit G hereto and otherwise in form and substance
satisfactory to the Lenders, attesting to the
Solvency of the Borrower after giving effect to the
transactions contemplated hereby.
(xi) Certified copies of all Material
Agreements.
(xii) A favorable opinion of Andrew A. Quartner,
Esq., Senior Vice President-Law of the Borrower, in
substantially the form of Exhibit H hereto, and as to
such other matters as any Lender through the
Administrative Agent may reasonably request.
(xiii) Favorable opinions of Wiley, Rein &
Fielding, FCC counsel to the Borrower, in
substantially the form of Exhibit I hereto, and of
Cathy Massey, Esq., Senior Regulatory Counsel of the
Borrower, in substantially the form of Exhibit J-1
hereto and Scott K. Morris, Esq., Regulatory Counsel
of the Borrower in substantially the form of
Exhibit J-2, and as to such other matters as any
Lender through the Administrative Agent may
reasonably request and such other favorable opinions <PAGE>
<PAGE> 3-6
of such other FCC and PUC counsel as any Lender
through the Administrative Agent may reasonably
request.
(xiv) A favorable opinion of Shearman & Sterling,
special counsel to the Arranging Agents, in
substantially the form of Exhibit K hereto.
(xv) The Administrative Agent shall have
received on or before the date of the initial
Borrowing, each dated not more than ten days before
the date of such Borrowing, in sufficient copies for
each Lender, Federal Reserve Form U-1 provided for in
Regulation U issued by the Board of Governors of the
Federal Reserve System, the statements made in which
shall be such as to permit the transactions
contemplated hereby in accordance with said
Regulation U.
(xvi) Such other documents as any Lender through
the Administrative Agent may reasonably request.
(g) All of the Subject Debt outstanding on the date
of the initial Borrowing shall have been called for
redemption in accordance with its terms.
(h) The amount of the initial Borrowing shall be in
an amount necessary (and shall be comprised of Advances of
such Type and having such Interest Periods) so that (after
giving effect thereto and the prepayment of the 1990
Advances to be made with the proceeds thereof) the
Advances then outstanding shall be equal to one-third of
the 1990 Advances then outstanding and such Advances shall
be of the same Type and have the same Interest Periods as
the 1990 Advances then outstanding and the proceeds of
such initial Borrowing shall be simultaneously applied to
prepay or repay amounts outstanding under the 1990 Credit
Agreement and transaction costs and expenses.
(i) Each of the conditions to the effectiveness of
the Amendment shall have been satisfied or waived and the
Amendment shall be in full force and effect.
SECTION 3.02. Conditions Precedent to Each
Borrowing. The obligation of each Lender to make an Advance
on the occasion of each Borrowing (including the initial
Borrowing) shall be subject to the further conditions
precedent that on the date of such Borrowing:
(a) the following statement shall be true (and each
of the giving of the applicable Notice of Borrowing and <PAGE>
<PAGE> 3-7
the acceptance by the Borrower of the proceeds of such
Borrowing or, in the event that the Borrower does not
deliver a Notice of Borrowing, the acceptance by the
Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty by the Borrower
that on the date of such Borrowing such statements are
true): No event has occurred and is continuing, or would
result from such Borrowing or from the application of the
proceeds therefrom, that constitutes a Default and such
Borrowing has been duly authorized by all necessary
corporate action;
(b) (other than in the case of the initial
Borrowing, which shall be in compliance with the
requirements of Section 3.01(h)) the Borrower shall have
made a simultaneous borrowing under the 1990 Credit
Agreement (i) that shall be comprised of 1990 Advances of
the same Type as the Advances comprising such Borrowing,
(ii) with the same Interest Periods, (iii) that shall be
used for the same purpose as the Borrowing to be made
hereunder and (iv) that shall be in an amount equal to
300% of the Borrowing to be made hereunder; and
(c) the Administrative Agent shall have received
such other approvals, opinions or documents as any Lender
through the Administrative Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Certain
Borrowings. The obligation of each Lender to make an Advance
on the occasion of each Borrowing (including the initial
Borrowing) that would increase the aggregate outstanding
amount of Advances owing to such Lender immediately prior to
the making of such Advance shall be subject to the further
condition precedent that on the date of such Borrowing the
following statement shall be true (and each of the giving of
the applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date
of such Borrowing such statement is true): The
representations and warranties contained in each Loan Document
are correct on and as of the date of such Borrowing, before
and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and
as of such date, except to the extent that any such
representation or warranty by its terms relates to a specified
prior date.
SECTION 3.04. Determinations Under Sections 3.01,
3.02 and 3.03. For purposes of determining compliance with
the conditions specified in Sections 3.01, 3.02 and 3.03, <PAGE>
<PAGE> 3-8
each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lenders unless an officer of
the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice
from such Lender prior to a Borrowing specifying its objection
thereto (unless such objection shall have been withdrawn by
notice to the Administrative Agent to that effect or such
Lender shall have made available to the Administrative Agent
such Lender's ratable portion of such Borrowing).
<PAGE>
<PAGE> 4-1
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Organization of the Borrower. The Borrower
(i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified as a foreign
corporation and is in good standing in each jurisdiction
in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be
licensed would not have a material adverse effect on its
business, condition (financial or otherwise), operations,
properties or prospects and (iii) has all requisite
corporate power and authority to own or lease and operate
its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Organization of the Subsidiaries of the Borrower
and Minority Entities. Set forth in Schedule III hereto
is a complete and accurate list, as of the date hereof, of
all of the Subsidiaries of the Borrower and all of the
Minority Entities, with all First-Tier Restricted
Subsidiaries, Restricted Subsidiaries, Unrestricted
Subsidiaries and Minority Entities being identified as
such, showing as of the date hereof (as to each such
Person) (i) for First-Tier Restricted Subsidiaries, the
jurisdiction of its incorporation, the number of shares of
each class of capital stock outstanding and the percentage
of the outstanding shares of each such class owned by the
Borrower and the number of shares covered by all
outstanding options, warrants, rights of conversion or
purchase and similar rights at the date hereof and
(ii) for each other Subsidiary and each Minority Entity,
the percentage of equity interests owned by and the
percentage of voting power held by, the Borrower and any
of its Subsidiaries. All of the outstanding capital stock
of all First-Tier Restricted Subsidiaries has been validly
issued, is fully paid and non-assessable and all such
shares are owned by the Borrower, free and clear of all
Liens, except those created by the Loan Documents and the
1990 Loan Documents. Each such First-Tier Restricted
Subsidiary (i) is a corporation duly organized, validly
existing and <PAGE>
<PAGE> 4-2
in good standing under the laws of the jurisdiction of its
incorporation or organization (as the case may be),
(ii) is duly qualified as a foreign corporation and is in
good standing in each jurisdiction in which it owns or
leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the
failure to so qualify or be licensed would not have a
material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole and (iii) has all requisite corporate
power and authority to own or lease and operate its
properties and to carry on its business as now conducted
and as proposed to be conducted.
(c) Compliance with Law. The execution, delivery
and performance by the Borrower of this Agreement, each
other Loan Document, each 1990 Loan Document and the
Amendment, and the consummation of the Refinancing by the
Borrower and MCI and the other transactions contemplated
hereby and thereby, are within the respective corporate
power of the Borrower and MCI (with respect to the
Refinancing), have been duly authorized by all necessary
corporate action, and do not and will not upon the
consummation thereof (i) contravene the charter or by-laws
of the Borrower or MCI (with respect to the Refinancing),
(ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934, as amended, the Racketeer
Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970, as amended, and the
Communications Act of 1934, as amended), rule, regulation
(including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, indenture,
mortgage, deed of trust, lease or any other material
contract or other agreement binding on or affecting the
Borrower or any of the Restricted Subsidiaries or any of
their respective properties or (iv) result in or require
the creation or imposition of any Lien upon or with
respect to any of the properties of the Borrower or any of
its Subsidiaries (other than the Liens created by the Loan
Documents and the 1990 Loan Documents). None of the
Borrower or any of its Subsidiaries is in violation of any
such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of
any such contract, <PAGE>
<PAGE> 4-3
loan agreement, indenture, mortgage, deed of trust, lease
or other instrument, the violation or breach of which
could have a material adverse effect on the business,
condition (financial or otherwise), operations, properties
or prospects of the Borrower and the Restricted
Subsidiaries taken as a whole.
(d) Approvals. No authorization or approval or
other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other
third party (including, without limitation, all Regulatory
Authorities) is required for the due execution, delivery
and performance by the Borrower of this Agreement or any
other Loan Document or for the consummation of the
Refinancing by the Borrower or MCI or the Amendment by the
Borrower or the other transactions contemplated hereby or
thereby, except for the authorizations, approvals,
actions, notices and filings listed in Schedule VII
hereto, all of which have been duly obtained, taken, given
or made and are in full force and effect. This Agreement
has been, and the Pledge Agreement when delivered
hereunder will have been, duly executed and delivered by
the Borrower.
(e) Legal Effect. This Agreement is, and each other
Loan Document when delivered hereunder or thereunder will
be, the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance
with its terms.
(f) Financial Information. (i) The Consolidated
balance sheets of the Borrower and its Subsidiaries, and
the consolidating balance sheets of the Borrower and the
Restricted Subsidiaries as a group and the Unrestricted
Subsidiaries as a group, as at December 31, 1992, and the
related Consolidated statements of income and changes in
financial position of the Borrower and its Subsidiaries,
and the related consolidating statements of income and
changes in financial position of the Borrower and its
Subsidiaries as a group and the Core Properties as a
group, for the fiscal year then ended, certified by Arthur
Andersen & Co., independent public accountants and (ii)
the Consolidated balance sheets of the Borrower and its
Subsidiaries, and the consolidating balance sheets of the
Borrower and the Restricted Subsidiaries as a group and
the Unrestricted Subsidiaries as a group, as at
September 30, 1993, and the related Consolidated
statements of income and statements of cash flow of the
Borrower and its Subsidiaries, and the related
consolidating statements of income and statements of cash <PAGE>
<PAGE> 4-4
flow of the Borrower and its Subsidiaries as a group and
the Core Properties as a group, for the nine months then
ended, duly certified by a Financial Officer of the
Borrower, copies of which have been furnished to each
Lender, fairly present, subject, in the case of said
balance sheets as at September 30, 1993 and said
statements of income and statements of cash flow for the
nine months then ended, to year-end audit adjustments, the
Consolidated financial condition of the Borrower and its
Subsidiaries, the consolidating financial condition of the
Borrower and the Restricted Subsidiaries as a group and
the Unrestricted Subsidiaries as a group and the
consolidating financial condition of the Borrower and its
Subsidiaries as a group and the Core Properties as a group
as at such dates and for the periods ended on such dates,
all in accordance with generally accepted accounting
principles applied on a consistent basis, and, since
September 30, 1993, there has been no material adverse
change in the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole
or in the cellular industry generally.
(g) Disclosure. No information, exhibit or report
furnished by the Borrower to any Agent or any Lender in
connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any
material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements
contained therein, in light of the circumstances in which
they were made, not misleading; provided that, with
respect to financial projections and forecasts included
therein, the Borrower represents that such projections and
forecasts were prepared in good faith based on the
assumptions stated therein, which assumptions were fair
and reasonable in light of the conditions existing at the
time of delivery of such projections and forecasts, and
represented, at the time of delivery, the Borrower's best
estimate of its future financial performance.
(h) Material Litigation. Other than the Disclosed
Litigation, there is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of
its Subsidiaries pending or threatened before any court,
governmental agency or arbitrator that could have a
material adverse effect on (i) the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole, (ii) the rights and remedies of the
Agents or the Lenders under any Loan Document, the <PAGE>
<PAGE> 4-5
Intercreditor Agreement or any 1990 Loan Document, or the
rights and remedies of the 1990 Agents and the 1990
Lenders under the 1990 Loan Documents or the Intercreditor
Agreement, or (iii) the ability of the Borrower to perform
its obligations under any Loan Document, the Intercreditor
Agreement or any 1990 Loan Document, or that purports to
affect the legality, validity or enforceability of this
Agreement, any other Loan Document, the Intercreditor
Agreement, any 1990 Loan Document or the consummation of
the transactions contemplated hereby and thereby; and
there has been no adverse change in the status, or
financial effect on the Borrower and the Restricted
Subsidiaries of the Disclosed Litigation.
(i) Regulation U. The Borrower is not engaged in
the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Advance
will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or
carrying any margin stock, in violation of Regulation U.
(j) ERISA Plans. Set forth in Schedule VIII hereto
is a complete and accurate list, as of the date hereof, of
all Plans, Multiemployer Plans and Welfare Plans with
respect to any employees of the Borrower or any of its
Subsidiaries.
(k) No Reportable Event. No ERISA Event has
occurred or is reasonably expected to occur with respect
to any Plan.
(l) Plan Funding. Neither the Borrower nor any
ERISA Affiliate is, as of the date hereof, required to
file with the Internal Revenue Service a Schedule B
(Actuarial Information) (Form 5500 Series) for any Plan.
(m) Welfare Plan Costs. (i) The aggregate
annualized cost (including, without limitation, the cost
of insurance premiums) with respect to Welfare Plans that
provided benefits to retired or former employees of the
Borrower or any of its Subsidiaries, for which the
Borrower and its Subsidiaries are liable, does not exceed
$35,000,000 and (ii) as of the date hereof, the aggregate
annualized cost for the most recent twelve-month period
incurred by the Borrower and its Subsidiaries for benefits
provided with respect to Welfare Plans did not exceed
$35,000,000.
<PAGE>
<PAGE> 4-6
(n) No Catastrophic Events. Neither the business
nor the properties of the Borrower or any of its
Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by
insurance) that could have a material adverse effect on
the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and
the Restricted Subsidiaries taken as a whole.
(o) Compliance with Environmental Law. The
operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all
Environmental Laws and neither utilize, contain nor are
affected by any Hazardous Materials, and neither the
Borrower nor any of its Subsidiaries has any material
liability, contingent or otherwise, under any
Environmental Law.
(p) No Burdensome Agreements. Neither the Borrower
nor any of its Subsidiaries is a party to any indenture,
loan or credit agreement or any lease or other agreement
or instrument or subject to any charter or corporate
restriction that could have a material adverse effect on
(i) the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and
the Restricted Subsidiaries taken as a whole, (ii) the
rights and remedies of the Agents or the Lenders under any
Loan Document or the Intercreditor Agreement or the rights
and remedies of the 1990 Lenders or the 1990 Agents under
any 1990 Loan Documents or the Intercreditor Agreement or
(iii) the ability of the Borrower to carry out its
obligations under any Loan Document or any 1990 Loan
Document.
(q) Taxes. The Borrower and each of its
Subsidiaries have filed all tax returns (Federal, state
and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties.
(r) Investment Company Act of 1940. Neither the
Borrower nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of
1940, as amended. Neither the making of any Advances, nor
the application of the proceeds or repayment thereof by
the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any <PAGE>
<PAGE> 4-7
provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
(s) Solvency. The Borrower is Solvent.
(t) Condition of System. All of the material
properties, equipment and systems of each of the Borrower,
the Restricted Subsidiaries and the Qualified Minority
Entities are, and all material properties, equipment and
systems to be added in connection with any contemplated
system expansion or construction will be, in good repair,
working order and condition and are and will be in
material compliance with all applicable standards, rules
or requirements imposed by (i) any governmental agency or
authority (including, without limitation, any Regulatory
Authority), (ii) any material Franchise and (iii) any
agreements with telephone companies.
(u) Fees. The Borrower and each Restricted
Subsidiary and Qualified Minority Entity have paid all
franchise, license or other fees and charges that have
become due pursuant to any material Franchise in respect
of its Cellular Businesses and have made adequate
provisions for any such fees and charges which have
accrued, except where the failure to pay such fees and
charges would not be reasonably likely to (i) have a
material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole or (ii) result in the revocation,
termination or adverse modification of a material
Franchise held by the Borrower or any Restricted
Subsidiary or Qualified Minority Entity.
(v) Public Utility Holding Company Act. The
Borrower is not a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a
"holding company," as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
(w) Capital Stock. As of November 30, 1993, the
authorized capital stock of the Borrower consists of 400
million shares of Class A Common Stock, par value $.01
("Class A Shares"), 200 million shares of Class B Common
Stock, par value $.01 ("Class B Shares"), and 10 million
shares of preferred stock, of which (a) 147,852,055
Class A Shares are issued and outstanding and 6,849,783
Class A Shares are reserved for issuance pursuant to stock
options granted to certain Borrower employees and
(b) 60,143,547 Class B Shares are issued and outstanding <PAGE>
<PAGE> 4-8
and 3,086,036 Class B Shares are reserved for issuance
pursuant to stock options granted to certain Borrower
employees. On the date hereof, there are no commitments
by the Borrower for the sale or other disposition of, and
no outstanding options to purchase, the Class A Shares or
Class B Shares outstanding other than pursuant to the AT&T
Merger Agreement, the BT Purchase Agreement and the stock
options referred to above. Neither the Borrower nor any
Restricted Subsidiary is subject to any obligation
(contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock except,
in the case of the Borrower, (i) capital stock issued in
connection with the acquisition of Franchise Interests and
(ii) pursuant to the BT Purchase Agreement.
(x) No Limitations on Dividends. Neither the
Borrower nor any of the Restricted Subsidiaries is subject
or party to any agreement, Lien, charter, by-law,
regulatory or other provision (except for applicable
statutory corporate law) restricting, directly or
indirectly, the payment of dividends by a Restricted
Subsidiary or the making of advances or other cash
payments by any Restricted Subsidiary other than the
limitations contained in the agreements set forth in
Schedule IX hereto.
(y) Licenses. The Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities have
obtained all necessary Franchises from, and have filed all
required registrations, applications, reports and other
documents with, all Regulatory Authorities for their
respective businesses as currently conducted. Each such
Franchise is valid and in full force and effect; no event
has occurred that would be reasonably likely to (i) result
in the revocation, termination or adverse modification of
any such Franchise, or (ii) materially and adversely
affect any rights of the Borrower or a Restricted
Subsidiary thereunder; the Borrower has no reason to
believe and no knowledge that such Franchises will not be
renewed in the ordinary course; and the Borrower and the
Restricted Subsidiaries have sufficient time, materials,
equipment, contract rights and other required resources to
complete, in a timely fashion and in full, construction of
all their Cellular Systems and RCC Systems in compliance
with all applicable technical standards and construction
requirements and deadlines of any applicable Regulatory
Authority.
<PAGE>
<PAGE> 4-9
(z) Regulation of the Lenders. Neither any Agent
nor any Lender will, by reason of the execution, delivery
and performance (other than the enforcement of remedies)
of any of the Loan Documents, any of the 1990 Loan
Documents or the Intercreditor Agreement, be subject to
the regulation or control of either the FCC or any other
Regulatory Authority.
(aa) Existing Indebtedness. Set forth in Schedule II
hereto is a complete and accurate list of all Existing
Indebtedness, showing as of the date hereof the principal
amount outstanding thereunder.
(bb) Material Agreements. Set forth in Schedule IV
hereto is a complete and accurate list of all Material
Agreements as of the date hereof. Each Material Agreement
set forth in such Schedule IV has been duly authorized,
executed and delivered by all parties thereto, has not
been amended or otherwise modified, is in full force and
effect and is binding upon and enforceable against all
parties thereto in accordance with its terms, and, to the
best of the Borrower's knowledge after due investigation,
there exists no default under any Material Agreement by
any party thereto. Each such Material Agreement complies
with all applicable rules, regulations and standards of
the FCC and other Regulatory Authorities.
(cc) Ownership. Schedule III hereto sets forth as of
the date hereof a complete and correct list of (i) each
Cellular Entity in which any Subsidiary of the Borrower
has a Franchise Interest and whether such Entity is a
Cellular Licensee, Cellular Permittee or Cellular
Tentative Selectee, (ii) each MSA or RSA that such
Cellular Entity is authorized to serve, (iii) the name of
each Subsidiary of the Borrower that owns any such
Franchise Interest, (iv) the form, class and percentage
ownership and voting interest of each Subsidiary of the
Borrower in such Cellular Entity, (v) the population of
each MSA or RSA authorized to be served by each such
Cellular Entity according to the Donnelly Marketing
Service population estimates for 1989, (vi) the
Attributable Share of the MSA Pops or RSA Pops of each
such Cellular Entity, (vii) the expiration date of the
Franchise of such Cellular Entity, (viii) to the extent
not otherwise set forth in Schedule III hereto, each
ownership interest of the Borrower or any of its
Subsidiaries in any Person, and the form, class and
percentage of such ownership interest and (ix) the
percentage of all outstanding Franchise Interests owned <PAGE>
<PAGE> 4-10
or subject to any agreement to purchase or sell or any
option, put or call to which the Borrower or any of its
Subsidiaries is a party.
(dd) Title to Property. The Borrower and each of the
Restricted Subsidiaries has good and sufficient title to
its respective properties and assets free and clear of all
Liens, other than Liens created or permitted by the Loan
Documents.
(ee) Calculations. During the period from February
26, 1990 through and including September 30, 1993, the
Borrower has (i) not applied any proceeds of 1990 Advances
to make Investments in Unrestricted Subsidiaries of the
type described in Section 2.13(g) hereof, (ii) applied
proceeds of 1990 Advances to make purchases of RCC Assets
of the type described in Section 2.13(h) hereof in an
aggregate amount of $15,297,000, (iii) made dispositions
of assets of the type described in Section 2.04(b)(iii)(E)
hereof for which the Borrower received Net Cash Proceeds
in an aggregate amount equal to $277,024,000, (iv) made
dispositions of Cellular Assets permitted by Section
5.02(d)(iii) hereof that represent 1,938,500 Pops and
(v) made Investments in Unrestricted Subsidiaries pursuant
to Section 5.02(e)(ix) hereof in an aggregate amount equal
to $113,385,000. Through and including September 30,
1993, the sum of the amounts described in clauses (A)-(F)
of Section 5.02(e)(ix) hereof is $840,906,600. During the
period from September 30, 1993 to, and including, the date
hereof there has been no change in the result of the
foregoing calculations other than those changes that,
individually or in the aggregate, are not material.
<PAGE>
<PAGE> 5-1
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Required
Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc. (i) Comply, and
cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation,
compliance with the Communications Act of 1934, as
amended, ERISA, all applicable Environmental Law and the
Racketeer Influenced and Corrupt Organizations Chapter of
the Organized Crime Control Act of 1970, as amended, and
(ii) obtain and maintain, and cause each of its
Subsidiaries to obtain and maintain, all licenses,
permits, franchises or other governmental authorizations
and approvals necessary to own, acquire or dispose of
their respective properties, to conduct their respective
businesses or to comply with the FCC's or any other
Regulatory Authority's construction, operating and
reporting requirements, the violation of which or the
failure to obtain or maintain which could materially
adversely affect the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole.
(b) Payment of Taxes, Etc. Pay and discharge, and
cause each of its Subsidiaries to pay and discharge,
before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed
upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its
property; provided that neither the Borrower nor any of
its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause
each Restricted Subsidiary to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same <PAGE>
<PAGE> 5-2
general areas in which the Borrower or such Restricted
Subsidiary operates.
(d) Preservation of Corporate Existence, Etc.
Preserve and maintain, and cause each Restricted
Subsidiary to preserve and maintain, its corporate,
partnership or joint venture existence, rights (charter
and statutory) and franchises; provided that neither the
Borrower nor any Restricted Subsidiary shall be required
to preserve any right or franchise (other than any
Franchise Interest) if the Board of Directors of the
Borrower or such Restricted Subsidiary shall determine
that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower or such
Restricted Subsidiary, as the case may be, and if the loss
thereof is not disadvantageous in any material respect to
the Borrower and the Restricted Subsidiaries taken as a
whole or to the Lenders or the 1990 Lenders.
(e) Visitation Rights. At any reasonable time and
from time to time, permit any Agent, or any of the Lenders
or any agents or representatives thereof, to examine and
make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and
any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and
with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account,
in which full and correct entries shall be made of all
financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each Restricted Subsidiary to maintain
and preserve, all of its properties that are used or
useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and,
from time to time, make or cause to be made all
appropriate and proper repairs, renewals, replacements,
additions and improvements thereto, and keep all systems
and equipment which may now or in the future be subject to
compliance with any standards or rules (including, without
limitation, compliance with requirements as to the time
periods in which system construction must be completed)
imposed by any <PAGE>
<PAGE> 5-3
governmental agency or authority (including, without
limitation, the FCC or any other Regulatory Authority) in
material compliance with such standards or rules. The
equipment and systems shall also be installed and
maintained by the Borrower and the Restricted Subsidiaries
in compliance with any material requirement imposed under
FCC or other Regulatory Authorities regulations, permits,
or licenses or under agreements affecting the Borrower or
any Restricted Subsidiary. The Borrower and the
Restricted Subsidiaries shall maintain, preserve and
protect, and renew, all material Franchises, service
marks, trademarks and trade names held by any of them that
are useful or necessary to operate their Cellular Systems
and RCC Systems.
(h) Performance of Material Agreements. Perform and
observe all the terms and provisions of each Material
Agreement to be performed or observed by it, maintain each
such Material Agreement in full force and effect, enforce
each such Material Agreement in accordance with its terms,
take all such action to such end as may be from time to
time requested by the Administrative Agent and, upon
request of the Administrative Agent, make to each other
party to each such Material Agreement such demands and
requests for information and reports or for action as the
Borrower is entitled to make under such Material
Agreement, and cause each Restricted Subsidiary to do so.
(i) Transactions with Affiliates. Conduct, and
cause each Restricted Subsidiary to conduct, all
transactions otherwise permitted under the Loan Documents
with any of their Affiliates on terms that in all material
respects are fair and reasonable and no less favorable to
the Borrower or such Restricted Subsidiary than it would
obtain in a comparable arm's-length transaction with a
Person not an Affiliate, other than (i) transactions
conducted in accordance with the provisions of tax
agreements that comply with the provisions of Section
5.02(p), (ii) transactions conducted in accordance with
the Private Market Value Guarantee, and (iii) transactions
among the Borrower and the Restricted Subsidiaries, other
than any Restricted Subsidiary in which an Affiliate
(other than the Borrower or another Restricted Subsidiary)
has an equity or other ownership interest.
<PAGE>
<PAGE> 5-4
(j) Interest Rate Hedging. Within 120 days after
the date of the initial Borrowing and within 30 days after
the date of each subsequent Borrowing, maintain Hedge
Agreements with Persons that are acceptable to, and that
contain terms and conditions satisfactory to, the
Arranging Agents, that cover a notional amount of not less
than 33% of the aggregate amount of the Advances that are
outstanding on the date on which such Hedge Agreement is
first required and that provide protection against
fluctuations in interest rates for a period of no less
than three years from the date of the initial Borrowing.
(k) Simultaneous Borrowings, Prepayments and
Commitment Reductions. On any date on which a Borrowing
under Section 2.01 that would increase the aggregate
outstanding amount of the Advances (other than the initial
Borrowing or any borrowing), a prepayment under
Section 2.07 or a reduction in the Commitments under
Section 2.04 is made or required to be made, make a
simultaneous borrowing (comprised of 1990 Advances of the
same Type as Advances comprising such Borrowing having the
same Interest Periods and used for the same purposes),
prepayment or commitment reduction, as the case may be,
under the 1990 Credit Agreement in an amount equal to
three times the amount of the Borrowing, prepayment or
commitment reduction, as the case may be, to be made
hereunder.
(l) Reporting Requirements. Furnish to the Lenders:
(i) as soon as possible and in any event within
two days after the occurrence of each Default
continuing on the date of such statement, a statement
of a Financial Officer of the Borrower setting forth
details of such Default and the action that the
Borrower has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event
within 60 days after the end of each fiscal quarter
of each fiscal year of the Borrower, a Consolidated
balance sheet of the Borrower and its Subsidiaries as
of the end of such quarter and Consolidated
statements of income and cash flows of the Borrower
and its Subsidiaries as of the end of such fiscal
quarter and for the period commencing at the end of
the previous fiscal year and ending with the end of
such quarter, setting forth in each case in
comparative form the corresponding figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and duly certified (which <PAGE>
<PAGE> 5-5
certification may be subject to year-end audit
adjustments) by a Financial Officer of the Borrower
as having been prepared in conformity with GAAP;
(iii) as soon as available and in any event
within 60 days after the end of each fiscal quarter
of each fiscal year of the Borrower, a combined
balance sheet of the Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities
(prepared on an Attributable Share basis) and a
balance sheet of each of the Borrower, the Restricted
Subsidiaries (as a group) and the Qualified Minority
Entities (as a group), in each case as of the end of
such quarter, a combined statement of income of the
Borrower, the Restricted Subsidiaries and the
Qualified Minority Entities (prepared on an
Attributable Share basis), a statement of income of
each of the Borrower, the Restricted Subsidiaries (as
a group) and the Qualified Minority Entities (as a
group), a statement of the aggregate amount of
capital expenditures of the Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities
(prepared on an Attributable Share basis), and a
statement of cash flow of the Borrower, in each case
for such quarter and for the period commencing at the
end of the previous fiscal year and ending with the
end of such quarter, setting forth in each case in
comparative form the corresponding figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and duly certified (which
certification may be subject to year-end audit
adjustments) by a Financial Officer of the Borrower
as having been prepared in accordance with GAAP,
except that such certification shall state that such
information has been presented on an Attributable
Share basis, together with (A) a certificate of a
Financial Officer of the Borrower setting forth the
Attributable Share of the aggregate number of
subscribers served by all Cellular Entities in which
the Borrower, a Restricted Subsidiary or a Qualified
Minority Entity has a Franchise Interest as of such
date, (B) a certificate of such Financial Officer
stating that no Default has occurred and is
continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes
to take with respect thereto and (C) a Compliance
Certificate, together with information sufficient to
enable the Lenders to verify the calculations
therein;
<PAGE>
<PAGE> 5-6
(iv) as soon as available and in any event
within 120 days after the end of each fiscal year of
the Borrower, a copy of the annual audit report for
such year for the Borrower and its Subsidiaries,
including therein a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such
fiscal year, Consolidated statements of income,
shareholders' equity and cash flow of the Borrower
and its Subsidiaries, in each case for such fiscal
year and certified in a manner acceptable to the
Required Lenders by Arthur Andersen & Co., any
Approved Accountant or any other independent public
accountants of recognized standing acceptable to the
Required Lenders, together with (A) a certificate of
a Financial Officer of the Borrower setting forth the
Attributable Share of the aggregate number of
subscribers served by all Cellular Entities in which
the Borrower, a Restricted Subsidiary or a Qualified
Minority Entity has a Franchise Interest, as of such
date, (B) a certificate of such accounting firm to
the Lenders stating that in the course of the regular
audit of the business of the Borrower and its
Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained
no knowledge that a Default has occurred and is
continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a
statement as to the nature thereof, (C) a certificate
of such accounting firm to the Lenders stating that
(i) the financial statements of the Borrower, the
Restricted Subsidiaries and the Qualified Minority
Entities for the last quarter of such fiscal year
delivered pursuant to Section 5.01(l)(iii) were
prepared in conformity with GAAP (other than that
such financial information was presented on an
Attributable Share basis) and (ii) the reported
financial results of the Restricted Subsidiaries and
the Qualified Minority Entities were incorporated
into the combined financial statements of the
Borrower, the Restricted Subsidiaries and the
Qualified Minority Entities in accordance with this
Agreement, (D) a Compliance Certificate, together
with information sufficient to enable the Lenders to
verify the calculations therein and (E) concurrently
with the delivery of the financial statements for
fiscal year 1996 and for each fiscal year occurring
thereafter, (x) a certificate of a Financial Officer
of the Borrower, in form satisfactory to the
Arranging Agents, setting forth (1) the Excess Cash
Flow for each such <PAGE>
<PAGE> 5-7
fiscal year and the calculation thereof and (2) the
reduction required by Section 2.04(b)(ii) hereof and
the percentage by which the Lenders' Commitments will
be reduced on each Amortization Date and (y) a letter
describing all Investments made during such fiscal
year and the Pops, if any, attributable to such
Investments;
(v) promptly and in any event within fifteen
days after the Borrower or any ERISA Affiliate knows
or has reason to know that any ERISA Event has
occurred, a statement of a Financial Officer of the
Borrower describing such ERISA Event and the action,
if any, that the Borrower or such ERISA Affiliate
proposes to take with respect thereto;
(vi) promptly and in any event within five
Business Days after receipt thereof by the Borrower
or any ERISA Affiliate, copies of each notice from
the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any
Plan;
(vii) promptly and in any event within 30 days
after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series)
with respect to each Plan;
(viii) promptly and in any event within ten
Business Days after receipt thereof by the Borrower
or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by
the Borrower or any ERISA Affiliate concerning (A)
the imposition of Withdrawal Liability by any
Multiemployer Plan, (B) the reorganization or
termination, within the meaning of Title IV of ERISA,
of any Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by the
Borrower or any ERISA Affiliate in connection with
any event described in clause (A) or (B) above;
(ix) promptly upon receipt thereof, copies of
all material financial reports or material written
recommendations, if any, submitted to the Borrower by
its auditors, in connection with each annual or
interim audit or examination of its books or the
books of any Subsidiary;
<PAGE>
<PAGE> 5-8
(x) promptly after the commencement thereof,
notice of all actions, suits and proceedings before
any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any of the
Restricted Subsidiaries of the type described in
Section 4.01(h);
(xi) promptly after the sending or filing
thereof, copies of all proxy statements, financial
statements and reports that the Borrower or any of
the Restricted Subsidiaries sends to its public
stockholders, and copies of all regular, periodic and
special reports, and all registration statements
(other than Registration Statements on Form S-8) that
the Borrower or any of its Subsidiaries files with,
and any comments or correspondence (other than those
of a routine nature) received by the Borrower or any
of its Subsidiaries from, the Securities and Exchange
Commission or any governmental authority that may be
substituted therefor, or with any national securities
exchange;
(xii) promptly after the furnishing thereof, any
communication from any trustee, financial institution
or other Person acting in a similar capacity pursuant
to the terms of the 1990 Loan Documents or any other
indenture, loan or credit or similar agreement with
respect to a principal amount of Indebtedness of
$25,000,000 or more that relates to the occurrence or
continuance of an event of default, the acceleration
of Indebtedness or the amendment, modification or
waiver of any provision of any such agreement;
(xiii) promptly after the Borrower or any
Restricted Subsidiary has reason to know, a statement
of a Financial Officer describing in reasonable
detail any (A) refusal or failure by any
instrumentality to renew or extend any permit or
Franchise with respect to the Cellular Businesses of
the Borrower and its Subsidiaries, or (B) proposed
abandonment or proposed or actual revocation,
termination or materially adverse modification of any
Franchise or any dispute related thereto, or (C)
denial or threatened denial or revocation or material
modification by any Regulatory Authority of any
Franchise including, without limitation, by the FCC
of any FCC Licenses, or (D) notice from any <PAGE>
<PAGE> 5-9
Regulatory Authority of the imposition of any fines
or penalties or forfeitures, or (E) threats, notices
or requests by any Regulatory Authority with respect
to any of the foregoing, or with respect to any
proceeding or hearing relating to the foregoing, that
might result in any of the foregoing, either
individually or in the aggregate, being materially
adverse to the Borrower or any Restricted Subsidiary;
and
(xiv) promptly after request therefor, such other
information respecting the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower or any of its Subsidiaries
as any Lender may from time to time reasonably
request; provided that a Lender shall not be entitled
to receive any information the disclosure of which
the Borrower reasonably believes would violate the
restrictions regarding security imposed by the
government of the United States or any agency thereof
with respect to government contracts.
(m) Maintenance of Corporate Separateness. Conduct
its business and operations and the business and
operations of each Restricted Subsidiary separately from
that of each Unrestricted Subsidiary, and cause each
Unrestricted Subsidiary to conduct its business and
operations separately from that of the Borrower and the
Restricted Subsidiaries, including, without limitation,
(i) not commingling funds or other assets of an
Unrestricted Subsidiary with the funds or other assets of
the Borrower or a Restricted Subsidiary; (ii) maintaining
separate corporate and financial records and observing all
corporate formalities; (iii) causing each Unrestricted
Subsidiary to pay its liabilities from its assets;
provided that this clause shall not prohibit the Borrower
or any Restricted Subsidiary from making an Investment in
an Unrestricted Subsidiary that is otherwise permitted
under this Agreement; (iv) maintaining capitalization
adequate to meet the business needs of each Unrestricted
Subsidiary; (v) causing all reports and filings of the
Borrower to refer to each Unrestricted Subsidiary as a
Subsidiary rather than as a division; and (vi) causing
each Unrestricted Subsidiary to conduct its dealings with
third parties in its own name and as a separate and
independent entity.
<PAGE>
<PAGE> 5-10
(n) Ownership of Unrestricted Subsidiaries. Cause
each Unrestricted Subsidiary to be a direct or indirect
Subsidiary of an Unrestricted Subsidiary in which all of
the equity interest is registered in the name of the
Borrower or otherwise directly owned by the Borrower.
SECTION 5.02. Negative Covenants. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, without the
written consent of the Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to
exist, or permit any Restricted Subsidiary to create,
incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character
(including, without limitation, accounts) whether now
owned or hereafter acquired, or sign or file, or permit
any Restricted Subsidiary to sign or file, under the
Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any Restricted
Subsidiary as debtor, or sign, or permit any Restricted
Subsidiary to sign, any security agreement authorizing any
secured party thereunder to file such financing statement,
or assign, or permit any Restricted Subsidiary to assign,
any accounts or other right to receive income; excluding,
however, from the operation of the foregoing restrictions,
the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) the Liens described on Schedule X;
(iv) (A) Liens incurred in connection with
Indebtedness permitted by Sections 5.02(b)(ii)(B)
through (E); (B) Liens incurred in connection with
Capitalized Leases of the Borrower, subject to the
limitations set forth in Section 5.02(b)(ii)(B); and
(C) purchase money Liens upon or in vehicles and
office equipment held or acquired by the Borrower in
the ordinary course of business to secure the
purchase price of such property or to secure
Indebtedness incurred by the Borrower solely for the
purpose of financing the acquisition of such
property; provided that no such Lien shall extend to
or cover any property other than (x) the property
being acquired and (y) in the case of Indebtedness
permitted by Section 5.02(b)(ii)(C), the equity <PAGE>
<PAGE> 5-11
interest of the Borrower or any Restricted Subsidiary
in the Subsidiary (other than a First-Tier Restricted
Subsidiary) that owns such property;
(v) Liens on equity interests in Unrestricted
Subsidiaries other than Holdings;
(vi) Liens incurred in connection with
Indebtedness permitted by Section 5.02(b)(ii)(F);
provided that such Liens shall extend only to the
assets of the Person that has become a Restricted
Subsidiary or to the equity interests of the Borrower
or any Restricted Subsidiary in the Person that has
become a Restricted Subsidiary so long as such Person
has not become a First-Tier Restricted Subsidiary;
(vii) Liens created by the 1990 Loan Documents,
to the extent such Liens are pari passu in all
respects with the Liens created by the Loan
Documents; and
(viii) the replacement, extension or renewal of
any Lien permitted by clause (iii) above upon or in
the same property theretofore subject thereto or the
replacement, extension or renewal (without increase
of principal amount) of the Indebtedness secured
thereby.
(b) Indebtedness. (i) Create, incur, assume or
suffer to exist any Indebtedness unless, after giving
effect to the assumption or incurrence of such
Indebtedness, the Borrower and the Restricted Subsidiaries
are in compliance with the ratios set forth in Sections
5.03(a) and (d);
(ii) permit any Restricted Subsidiary to create,
incur, assume or suffer to exist any Indebtedness other
than the Indebtedness set forth below and provided that,
after giving effect to the assumption or incurrence of
such Indebtedness, the Borrower and the Restricted
Subsidiaries are in compliance with the ratios set forth
in Sections 5.03(a) and (d):
(A) Existing Indebtedness and extensions,
renewals and refinancings thereof that are on terms
(other than interest rate, prepayment premiums, fees
and other similar financial terms) no less favorable <PAGE>
<PAGE> 5-12
to the Lenders and such Restricted Subsidiary than
such Existing Indebtedness and that have a weighted
average life to maturity at least equal to the then
remaining weighted average life of such Existing
Indebtedness;
(B) Capitalized Leases and purchase money
Indebtedness in vehicles and office equipment held or
acquired by any Core Property in the ordinary course
of business; provided that after giving effect to the
obligations of such Restricted Subsidiary with
respect to such Capitalized Leases and such
Indebtedness the obligations of the Borrower and all
Restricted Subsidiaries with respect to all
Capitalized Leases and such Indebtedness would not
exceed $125,000,000;
(C) except for Core Properties (which may not
incur Indebtedness pursuant to this clause),
Indebtedness incurred solely to finance the
acquisition of cellular equipment or the construction
of facilities to be used in connection with a
Cellular Business including Indebtedness incurred in
connection with the development of any newly acquired
Cellular Business and to provide related working
capital to such Cellular Business; provided that the
amount of such Indebtedness to be incurred by such
Restricted Subsidiary shall not exceed 150% of the
amount reasonably scheduled by agreement of the
Borrower's equipment vendors and contractors to be
expended by such Restricted Subsidiary for the
acquisition or construction of such equipment and
facilities;
(D) Indebtedness incurred to finance Severable
Equipment in an aggregate outstanding amount for any
Cellular System not to exceed the greater of (x)
$25,000 in any Cellular System and (y) ten cents for
each Pop in such Cellular System;
(E) Indebtedness incurred to finance Subscriber
Equipment in an aggregate outstanding amount for any
Cellular System not to exceed fifty cents for each
Pop in such Cellular System;
(F) Indebtedness of a Person that was
outstanding at the time such Person becomes a
Restricted Subsidiary (provided that such
Indebtedness was not incurred in anticipation of <PAGE>
<PAGE> 5-13
becoming a Restricted Subsidiary) and refinancings
thereof on terms (other than interest rate,
prepayment premiums, fees and other similar financial
terms) no less favorable to the Lenders and such
Restricted Subsidiary than such outstanding
Indebtedness and that has a weighted average life to
maturity at least equal to the then remaining
weighted average life of such outstanding
Indebtedness;
(G) Indebtedness (other than described in
clause (C)) attributable to a Restricted Subsidiary
by reason of its holding or owning an interest in a
Minority Entity unless the partnership or other
agreement pursuant to which such Restricted
Subsidiary holds or owns its interest in such
Minority Entity permits the Borrower or such
Restricted Subsidiary to prohibit the incurrence of
such Indebtedness;
(H) Indebtedness to the Borrower; provided that
such Indebtedness shall be evidenced by a promissory
note that has been pledged to the Collateral Agent
for the benefit of the Lenders under the Pledge
Agreement; and
(I) Indebtedness to another Restricted
Subsidiary; provided that promissory notes evidencing
such Indebtedness shall provide by their terms that
such Indebtedness shall, if not previously repaid,
automatically be cancelled upon any sale or other
disposition of the Restricted Subsidiary obligor
thereunder in connection with the exercise of
remedies under the Pledge Agreement.
(c) Mergers, Etc. Merge with or into, or
consolidate with or into, any Person (other than the
Merger); or permit any Restricted Subsidiary to merge with
or into or consolidate with or into any other Person,
unless in the case of a Restricted Subsidiary
(i) immediately after giving effect thereto, no event
shall occur and be continuing that constitutes a Default,
(ii) if the surviving entity is not a Restricted
Subsidiary, the disposition of such Restricted Subsidiary
shall otherwise have been permitted under Section 5.02(d)
and any resulting Investment shall otherwise be permitted
by Section 5.02(e)(ix) and (iii) the Borrower delivers to
the Administrative Agent a certificate of a Financial
Officer of the Borrower showing, in sufficient detail so <PAGE>
<PAGE> 5-14
as to permit computation, that, immediately after giving
effect thereto, the Borrower and the Restricted
Subsidiaries are in compliance with the ratios set forth
in Sections 5.03(a) and (d).
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any Restricted Subsidiary
to sell, lease, transfer or otherwise dispose of, any of
its assets, including, without limitation, substantially
all assets constituting the business of a division, branch
or other unit operation, except:
(i) dispositions of assets (other than
Franchise Interests) in the ordinary course of
business;
(ii) Permitted Cellular Asset Swaps;
(iii) dispositions of Cellular Assets (other than
Core Properties) that, in the aggregate for all such
sales after February 26, 1990, do not represent more
than 7,500,000 MSA Pops and RSA Pops; provided that
the Net Cash Proceeds thereof are applied (A) upon
the reduction of the Commitments required by Section
2.04(b)(iii) to prepay the Facility as required by
Section 2.07(b)(i) or (B) to prepay the Facility if
required by Section 2.07(b)(ii);
(iv) dispositions of any assets if the Net Cash
Proceeds thereof are applied to prepay in full all
amounts payable by the Borrower under this Agreement
and the other Loan Documents and the Commitments of
the Lenders have been terminated;
(v) dispositions of RCC Assets and assets that
are not Cellular Assets;
(vi) dispositions of Unrestricted Subsidiaries;
and
(vii) dispositions of assets (including capital
stock of a class registered under the Securities
Exchange Act of 1934, but excluding all other
Franchise Interests) to an Unrestricted Subsidiary;
provided that any resulting Investment in such
Unrestricted Subsidiary would not be prohibited by
Section 5.02(e)(ix);
<PAGE>
<PAGE> 5-15
provided that, if any such sale, transfer or other
disposition of assets by the Borrower or any Restricted
Subsidiary would affect more than 1,000,000 Pops, prior
to, or simultaneously with, such sale, transfer or
disposition, the Borrower shall deliver to the Lenders a
certificate of a Financial Officer of the Borrower
showing, in sufficient detail so as to permit computation,
that, immediately after giving effect thereto the Borrower
and the Restricted Subsidiaries are in compliance with the
ratios set forth in Sections 5.03(a) and (d).
(e) Investments in Other Persons. Make, or permit
any Restricted Subsidiary to make, any Investment in any
Person, other than:
(i) acquisitions of Cash Equivalents or
repurchase agreements and reverse repurchase
agreements with any securities dealer with respect to
Cash Equivalents that are fully collateralized by
Cash Equivalents;
(ii) acquisitions of debt securities in an
aggregate amount for the Borrower and all Restricted
Subsidiaries not to exceed $50,000,000; provided that
no more than $25,000,000 of such debt securities
shall be securities of any single issuer;
(iii) capital contributions or loans to a
Minority Entity in which a Restricted Subsidiary
holds a Franchise Interest; provided that unless the
Borrower or a Restricted Subsidiary owns or has the
right to acquire, pursuant to a binding contract,
more than 50% of the outstanding voting interests of
such Minority Entity, the Borrower's or such
Restricted Subsidiary's percentage of any capital
contribution or loan to such Minority Entity shall
not exceed the Attributable Share of such Minority
Entity;
(iv) Targeted Acquisitions by the Borrower or
any Restricted Subsidiary; provided that, without
limitation of the Borrower's ability to make Targeted
Acquisitions under clause (ix), no such Acquisition
pursuant to this clause (iv) shall be designated as
an Unrestricted Subsidiary;
(v) Investments in Restricted Subsidiaries;
provided that any Indebtedness resulting therefrom
shall, to the extent it is owed to the Borrower, be <PAGE>
<PAGE> 5-16
evidenced by a promissory note that has been pledged
to the Collateral Agent for the benefit of the
Lenders under the Pledge Agreement;
(vi) (x) loans and advances by First-Tier
Restricted Subsidiaries to Cellular Entities owning
an MSA Franchise or Geographically-Related RSA
Franchise that are fully secured by a first priority
security interest and that are in an aggregate amount
not to exceed $50,000,000 and (y) additional
Investments (other than loans, advances and similar
Investments) in Persons owning RCC Assets in an
aggregate amount for the Borrower and all Restricted
Subsidiaries, together with the amount of all loans
and advances under clause (x), not to exceed
$200,000,000;
(vii) loans and advances to employees that in the
aggregate for the Borrower and the Restricted
Subsidiaries do not exceed $20,000,000;
(viii) other loans and advances in the ordinary
course of business that in the aggregate do not
exceed $20,000,000;
(ix) Investments in Unrestricted Subsidiaries;
provided that the aggregate amount invested
(excluding Investments pursuant to clause (x) of this
Section 5.02(e), Investments by Restricted
Subsidiaries in additional LIN Shares and
acquisitions by Restricted Subsidiaries of Franchise
Interests that result in the direct or indirect
ownership of additional outstanding common equity of
any Cellular Entity that was an Unrestricted
Subsidiary immediately prior to such acquisition and
did not become an Unrestricted Subsidiary as a part
of the same transaction or series of related
transactions with such acquisition, to the extent,
and solely to the extent, that any such acquisition
would constitute a Targeted Acquisition, but
including all other Investments in Unrestricted
Subsidiaries pursuant to this Section 5.02(e)) by the
Borrower and all Restricted Subsidiaries since
February 26, 1990 shall not exceed the sum of
(A) $100,000,000, plus (B) the net proceeds
(including the fair market value of non-cash proceeds
as determined in good faith by a Financial Officer of
the Borrower and set forth in a certificate of such
Financial Officer delivered to the Arranging Agents
and not objected to by the Arranging Agents) of
issuances by the Borrower after <PAGE>
<PAGE> 5-17
October 20, 1989 of (1) common stock (other than the
McCaw Stock Sale), (2) preferred stock that is not
subject to mandatory redemption and does not pay
dividends in cash or in securities constituting
Indebtedness and (3) options or warrants to purchase
common stock or preferred stock referred to in clause
(2) above, plus (C) the net proceeds (as so
determined) received by the Borrower or a Restricted
Subsidiary of sales of the equity securities of
Unrestricted Subsidiaries (excluding LIN Shares)
after October 20, 1989, plus (D) cash dividends or
distributions received by the Borrower or a
Restricted Subsidiary after October 20, 1989 from any
Unrestricted Subsidiary, plus (E) the fair market
value (as determined in good faith by the Board of
Directors of the Borrower and set forth in a
certificate of a Financial Officer of the Borrower
delivered to the Lenders and not objected to by the
Arranging Agents or the Required Lenders within ten
days after delivery thereof) of the equity held or
owned by the Borrower or a Restricted Subsidiary in
any Unrestricted Subsidiary (excluding LIN Shares),
the principal assets of which consist of Franchise
Interests or RCC Assets, upon the conversion of such
Subsidiary into a Restricted Subsidiary or the fair
market value (as so determined) of such assets
distributed to the Borrower or such Restricted
Subsidiary, plus (F) proceeds deemed received by the
Borrower by conversion into common stock of
convertible Indebtedness that is not outstanding on
October 20, 1989 or of preferred stock (other than
preferred stock referred to in clause (B)(2) above);
and provided further that neither the Borrower nor
any Restricted Subsidiary shall directly or
indirectly make or hold any such Investment in the
form of a general partnership interest or other
interest that does not limit the liability of the
Borrower and the Restricted Subsidiaries thereunder;
provided that
(A) neither the Borrower nor any Restricted
Subsidiary shall make Investments in any Unrestricted
Subsidiary unless prior to such Investment a
Financial Officer of the Borrower or, with respect to
Investments in any Person the total assets of which
have a fair market value of $200,000,000 or more, the
Board of Directors of the Borrower has determined in
his or its good faith judgment (as the case may be)
that such Unrestricted <PAGE>
<PAGE> 5-18
Subsidiary will be able to satisfy its potential
liabilities and its other liabilities from its own
assets and earnings, including any potential
liabilities of such Unrestricted Subsidiary with
respect to taxes, ERISA, Environmental Law and other
similar matters; and
(B) if as a result of any Investment permitted
by this Section 5.02(e) the Borrower or any
Restricted Subsidiary will acquire more than
1,000,000 Pops, prior to or simultaneously with such
Investment, the Borrower shall deliver to the Lenders
a certificate of a Financial Officer of the Borrower
(1) showing, in detail satisfactory to the Arranging
Agents, that, immediately after giving effect to such
Investment, the Borrower and the Restricted
Subsidiaries are in compliance with the ratios set
forth in Sections 5.03(a) and (d) and (2) listing,
for each Person that is the subject of such
Investment, (u) each Cellular Entity in which such
Person has a Franchise Interest and whether such
Cellular Entity is a Cellular Licensee, Cellular
Permittee or Cellular Tentative Selectee, (v) each
MSA or RSA such Cellular Entity is authorized to
serve, (w) the form, class and percentage ownership
and voting interest of such Person in each such
Cellular Entity, (x) the MSA Pops or the RSA Pops, as
the case may be, of each MSA or RSA authorized to be
served by each such Cellular Entity (determined by
reference to the most recent Donnelly Marketing
Service population estimates (or, if no such
estimates are available, according to the estimates
of a comparable service or publication, which service
or publication shall be acceptable to the Lenders)),
(y) the Attributable Share of the MSA Pops or RSA
Pops of each such Cellular Entity immediately after
giving effect to such Investment and (z) the
expiration date of each Franchise granted to such
Cellular Entity; and
(x) the acquisition by Holdings of LIN Shares
pursuant to the Tender Offer and the Los Angeles
Contribution.
(f) Dividends, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for
value any of its capital stock or any warrants, rights or
options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as
such, or make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to
its stockholders as such, or permit any Restricted
Subsidiary to purchase, redeem, retire, <PAGE>
<PAGE> 5-19
defease or otherwise acquire for value any capital stock
of the Borrower or any warrants, rights or options to
acquire such capital stock, except that the Borrower may
(i) declare and deliver dividends and distributions
payable only in, or purchase, redeem, retire, defease or
otherwise acquire such capital stock for value consisting
of, common stock of the Borrower or preferred stock that
complies with the provisions of Section 5.02(o) or
warrants, rights or options to purchase such stock of the
Borrower, (ii) redeem equity issued in connection with the
acquisition of Franchise Interests, (iii) repurchase
employee common stock and options in an aggregate amount
not exceeding, in any fiscal year of the Borrower, 1% of
the issued and outstanding common stock of the Borrower,
(iv) redeem common stock in accordance with the provisions
of the Borrower's certificate of incorporation as in
effect on February 26, 1990 relating to the application of
laws and regulations governing foreign ownership or
otherwise enabling the Borrower to prevent the loss of a
Franchise and (v) repurchase Class A Shares and Class B
Shares from BT to maintain trading in the Class A Shares
in accordance with the terms of the BT Purchase Agreement
as in effect on February 26, 1990; provided that
(A) immediately after giving effect to each such purchase,
repurchase, redemption or distribution, no event shall
occur and be continuing that constitutes a Default,
(B) with respect to purchases, repurchases or redemptions
(other than redemptions or repurchases of stock that are
permitted by clauses (iv) and (v) hereof), such purchases,
repurchases or redemptions are made at a price that does
not exceed the existing market price and (C) with respect
to purchases, redemptions or repurchases since February
26, 1990 of stock that are permitted by clauses (iv) and
(v), the cash consideration payable with respect thereto
shall not in the aggregate for all such redemptions or
repurchases since February 26, 1990 exceed $250,000,000.
(g) Change in Nature of Business. Permit any of the
Restricted Subsidiaries to engage in any business other
than the Cellular Business and RCC Business and any other
business owned by a Restricted Subsidiary on February 26,
1990 or acquired incidental to the acquisition of Cellular
Businesses and RCC Businesses or permit any Unrestricted
Subsidiary to engage in any business other than the
communications business and any other business owned by an
Unrestricted Subsidiary on February 26, 1990 or acquired
incidental to the acquisition of communications
businesses; notwithstanding <PAGE>
<PAGE> 5-20
the foregoing authorization to acquire incidental
businesses, the Borrower and the Restricted Subsidiaries,
taken as a whole, shall remain at all times primarily
engaged in the business of owning and operating Cellular
Businesses and RCC Businesses.
(h) Compliance with ERISA. (i) Terminate, or permit
any ERISA Affiliate to terminate, any Plan so as to result
in any material liability of the Borrower and its ERISA
Affiliates as a whole to the PBGC or (ii) permit to
continue unremedied any Reportable Event (as defined in
Title IV of ERISA), or any other event or condition, that
presents a material risk of such a termination by the PBGC
of any Plan.
(i) Plan Amendments. Amend, modify or change in any
manner or permit its Subsidiaries to amend, modify or
change in any manner, any Plan, Multiemployer Plan or
Welfare Plan sponsored, maintained or contributed to by
the Borrower or its Subsidiaries, if such amendment,
modification or change, together with all other such
amendments, modifications and changes, would result in a
material increase in the costs and expenses in respect of
such Plans, Multiemployer Plans and Welfare Plans of the
Borrower and its Subsidiaries taken as a whole.
(j) Accounting Changes. Make or permit, or permit
any Subsidiary to make or permit, any significant change
in accounting policies or reporting practices, except as
required or permitted by GAAP.
(k) Prepayments, Amendments, Etc. of Debt. Prepay,
redeem, purchase, defease or otherwise satisfy prior to
the scheduled maturity thereof in any manner any
Subordinated Debt, other than (i) in connection with the
Refinancing and (ii) prepayments with the proceeds of
refinancings thereof on terms no less favorable to the
Lenders and the Borrower than such Subordinated Debt and
having a weighted average life to maturity at least equal
to the then remaining weighted average life of such
Subordinated Debt, make any payment in violation of any
subordination terms of any Subordinated Debt or amend,
modify or change in any manner any term or condition of
any Subordinated Debt if such amendment would be adverse
to the Lenders, or permit any of the Restricted
Subsidiaries to do any of the foregoing.
(l) Amendments, Etc. (x) Amend, modify, or change
in any manner any term or condition of or accept any
consent, waiver or approval under any 1990 Loan Document <PAGE>
<PAGE> 5-21
unless simultaneously with the effectiveness thereof the
same amendment, modification or waiver will become
effective with respect to the Loan Documents or (y) amend,
modify, or change in any manner any term or condition of,
give any consent, waiver or approval under or waive any
default under or breach of any term or condition of its
charter or by-laws or any Material Agreement, except
amendments, modifications and waivers that would not (in
the good faith judgment of the Lenders) have a material
adverse effect on (i) the business, condition (financial
or otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole,
(ii) the rights and remedies of the Agents or the Lenders
under any Loan Document or the Intercreditor Agreement or
the rights and remedies of the 1990 Agents or the
1990 Lenders under the 1990 Loan Documents or the
Intercreditor Agreement or (iii) the ability of the
Borrower to perform its obligations under any Loan
Document, any 1990 Loan Document or the Intercreditor
Agreement, or permit any Restricted Subsidiary to do any
of the foregoing.
(m) Transfer of LIN Shares. Own or control
directly, or permit any of its Subsidiaries, other than
Holdings, to own or control directly or indirectly, any
LIN Shares, unless at such time Holdings owns a majority
(on a fully diluted basis) of all issued and outstanding
LIN Shares.
(n) Negative Pledge. (i) Enter into or suffer to
exist any agreement prohibiting the creation or assumption
of any Lien upon any of its property or assets other than
in favor of the Agents or the Lenders and the 1990 Agents
or the 1990 Lenders to the extent that the prohibition on
Liens in favor of the 1990 Agents or the 1990 Lenders is
the same as the prohibition in favor of the Agents or the
Lenders; or (ii) permit any Restricted Subsidiary to enter
into or suffer to exist any agreement prohibiting the
creation or assumption of any Lien upon any of the
properties or assets of such Restricted Subsidiary other
than in connection with (A) any Existing Indebtedness and
any Indebtedness outstanding on the date such Person first
becomes a Restricted Subsidiary, (B) any Indebtedness
permitted by Sections 5.02(b)(ii)(B), (C), (D) and (E)
hereof and (C) any partnership agreements or other similar
agreements to which such Restricted Subsidiary is subject
on the date hereof.
<PAGE>
<PAGE> 5-22
(o) Preferred Stock. Issue or authorize the
issuance of, or permit any Restricted Subsidiary to issue
or authorize the issuance of, any preferred stock other
than preferred stock of the Borrower issued in connection
with an Investment permitted by Section 5.02 or preferred
stock of the Borrower that (i) is either not convertible
or is convertible only into common stock of the Borrower,
(ii) is not accorded voting rights, either before or after
conversion or the occurrence of any other event, that
would result in a change of control contemplated by
Section 6.01(i) or 6.01(j) and (iii) is not subject to
mandatory redemption earlier than 180 days following the
Final Maturity Date.
(p) Tax Consolidation. File or consent to or permit
the filing of any consolidated income tax return on behalf
of it or any Restricted Subsidiary with any Person (other
than a consolidated return of the Borrower and its
Restricted Subsidiaries), unless such Person shall be
subject to a tax sharing agreement or arrangement with the
Borrower and the Restricted Subsidiaries pursuant to which
the Borrower and the Restricted Subsidiaries will not be
required to pay income taxes or amounts in lieu of income
taxes greater than the amount that the Borrower and the
Restricted Subsidiaries would have been required to pay if
the Borrower and the Restricted Subsidiaries had filed
income tax returns on a consolidated basis as a separate
affiliated group (as such term is defined in Section
1504(a) of the Code) of corporations consisting of only
the Borrower and the Restricted Subsidiaries.
(q) Management Fees. Except for management fees
payable by a Restricted Subsidiary to the Borrower or
payable by a Restricted Subsidiary to a wholly-owned
Restricted Subsidiary or reasonable management fees
payable by a Restricted Subsidiary to another Restricted
Subsidiary that is not a wholly-owned Restricted
Subsidiary, enter into any management agreement or
directly or indirectly pay or become liable to any Person
for any sum or property for fees for management or similar
services rendered, or permit any Restricted Subsidiary to
do so, other than management agreements with a Restricted
Subsidiary that are automatically terminated upon the
exercise of remedies by the Collateral Agent, the
Administrative Agent or the Lenders under any of the Loan
Documents.
<PAGE>
<PAGE> 5-23
(r) Holding Company Status. Own directly or acquire
any assets other than shares of capital stock of
wholly-owned First-Tier Restricted Subsidiaries and
wholly-owned Unrestricted Subsidiaries, promissory notes
of Restricted Subsidiaries that have been pledged to the
Lenders pursuant to the Pledge Agreement and immaterial
amounts of other assets.
(s) Minority Entities. Permit any of the Restricted
Subsidiaries to own, hold, acquire or commit to acquire,
directly or indirectly, any equity or other ownership
interest in, any Minority Entity or any Investment in any
other Person that is not a Restricted Subsidiary if, after
giving effect to such ownership, holding or acquisition,
(x) the Attributable Share of the Pops of all Minority
Entities and such Persons would be greater than ten
percent (10%) of (y) the Attributable Share of all Pops of
the Borrower, the Restricted Subsidiaries and all Minority
Entities; provided that, for purposes of determining
compliance with this Section 5.02(s), the Attributable
Share of the Pops of any Minority Entity or such Person
shall not be included in clause (x) if (i) the Borrower or
any Restricted Subsidiary owns or has the right to
acquire, pursuant to a binding and enforceable written
agreement or agreements:
(A) 50% of the outstanding voting interests in such
Minority Entity or such Person and such Minority
Entity or such Person has the power to vote to
direct or control the management of the Cellular
Entity serving any of the following MSAs:
Buffalo, New York; Indianapolis, Indiana;
Milwaukee, Wisconsin; and San Francisco/San
Jose, California ("Named MSAs") and in any other
MSA that is held by the same Cellular Entity and
(1) is adjacent to a Named MSA, (2) is operated
as a single cellular cluster with such Named MSA
and (3) was owned by such Cellular Entity at the
time the Borrower or a Restricted Subsidiary
first obtained an ownership interest in such
Cellular Entity, or
(B) more than 50% of the outstanding voting
interests in such Minority Entity or such
Person,
or (ii) the Borrower or any Restricted Subsidiary has
equal participation or greater on a committee consisting <PAGE>
<PAGE> 5-24
of two or more partners that controls such Minority Entity
or such Person.
(t) Unrestricted Subsidiaries. At any time (i)
become, or permit any Restricted Subsidiary to become,
liable for, directly or indirectly, any Indebtedness or
other obligations of any nature of an Unrestricted
Subsidiary other than as permitted by Section 5.02(e)(ix),
(ii) permit any Unrestricted Subsidiary to own any
Indebtedness of, or equity interests in, the Borrower or
any Restricted Subsidiary or (iii) acquire, or permit any
Restricted Subsidiary to acquire, any property, goods or
services from an Unrestricted Subsidiary or provide, or
permit any Restricted Subsidiary to provide, any property,
goods or services to an Unrestricted Subsidiary other than
transactions conducted in compliance with Section 5.01(i).
SECTION 5.03. Financial Covenants. So long as any
Advance remains unpaid or any Lender shall have any Commitment
hereunder, the Borrower will, and will cause the Restricted
Subsidiaries to, unless the Required Lenders shall otherwise
consent in writing:
(a) Debt-to-Pops Ratio. Maintain ownership of
sufficient Franchise Interests and limit Indebtedness so
that at all times the ratio of (i) the sum of (without
duplication) Adjusted Combined Debt and the Attributable
Share of the Indebtedness of all Minority Entities less
Cash Equivalents (determined as set forth below) to (ii)
the Attributable Share of the Pops of the Borrower, the
Restricted Subsidiaries and all Minority Entities shall
not exceed 97.50 to 1.
For purposes of this Section 5.03(a), Cash Equivalents
shall mean the sum of (a) Cash Equivalents owned by the
Borrower and the wholly-owned Restricted Subsidiaries plus
(b) the Attributable Share of the Cash Equivalents of each
other Restricted Subsidiary plus (c) the Attributable
Share of the aggregate Cash Equivalents of the Qualified
Minority Entities, but only to the extent that such amount
of Cash Equivalents does not exceed the Attributable Share
of the Senior Debt of the Qualified Minority Entities.
(b) Cash Flow to Debt Service Ratio. Cause, on the
date of the initial Borrowing and on the last day of each
fiscal quarter thereafter, the ratio of Adjusted Combined <PAGE>
<PAGE> 5-25
Cash Flow to Pro Forma Combined Debt Service to be equal
to or greater than 1.0.
For purposes of calculating compliance with this Section
5.03(b) on the date of the initial Borrowing (i) Adjusted
Combined Cash Flow shall be the Adjusted Combined Cash
Flow for the most recent fiscal quarter ended prior to
such date and (ii) the amount of Combined Debt used to
calculate Pro Forma Combined Debt Service shall include
the amount of the initial Borrowing.
(c) Debt to Cash Flow Ratio. Not allow on the last
day of any fiscal quarter set forth below the ratio of
Senior Debt (SD) and Combined Debt (CD) to Adjusted
Combined Cash Flow (ACCF) to be greater than the amount
set forth below for each such date:
Period Ending SD/ACCF CD/ACCF
09/30/93 6.50 6.50
12/31/93 6.50 6.50
03/31/94 6.50 6.50
06/30/94 6.50 6.50
09/30/94 6.50 6.50
12/31/94 6.25 6.50
03/31/95 6.00 6.25
06/30/95 5.75 6.25
09/30/95 5.50 6.00
12/31/95 5.25 6.00
03/31/96 and 5.00 6.00
thereafter
For purposes of this Section 5.03(c), Adjusted Combined
Cash Flow shall be further adjusted upward or downward, as
the case may be, on each date of determination to include
the Attributable Share (measured as of such date) of the
Cash Flow for the period of the two fiscal quarters set
forth in the most recent Compliance Certificate delivered
by the Borrower, multiplied by two, of any business or
assets that were acquired by the Borrower or by a
Restricted Subsidiary (so long as such business or assets
are not designated as an Unrestricted Subsidiary) since
the last day of the second such fiscal quarter and to
exclude the Cash Flow attributable to any business or
assets that were disposed of by the Borrower or a
Restricted Subsidiary since the last day of such second
fiscal quarter; provided, however, that, until the
Borrower has delivered to the Lenders a certificate of a
Financial Officer of the Borrower, in form satisfactory to
the Arranging Agents, setting forth the Cash Flow of all
businesses and assets acquired or disposed of since <PAGE>
<PAGE> 5-26
the last day of such second fiscal quarter, the Borrower
shall not allow Senior Debt or Combined Debt to exceed the
amounts permitted on the basis of the information
contained in such Compliance Certificate or in any
preceding certificate of a Financial Officer of the
Borrower.
(d) Incurrence Test. Not create, incur or assume
any Indebtedness (including, without limitation, any
Indebtedness hereunder) or allow any Restricted Subsidiary
to create, incur or assume any Indebtedness unless the
ratio of Combined Debt (CD), after giving effect to the
creation, incurrence or assumption of all Indebtedness to
be created, incurred or assumed on such date of
determination to Adjusted Combined Cash Flow (ACCF) set
forth in the most recent Compliance Certificate delivered
by the Borrower is less than or equal to the amount set
forth in Section 5.03(c) for the most recent fiscal
quarter ended prior to such date of determination,
provided that until the Borrower delivers a Compliance
Certificate under this Agreement, Adjusted Combined Cash
Flow shall be the amount set forth in the most recent
Compliance Certificate delivered under the 1990 Credit
Agreement.
For purposes of this Section 5.03(d), Adjusted Combined
Cash Flow shall be further adjusted upward or downward, as
the case may be, on each date of determination to include
the Attributable Share (measured as of such date) of the
Cash Flow for the period of the two fiscal quarters set
forth in the most recent Compliance Certificate delivered
by the Borrower, multiplied by two, of any business or
assets that were acquired by the Borrower or by a
Restricted Subsidiary (so long as such business or assets
are not designated as an Unrestricted Subsidiary) since
the last day of the second such fiscal quarter and to
exclude the Cash Flow attributable to any business or
assets that were disposed of by the Borrower or a
Restricted Subsidiary since the last day of such second
fiscal quarter; provided, however, that, until the
Borrower has delivered to the Lenders a certificate of a
Financial Officer of the Borrower, in form satisfactory to
the Arranging Agents, setting forth the Cash Flow of all
businesses and assets acquired or disposed of since the
last day of such second fiscal quarter, neither the
Borrower nor any Restricted Subsidiary shall create, incur
or assume Indebtedness in excess of the amounts permitted
on the basis of the information contained in such
Compliance Certificate or in any preceding certificate of
a Financial Officer of the Borrower.
<PAGE>
<PAGE> 6-1
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of,
or interest on, any Advance, or the Borrower shall fail to
make any other payment under any Loan Document, in each
case when the same becomes due and payable; or
(b) Any representation or warranty made by the
Borrower or any of its Subsidiaries (or any of their
officers) under or in connection with any Loan Document or
any certificate or financial information delivered
pursuant thereto shall prove to have been incorrect in any
material respect when made; or
(c) (i) The Borrower shall fail to perform or
observe any term, covenant or agreement contained in
Sections 5.01(d), (i), (j), (k), (l), 5.02(a), (b), (c),
(d), (e), (f), (g), (h), (i), (k), (l), (m), (n), (o),
(q), (r), (t) or 5.03; or (ii) the Borrower shall fail to
perform any other term, covenant or agreement contained in
any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for ten days after
written notice thereof shall have been given to the
Borrower by any Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall
fail to pay any principal of, premium or interest on or
other amounts payable in respect of the 1990 Credit
Agreement or Indebtedness in an aggregate outstanding
principal amount of $25,000,000 or more (but excluding
Indebtedness outstanding hereunder) of the Borrower or
such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other event shall
occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness and shall
continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect
of such failure, event or condition is to <PAGE>
<PAGE> 6-2
accelerate, or to permit the acceleration of, the maturity
of such Indebtedness or any such Indebtedness shall be
declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated
maturity thereof; or
(e) The Borrower or any of its Material Restricted
Subsidiaries shall generally not pay its debts as such
debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or any of
its Material Restricted Subsidiaries seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its property and, in the case of any
proceeding instituted against it (but not instituted by
it) that is being diligently contested by it in good
faith, such proceeding shall remain undismissed or
unstayed for a period of 45 days; or the Borrower or any
of its Material Restricted Subsidiaries shall take any
corporate action to authorize any of the actions set forth
above in this subsection (e); or
(f) Any judgments or orders for the payment of money
in the aggregate equal to or in excess of $5,000,000 shall
be rendered against the Borrower or any of the Restricted
Subsidiaries and there shall be any period of 60
consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(g) Any non-monetary judgment or order shall be
rendered against the Borrower or any of its Subsidiaries
that could have a material adverse effect on (i) the
business, condition (financial or otherwise), operations,
properties or prospects of the Borrower and the Restricted
Subsidiaries taken as a whole, (ii) the ability of the
Borrower or any of the Restricted Subsidiaries to perform
its obligations under any Loan <PAGE>
<PAGE> 6-3
Document to which it is a party or (iii) the rights and
remedies of the Agents or the Lenders under any Loan
Document or the Intercreditor Agreement or the rights and
remedies of 1990 Agents or the 1990 Lenders under the 1990
Loan Documents or the Intercreditor Agreement, and there
shall be any period of ten consecutive days during which a
stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect;
or
(h) The Pledge Agreement after delivery thereof
shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected Lien on the
Collateral purported to be covered thereby, subject to no
other Liens, other than the Lien under the 1990 Pledge
Agreement; provided that with respect to Collateral that
does not relate to any Core Property and that,
(i) individually or in the aggregate, represents less than
5% (as of the date of such lapse) of all Pops held by the
Borrower and the Restricted Subsidiaries or (ii) evidences
Indebtedness in an aggregate outstanding principal amount
of less than $25,000,000, an Event of Default shall not
have been deemed to have occurred unless the Borrower
shall have failed to create a valid and perfected Lien on
such Collateral, subject to no other Liens, other than the
Lien under the 1990 Pledge Agreement within 10 days after
the date on which the Borrower first becomes aware of such
lapse; or
(i) At any time before the consummation of the
Merger, Craig O. McCaw or a Designated Party, and at any
time after the consummation of the Merger, AT&T shall fail
to have the right to cause the election of his or its
nominees to a majority of the directorships of the Board
of Directors of the Borrower; or
(j) (i) At any time before the consummation of the
Merger, the McCaw Family shall at any time for any reason
cease to be the legal and beneficial owner of at least
20,000,000 Class B Shares (or such other number of Class B
Shares as may be determined after adjustment to give
effect to increases or decreases in such number of Class B
Shares including, without limitation, increases or
decreases resulting from stock dividends, stock splits,
reclassifications or combinations effected with respect to
such Class B Shares, such adjustments to be calculated in
a manner approved by the Arranging Agents) or (ii) at any
time after the consummation of the Merger, AT&T shall for
any reason cease to have Economic Ownership of Voting
Stock representing in the aggregate at least 51% of the
combined voting power of all Voting Stock of the Borrower;
or <PAGE>
<PAGE> 6-4
(k) Any ERISA Event shall have occurred with respect
to a Plan and, 30 days after notice thereof shall have
been given to the Borrower by the Administrative Agent,
(i) such ERISA Event shall still exist and (ii) the sum
(determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to
which an ERISA Event shall have occurred and then exist
(or in the case of a Plan with respect to which a
Termination Event described in clauses (c) through (f) of
the definition of ERISA Event shall have occurred and then
exist, the liability related thereto) is equal to or
greater than $25,000,000; or
(l) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the
Borrower and its ERISA Affiliates in connection with
Withdrawal Liabilities (determined as of the date of such
notification), exceeds $25,000,000 and any part of such
Withdrawal Liability shall not have been paid when the
same becomes due and payable; or
(m) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as
a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then
in reorganization or being terminated have been or will be
increased over the amounts contributed to such
Multiemployer Plans for the plan year of each such
Multiemployer Plan immediately preceding the plan year in
which such reorganization or termination occurs by an
amount exceeding $25,000,000; or
(n) The Borrower or any ERISA Affiliate shall have
committed a failure described in Section 302(f)(l) of
ERISA and the amount determined under Section 302(f)(3) of
ERISA is equal to or greater than $25,000,000; or
(o) There shall occur any material adverse change in
the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and
the Restricted Subsidiaries taken as a whole;
<PAGE>
<PAGE> 6-5
then, and in any such event, the Administrative Agent
(i) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the
Borrower; provided that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower
under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and
(B) the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
<PAGE>
<PAGE> 7-1
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender
hereby appoints and authorizes each Agent to take such action
as agent on its behalf and to exercise such powers and
discretion under this Agreement, the other Loan Documents and
the Intercreditor Agreement as are delegated to such Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided
for by the Loan Documents or the Intercreditor Agreement
(including, without limitation, enforcement or collection of
the Indebtedness resulting from the Advances), none of the
Agents shall be required to exercise any discretion or take
any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required
Lenders and, under certain circumstances specified herein, the
Majority Lenders and under the circumstances specified in the
Pledge Agreement, the Required Secured Lenders and such
instructions shall be binding upon all Lenders and all the
1990 Lenders; provided that none of the Agents shall be
required to take any action that exposes any Agent to personal
liability or that is contrary to this Agreement, the 1990
Credit Agreement or applicable law. The Administrative Agent
agrees to give to each Lender and to the 1990 Administrative
Agent prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. No Agent or
any of their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it,
under or in connection with the Loan Documents, the 1990 Loan
Documents or the Intercreditor Agreement, except for its or
their own gross negligence or wilful misconduct. Without
limitation of the generality of the foregoing, each Agent:
(i) may treat the Lender that made any Advance as the holder
of the Indebtedness resulting therefrom until the
Administrative Agent receives and accepts an Assignment and
Acceptance entered into by such Lender, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no
warranty or representation to any Lender or any 1990 Lender
and shall not be responsible to any Lender or any 1990 Lender
for any statements, warranties or <PAGE>
<PAGE> 7-2
representations made in or in connection with the Loan
Documents, the 1990 Loan Documents or the Intercreditor
Agreement; (iv) shall not have any duty to ascertain or to
inquire as to (x) the performance or observance of any of the
terms, covenants or conditions of any Loan Document or any
1990 Loan Document on the part of the Borrower or to inspect
the property (including the books and records) of the Borrower
or (y) the performance or observance of any of the terms,
covenants or conditions of the Intercreditor Agreement on the
part of any Agent, Lender, 1990 Agent or 1990 Lender;
(v) shall not be responsible to any Lender or any 1990 Lender
for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document, any
1990 Loan Document, the Intercreditor Agreement or any other
instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of any Loan
Document, any 1990 Loan Document or the Intercreditor
Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram,
telecopier, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 7.03. TD (Texas), Toronto-Dominion, PNC and
Barclays and Affiliates. With respect to the Commitments and
the Advances made by each of them, TD (Texas), Toronto-
Dominion, PNC and Barclays shall have the same rights and
powers under the Loan Documents, the 1990 Loan Documents and
the Intercreditor Agreement as any other Lender, 1990 Lender
or 1990 Agent (as the case may be) and may exercise the same
as though it were not the Administrative Agent, an Arranging
Agent or a 1990 Agent (as the case may be) and TD (Texas) were
not the Collateral Agent; and the term "Lender", "Lenders",
"1990 Lender" or "1990 Lenders" shall, unless otherwise
expressly indicated, include each of TD (Texas),
Toronto-Dominion, PNC and Barclays in its individual capacity.
Each of TD (Texas), Toronto-Dominion, PNC and Barclays and its
Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business
with the Borrower, any of its Subsidiaries and any Person who
may do business with or own securities of the Borrower or any
such Subsidiary, all as if each of TD (Texas),
Toronto-Dominion, PNC and Barclays were not the Collateral
Agent, the Administrative Agent, an Arranging Agent or a 1990
Agent (as the case may be) and without any duty to account
therefor to the Lenders or 1990 Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance
upon the Agents, any Lender, any 1990 Agent or any 1990 <PAGE>
<PAGE> 7-3
Lender and based on the financial statements referred to in
Section 4.01 and such other documents and information as it
has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the Intercreditor
Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Agents, any
Lender, the 1990 Agents or any 1990 Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the Intercreditor
Agreement.
SECTION 7.05. Indemnification. The Lenders and the
1990 Lenders will indemnify each Agent (to the extent not
promptly reimbursed by the Borrower), according to the
proportion that the sum of the principal amounts of the
Advances and 1990 Advances then owing to each such Lender
bears to the aggregate principal amount of the sum of the
Advances and the 1990 Advances then outstanding (or if no
Advances and 1990 Advances are at the time outstanding or if
any Advances or 1990 Advances are then owing to Persons that
are not Lenders or 1990 Lenders, according to the proportion
that the sum of such Lender's or 1990 Lender's Commitment and
its 1990 Commitment bears to the sum of the Commitments and
the 1990 Commitments) or, in the case of the Collateral Agent,
according to the proportion that the sum of (a) the principal
amounts of the Advances then owing to such Lender, (b) the
respective amounts of such Lender's then unused Commitment and
(c) the Agreement Values of the Secured Hedge Agreements for
such Lender bears to the sum of (i) the sum of the Advances
and the 1990 Advances then outstanding, (ii) the sum of the
unused Commitments and the unused 1990 Commitments and (iii)
the sum of the Agreement Values and the 1990 Agreement Values,
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent (as
the case may be) in any way relating to or arising out of the
Loan Documents or the Intercreditor Agreement or in the case
of the Collateral Agent, the 1990 Loan Document or any action
taken or omitted by such Agent under the Loan Documents or the
Intercreditor Agreement; provided that no Lender shall be
liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross
negligence or wilful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse each Agent promptly
upon demand for its ratable share of any costs and expenses
payable by the <PAGE>
<PAGE> 7-4
Borrower under Section 8.04 (other than any costs and expenses
payable to the financial institution acting as such Agent in
its capacity as a Lender), to the extent that such Agent is
not promptly reimbursed for such costs and expenses by the
Borrower.
SECTION 7.06. Successor Collateral Agent or
Administrative Agent; Successor Arranging Agents. (a) The
Collateral Agent or Administrative Agent may resign at any
time by giving written notice thereof to each of the Lenders
and the Borrower and in the case of the Collateral Agent, the
1990 Lenders and may be removed at any time with or without
cause by the Majority Lenders in the case of the
Administrative Agent or the Required Lenders in the case of
the Collateral Agent. Upon any such resignation or removal,
the Required Lenders shall have the right to appoint a
successor Collateral Agent and the Majority Lenders shall have
the right to appoint a successor Administrative Agent. If no
successor Agent shall have been appointed by the Required
Lenders, in the case of the Collateral Agent, or the Majority
Lenders, in the case of the Administrative Agent, and shall
have accepted such appointment, within 30 days after the
retiring Collateral Agent's or Administrative Agent's giving
of notice of resignation or the Required Lenders' or Majority
Lenders' (as the case may be) removal of the retiring
Collateral Agent or Administrative Agent, then the retiring
Collateral Agent or Administrative Agent (as the case may be)
may, on behalf of the Lenders, appoint a successor Collateral
Agent or Administrative Agent (as the case may be), which
shall be a commercial bank organized under the laws of the
United States or of any state thereof and having a combined
capital and surplus of at least $100,000,000 and with respect
to the Collateral Agent shall be the Collateral Agent under
the 1990 Loan Documents. Upon the acceptance of any
appointment as Collateral Agent or Administrative Agent
hereunder by a successor Collateral Agent or Administrative
Agent, such successor Collateral Agent or Administrative Agent
shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the
retiring Collateral Agent or Administrative Agent, and the
retiring Collateral Agent or Administrative Agent shall be
discharged from its duties and obligations under this
Agreement. After any retiring Collateral Agent's or
Administrative Agent's resignation or removal hereunder as
Collateral Agent or Administrative Agent, the provisions of
this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Collateral
Agent or Administrative Agent under this Agreement.
<PAGE>
<PAGE> 7-5
(b) Any Arranging Agent may resign at any time by
giving written notice thereof to each of the Lenders and the
Borrower and may be removed at any time with or without cause
by the Majority Lenders. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint
a successor Arranging Agent. If at any time, more than two
Arranging Agents have been removed or have delivered a notice
of resignation and have not been replaced, within 30 days
after the first date on which such circumstance exists, then
the remaining Arranging Agents may, on behalf of the Lenders,
appoint a successor Arranging Agent or successor Arranging
Agents (as the case may be). Each such successor Arranging
Agent shall be a commercial bank organized under the laws of
the United States or of any state thereof and having a
combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Arranging Agent hereunder
by a successor Arranging Agent, such successor Arranging Agent
shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the
remaining Arranging Agents and the retiring Arranging Agent
shall be discharged from its duties and obligations under the
Loan Documents. After any retiring Arranging Agent's
resignation or removal hereunder as Arranging Agent, the
provisions of this Article VII shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was
Arranging Agent under this Agreement.
SECTION 7.07. The Managing Agents and Lead Managers.
The Lenders whose names are set forth on the signature pages
hereof under the headings "Managing Agents" and "Lead
Managers" have been so designated in recognition of their
respective Commitments, and the use of such title does not
impose on such Lenders any duties or obligations greater than
those of any other Lender.
<PAGE>
<PAGE> 8-1
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to any
departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by
the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders
and all the 1990 Lenders, do any of the following: (i) waive
any of the conditions specified in Section 3.01, or, in the
case of the initial Borrowing, Section 3.02 or 3.03,
(ii) change the percentage of the Commitments or 1990
Commitments or of the aggregate unpaid principal amount of the
Advances or the 1990 Advances, or the number of Lenders or
1990 Lenders, that shall be required for the Lenders or any of
them to take any action hereunder, (iii) release any
Collateral; provided that Lenders and 1990 Lenders holding at
least 85% of the aggregate unpaid principal amount of the
Advances and the 1990 Advances outstanding or, if no such
principal amount is outstanding, Lenders and 1990 Lenders
having at least 85% of the sum of the Commitments and the 1990
Commitments, may release (A) any Collateral if, after giving
effect to such release, Adjusted Combined Cash Flow from the
remaining Collateral is equal to or greater than 125% of Pro
Forma Combined Debt Service or (B) any Collateral that,
together with all Collateral previously released under this
proviso represents, in the aggregate for all Collateral
released under this provision or Section 8.01(iii)(B) of the
1990 Credit Agreement, less than 10% of Adjusted Combined Cash
Flow, the value of such previously released Collateral to be
determined at the time of release, (iv) amend this
Section 8.01, (v) increase the Commitments or 1990 Commitments
of the Lenders or the 1990 Lenders or subject the Lenders or
the 1990 Lenders to any additional obligations, (vi) reduce
the principal of, or interest on, the Advances or 1990
Advances or any fees or other amounts payable hereunder or
under the 1990 Credit Agreement or (vii) postpone any date
fixed for any payment of principal of, or interest on, the
Advances or the 1990 Advances or any fees or other amounts
payable hereunder or under the 1990 Credit Agreement;
provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by the Collateral Agent, the
Administrative Agent or each Arranging Agent (as the case may
be) in addition to the Lenders and the 1990 Lenders required
above to take such action, affect the rights or duties of the
Collateral Agent, <PAGE>
<PAGE> 8-2
the Administrative Agent or the Arranging Agents (as the case
may be) under this Agreement or under the 1990 Credit
Agreement. Notwithstanding the foregoing, no amendment or
waiver or consent to departure by the Borrower therefrom shall
in any event be effective unless such amendment, waiver or
consent complies with the requirements of Section 5.02(l). No
amendment or waiver of any provision of the Intercreditor
Agreement or any consent to or departure therefrom that would
adversely affect the Borrower in a significant respect shall
be effective unless the same shall have been accepted and
agreed to by the Borrower.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy or telex communication) and
telegraphed, telecopied, telexed, mailed or delivered, if to
the Borrower, at its address at 5400 Carillon Point, Kirkland,
Washington 98033, Attention: Chief Financial Officer; with a
copy to Andrew A. Quartner, Senior Vice President-Law, McCaw
Cellular Communications, Inc., 1150 Connecticut Avenue, N.W.,
4th Floor, Washington, D.C. 20036; if to any Lender that is a
signatory hereto, at its Domestic Lending Office specified
opposite its name in Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a
Lender; if to the Collateral Agent, at its address at 909
Fannin, Suite 1700, Houston, Texas 77010, Attention: Manager,
Agency; with a copy to The Toronto-Dominion Bank, 31 West 52nd
Street, New York, New York 10019, Attention: Managing
Director, Communications Finance; if to the Administrative
Agent, at its address at 909 Fannin, Suite 1700, Houston,
Texas 77010, Attention: Manager, Agency; with a copy to The
Toronto-Dominion Bank, 31 West 52nd Street, New York, New York
10019, Attention: Managing Director, Communications Finance;
and if to any Arranging Agent, at its Domestic Lending Office
or, as to the Borrower or the Administrative Agent, at such
other address as shall be designated by such party in a
written notice to the other parties and, as to each other
party, at such other address as shall be designated by such
party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications
shall, when telegraphed, telecopied, telexed or mailed, be
effective when delivered to the telegraph company, when
transmitted by telecopier, when confirmed by telex answerback
or five days after being deposited in the mails, respectively,
except that notices and communications to the Administrative
Agent pursuant to <PAGE>
<PAGE> 8-3
Article II, III or VII and any Compliance Certificate
delivered pursuant to Section 5.01(l) shall not be effective
until received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on
the part of any Lender or the Agents to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower
agrees to pay on demand (i) all costs and expenses of the
Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the
Loan Documents, the 1990 Loan Documents and the Intercreditor
Agreement including, without limitation, (A) all due
diligence, transportation, computer, duplication, appraisal,
audit, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel
for the Agents with respect thereto and with respect to
advising any of the Agents as to their respective rights and
responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents
and the Intercreditor Agreement and with respect to
negotiations with the Borrower regarding any Default or any
events or circumstances that may give rise to a Default and
(ii) all costs and expenses of the Agents and the Lenders in
connection with the enforcement of the Loan Documents, the
1990 Loan Documents or the Intercreditor Agreement whether in
any action, suit or litigation, any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights generally
or otherwise (including, without limitation, the reasonable
fees and expenses of counsel for any Agent or any Lender with
respect thereto).
(b) The Borrower agrees to indemnify and hold
harmless each Agent and each Lender and each of their
Affiliates and their respective officers, directors,
employees, agents and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel for the Lenders as a
group; provided that any Lender or group of Lenders that has
determined in good faith that due to potential conflicts of
interest such Lender or group of Lenders cannot be adequately
represented by such counsel may retain separate counsel to <PAGE>
<PAGE> 8-4
represent such Lender or group of Lenders, such representation
to be limited, to the extent practicable, to the issues to
which such potential conflict relates) that may be incurred by
or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or
in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of,
related to or in connection with any acquisition or proposed
acquisition of all or any portion of the stock or
substantially all the assets of any Person, any of the other
transactions contemplated hereby (including, without
limitation, the Amendment) and any use made or proposed to be
made by the Borrower or any of its Subsidiaries of all or any
portion of a Borrowing hereunder (including, without
limitation, the Refinancing) whether or not such
investigation, litigation or proceeding is brought by the
Borrower, the Borrower's shareholders or creditors or any
other Lender or 1990 Lender or an Indemnified Party or an
Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or wilful misconduct.
(c) If any payment of principal of any LIBO Rate
Advance or Adjusted CD Rate Advance is made by the Borrower to
or for the account of a Lender other than on the last day of
the Interest Period for such Advance, as a result of a payment
pursuant to Section 2.07, acceleration of the maturity of the
Advances pursuant to Section 6.01 or for any other reason, or
by an Eligible Assignee to a Lender other than on the last day
of the Interest Period for such Advance if a Lender is
required to assign its rights and obligations under this
Agreement pursuant to Section 8.07 as a result of a demand by
the Borrower pursuant to Section 8.07(a), the Borrower shall,
upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it
may reasonably incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
<PAGE>
<PAGE> 8-5
(d) If the Borrower fails to pay when due any costs
or other amounts under any Loan Document including, without
limitation, expenses, fees, attorneys' fees and disbursements,
indemnities and any other similar amount payable by the
Borrower, such amount may be paid by any Agent or any Lender
(in their sole discretion) on behalf of the Borrower and, if
such amounts are not immediately reimbursed by the Borrower,
such amounts will constitute an Advance of such Agent or such
Lender hereunder.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of Default
and (b) the making of the request or the granting of the
consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable
pursuant to the provisions of Section 6.01, each Lender is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time
owing by such Lender or any branch, agency, Subsidiary or
Affiliate of such Lender to or for the credit or the account
of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under or in respect of this
Agreement, irrespective of whether such Lender shall have made
any demand under this Agreement and although such obligations
may be unmatured. Each Lender agrees promptly to notify the
Borrower 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. The
rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation,
other rights of set-off) that such Lender may have.
SECTION 8.06. Binding Effect; Survival. This
Agreement shall become effective when it shall have been
executed by the Borrower, the Collateral Agent and the
Administrative Agent and when the Administrative Agent shall
have been notified by each Lender that such Lender has
executed this Agreement and the Intercreditor Agreement and
thereafter shall be binding upon and inure to the benefit of
the Borrower, the Agents and each Lender and their respective
successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
Without prejudice to the survival of the other agreements of
the Borrower hereunder, the agreements of the Borrower
contained in Sections 2.09, 2.11, and 8.04 shall survive the
payment in full of the obligations of the Borrower hereunder.
<PAGE>
<PAGE> 8-6
SECTION 8.07. Assignments and Participations.
(a) Each Lender may (subject to the provisions of Section
8.07(f)), and, if demanded by the Borrower (following a demand
by such Lender pursuant to Section 2.09 or 2.11, or notice by
such Lender pursuant to Section 2.02(b)(ii) or within 60 days
after such Lender's failure to grant a consent or waiver, or
to execute an amendment, which consent, waiver or amendment
was requested by the Borrower in writing) upon at least ten
Business Days' notice to such Lender and the Administrative
Agent, shall, promptly assign to one or more Eligible
Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a
portion of its Commitment and the Advances owing to it);
provided that (i) with respect to any partial assignment, the
amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of
the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $10,000,000 or
shall be an integral multiple of $1,000,000 in excess thereof,
(ii) with respect to any such assignment (other than an
assignment made as a result of a demand by the Borrower
pursuant to this Section 8.07(a)) by a Lender that is an
original signatory hereto, such Lender shall, unless the
Borrower shall otherwise consent in writing, retain a
Commitment that is equal to 35% of such Lender's Commitment on
the date of execution and delivery of this Agreement; provided
that the foregoing requirement shall be satisfied if, and to
the extent, that the sum of such Lender's Commitment under
this Agreement plus its 1990 Commitment is equal to or greater
than 35% of the sum of such Lender's Commitment on the date of
execution and delivery of this Agreement and such Lender's
1990 Commitment on the date of execution and delivery of the
1990 Credit Agreement, (iii) each such assignment shall be to
an Eligible Assignee, (iv) each such assignment made as a
result of a demand by the Borrower pursuant to this Section
8.07(a) (A) shall be arranged by the Borrower after
consultation with the Administrative Agent, (B) shall be
either an assignment of all of the rights and obligations of
the assigning Lender under this Agreement or an assignment of
a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that
together cover all of the rights and obligations of the
assigning Lender under this Agreement, except that the
provisions of Sections 2.09, 2.11 and 8.04 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was a Lender under this Agreement, and (C) if
demanded by the Borrower due to the failure of such Lender to
grant a consent or waiver or to execute an amendment requested
by the Borrower, which consent, waiver or amendment has not
been approved by the Required Lenders, all the rights and
obligations of each <PAGE>
<PAGE> 8-7
other Lender that has failed to grant such consent or waiver
or execute such amendment shall have been assigned to one or
more Lenders and/or Eligible Assignees who shall have granted
such consent or waiver or executed such amendment (or, in the
case of an Eligible Assignee that is not a Lender at such
time, shall have agreed to grant such consent or waiver or to
execute such amendment), (v) no Lender shall be obligated to
make any such assignment as a result of a demand by the
Borrower pursuant to this Section 8.07(a) unless and until
such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender,
together with accrued interest thereon to the date of payment
of such principal amount and all other amounts payable to such
Lender under the Loan Documents, (vi) the parties to each such
assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and
recordation fee of $2500.00 (which, in the case of any
Assignment made as a result of a demand by the Borrower under
this Section 8.07(a), shall be payable by the Borrower) and
(vii) each such assignment shall be of a uniform and not a
varying percentage of all rights and obligations under this
Agreement. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (B) the Lender assignor
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other <PAGE>
<PAGE> 8-8
instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of the Borrower or any Restricted Subsidiary or the
performance or observance by the Borrower or any Restricted
Subsidiary of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial
statements referred to in Section 4.01, the Intercreditor
Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv)
such assignee agrees that it will, independently and without
reliance upon the Agents, such assigning Lender or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agents to take
such action as agent on its behalf and to exercise such powers
and discretion under this Agreement as are delegated to the
Agents by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; (vii) such
assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender; and
(viii) such assignee agrees to perform its obligations under
and be bound by the terms of the Intercreditor Agreement.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Advances
owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the
Agents and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing
that it is an Eligible Assignee, the Administrative Agent
shall, if such Assignment and Acceptance <PAGE>
<PAGE> 8-9
has been completed and is in the form of Exhibit B hereto with
such immaterial changes as are acceptable to the
Administrative Agent, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the
Borrower.
(e) Each Lender may (subject to the provisions of
Section 8.07(f)) sell participations to one or more banks or
other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the
Advances owing to it); provided that (i) such Lender's
obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, (iii) the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations
under this Agreement and (iv) if such sale includes the right
to approve any amendment or waiver of any provision of any
Loan Document or the Intercreditor Agreement, or any consent
to any departure by the Borrower therefrom (except approval
rights relating to any such amendment, waiver or consent that
would reduce the principal of, or interest on, the Advances or
any fees or other amounts payable hereunder, postpone any date
fixed for any payment of principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, or
any release of the Collateral as provided in Section 8.01) the
amount of the Commitment being sold shall in no event be less
than $10,000,000.
(f) Any Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant
any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided that, prior
to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to
the Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances <PAGE>
<PAGE> 8-10
owing to it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 8.09. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 8.10. Confidentiality of Financial
Information. The Agents and the Lenders agree that they will
not disclose Financial Information (as defined below) without
the prior consent of the Borrower (other than to their
directors, employees, auditors or counsel); provided that any
Agent and any Lender is authorized to make such disclosure of
Financial Information without any consent of the Borrower (a)
as may be required by law (such as pursuant to any subpoena or
civil investigative demand) and as may be requested or
required by any state or federal authority, examiner,
regulatory body or agency having jurisdiction over any Agent
or any Lender, (b) as permitted by Section 8.07(g) and (c) as
specifically provided in Section 12 of the Pledge Agreement.
Any Agent or Lender authorized to disclose Financial
Information pursuant to the preceding proviso shall use its
best efforts to give the Borrower prior notice of such
disclosure (other than with respect to any disclosure
requested or required by any state or federal authority,
examiner, regulatory body or agency having jurisdiction over
such Agent or Lender). The term "Financial Information" means
any information delivered by the Borrower under any provision
of this Agreement, including, without limitation, Section
5.01(l), that relates to the business, operations or financial
condition of the Borrower or its Subsidiaries or any
competitor of the Borrower or with respect to a proposed
acquisition by the Borrower other than information (a) that
is, or generally becomes, available to the public, (b) that
was available to any Agent or any Lender on a nonconfidential
basis prior to its disclosure to such Agent or such Lender (as
the case may be) by the Borrower or any Affiliate or (c) that
becomes available to any Agent or any Lender from a Person or
other source that is not, to the best knowledge of <PAGE>
<PAGE> 8-11
such Agent or such Lender (as the case may be), otherwise
bound by a confidentiality agreement with the Borrower.
SECTION 8.11. Waiver of Jury Trial. Each of the
Borrower, the Agents and the Lenders hereby irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the
Advances or the action of any Agent or any Lender in the
negotiation, administration, performance or enforcement
thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
McCAW CELLULAR COMMUNICATIONS,
INC.
By
Title:
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent and
Collateral Agent
By
Title:
BARCLAYS BANK PLC,
as Arranging Agent and Lender
By
Title:
PNC BANK NATIONAL ASSOCIATION,
as Arranging Agent and Lender
By
Title:
<PAGE>
<PAGE>
THE TORONTO-DOMINION BANK,
as Arranging Agent and Lender
By
Title:
Managing Agents and Lenders
BANK OF MONTREAL
By
Name:
Title:
THE BANK OF NEW YORK
By
Name:
Title:
THE BANK OF NOVA SCOTIA
By
Name:
Title:
BANKERS TRUST COMPANY
By
Name:
Title:
<PAGE>
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE
By
Name:
Title:
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLAND BRANCHES
By
Name:
Title:
By
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By
Name:
THE LONG TERM CREDIT BANK OF
JAPAN, LIMITED
By
Name:
Title:
NATIONSBANK OF NORTH
CAROLINA, N.A.
By
Name:
Title:
<PAGE>
<PAGE>
Lead Managers and Lenders
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
Name:
Title:
BANK OF HAWAII
By
Name:
Title:
BANQUE NATIONALE DE PARIS
By
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.
By
Name:
Title:
<PAGE>
<PAGE>
COMPAGNIE FINANCIERE de CIC et de
l'UNION EUROPEENNE
By
Name:
Title:
CONTINENTAL BANK, N.A.
By
Name:
Title:
CORESTATES BANK NA
By
Name:
Title:
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By
Name:
Title:
MELLON BANK, N.A.
By
Name:
Title:
<PAGE>
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By
Name:
Title:
ROYAL BANK OF CANADA
By
Name:
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By
Name:
Title:
Lenders
ABN AMRO BANK, N.V.
By
Name:
Title:
By
Name:
Title:
BANK OF IRELAND
By
Name:
Title:
<PAGE>
<PAGE>
THE BANK OF YOKOHAMA, LTD.
By
Name:
Title:
BANQUE FRANCAISE du COMMERCE
EXTERIEUR
By
Name:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED
By
Name:
Title:
FIRST NATIONAL BANK OF MARYLAND
By
Name:
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By
Name:
Title:
<PAGE>
<PAGE>
THE FUJI BANK, LIMITED
By
Name:
Title:
THE SANWA BANK, LIMITED
By
Name:
Title:
SEATTLE FIRST NATIONAL BANK
By
Name:
Title:
SOCIETE GENERALE
By
Name:
Title:
[COMPOSITE CONFORMED COPY
INCLUDING THE CONSENT
DATED AS OF FEBRUARY 27,
1990, AMENDMENT NO. 1
DATED AS OF NOVEMBER 27,
1990 AND AMENDMENT NO. 2
DATED AS OF DECEMBER 3,
1993]
$3,000,000,000
CREDIT AGREEMENT
Dated as of February 26, 1990
Among
McCAW CELLULAR COMMUNICATIONS, INC.
as Borrower
and
THE LENDERS NAMED HEREIN
as Lenders
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Administrative Agent
and
KANSALLIS-OSAKE-PANKKI
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
PROVIDENT NATIONAL BANK
and
THE TORONTO-DOMINION BANK
as Arranging Agents
and
THE TORONTO-DOMINION BANK TRUST COMPANY
as Collateral Agent
<PAGE>
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms................ 1-1
1.02 Computation of Time Periods.......... 1-40
1.03 Accounting Terms and Computations.... 1-40
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01 The Advances......................... 2-1
2.02 Making the Advances.................. 2-1
2.03 Fees................................. 2-4
2.04 Reduction of the Commitments;
Unavailable Commitments............ 2-5
2.05 Repayment............................ 2-7
2.06 Interest............................. 2-8
2.07 Prepayments.......................... 2-8
2.08 Interest Rate Determination.......... 2-10
2.09 Increased Costs, Etc................. 2-10
2.10 Payments and Computations............ 2-11
2.11 Taxes................................ 2-13
2.12 Sharing of Payments, Etc............. 2-15
2.13 Use of Proceeds...................... 2-16
2.14 Evidence of Indebtedness............. 2-17
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial
Borrowing.......................... 3-1
3.02 Conditions Precedent to LIN
Borrowings......................... 3-5
3.03 Conditions Precedent to Each
Borrowing.......................... 3-9
3.04 Conditions Precedent to Certain
Borrowings......................... 3-9
3.05 Determinations Under Sections 3.01,
3.02, 3.03 and 3.04................ 3-10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the
Borrower........................... 4-1
<PAGE>
<PAGE> ii
Section Page
(a) Organization of the Borrower.... 4-1
(b) Organization of the Subsidiaries
of the Borrower and
Minority Entities............. 4-1
(c) Compliance with Law............. 4-2
(d) Approvals....................... 4-3
(e) Legal Effect.................... 4-3
(f) Financial Information........... 4-3
(g) Disclosure...................... 4-4
(h) Material Litigation............. 4-5
(i) Regulation U.................... 4-5
(j) ERISA Plans..................... 4-5
(k) No Reportable Event............. 4-5
(l) Plan Funding.................... 4-5
(m) Welfare Plan Costs.............. 4-6
(n) No Catastrophic Events.......... 4-6
(o) Compliance with Environmental
Law........................... 4-6
(p) No Burdensome Agreements........ 4-6
(q) Taxes........................... 4-7
(r) Investment Company Act of 1940.. 4-7
(s) Solvency........................ 4-7
(t) Condition of System............. 4-7
(u) Fees............................ 4-7
(v) Public Utility Holding Company
Act........................... 4-8
(w) Capital Stock................... 4-8
(x) No Limitations on Dividends..... 4-8
(y) Licenses........................ 4-8
(z) Regulation of the Lenders....... 4-9
(aa) Existing Indebtedness........... 4-9
(bb) Material Agreements............. 4-9
(cc) Ownership....................... 4-9
(dd) Title to Property............... 4-10
(ee) Calculations.................... 4-10
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants................ 5-1
(a) Compliance with Laws, Etc....... 5-1
(b) Payment of Taxes, Etc........... 5-1
(c) Maintenance of Insurance........ 5-1
(d) Preservation of Corporate
Existence, Etc................ 5-2
(e) Visitation Rights............... 5-2
<PAGE>
<PAGE> iii
Section Page
(f) Keeping of Books................ 5-2
(g) Maintenance of Properties, Etc.. 5-2
(h) Performance of Material
Agreements.................... 5-3
(i) Transactions with Affiliates.... 5-3
(j) Interest Rate Hedging........... 5-3
(k) Control of LIN.................. 5-4
(l) Reporting Requirements.......... 5-4
(m) Maintenance of Corporate
Separateness.................. 5-9
(n) Ownership of Unrestricted
Subsidiaries.................. 5-9
(o) Metromedia Acquisition.......... 5-10
(p) LIN Dividend.................... 5-10
(q) McCaw Stock Sale................ 5-10
(r) Simultaneous Borrowings,
Prepayments and Commitment
Reductions................... 5-10
5.02 Negative Covenants................... 5-11
(a) Liens, Etc...................... 5-11
(b) Indebtedness.................... 5-12
(c) Mergers, Etc.................... 5-14
(d) Sales, Etc. of Assets........... 5-15
(e) Investments in Other Persons.... 5-16
(f) Dividends, Etc.................. 5-19
(g) Change in Nature of Business.... 5-20
(h) Compliance with ERISA........... 5-21
(i) Plan Amendments................. 5-21
(j) Accounting Changes.............. 5-21
(k) Prepayments, Amendments,
Etc. of Debt.................. 5-21
(l) Amendments, Etc. ............... 5-22
(m) Transfer of LIN Shares.......... 5-22
(n) Negative Pledge................. 5-22
(o) Preferred Stock................. 5-23
(p) Tax Consolidation............... 5-23
(q) Management Fees................. 5-23
(r) Holding Company Status.......... 5-24
(s) Minority Entities............... 5-24
(t) Acquire LIN Shares.............. 5-25
(u) Unrestricted Subsidiaries....... 5-25
5.03 Financial Covenants.................. 5-25
(a) Debt-to-Pops Ratio.............. 5-25
(b) Cash Flow to
Debt Service Ratio............ 5-26
(c) Debt to Cash Flow Ratio......... 5-26
(d) Incurrence Test................. 5-27
(e) Contel Proceeds................. 5-28<PAGE>
<PAGE> iv
Section Page
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default.................... 6-1
ARTICLE VII
THE AGENTS
7.01 Authorization and Action............. 7-1
7.02 Agents' Reliance, Etc................ 7-1
7.03 The Toronto-Dominion Bank Trust
Company, Morgan, Kansallis,
Provident and Toronto-Dominion
and Affiliates..................... 7-2
7.04 Lender Credit Decision............... 7-3
7.05 Indemnification...................... 7-3
7.06 Successor Collateral Agent or
Administrative Agent; Successor
Arranging Agents................... 7-4
7.07 The Managing Agents, Co-Agents,
Co-Managers, Managers and
Participants....................... 7-5
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc...................... 8-1
8.02 Notices, Etc......................... 8-2
8.03 No Waiver; Remedies.................. 8-3
8.04 Costs; Expenses...................... 8-3
8.05 Right of Set-off..................... 8-5
8.06 Binding Effect; Survival............. 8-5
8.07 Assignments and Participations....... 8-5
8.08 Governing Law........................ 8-10
8.09 Execution in Counterparts............ 8-10
8.10 Confidentiality of Financial
Information........................ 8-10
8.11 Waiver of Jury Trial................. 8-11
<PAGE>
<PAGE> v
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Existing Indebtedness
Schedule III - Subsidiaries, Minority Entities and Cellular
Entities
Schedule IV - Material Agreements
Schedule V - Terms of Subordination
Schedule VI - Disclosed Litigation
Schedule VII - Approvals
Schedule VIII - ERISA Plans
Schedule IX - Limitations on Dividends
Schedule X - Existing Liens
<PAGE>
<PAGE> vi
EXHIBITS
Exhibit A - Form of Notice of Borrowing
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Pledge Agreement
Exhibit E - Form of Solvency Letter
Exhibit F - Form of Opinion of Senior Vice President
Law to the Borrower
Exhibit G - Form of Opinion of FCC counsel to the
Borrower
Exhibit H - Form of Opinion of PUC counsel to the
Borrower
Exhibit I - Form of Opinion of special counsel to the
Agents
Exhibit J - Form of Opinion of special counsel to the
Borrower
<PAGE>
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of February 26, 1990 among
McCAW CELLULAR COMMUNICATIONS, INC., a Delaware corporation (the
"Borrower"), the banks and financial institutions (the
"Lenders") listed on the signature pages hereof, MORGAN GUARANTY
TRUST COMPANY OF NEW YORK ("Morgan"), as administrative agent
(together with any successor appointed pursuant to Article VII,
the "Administrative Agent") for the Lenders hereunder,
KANSALLIS-OSAKE-PANKKI ("Kansallis"), MORGAN, PROVIDENT NATIONAL
BANK ("Provident") and THE TORONTO-DOMINION BANK
("Toronto-Dominion"), as arranging agents (together with any
successors appointed pursuant to Article VII, the "Arranging
Agents") for the Lenders hereunder, and THE TORONTO-DOMINION
BANK TRUST COMPANY, as collateral agent (together with any
successors appointed pursuant to Article VII, the "Collateral
Agent"). Capitalized terms used in this Agreement are defined
in Article I.
PRELIMINARY STATEMENTS
(1) The Borrower intends to acquire a majority of the
LIN Shares through the Tender Offer made pursuant to the Offer
to Purchase.
(2) The Borrower also intends, from time to time, to
finance the acquisition of entities whose principal assets
consist of MSA Franchise Interests and/or RSA Franchise
Interests, to construct plant and operating systems for Cellular
Systems or RCC Systems, to purchase or redeem the MCI Warrants
and to purchase RCC Assets or to make loans to MSA Franchise
Interests or Geographically-Related RSA Franchise Interests, all
as more fully set forth herein.
(3) The Borrower has requested that the Lenders lend
up to $3,000,000,000 to the Borrower to enable the Borrower to
consummate the Tender Offer and to accomplish the other
acquisitions, refinancings and permitted activities described
herein. The Lenders have indicated their willingness to lend
such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the
parties hereto hereby agree as follows:
<PAGE>
<PAGE> 1-2
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Adjusted CD Rate" means, for any Interest Period for
each Adjusted CD Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the sum of:
(a) the rate per annum obtained by dividing (i)
the rate of interest determined by the Administrative
Agent to be the average (rounded upward to the nearest
whole multiple of 1/100 of 1% per annum, if such
average is not such a multiple) of the consensus bid
rate determined by each of the Reference Lenders for
the bid rates per annum, at 9:00 A.M. (New York City
time) (or as soon thereafter as practicable) on the
first day of such Interest Period, of New York
certificate of deposit dealers of recognized standing
selected by such Reference Lender for the purchase at
face value of certificates of deposit of such Reference
Lender in an amount substantially equal to such
Reference Lender's Adjusted CD Rate Advance comprising
part of such Borrowing and with a maturity equal to
such Interest Period, by (ii) a percentage equal to
100% minus the Adjusted CD Rate Reserve Percentage (as
defined below) for such Interest Period, plus
(b) the Assessment Rate (as defined below) for
such Interest Period.
"Adjusted CD Rate Advance" means an Advance that bears
interest as provided in Section 2.06(b).
"Adjusted CD Rate Reserve Percentage" for the Interest
Period for each Adjusted CD Rate Advance comprising part of
the same Borrowing means the reserve percentage applicable
on the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not limited
to, any <PAGE>
<PAGE> 1-3
emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with deposits exceeding one billion Dollars
with respect to liabilities consisting of or including
(among other liabilities) Dollar nonpersonal time deposits
in the United States with a maturity equal to such Interest
Period. The "Assessment Rate" for the Interest Period for
each Adjusted CD Rate Advance comprising part of the same
Borrowing means the annual assessment rate estimated by the
Administrative Agent on the first day of such Interest
Period for determining the then current annual assessment
payable by Morgan to the Federal Deposit Insurance
Corporation (or any successor) for insuring Dollar deposits
of Morgan in the United States. The Adjusted CD Rate for
each Interest Period for each Adjusted CD Rate Advance
comprising part of the same Borrowing shall be determined by
the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from
the Reference Lenders on the first day of such Interest
Period, subject, however, to the provisions of Sections
2.02(b) and 2.08.
"Adjusted Combined Cash Flow" or "ACCF" means, as of
any date, unless otherwise provided in this Agreement,
Combined Cash Flow for the two most recent fiscal quarters
ended on or prior to such date, as set forth in the
Compliance Certificate for such most recent fiscal quarter,
multiplied by two, adjusted to
(a) include (without duplication):
(i) the Attributable Share (measured as of
the last day of the second such fiscal quarter) of
the Cash Flow for such two fiscal quarters of each
Cellular Business that was either a Restricted
Subsidiary or a Qualified Minority Entity on the
last day of such second fiscal quarter; and
(ii) the Attributable Share (measured as of
the last day of the second such fiscal quarter) of
the Cash Flow for such two fiscal quarters of any
other business or assets that were acquired by the
Borrower or by a Restricted Subsidiary (so long as
such business or assets are not designated as an
Unrestricted Subsidiary) during such two fiscal
quarters; and
<PAGE>
<PAGE> 1-4
(b) exclude (without duplication) the Cash Flow
attributable to any interest in a Restricted Subsidiary
or Qualified Minority Entity, or any other business or
asset, that was disposed of by the Borrower or a
Restricted Subsidiary during such two fiscal quarters.
"Adjusted Combined Debt" or "ACD" means, for any date
of determination, Combined Debt on such date less the
product of RCC Operating Cash Flow of the Borrower and the
Restricted Subsidiaries for the two fiscal quarters set
forth in the most recent Compliance Certificate delivered by
the Borrower, multiplied by ten.
"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.
"Administrative Agent's Account" means the account of
the Administrative Agent maintained by the Administrative
Agent with Morgan at its office at 60 Wall Street, New York,
New York, Account No. 999-99-090, Reference: McCaw Cellular
Communications, Inc.
"Advance" has the meaning specified in Section 2.01.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or
is under common control with, such Person or is a spouse of
or any other relative (by blood, adoption or marriage) of
such Person within the third degree or is a partner, member,
director, officer or employee of such Person. For purposes
of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control
with") of a Person means the possession, direct or indirect,
of the power to vote 10% or more of the Voting Stock of such
Person or to direct or cause the direction of the management
and policies of such Person, whether through the ownership
of Voting Stock, by contract or otherwise.
"Agents" means the Administrative Agent, the Arranging
Agents and the Collateral Agent.
"Agreement Value" has the meaning specified in the
Pledge Agreement.
"Amendment" means Amendment No. 2 to the Credit
Agreement and Amendment No. 1 to the Pledge Agreement <PAGE>
<PAGE> 1-5
dated as of December 3, 1993 among the Borrower, the Lenders
and the Agents.
"Amendment Effective Date" means the date on which the
Amendment becomes effective pursuant to the terms thereof.
As used herein, the phrase "as in effect on the Amendment
Effective Date" means as in effect on the Amendment
Effective Date, after giving effect to the execution and
delivery of all documents required to be executed and
delivered on or prior to the Amendment Effective Date
pursuant to the terms thereof.
"Amortization Commencement Date" means December 31,
1995.
"Amortization Date" has the meaning specified in
Section 2.04(b)(i).
"Applicable Lending Office" means, for each Lender,
such Lender's Domestic Lending Office in the case of a Base
Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's LIBO Lending
Office in the case of a LIBO Rate Advance.
"Applicable Margin" means, for each Advance, a
percentage per annum determined by the ratio of (a) Combined
Debt (CD) less Cash Equivalents (determined as set forth
below) to (b) Adjusted Combined Cash Flow (ACCF) set forth
below:
LIBO Adjusted Base
Rate CD Rate Rate
Ratio of CD/ACCF Advances Advances Advances
6.0 to 1 (or greater) 1-5/8 1-3/4 5/8
5.5 to 1 to 6.0 to 1 1-1/2 1-5/8 1/2
5.0 to 1 to 5.5 to 1 1-1/4 1-3/8 3/8
4.5 to 1 to 5.0 to 1 1-1/8 1-1/4 1/8
less than 4.5 to 1 7/8 1 -
The Applicable Margin will be determined by reference to
the amount of Adjusted Combined Cash Flow set forth in the
most recent Compliance Certificate delivered by the
Borrower from time to time and by reference to the amounts
of Combined Debt and Cash Equivalents set forth in the most
recent certificate of a Financial Officer of the Borrower
containing such information delivered to the Administrative
Agent not less than three days before any date of
determination. For purposes of this definition, <PAGE>
<PAGE> 1-6
Cash Equivalents shall mean the sum of (a) Cash Equivalents
owned by the Borrower and the wholly-owned Restricted
Subsidiaries plus (b) the Attributable Share of the Cash
Equivalents of each other Restricted Subsidiary plus (c)
the Attributable Share of the aggregate Cash Equivalents of
the Qualified Minority Entities, but only to the extent
that such amount of Cash Equivalents does not exceed the
Attributable Share of the Combined Debt of the Qualified
Minority Entities.
"Approved Accountants" means any of Arthur Andersen &
Co., Price Waterhouse, KPMG Peat Marwick, Deloitte &
Touche, Coopers & Lybrand and Ernst & Young.
"Approved Asset Sales" means all sales, transfers and
other dispositions of assets that have been approved in
writing by the Lenders and the 1993 Lenders.
"Approved Cellular Assets" means (a) any Franchise
Interest (i) with respect to an MSA or RSA in which the
Borrower or LIN has, on the date hereof, a Franchise
Interest, if the Cellular Entity in which such Franchise
Interest is being acquired is (or would become after giving
effect to the acquisition of such Franchise Interest) a
Restricted Subsidiary; (ii) with respect to any of the 25
largest MSAs (measured at the time of acquisition), if the
Cellular Entity serving such MSA is (or would become after
giving effect to the acquisition of such Franchise
Interest) a Restricted Subsidiary; (iii) with respect to an
MSA or RSA that is located adjacent to an MSA in which the
Borrower or LIN has, on the date hereof, a Franchise
Interest, if the Cellular Entity serving such MSA or RSA is
(or would become after giving effect to the acquisition of
such Franchise Interest) a Restricted Subsidiary; (iv) with
respect to any MSA or RSA in a group of adjacent MSAs and
RSAs that have an aggregate number of MSA Pops at least
equal to the number of MSA Pops for the 15th largest MSA
(measured at the time of acquisition), if after giving
effect to any such acquisition the Borrower and its
Restricted Subsidiaries would own at least 50% of the
equity interests having the power to vote to elect the
Board of Directors or other governing body of each Cellular
Entity in such group; or (v) with respect to MSAs and RSAs
that are part of a Cellular Group, if Cellular Entities
representing at least 80% of the Total Cellular Group Pops
for such Cellular Group are (or would become after giving
effect to the acquisition of such Franchise Interest)
Restricted Subsidiaries; and (b) cellular <PAGE>
<PAGE> 1-7
equipment acquired by any Cellular Entity or Cellular Group
referred to in clauses (a)(ii)-(v) above, to the extent
acquired in connection with the acquisition of such
Franchise Interests.
"Arranging Agents" has the meaning specified in the
recital of parties to this Agreement.
"Asset Sale Balance" means the sum of (a)
$101,539,190.25 and (b) 75% of the amount by which the
aggregate Net Cash Proceeds of all Permitted Dispositions
that occur after December 3, 1993 exceed the aggregate
purchase price of all Approved Cellular Assets acquired by
the Borrower and the Restricted Subsidiaries after December
3, 1993.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit B hereto.
"AT&T" means American Telephone and Telegraph Company.
"AT&T Merger Agreement" means the Agreement and Plan
of Merger dated August 16, 1993 among AT&T, Ridge and the
Borrower, as in effect on December 3, 1993.
"Attributable Share" means, for purposes of
determining the Pops, income, Indebtedness or other
measured characteristic of any Person, the percentage
ownership interest in such Person held directly or
indirectly by the Borrower (other than any such ownership
interest held by an Unrestricted Subsidiary).
"Available Commitment" means for any Lender the amount
by which such Lender's Commitment exceeds such Lender's
Unavailable Commitment.
"Bank Credit Facilities" means this Agreement and the
1993 Credit Agreement.
"Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate
per annum shall at all times be equal to the rate of
interest announced publicly by Morgan in New York, New
York, from time to time, as its prime rate; provided that
with respect to any Advance that is made during the period
from December 15th of any year through <PAGE>
<PAGE> 1-8
January 15th of the following year, such rate per annum for
such Advance during such period (regardless of whether the
Interest Period for such Advance shall extend beyond such
period) shall at all times be equal to the higher of such
prime rate and a rate equal to 1/2 of 1% per annum above
the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears
interest as provided in Section 2.06(c) and each payment or
advance made by any Agent or any Lender under Section
8.04(d).
"Board of Directors" of any Person means the board of
directors of such Person or any duly authorized committee
of such board.
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Morgan at its office at 60
Wall Street, New York, New York, Account No. 000-56-082,
Reference: McCaw Cellular Communications, Inc.
"Borrowing" means a borrowing consisting of Advances
of the same Type made on the same day by the Lenders.
"BT" means British Telecom USA Holdings, Inc.
"BT Purchase Agreement" means the Purchase Agreement
dated January 19, 1989 between the Borrower and BT, as
amended from time to time.
"BT Shareholders Agreement" means the Shareholders
Agreement dated as of June 20, 1989 among the Borrower, BT,
Craig O. McCaw, John E. McCaw, Jr., Bruce R. McCaw and
Keith W. McCaw, as amended from time to time.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City
and, if the applicable Business Day relates to any LIBO
Rate Advances, on which dealings are carried on in the
London interbank market.
"Capital Expenditures" means, for any period, the sum
of (without duplication) (a) all expenditures during such
period for real property or improvements and equipment
utilized in a Cellular Business and other <PAGE>
<PAGE> 1-9
business operations, or for replacements or substitutions
therefor or additions thereto, that have a useful life of
more than one year plus (b) the entire principal amount of
any Indebtedness assumed or incurred in connection with any
such expenditures.
"Capitalized Leases" has the meaning specified in
clause (e) of the definition of Indebtedness.
"Cash Equivalents" means, to the extent owned free and
clear of all Liens: (a) Dollars on hand and in insured
demand deposit accounts; (b) obligations issued or
unconditionally guaranteed by the United States or any
agency thereof; (c) certificates of deposit or bankers'
acceptances that become payable within one year after the
date of issuance and that are issued by (i) any Lender or
(ii) any other commercial bank organized under the laws of
the United States or any state thereof or any other country
that is a member of the OECD or any political subdivision
of such country and having combined capital and surplus of
at least $1,000,000,000; (d) commercial paper with a rating
of at least "Prime-1" by Moody's Investors Service, Inc. or
"A-1" by Standard & Poor's Corporation; and (e) repurchase
and reverse repurchase agreements with any securities
dealer with respect to securities of the types specified in
clauses (a) through (d) in respect of an aggregate
principal amount of securities not in excess of $50,000,000
and that are fully collateralized by any of the securities
specified in clauses (a) through (d).
"Cash Flow" or "CF" means, for any Person for any
period, the sum of:
(a) the Net Income of such Person for such
period; and
(b) the sum of the following (to the extent
deducted in the computation of such Net Income):
(i) depreciation expense;
(ii) amortization expense;
(iii) Interest Expense;
(iv) charges for reserves for deferred
taxes; and
<PAGE>
<PAGE> 1-10
(v) other non-cash items.
"CD Lending Office" means, for any Lender, the office
of such Lender specified as its "CD Lending Office"
opposite its name in Schedule I hereto or in the Assignment
and Acceptance pursuant to which it became a Lender (or, if
no such office is specified, its Domestic Lending Office),
or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative
Agent.
"Cellular Assets" means each Cellular System or
Franchise Interest owned directly or indirectly by the
Borrower or any Restricted Subsidiary.
"Cellular Business" means the business of operating
one or more Cellular Systems and other businesses directly
related thereto.
"Cellular Entity" means a Cellular Licensee, Cellular
Permittee or a Cellular Tentative Selectee.
"Cellular Group" means any group of MSAs and RSAs that
is operated as a single cellular cluster on a basis
comparable to the basis on which the Borrower has operated
its cellular clusters prior to the date hereof and that has
Total Cellular Group Pops at least equal to the number of
MSA Pops for the 15th largest MSA (measured at the time of
acquisition), if either each MSA and RSA within such group
is within 25 miles of another MSA or RSA in such group or
the Borrower demonstrates to the satisfaction of the
Arranging Agents that it will operate such cellular group
as a single cellular cluster.
"Cellular Licensee" means any Person that is
authorized by the FCC to own, control and operate a
Cellular System in an MSA or an RSA.
"Cellular Permittee" means a Person that is authorized
by the FCC to construct a Cellular System in an MSA or an
RSA.
"Cellular System" means a domestic public cellular
radio telecommunications service system licensed under Part
22 of the FCC's Rules.
"Cellular Tentative Selectee" means a Person
designated in a public notice issued by the FCC to become <PAGE>
<PAGE> 1-11
a Cellular Permittee unless and until such designation
shall have been reversed or revoked by the FCC.
"Class A Shares" has the meaning specified in
Section 4.01(w).
"Class B Shares" has the meaning specified in
Section 4.01(w).
"Code" means the Internal Revenue Code of 1986, as
amended.
"Collateral" means all "Collateral" referred to in the
Pledge Agreement and all other property that is subject to
any Lien in favor of the Agents or the Lenders.
"Collateral Agent" has the meaning specified in the
recital of the parties to this Agreement.
"Combined Cash Flow" or "CCF" means, for any period,
the sum of (without duplication):
(a) Consolidated Cash Flow of the Borrower and
the wholly-owned Restricted Subsidiaries for such
period; and
(b) the Attributable Share of the Cash Flow of
each other Restricted Subsidiary and each Qualified
Minority Entity for such period.
"Combined Debt" means, for any date of determination:
(a) the sum of (without duplication):
(i) Indebtedness of the Borrower; and
(ii) the Attributable Share of the
Indebtedness of each Restricted Subsidiary and
each Qualified Minority Entity; provided that
Indebtedness owing by a Restricted Subsidiary or
a Qualified Minority Entity to the Borrower or
another Restricted Subsidiary or by the Borrower
to a Restricted Subsidiary shall not be included
in this calculation; less
(b) for purposes of determining compliance with
Section 5.03(a) only:
<PAGE>
<PAGE> 1-12
(i) before October 1, 1991, Indebtedness
evidenced by the Convertible Subordinated
Debentures; and
(ii) before October 1, 1992, Indebtedness
evidenced by the Convertible Discount Debentures
(the amount of such convertible Indebtedness to be
determined in accordance with GAAP).
"Combined Operating Cash Flow" or "COCF" means, for
any period, the sum of (without duplication):
(a) Consolidated Operating Cash Flow of the
Borrower and the wholly-owned Restricted Subsidiaries
for such period; and
(b) the Attributable Share of the Operating Cash
Flow of each other Restricted Subsidiary and each
Qualified Minority Entity for such period.
"Commitment" means for each Lender the amount set
forth opposite such Lender's name in Schedule I hereto
under the caption "Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set
forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c), as the
same may be reduced pursuant to Section 2.04(a) or (b).
"Communications Assets" means Cellular Assets, RCC
Assets and other telephone or telecommunications assets.
"Compliance Certificate" means a certificate of a
Financial Officer of the Borrower, in substantially the
form of Exhibit C hereto, to be delivered pursuant to
Section 5.01(l)(ii) and (iii).
"Consolidated", with respect to any Person and any
specified Subsidiaries, refers to the consolidation of
financial statements of such Person and such Subsidiaries
in accordance with GAAP.
"Contel Agreement" means the Agreement dated
October 2, 1989 by and among the Borrower, Cellular Fund,
Inc. and Contel Cellular Inc.
"Contel Transaction" means the sale by the Borrower of
its Cellular Assets in 13 markets in Alabama, Kentucky and
Tennessee pursuant to the Contel Agreement.
<PAGE>
<PAGE> 1-13
"Convertible Debentures" means the Convertible
Discount Debentures and the Convertible Subordinated
Debentures.
"Convertible Discount Debentures" means the Borrower's
$285,765,000 Convertible Senior Subordinated Discount
Debentures due June 15, 2008 issued under an Indenture
dated as of June 15, 1988 between the Borrower and
Seattle-First National Bank, as trustee.
"Convertible Subordinated Debentures" means the
Borrower's $115,000,000 8% Convertible Senior Subordinated
Debentures due June 15, 2008 issued under an Indenture
dated as of June 15, 1988 between the Borrower and
Seattle-First National Bank, as trustee.
"Core Properties" means each of the Restricted
Subsidiaries that owns Franchise Interests in the following
MSAs: Seattle, Washington; Tacoma, Washington; Portland,
Oregon; Tampa, Florida; Jacksonville, Florida; Orlando,
Florida; West Palm Beach, Florida; and Miami, Florida.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
"Designated Party" has the meaning specified in the
Shareholders Agreement as in effect on the date hereof.
"Disclosed Litigation" has the meaning specified in
Section 3.01(c).
"Dollars" and the sign "$" each mean lawful money of
the United States of America.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its
"Domestic Lending Office" set forth opposite its name in
Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify
to the Borrower and the Administrative Agent.
"Economic Ownership" means for purposes of determining
the percentage of Voting Stock legally and beneficially
owned by AT&T (a) all Voting Stock of which AT&T is the
sole legal and beneficial owner and (b) a portion of the
Voting Stock legally and beneficially <PAGE>
<PAGE> 1-14
owned by a Majority Entity equal to the percentage
ownership interest that AT&T holds directly or indirectly
in such Majority Entity. Notwithstanding any other
provision set forth herein, Voting Stock legally or
beneficially owned by an entity that is not a Majority
Entity (other than AT&T) shall not be included in the
determination of Economic Ownership.
"Eligible Assignee" means (a) a commercial bank
organized under the laws of the United States, or any state
thereof, and having total assets in excess of $500,000,000
and a combined capital and surplus of at least
$100,000,000; (b) a savings and loan association or savings
bank organized under the laws of the United States, or any
state thereof, and having total assets in excess of
$500,000,000 and a combined capital and surplus of at least
$100,000,000; (c) a commercial bank organized under the
laws of any other country that is a member of the OECD or
has concluded special lending arrangements with the
International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a
political subdivision of any such country, and having total
assets in excess of $500,000,000 and a combined capital and
surplus of at least $100,000,000; provided that such bank
is acting through a branch or agency located in the United
States; (d) the central bank of any country that is a
member of the OECD; (e) a finance company, insurance
company or other financial institution or fund (whether a
corporation, partnership or other entity) that is engaged
in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business, and having
total assets in excess of $500,000,000 and (other than in
the case of a fund) a combined capital and surplus of at
least $100,000,000; and (f) any Affiliate of any Lender
acceptable to the Borrower; provided that such acceptance
by the Borrower shall not be unreasonably withheld (and
shall be deemed to be given if the Borrower fails to
respond to a written request therefor within ten Business
Days after its receipt thereof).
"Environmental Law" means any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or
award relating to the environment, health or safety or to
the release of any materials into the environment,
including, without limitation, the Clean Air Act, as
amended, the Clean Water Act of 1977, as amended, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Hazardous <PAGE>
<PAGE> 1-15
Materials Transportation Act, as amended, and the Resource
Conservation and Recovery Act of 1976, as amended.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" of any Person means any other Person
that for purposes of Title IV of ERISA is a member of such
Person's controlled group, or under common control with
such Person, within the meaning of Section 414 of the Code
and the regulations promulgated and rulings issued
thereunder.
"ERISA Event" means (a) a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice
requirement with respect thereto has been waived by the
PBGC; (b) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e)
of ERISA); (c) the cessation of operations at a facility in
the circumstances described in Section 4068(f) of ERISA;
(d) the withdrawal by the Borrower or an ERISA Affiliate
from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (e) the failure by the Borrower or any
ERISA Affiliate to make a payment to a Plan required under
Section 302(f)(1) of ERISA which Section imposes a lien for
failure to make required payments; (f) the adoption of an
amendment to a Plan requiring the provision of security to
such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition that might constitute grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Events of Default" has the meaning specified in
Section 6.01.
<PAGE>
<PAGE> 1-16
"Excess Cash Flow" means, for any fiscal year,
Combined Cash Flow for such fiscal year less (without
duplication) (a) Pro Forma Combined Debt Service for the
next succeeding fiscal year determined on the basis of the
outstanding principal balance of Combined Debt as of the
first day of such next succeeding fiscal year, (b)
projected Capital Expenditures, projected costs to be
incurred in connection with any permitted acquisition of
Franchise Interests and RCC Assets and loans that are
permitted by Section 5.02(e) that the Borrower expects to
incur during the next succeeding fiscal year (projected in
good faith by a Financial Officer of the Borrower and set
forth in a certificate delivered to the Lenders pursuant to
Section 5.01(l)(iii)), (c) the amount reserved for deferred
taxes during such fiscal year, (d) expenditures for, or
cash losses with respect to, extraordinary items during
such fiscal year and (e) $100,000,000.
"Excluded Sale" has the meaning assigned in Section
2.04(b)(iii).
"Existing Indebtedness" means the Indebtedness of the
Borrower and the Restricted Subsidiaries as of December 3,
1993, as set forth in Schedule II hereto.
"Existing Loan Agreement" means the Loan Agreement
dated as of December 24, 1987 among the Borrower and the
agents and banks party thereto, as amended to the date
hereof.
"Facility" means the aggregate amount of the Lenders'
Commitments.
"FCC" means the Federal Communications Commission, or
any successor agency or entity performing substantially the
same functions.
"FCC License" means any mobile telephone, cellular
telephone, microwave or other communications license,
permit, certificate of compliance, franchise, approval or
authorization granted or issued by the FCC for control,
ownership, construction or operation of a Cellular System.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds <PAGE>
<PAGE> 1-17
brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the
average of the quotations for such day for such
transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected
by it.
"Final Maturity Date" means the earliest of (a) March
31, 2000, (b) the final maturity date of the 1993 Credit
Agreement and (c) the date on which the Commitments of the
Lenders have been reduced to zero.
"Final Order" means an order, license, permit,
consent, approval or other authorization of a Regulatory
Authority that is no longer subject to reconsideration or
review by such Regulatory Authority or by any court or
administrative body.
"Financial Information" has the meaning specified in
Section 8.10.
"Financial Officer" means, as to any Person, the chief
executive officer, the chief financial officer, any senior
vice president of finance, the treasurer or the controller
of that Person.
"First-Tier Restricted Subsidiary" means any
Restricted Subsidiary any of the equity interests in which
are registered in the name of the Borrower or otherwise
directly owned by the Borrower.
"Franchise" means a franchise, permit or license
(including, without limitation, an FCC License),
designation (including, without limitation, as a Cellular
Tentative Selectee) or certificate granted by the United
States or any other country or state or a city, town,
county or other municipality (to the extent subject to
regulation thereby), public utility commission or public
service commission, power company or any other regulatory
authority pursuant to which a Person has the right to own,
control, construct or operate a Cellular System or RCC
System.
"Franchise Interest" means a direct or indirect
ownership interest in any Person that is a Cellular Entity.
<PAGE>
<PAGE> 1-18
"GAAP" has the meaning specified in Section 1.03.
"Geographically-Related RSA" means an RSA located
adjacent to or within 25 miles of an MSA Cellular System
controlled by the Borrower or a Subsidiary.
"Hazardous Materials" means all materials subject to
any Environmental Law, including, without limitation,
materials listed in 49 C.F.R. Section 172.101, materials defined
as hazardous pursuant to Section 101(14) of the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, flammable, explosive or
radioactive materials, hazardous or toxic wastes or
substances, petroleum or petroleum distillates or asbestos
or material containing asbestos.
"Hedge Agreement" means interest rate swap, cap,
collar, ceiling, hedge or other interest rate protection
agreement designed to hedge against fluctuations in
interest rates.
"Holdings" means MMM Holdings, Inc., a Delaware
corporation and a direct wholly-owned Subsidiary of the
Borrower.
"Indebtedness" of any Person means (without
duplication):
(a) all indebtedness of such Person for borrowed
money;
(b) all obligations of such Person for the
deferred purchase price of capital assets (including
amounts owed to sellers of Franchise Interests,
Cellular Systems, RCC Franchise Interests or RCC
Systems for the acquisition thereof);
(c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments
(other than performance bonds, letters of credit and
similar undertakings in connection with the
construction, development or operation of a business,
to the extent such undertakings do not secure an
obligation for borrowed money or the deferred purchase
price of property or services);
(d) all indebtedness created or arising under
any conditional sale or other title retention
agreement with respect to property acquired by such <PAGE>
<PAGE> 1-19
Person (even though the rights and remedies of the
seller or lender under such agreement in the event of
default are limited to repossession or sale of such
property);
(e) all obligations of such Person as lessee
under leases that have been or should be, in
accordance with GAAP, recorded as capital leases
("Capitalized Leases"), to the extent properly
classified as a liability on the balance sheet of such
Person;
(f) all obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or
similar facilities (to the extent not included in
clause (c) above);
(g) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value
any capital stock of such Person or any warrants,
rights or options to acquire such capital stock (other
than the obligation to repurchase the MCI Warrants
under the MCI Warrant Agreement), which obligations
shall be valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid
dividends and, in the case of other such obligations,
at the amount that, in light of all the facts and
circumstances existing at the time of determination,
can reasonably be expected to become payable;
(h) all Indebtedness referred to in clauses (a)
through (g) above guaranteed directly or indirectly by
such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to
pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss,
(iii) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for
property or services irrespective of whether such
property is received or such services are rendered) or
(iv) otherwise to assure a creditor against loss; and
<PAGE>
<PAGE> 1-20
(i) all Indebtedness referred to in clauses (a)
through (g) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract
rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of
such Indebtedness.
"Indemnified Party" has the meaning specified in
Section 8.04(b).
"Insufficiency" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within
the meaning of Section 4001(a)(18) of ERISA.
"Intercreditor Agreement" means the Intercreditor
Agreement, in substantially the form of Exhibit K hereto
(as amended from time to time in accordance with its
terms).
"Interest Expense" means, for any period, interest
expense for such period, including, without limitation,
imputed interest on Capitalized Leases.
"Interest Period" means, for each Advance comprising
part of the same Borrowing, the period commencing on the
date of such Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be (a) in the case of a
LIBO Rate Advance, one, two, three or six months, and,
subject to clause (v) below, nine or twelve months, (b) in
the case of an Adjusted CD Rate Advance, 30, 60, 90 or 180
days and (c) in the case of a Base Rate Advance, any period
up to 30 days (or, in the case of any payment or advance
made by any Agent or any Lender under Section 8.04(d), a
period equal to 30 days), as the Borrower may, upon notice
received by the Administrative Agent not later than 11:00
A.M. (New York City time) on the third Business Day (in the
case of a LIBO Rate Advance having an Interest Period of
six months or less), the fifth Business Day (in the case of
a LIBO Rate Advance having an Interest Period of nine
months or twelve months), the second Business Day (in the
case of an Adjusted CD Rate Advance) or the Business Day
(in the <PAGE>
<PAGE> 1-21
case of a Base Rate Advance) prior to the first day of such
Interest Period, select; provided, however, that:
(i) the Borrower may not select any Interest
Period for any Advance that ends after any
Amortization Date unless, after giving effect to such
selection, the aggregate unpaid principal amount of
Advances owing to each Lender and having Interest
Periods that end on or after such Amortization Date
shall be equal to or less than the amount to which the
Commitment of such Lender is automatically reduced on
such Amortization Date pursuant to Section 2.04(b)(i)
and the principal amount of Advances due and payable
on and prior to such Amortization Date;
(ii) the Borrower may, subject to Section
2.02(b)(i), make more than one Borrowing on any
Business Day, but Interest Periods commencing on the
same date for Advances comprising part of the same
Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day;
provided, however, that, in the case of any Interest
Period for a LIBO Rate Advance, if such extension
would cause the last day of such Interest Period to
occur in the next following calendar month, the last
day of such Interest Period shall occur on the next
preceding Business Day;
(iv) whenever the first day of any Interest
Period occurs on a day of an initial calendar month
for which there is no numerically corresponding day in
the calendar month that succeeds such initial calendar
month by the number of months equal to the number of
months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding
calendar month;
(v) with respect to LIBO Rate Advances, the
Borrower shall not be entitled to elect an Interest
Period having a duration of nine months or twelve
months if, by close of business (New York City time)
on the third Business Day prior to the first day of
such Interest Period, any Lender notifies the
Administrative Agent (which shall deliver a copy of <PAGE>
<PAGE> 1-22
such notice to the Borrower) that such Lender would be
unable to obtain funding for, or that the LIBO Rate
will not reflect the cost to such Lender of funding or
maintaining, the LIBO Rate Advance to be made by such
Lender for the period selected by the Borrower and any
such Advances made by the Lenders on such first day of
the Interest Period shall be Base Rate Advances;
following receipt of such notice the Borrower's right
to select Interest Periods for LIBO Rate Advances
having a duration of nine months or twelve months
shall be suspended until such Lender subsequently
notifies the Administrative Agent that the
circumstances causing such suspension no longer exist;
(vi) during the period from the date hereof
through, and including, the six-month anniversary of
such date the Borrower shall be entitled to select
Interest Periods having a duration of only 30 days, in
the case of an Adjusted CD Rate Advance or one month,
in the case of a LIBO Rate Advance; and
(vii) in addition to the requirements of clause
(vi), the Borrower shall select Interest Periods for
LIBO Rate Advances and Adjusted CD Rate Advances so
that no LIBO Rate Advances and no Adjusted CD Rate
Advances shall be outstanding (A) on the date of the
initial Borrowing hereunder and for five consecutive
Business Days thereafter, (B) for at least an
additional period of five consecutive Business Days
during each of the period from the eighth calendar day
until the twenty-first calendar day of the month of
April 1990 and the period from the tenth calendar day
until the twenty-third calendar day of the month of
June 1990 and (C) for a period of five consecutive
Business Days occurring within two weeks before or
after the six-month anniversary of the date of such
initial Borrowing.
"Investment" in any Person means any loan or advance
to, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities
of, any capital contribution to or any other investment in
such Person, including, without limitation, any arrangement
pursuant to which the investor incurs Indebtedness of the
types referred to in clauses (h) and (i) of the definition
of "Indebtedness" in respect of such Person.
<PAGE>
<PAGE> 1-23
"Kansallis" has the meaning specified in the recital
of parties to this Agreement.
"Lenders" means the banks and financial institutions
listed on the signature pages hereof and each Eligible
Assignee that shall become a party hereto pursuant to
Section 8.07.
"LIBO Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "LIBO
Lending Office" set forth opposite its name in Schedule I
hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is
specified, its Domestic Lending Office), or such other
office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"LIBO Rate" means, for any Interest Period for each
LIBO Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum
obtained by dividing (a) the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such
average is not such a multiple) of the rate per annum at
which deposits in Dollars are offered to the Reference
Lenders by leading banks in the London interbank market at
11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially
equal to such Reference Lender's LIBO Rate Advance
comprising part of such Borrowing to be outstanding during
such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the
LIBO Rate Reserve Percentage for such Interest Period. The
LIBO Rate for each Interest Period for each LIBO Rate
Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the
Administrative Agent from the Reference Lenders two
Business Days before the first day of such Interest Period,
subject, however, to the provisions of Sections 2.02(b) and
2.08.
"LIBO Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a).
"LIBO Rate Reserve Percentage" for the Interest Period
for each LIBO Rate Advance comprising part of the same
Borrowing means the reserve percentage applicable two
Business Days before the first day of such Interest Period
under regulations issued from time to time by the <PAGE>
<PAGE> 1-24
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of
the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference
to which the interest rate on LIBO Rate Advances is
determined) having a term equal to such Interest Period.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement of any kind, including, without
limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other
encumbrance on title to real property, but not including
any inchoate right of set-off as such.
"LIN" means LIN Broadcasting Corporation, a Delaware
corporation.
"LIN Borrowing" means each Borrowing the proceeds of
which will be used directly or indirectly by the Borrower
to acquire LIN Shares in connection with the consummation
of the Tender Offer.
"LIN Share" means each issued and outstanding share of
LIN's common stock, together with the Rights associated
with such share of common stock.
"Loan Documents" means this Agreement and the Pledge
Agreement.
"Los Angeles Contribution" means the transfer by the
Borrower to LIN, as a contribution to capital or otherwise
without consideration, of the Borrower's 4.9725% ownership
interest in the non-wireline cellular licensee serving the
Los Angeles market.
"Majority Entity" means, with respect to AT&T, any
Person of which AT&T legally and beneficially owns more
than 50% of the combined voting power of all of such
Person's Voting Stock.
"Majority Lenders" means, at any time, Lenders having
more than 50% of the aggregate unpaid principal amount of
the Advances, or if no such principal amount <PAGE>
<PAGE> 1-25
is then outstanding, Lenders having more than 50% of the
Commitments.
"Marketable Security" means any debt or equity
security that is either listed on a national securities
exchange or for which a quotation is available through the
National Association of Security Dealers Automated
Quotation System; provided that Marketable Security shall
not include (a) any security that belongs to a class of
securities of which the Borrower and the Restricted
Subsidiaries own, in the aggregate, 20% or more of all
issued and outstanding securities and (b) any security that
is subject, in the good faith judgment of the Arranging
Agents, to material restrictions on resale.
"Material Agreement" means each agreement that is
material to the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole.
"Material Restricted Subsidiary" means each of the
Core Properties and any Restricted Subsidiary or group of
Restricted Subsidiaries that, in the aggregate, owns or
holds the lesser of (a) 500,000 Pops or (b) at least 1% of
all Pops then owned or held by the Borrower and the
Restricted Subsidiaries.
"McCaw Family" has the meaning specified in the
Shareholders Agreement as in effect on the date hereof.
"McCaw Stock Sale" means the sale by the Borrower to
LIN, for cash in the amount of $425,000,000, of a number of
Class A Shares that, at the time of such sale, have a fair
market value equal to such amount.
"MCI" means McCaw Cellular, Inc., a Washington
corporation.
"MCI Common Stock" means the Class A Common Stock
of MCI.
"MCI Debt" means the 12-3/4% Senior Notes of MCI due
January 1, 1994 issued pursuant to an Indenture dated as of
July 1, 1986 between MCI and Bankers Trust Company, as
trustee and the 13% Senior Subordinated Notes due July 1,
1996 issued pursuant to an Indenture dated as of July 1,
1986 between MCI and Bankers Trust Company, as trustee.
<PAGE>
<PAGE> 1-26
"MCI Warrant Agreement" means the agreement dated as
of July 1, 1986 between MCI and United States Trust Company
of New York, as warrant agent.
"MCI Warrant Price" means, as of any date, the greater
of (a) the fair market value of the MCI Warrants on such
date as determined by the average of two appraisals (which
appraisals shall not discount such fair market value for
lack of liquidity, lack of control or non-exercisability)
by qualified, nationally recognized appraisers or
investment bankers; and (b) the Minimum Value on such date.
"MCI Warrants" means the warrants issued by MCI
pursuant to the MCI Warrant Agreement.
"Merger" means the merger of Ridge with and into the
Borrower with the Borrower as the surviving corporation in
accordance with the terms set forth in the AT&T Merger
Agreement.
"Minimum Value" means (i) at all times prior to
January 1, 1992, $51.3515 per MCI Warrant, (ii) for each
successive six-month period thereafter through June 30,
1998, an amount per MCI Warrant equal to the product of the
Minimum Value immediately prior to such period and 1.085,
plus a prorated portion of the increase payable on the next
succeeding six-month increase date, and (iii) thereafter,
the highest amount per MCI Warrant determined pursuant to
clause (ii) above.
"Minority Entity" means any Person that owns or
operates a Cellular Business, other than a Subsidiary of
the Borrower, in which any Restricted Subsidiary holds an
equity or other ownership interest.
"Morgan" has the meaning specified in the recital of
the parties to this Agreement.
"MSA" means a "Metropolitan Statistical Area", as such
term is defined and modified by the FCC for purposes of
Cellular System licensing.
"MSA Pops" means, for each MSA for which a Cellular
Licensee or Cellular Permittee holds an FCC License, the
number of residents of such MSA as reflected in the
Donnelly Marketing Service population estimates for 1989.
<PAGE>
<PAGE> 1-27
"Multiemployer Plan" means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which the
Borrower or any of its ERISA Affiliates is making or
accruing an obligation to make contributions, or has within
any of the preceding five plan years made or accrued an
obligation to make contributions, such plan being
maintained pursuant to one or more collective bargaining
agreements.
"Multiple Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of the Borrower or any of its
ERISA Affiliates and at least one Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained
and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, for any sale, lease,
transfer or other disposition of any asset, or for any sale
or issuance of any security, by any Person, the aggregate
amount of cash received by or on behalf of such Person for
such asset or security (whether as initial consideration or
through payment or disposition of deferred consideration)
after deducting therefrom (a) the amount of such proceeds
required to be applied to repay Indebtedness of any
Subsidiary or Minority Entity or Indebtedness secured by
any asset so disposed of, (b) brokerage commissions, legal
fees, finder's fees and other similar fees and commissions,
(c) taxes currently payable in connection with or as a
result of such transaction, and (d) other out-of-pocket
costs incurred in connection therewith, in the case of each
of clauses (a), (b), (c) and (d) above to the extent, but
only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, paid to a Person that is
not an Affiliate of such Person (or, if paid to such an
Affiliate, to the extent the terms of such payment are no
more favorable to such Affiliate than such terms would be
in an arm's-length transaction) and are properly
attributable to such transaction or to the asset or
security that is the subject thereof.
"Net Income" means, for any Person and for any period,
the net income (or net loss) of such Person for such
period; provided that such amount shall be adjusted to
exclude (to the extent otherwise included therein):
<PAGE>
<PAGE> 1-28
(a) any restoration to income of any contingency
reserve, except to the extent that provision for such
reserve was made out of income accrued during such
period and except for normal accruals and reversals in
the ordinary course of business;
(b) any write-up or write-down of any asset;
(c) any net gain from the collection of the
proceeds of life insurance policies;
(d) any gain arising from the acquisition of any
securities or Indebtedness of such Person and any net
loss arising from the exercise of any warrant of such
Person;
(e) any deferred credit representing the excess
of equity in any Person at the date of acquisition
over the cost of the investment in such Person;
(f) any aggregate net gain (or loss) during such
period arising from the sale, exchange or other
disposition of capital assets (such term to include
all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of
fixed assets, and all securities) other than (i) any
sale, exchange or other disposition in the ordinary
course of business and (ii) any sale, exchange or
disposition of equipment utilized in the business of
such Person, the pro rata share of Net Income of which
is included herein;
(g) all extraordinary items; and
(h) any net income that is attributable to an
entity that is neither a Restricted Subsidiary nor a
Qualified Minority Entity, other than amounts actually
received by a Restricted Subsidiary as a distribution
or dividend.
"1993 Administrative Agent" means the "Administrative
Agent", as such term is defined in the 1993 Credit
Agreement.
"1993 Advance" means each "Advance", as such term is
defined in the 1993 Credit Agreement.
<PAGE>
<PAGE> 1-29
"1993 Agent" means each "Agent", as such term is
defined in the 1993 Credit Agreement.
"1993 Agreement Value" means the "Agreement Value", as
such term is defined in the 1993 Credit Agreement.
"1993 Commitments" means the "Commitments", as such
term is defined in the 1993 Credit Agreement.
"1993 Credit Agreement" means the $1,000,000,000
Credit Agreement dated as of December 3, 1993 among the
Borrower, the Lenders party thereto, TD (Texas), as
Administrative Agent, Toronto-Dominion, PNC and Barclays
Bank PLC, as Arranging Agents and TD (Texas), as Collateral
Agent, as amended from time to time in accordance with
Section 5.02(l) and the Intercreditor Agreement.
"1993 Lender" means each "Lender", as such term is
defined in the 1993 Credit Agreement.
"1993 Loan Documents" means the 1993 Credit Agreement
and the 1993 Pledge Agreement.
"1993 Pledge Agreement" means the "Pledge Agreement"
as such term is defined in the 1993 Credit Agreement.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Obligation" means, with respect to any Person, any
obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim,
whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or
otherwise affected by any proceeding referred to in Section
6.01(e). Without limiting the generality of the foregoing,
the Obligations of the Borrower under the Loan Documents
and the 1993 Loan Documents include (a) the obligation to
pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other
amounts payable by the Borrower under any Loan Document or
any 1993 Loan Document and (b) the obligation to reimburse
any amount in respect of any of the foregoing that any
Lender or 1993 Lender, in its sole discretion, may elect to
pay or advance on behalf of the <PAGE>
<PAGE> 1-30
Borrower pursuant to Section 8.04(d) of this Agreement or
the 1993 Credit Agreement.
"OECD" means the Organization for Economic Cooperation
and Development.
"Offer to Purchase" means the Borrower's Offer to
Purchase dated June 8, 1989, as amended from time to time.
"Operating Cash Flow" or "OCF" means, for any Person
for any period, Cash Flow of such Person for such period
plus Variable Marketing Expenses of such Person for such
period.
"Other Taxes" has the meaning specified in Section
2.11(b).
"Paging One Agreement" means the Loan Agreement dated
as of February 15, 1988 among McCaw Paging One, Inc., The
Toronto-Dominion Bank Trust Company, as agent, and the
lenders party thereto.
"PBGC" means the Pension Benefit Guaranty Corporation,
or any successor agency or entity performing substantially
the same functions.
"Permitted Cellular Asset Swap" means any disposition
followed by an acquisition, or other similar exchange, of
Cellular Assets (other than any of the Core Properties) by
the Borrower or any Restricted Subsidiary meeting the
following criteria: (a) within 150 days after the
consummation of such disposition, a Financial Officer of
the Borrower shall have delivered a certificate to the
Administrative Agent stating that the Borrower or a
Restricted Subsidiary has acquired or has entered into one
or more binding and enforceable agreements to acquire other
Cellular Assets having an aggregate fair market value
substantially equal to the value of the Cellular Assets
disposed of (such determination to be made in the good
faith judgment of a Financial Officer of the Borrower and
so stated in such certificate) and (b) within 365 days
after the date on which such binding agreement or
agreements have been executed and delivered by the parties
thereto, a Financial Officer of the Borrower shall have
delivered a certificate to the Administrative Agent stating
that the Borrower or a Restricted Subsidiary has
consummated such acquisition; provided that (i) the
Cellular Assets acquired by the Borrower or a Restricted
Subsidiary shall <PAGE>
<PAGE> 1-31
not be designated as an Unrestricted Subsidiary and (ii) if
the Borrower or a Restricted Subsidiary has not acquired or
entered into one or more agreements to acquire Cellular
Assets that are substantially equal in value to the
Cellular Assets disposed of, a Permitted Cellular Asset
Swap shall be deemed to have occurred to the extent of the
value of the Cellular Assets actually acquired or to which
such agreements apply, as the case may be (such
determinations of value to be made in the good faith
judgment of a Financial Officer of the Borrower and so
stated in the certificates of such Financial Officer
referred to in clauses (i) and (ii) above).
"Permitted Disposition" has the meaning specified in
Section 2.04(b)(iii)(G).
"Permitted Liens" means such of the following as to
which no enforcement, collection, execution, levy or
foreclosure proceeding shall have been commenced (unless
otherwise provided in this definition):
(a) Liens for taxes, assessments and
governmental charges or levies to the extent not
required to be paid by the Borrower or any Restricted
Subsidiary under Section 5.01(b);
(b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course
of business securing obligations that are not overdue
for a period of more than 60 days;
(c) Liens (other than any Lien imposed by ERISA)
or deposits made in the ordinary course of business to
secure obligations under workers' compensation,
unemployment insurance and other types of social
security, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance
and return-of-money bonds and other similar
obligations (to the extent such undertakings do not
secure obligations for the payment of borrowed money
or the deferred purchase price of property or
services);
(d) easements, rights of way and other
encumbrances on title to real property that do not
render title to the property encumbered thereby <PAGE>
<PAGE> 1-32
unmarketable or materially adversely affect the use of
such property for its present purposes; and
(e) judgment Liens that in the aggregate do not
exceed $5,000,000, each of which has not been in
existence for a period of more than 60 days or the
execution of each of which has been stayed pending
appeal.
"Permitted RCC Asset Swap" means any disposition of
RCC Assets followed by an acquisition of Communications
Assets, or other similar exchange of such assets, or
followed by an Investment in the Restricted Subsidiaries,
by the Borrower or any Restricted Subsidiary meeting the
following criteria: (a) the fair market value (determined
in good faith by a Financial Officer of the Borrower and
set forth in the certificates of such Financial Officer
described in clause (b) below) of all such RCC Assets
disposed of after the date hereof shall not exceed
$250,000,000; and (b) (i) within 150 days after the
consummation of such disposition, a Financial Officer of
the Borrower shall have delivered a certificate to the
Administrative Agent stating that a Restricted Subsidiary
or the Borrower (so long as such assets are not designated
as an Unrestricted Subsidiary) has acquired or has entered
into one or more binding and enforceable agreements to
acquire Communications Assets having a fair market value
substantially equal to the value of the RCC Assets disposed
of (such determination to be made in the good faith
judgment of a Financial Officer of the Borrower and so
stated in such certificate) or an amount equal to such fair
market value has been or will be invested in a Restricted
Subsidiary or Restricted Subsidiaries and (ii) within 365
days after the date on which the parties thereto executed
and delivered such binding agreement or agreements, a
Financial Officer of the Borrower shall have delivered a
certificate to the Administrative Agent stating that the
Borrower or a Restricted Subsidiary has consummated such
acquisition of Communications Assets or has invested such
amount in a Restricted Subsidiary or Restricted
Subsidiaries; provided that, if the Borrower or a
Restricted Subsidiary has not acquired or entered into one
or more agreements to acquire Communications Assets that
are substantially equal in value to the RCC Assets disposed
of or made an Investment in Restricted Subsidiaries in
substantially such amount, a Permitted RCC Asset Swap shall
be deemed to have occurred to the extent of the value of
the RCC Assets actually acquired <PAGE>
<PAGE> 1-33
or to which such agreements apply or to the extent of the
amount actually so invested, as the case may be (such
determinations of value to be made in the good faith
judgment of a Financial Officer of the Borrower and so
stated in the certificates referred to in clause (b)
above).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pledge Agreement" has the meaning specified in
Section 3.01(f)(vi).
"Pledged Debt" has the meaning specified in the Pledge
Agreement.
"Pledged Shares" has the meaning specified in the
Pledge Agreement.
"Pops" means (a) MSA Pops and (b) up to 4,500,000 RSA
Pops.
"Private Market Value Guarantee" means the Private
Market Value Guarantee dated December 11, 1989 between the
Borrower and LIN.
"Pro Forma Combined Debt Service" or "PCDS" means the
sum of all amounts scheduled to be paid during the current
fiscal quarter and the three consecutive fiscal quarters
following such fiscal quarter by the Borrower, each
Restricted Subsidiary and each Qualified Minority Entity to
any other Person with respect to:
(a) the principal of Combined Debt outstanding
(other than repayment of Advances pursuant to Section
2.05, but including reduction of the Commitments
pursuant to Section 2.04(b)(i));
(b) interest on such Combined Debt (excluding
amortization of debt discount and expense, but
including imputed interest on Capitalized Leases, and
assuming, in the case of fluctuating interest rates
that cannot be determined in advance, that the <PAGE>
<PAGE> 1-34
rate in effect will remain in effect throughout such
period);
(c) commitment, agency or other fees with
respect to such Combined Debt;
(d) dividends and other amounts scheduled to be
paid with respect to capital stock (other than
dividends payable in additional shares of such capital
stock), in each case with respect to such Combined
Debt and capital stock outstanding, after giving
effect to any such Combined Debt and capital stock
proposed on such day to be created or assumed and to
the concurrent retirement of any other Combined Debt
and capital stock on such day; and
(e) amounts scheduled to be paid under all Hedge
Agreements outstanding or required to be put in place
during such period, less amounts, if any, scheduled to
be received under such Hedge Agreements; such
calculation to assume that the reference rate under
each such Hedge Agreement in effect remains in effect
throughout such period;
provided that principal and interest in respect of any
guarantee for borrowed money shall be deemed to be payable
as if (A) the principal amount of such guarantee were
subject to the same rate of repayment as the Indebtedness
guaranteed and (B) interest in respect thereof was payable
at the same rate as the Indebtedness guaranteed.
"Pro Forma Senior Debt Service" or "PSDS" means the
sum of all amounts scheduled to be paid during the current
fiscal quarter and the three consecutive fiscal quarters
following such fiscal quarter by the Borrower, each
Restricted Subsidiary and each Qualified Minority Entity
with respect to:
(a) the principal of Senior Debt outstanding
(other than repayments of Advances pursuant to Section
2.05, but including reduction of the Commitments
pursuant to Section 2.04(b)(i));
(b) interest on such Senior Debt (excluding
amortization of debt discount and expense and
assuming, in the case of fluctuating interest rates
that cannot be determined in advance, that the rate <PAGE>
<PAGE> 1-35
in effect will remain in effect throughout such
period);
(c) commitment, agency or other fees with
respect to such Senior Debt;
(d) dividends and other amounts scheduled to be
paid with respect to capital stock (other than
dividends payable in additional shares of such capital
stock), in each case with respect to such Senior Debt
and capital stock outstanding, after giving effect to
any such Senior Debt and capital stock proposed on
such day to be created or assumed and to the
concurrent retirement of any other Senior Debt and
capital stock on such day; and
(e) amounts scheduled to be paid under all Hedge
Agreements outstanding or required to be put in place
during such period, less amounts, if any, scheduled to
be received under such Hedge Agreements; such
calculation to assume that the reference rate under
each such Hedge Agreement in effect remains in effect
throughout such period;
provided that principal and interest in respect of any
guarantee for borrowed money shall be deemed to be payable
as if (A) the principal amount of such guarantee were
subject to the same rate of repayment as the Indebtedness
guaranteed and (B) interest in respect thereof were payable
at the same rate as the Indebtedness guaranteed.
"Provident" has the meaning specified in the recital
of parties to this Agreement.
"PUC" means any state regulatory agency or body that
exercises jurisdiction over the ownership, construction or
operation of Cellular Systems or RCC Systems.
"Qualified Minority Entity" means any Minority Entity
so designated by a Financial Officer of the Borrower in a
written notice to the Administrative Agent; provided that
(i) any such designation may not be subsequently withdrawn,
(ii) no Minority Entity that has issued equity securities
registered under the Securities Exchange Act of 1934 may be
so designated and (iii) the Minority Entities designated
under this Agreement as "Qualified Minority Entities" shall
be the same as those designated under the 1993 Credit
Agreement.
<PAGE>
<PAGE> 1-36
"RCC Assets" means each RCC Business or RCC System
owned directly or indirectly by the Borrower or any
Restricted Subsidiary.
"RCC Business" means the business of operating one or
more RCC Systems.
"RCC Franchise Interest" means a direct or indirect
ownership interest in any Person that owns or operates an
RCC Business.
"RCC Operating Cash Flow" means, for any Person for
any period, the Operating Cash Flow of such Person for such
period attributable to RCC Assets.
"RCC System" means a radio common carrier system that
includes one or more of the following: (a) a radio paging
system licensed under Part 22 of the FCC's Rules; (b) a
conventional mobile telephone system licensed under Part 22
of the FCC's Rules and (c) a specialized mobile radio
system or private radio system licensed under Part 90 of
the FCC's Rules.
"Reference Lenders" means Morgan, Provident and
Toronto-Dominion.
"Refinancing" has the meaning specified in Section
2.13(k).
"Register" has the meaning specified in Section
8.07(c).
"Regulatory Authority" means the FCC, each PUC and any
other state or local authority that has jurisdiction over
the control, ownership, licensing, construction or
operation of all or any part of any Cellular System or RCC
System or the provision of service or the charges for such
service in any Cellular System or RCC System.
"Required Lenders" means, at any time following the
initial borrowing under the 1993 Credit Agreement and prior
to the payment in full of the 1993 Advances and the
expiration or termination of the 1993 Commitments, Lenders
and 1993 Lenders having more than 50% of the aggregate
unpaid principal amount of the sum of the Advances and the
1993 Advances, or, if no such principal amount is then
outstanding, Lenders and 1993 Lenders having more than 50%
of the sum of the Commitments and the 1993 Commitments and,
at any other time, Lenders having more than 50% of the
aggregate unpaid principal <PAGE>
<PAGE> 1-37
amount of the Advances or, if no such principal amount is
then outstanding, Lenders having more than 50% of the
Commitments.
"Required Secured Lenders" has the meaning specified
in the Pledge Agreement.
"Restricted Subsidiaries" means (a) all Subsidiaries
of the Borrower set forth in Part A of Schedule III; (b)
any Subsidiary of the Borrower organized or acquired after
December 3, 1993, unless designated in a written notice by
a Financial Officer of the Borrower as an Unrestricted
Subsidiary prior to its organization or acquisition (or
within 15 Business Days after its organization or
acquisition if, at the time of its organization or
acquisition, such Subsidiary could have been organized or
acquired as an Unrestricted Subsidiary); and (c) any
Unrestricted Subsidiary that is redesignated by a Financial
Officer of the Borrower as a Restricted Subsidiary;
provided that no Restricted Subsidiary may be redesignated
as an Unrestricted Subsidiary.
"Ridge" means Ridge Merger Corporation, a Delaware
corporation wholly owned by AT&T.
"Rights" means, with respect to any outstanding share
of LIN's common stock, the preferred stock purchase rights
associated with such share pursuant to the Rights
Agreement.
"Rights Agreement" means the Rights Agreement dated as
of May 2, 1988 as amended and restated as of January 13,
1989 and amended as of June 19, 1989 and September 10,
1989, between LIN and Manufacturers Hanover Trust Company,
as rights agent.
"RSA" means a "Rural Service Area", as such term is
defined and modified by the FCC for purposes of Cellular
System licensing.
"RSA Pops" means, for each RSA for which a Cellular
Licensee or Cellular Permittee holds an FCC License, the
number of residents of such RSA as reflected in the
Donnelly Marketing Service population estimates for 1989.
"Secured Hedge Agreement" has the meaning specified in
the Pledge Agreement.
<PAGE>
<PAGE> 1-38
"Senior Debt" or "SD" means Combined Debt, other than
Subordinated Debt.
"Senior Subordinated Debentures" means the Borrower's
$400,000,000 14% Senior Subordinated Debentures due June
15, 1998, issued under an Indenture dated as of June 15,
1988 between the Borrower and Seattle-First National Bank,
as trustee.
"Severable Equipment" means any additions,
modifications and improvements to the initial configuration
of any Cellular System that may be removed therefrom
without diminishing or impairing the function, utility,
performance or operating condition of the initial
configuration as in effect immediately prior to the making
or installation of such addition, modification or
improvement.
"Shareholders Agreement" means the Shareholders
Agreement dated as of May 31, 1989 among the Borrower, the
Trustees under the will of the late Eben D. Jordan, the
Trustees of the Taylor Voting Trust, the holders of certain
units of the Taylor Voting Trust, Craig O. McCaw, John E.
McCaw, Jr., Bruce R. McCaw and Keith W. McCaw, and the
other parties named therein, as amended from time to time.
"Single Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of the Borrower or any of its
ERISA Affiliates and no Person other than the Borrower and
its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4069 of ERISA
in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the
total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable
liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not <PAGE>
<PAGE> 1-39
about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably
small capital. In computing the amount of contingent
liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in light
of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subject Debt" means (a) the 12.95% Senior
Subordinated Debentures; (b) the Senior Subordinated
Debentures; and (c) the MCI Debt.
"Subordinated Debt" means all Indebtedness of the
Borrower that is subordinated to the obligations of the
Borrower under or in respect of the Loan Documents on terms
of subordination no less favorable to the Lenders than the
terms set forth in Schedule V hereto, or as the Required
Lenders may otherwise agree, that provides for the
amortization of no more than 5% of the principal amount
thereof in each of 1999 and 2000 and that otherwise
contains terms and conditions satisfactory to the Required
Lenders.
"Subscriber Equipment" means any cellular mobile
telephones, cellular portable telephones, speakers,
mounting hardware, subscriber test equipment and similar
subscriber equipment.
"Subsidiary" of any Person means (a) any corporation
of which more than 50% of the issued and outstanding
capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other
Subsidiaries and (b) any partnership, joint venture or
other association of which more than 50% of the equity
interests having the power to vote to direct or control the
management of such partnership, joint venture or other
association is at the time owned or controlled by such
Person, by such Person and one or more of the other
Subsidiaries or by one or more of such Person's other
Subsidiaries.
<PAGE>
<PAGE> 1-40
"Targeted Acquisitions" means the acquisition of
Franchise Interests with respect to any MSA, any
Geographically Related RSA, any other RSA in which the
Borrower or any Subsidiary has, on the date hereof, a
Franchise Interest or Hawaii, Kauai or Maui, Hawaii.
"Taxes" has the meaning specified in Section 2.11(a).
"TD (Texas)" means Toronto Dominion (Texas), Inc.
"Tender Offer" means the offer by the Borrower and
Holdings to acquire LIN Shares for cash pursuant to the
Offer to Purchase, as amended from time to time.
"Toronto-Dominion" has the meaning specified in the
recital of parties to this Agreement.
"Total Cellular Group Pops" with respect to any
Cellular Group, means the aggregate number of MSA Pops for
all MSAs in such Cellular Group; provided, however, that
for each Cellular Entity in such Cellular Group that is not
a Restricted Subsidiary, the Attributable Share of the MSA
Pops of such MSA shall be used for this calculation.
"12.95% Senior Subordinated Debentures" means the
Borrower's $600,000,000 12.95% Senior Subordinated
Debentures due August 15, 1999 issued under an Indenture
dated as of August 15, 1987 between the Borrower and
Seattle-First National Bank, as trustee.
"Type" refers to the distinction between Advances
bearing interest at the Base Rate, Advances bearing
interest at the LIBO Rate and Advances bearing interest at
the Adjusted CD Rate.
"Unavailable Commitment" has the meaning specified in
Section 2.04(c).
"United States" means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of the
Borrower that is not a Restricted Subsidiary.
"Variable Marketing Expenses" means, for any Person
and for any period, the aggregate amount of expenses that
are properly attributable to a Cellular Business owned or
operated by such Person incurred by such Person during such
period for advertising, sales and marketing.
<PAGE>
<PAGE> 1-41
"Voting Stock" means capital stock issued by a
corporation, or equivalent interests in any other Person,
the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such
Person, even though the right to vote has been suspended by
the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, maintained for employees of the
Borrower or any of its ERISA Affiliates.
"Withdrawal Liability" has the meaning given such term
under Part 1 of Subtitle E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means
"to but excluding".
SECTION 1.03. Accounting Terms and Computations. All
accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of
the financial statements referred to in Section 4.01(f)
("GAAP"). Unless otherwise provided herein, all computations
and calculations to be made under this Agreement, including,
without limitation, computations under Section 5.03, shall be
made in accordance with GAAP.
<PAGE>
<PAGE> 2-1
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to
make advances ("Advances") to the Borrower from time to time on
any Business Day during the period from the date hereof until
the Final Maturity Date in an aggregate amount not to exceed at
any time outstanding such Lender's Available Commitment. Each
Borrowing shall be in an aggregate amount not less than
$30,000,000 or an integral multiple of $7,500,000 in excess
thereof and shall be in such amount as shall be necessary to
give effect to the condition to funding in Section 3.03(b) and
shall consist of Advances of the same Type made on the same day
by the Lenders ratably according to their Commitments. Within
the limits of each Lender's Available Commitment, the Borrower
may borrow under this Section 2.01, repay pursuant to Section
2.05 or prepay pursuant to Section 2.07(a), and reborrow under
this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each
Borrowing shall be made on notice, given not later than 11:00
A.M. (New York City time) on the third Business Day (in the
case of a LIBO Rate Advance having an Interest Period of six
months or less), the fifth Business Day (in the case of a LIBO
Rate Advance having an Interest Period of nine months or twelve
months), the second Business Day (in the case of an Adjusted CD
Rate Advance), or the Business Day (in the case of a Base Rate
Advance) prior to the date of the proposed Borrowing by the
Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof by telex, telecopier or cable.
Each such notice of a Borrowing (a "Notice of Borrowing") shall
be by telex, telecopier or cable, confirmed immediately in
writing, in substantially the form of Exhibit A hereto,
specifying therein the requested (i) date of such Borrowing,
(ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing, (iv) purpose or
purposes for which the proceeds of such Borrowing will be used
and (v) Interest Period for each such Advance. Each Lender
shall, before 12:30 P.M. (New York City time) on the date of
such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such
Lender's ratable portion of such Borrowing. After the
Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to
the Borrower by crediting the Borrower's Account.
<PAGE>
<PAGE> 2-2
(b) Notwithstanding the foregoing:
(i) the Borrower shall not be entitled to make a
Borrowing if, after giving effect to such Borrowing, there
would be outstanding more than ten different Borrowings
that bear interest at the LIBO Rate or the Adjusted CD
Rate;
(ii) if any Lender shall, at least one Business Day
before the date of any requested Borrowing to bear interest
at the LIBO Rate, notify the Administrative Agent that the
introduction of or any change in or in the interpretation
of any law or regulation makes it unlawful, or that any
central bank or other governmental authority asserts that
it is unlawful, for such Lender or its LIBO Lending Office
to perform its obligations hereunder to make LIBO Rate
Advances or to fund or maintain LIBO Rate Advances
hereunder, the right of the Borrower to select LIBO Rate
Advances for such Borrowing or any subsequent Borrowing
shall be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such
suspension no longer exist, and each Advance comprising
such Borrowing shall be a Base Rate Advance;
(iii) if fewer than two Reference Lenders furnish
timely information to the Administrative Agent for
determining the Adjusted CD Rate for any Adjusted CD Rate
Advances, or the LIBO Rate for any LIBO Rate Advances,
comprising any requested Borrowing:
(A) the Administrative Agent shall promptly
notify the Borrower and the Lenders that the interest
rate cannot be determined for such Adjusted CD Rate
Advances or LIBO Rate Advances (as the case may be);
(B) the right of the Borrower to select Adjusted
CD Rate Advances or LIBO Rate Advances (as the case
may be) for such Borrowing or any subsequent Borrowing
shall be automatically suspended until the
Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension
no longer exist;
(C) each Advance comprising such Borrowing shall
be a Base Rate Advance; and
<PAGE>
<PAGE> 2-3
(iv) if the Required Lenders shall, at least one
Business Day before the date of a requested Borrowing,
notify the Administrative Agent that the LIBO Rate for LIBO
Rate Advances comprising such Borrowing will not adequately
reflect the cost to such Lenders of making, funding or
maintaining their respective LIBO Rate Advances for such
Borrowing, the right of the Borrower to select LIBO Rate
Advances for such Borrowing or any subsequent Borrowing
shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance.
(c) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of
Adjusted CD Rate Advances or LIBO Rate Advances, the Borrower
shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill
on or before the date specified in such Notice of Borrowing for
such Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as
part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with subsection (a) of
this Section 2.02, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that
such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and the
Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in <PAGE>
<PAGE> 2-4
the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute
such Lender's Advance as part of such Borrowing for purposes of
this Agreement.
(e) If the Lenders make Advances on a day on which
the Borrower is required to repay all or any part of the
Advances then outstanding, each Lender shall apply the proceeds
of the Advances to be made by it to make the repayment due to
such Lender and shall deliver to the Administrative Agent an
amount equal to the difference (if positive) between the amount
of such Lender's Advances and the amount required to be repaid
to such Lender.
(f) The failure of any Lender to make the Advance to
be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The
Borrower agrees to pay to the Administrative Agent for the
account of the Lenders a commitment fee (i) in the case of each
Lender that is a signatory hereto, on such Lender's commitment
(as set forth in the commitment letter delivered by such Lender
to the Borrower) as such commitment may be reduced, from time
to time, prior to the date hereof pursuant to such Lender's
commitment letter from, and including, the date on which the
Borrower accepted such Lender's commitment to, but excluding,
the date hereof and (ii) on the average daily unused portion of
each Lender's Commitment (including for purposes of calculating
such commitment fee such Lender's Unavailable Commitment) from,
and including, the date hereof in the case of each Lender that
is a signatory hereto and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Final
Maturity Date at the rate of 1/2 of 1% per annum, payable
(A) (to the extent not previously paid) on the date hereof, (B)
quarterly in arrears thereafter on the last Business Day of
each March, June, September and December and (C) on the Final
Maturity Date.
(b) Collateral Agent's, Administrative Agent's and
Arranging Agents' Fees. The Borrower shall pay to the
Collateral Agent, the Administrative Agent and the Arranging
Agents for their own accounts such fees as may from time to <PAGE>
<PAGE> 2-5
time be agreed between the Borrower and the Collateral Agent,
the Administrative Agent and the Arranging Agents,
respectively.
SECTION 2.04. Reduction of the Commitments;
Unavailable Commitments. (a) Optional. The Borrower shall
have the right subject to Section 5.01(r), upon at least three
Business Days' notice to the Administrative Agent, to terminate
in whole or reduce ratably in part the unused portions of the
Commitments of the Lenders; provided that each partial
reduction of the Commitments shall be in the minimum aggregate
amount of $45,000,000 or an integral multiple of $15,000,000 in
excess thereof and shall be in such amount as shall be
necessary for the Borrower to comply with Section 5.01(r).
(b) Mandatory. (i) Amortization. On each day on or
after the Amortization Commencement Date on which the
Commitment of any Lender shall be (without giving effect to any
automatic reduction of such Commitment on such day) greater
than the aggregate principal amount of the Advances owing to
such Lender on such day, the Commitment of such Lender shall
automatically permanently reduce to an amount equal to such
aggregate principal amount, and, on the Amortization
Commencement Date, the Unavailable Commitment of each Lender
shall be extinguished. In addition, on the last day of each
calendar quarter in each year (each such date being an
"Amortization Date") commencing on the first such date to occur
after the Amortization Commencement Date and ending on the
seventeenth Amortization Date, the Commitment of each Lender
shall automatically reduce by the amount obtained by
multiplying the percentage set opposite the applicable
Amortization Date below (as such percentage may be reduced
pursuant to clauses (ii) and (iii) below) times the aggregate
principal amount of the Advances owing to such Lender
outstanding on the Amortization Commencement Date:
Quarter Following
Amortization
Commencement Date Percentage
First through Fourth 2.50%
Fifth through Eighth 5.00%
Ninth through Twelfth 6.25%
Thirteenth through Sixteenth 7.50%
Seventeenth 15.00%
<PAGE>
<PAGE> 2-6
(ii) Excess Cash Flow. In the event that the Borrower
has Excess Cash Flow for any fiscal year (beginning with the
fiscal year ending December 31, 1996), the Facility shall be
permanently reduced by an amount equal to 75% of such Excess
Cash Flow and the percentage by which each Lender's Commitment
is to be reduced on each Amortization Date shall be reduced by
a fraction the numerator of which is the amount by which the
Facility has been reduced as a result of such Excess Cash Flow
and the denominator of which is the aggregate principal amount
of the Advances owing to all Lenders outstanding on the day
such reduction shall occur (without giving effect to any
reduction to be made on such day). Such reduction in the
Facility shall occur on the date on which the certificate of a
Financial Officer of the Borrower setting forth Excess Cash
Flow is required to be delivered to the Lenders under Section
5.01(l)(iii).
(iii) Sales of Assets. The Facility shall be
permanently reduced upon any sale, lease, transfer or other
disposition of assets of the Borrower or any Restricted
Subsidiary by an amount equal to 75% of the Net Cash Proceeds
of the assets so sold, transferred or otherwise disposed of,
other than (each of the following, to the extent otherwise
permitted under this Agreement, being an "Excluded Sale"):
(A) dispositions of assets (other than Franchise
Interests) in the ordinary course of business;
(B) Permitted Cellular Asset Swaps and Permitted RCC
Asset Swaps;
(C) the Contel Transaction;
(D) the Los Angeles Contribution;
(E) dispositions of Unrestricted Subsidiaries;
(F) dispositions permitted by Section 5.02(d)(viii);
and
(G) other dispositions of assets of the Borrower or
any Restricted Subsidiary exclusively for cash before the
Amortization Commencement Date to the extent that the
aggregate Net Cash Proceeds of all such dispositions after
the date hereof does not exceed $1,000,000,000 and as to
which (a) within 150 days after the consummation of each
such disposition, the Borrower shall have delivered to the
Lenders a certificate of a Financial Officer of the
Borrower describing in reasonable detail the asset <PAGE>
<PAGE> 2-7
that has been disposed of and setting forth the Net Cash
Proceeds received by the Borrower or such Restricted
Subsidiary in connection therewith and the computation of
such Net Cash Proceeds and (b) the Borrower shall have made
the prepayment, if any, required by Section 2.07(b)(ii)
(each such disposition referred to in this subclause (G)
being a "Permitted Disposition");
and, with respect to any such reduction of the Facility
occurring after the Amortization Commencement Date, the
percentage by which each Lender's Commitment is to be reduced
on each Amortization Date shall be reduced by a fraction the
numerator of which is the amount by which the Facility has been
reduced as a result of such sale or other disposition of assets
and the denominator of which is the aggregate principal amount
of the Advances owing to all Lenders outstanding on the day
such reduction shall occur (without giving effect to any
reduction to be made on such day).
(c) Unavailable Commitment. On the 150th day
following the consummation of each Permitted Disposition, a
portion of the Commitment of each Lender equal to such Lender's
ratable portion of the Asset Sale Balance on such day shall be
deemed and become unavailable for Borrowings hereunder (such
Lender's "Unavailable Commitment"). Upon the consummation of
any acquisition by the Borrower or any Restricted Subsidiary of
Approved Cellular Assets before the Amortization Commencement
Date, the Unavailable Commitment of each Lender shall be
reduced to an amount equal to such Lender's ratable portion of
the Asset Sale Balance on such day (after giving effect to such
acquisition). Upon (i) the 150th day following the
consummation of each Permitted Disposition and (ii) the date on
which the Borrower or any Restricted Subsidiary has consummated
the acquisition of Approved Cellular Assets, a Financial
Officer of the Borrower shall deliver to the Lenders a
certificate describing in reasonable detail the assets so
disposed of or acquired (as the case may be) and setting forth
the Asset Sale Balance as of such day (after giving effect to
any such disposition or acquisition) and the change in the
Unavailable Commitments of the Lenders, together with
information sufficient to enable the Lenders to verify the
calculation thereof.
SECTION 2.05. Repayment. The Borrower shall repay to
the Administrative Agent for the account of the Lenders the
outstanding principal amount of each Advance on the last day of
the Interest Period for such Advance.
<PAGE>
<PAGE> 2-8
SECTION 2.06. Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing
to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates
per annum:
(a) LIBO Rate Advances. If such Advance is a LIBO
Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (i) the
LIBO Rate for such Interest Period for such Advance plus
(ii) the Applicable Margin in effect from time to time
during such Interest Period, payable on the last day of
such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs
during such Interest Period every three months from the
first day of such Interest Period (or, if there is no
numerically corresponding day in such third month, the last
day of such month).
(b) Adjusted CD Rate Advances. If such Advance is an
Adjusted CD Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the
sum of (i) the Adjusted CD Rate for such Interest Period
for such Advance plus (ii) the Applicable Margin in effect
from time to time during such Interest Period, payable on
the last day of such Interest Period and, if such Interest
Period has a duration of more than 90 days, on each day
that occurs during such Interest Period every 90 days from
the first day of such Interest Period.
(c) Base Rate Advances. If such Advance is a Base
Rate Advance, a rate per annum equal at all times to the
sum of (i) the Base Rate in effect from time to time plus
(ii) the Applicable Margin in effect from time to time
during such Interest Period, payable on the last day of
such Interest Period.
(d) Default Interest. Upon the occurrence and during
the continuance of a Default, the Borrower shall pay
interest on the unpaid principal amount of each Advance
owing to each Lender, payable on demand, at a rate per
annum equal at all times to 2% per annum above the rate per
annum required to be paid on such Advance pursuant to
clause (a), (b) or (c) above.
SECTION 2.07. Prepayments. (a) Optional. The
Borrower may, subject to Section 5.01(r), upon at least one
Business Day's notice in the case of a Base Rate Advance or
five Business Days' notice in the case of a LIBO Rate Advance <PAGE>
<PAGE> 2-9
or an Adjusted CD Rate Advance to the Administrative Agent
stating the proposed date and aggregate principal amount of the
prepayment, and, if such notice is given, the Borrower shall,
prepay the outstanding principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in
part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided that (i)
each partial prepayment shall be in an aggregate principal
amount not less than $45,000,000 or an integral multiple of
$15,000,000 in excess thereof and shall be in such amount as
shall be necessary for the Borrower to comply with Section
5.01(r) and (ii) in the event any prepayment of a LIBO Rate
Advance or an Adjusted CD Rate Advance shall be made on any day
other than on the last day of the Interest Period therefor, the
Borrower shall reimburse the Lenders in respect thereof
pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, (x) on each
Business Day, prepay an aggregate principal amount of the
Advances comprising part of the same Borrowing equal to the
amount by which the aggregate principal amount of all Advances
exceeds the Available Commitments and (y) on the Business Day
on which it receives the Net Cash Proceeds of the Contel
Transaction, prepay an aggregate principal amount of the
Advances comprising part of the same Borrowing or Borrowings
equal to the amount of such Net Cash Proceeds.
(ii) The Borrower shall, on or before the 30th day
following any sale, lease, transfer or other disposition of
assets by the Borrower or any Restricted Subsidiary (other than
any disposition described in Sections 2.04(b)(iii)(A), (C), (D)
and (E)) prepay an aggregate principal amount of the Advances
comprising part of the same Borrowing equal to 75% of the Net
Cash Proceeds of such disposition and apply the balance of such
Net Cash Proceeds to the prepayment of the 1993 Advances
pursuant to the 1993 Credit Agreement; provided that (A) in the
event that such Net Cash Proceeds are less than $30,000,000, no
such prepayment shall be required until the 30th day following
the date on which the aggregate unpaid amount of such Net Cash
Proceeds equals or exceeds $30,000,000, and (B) no such
prepayment shall be required if, on or before such 30th day the
Borrower or a Restricted Subsidiary has entered into a contract
to acquire assets or, with respect to a disposition of RCC
Assets, has made investments such that such disposition
constitutes part of a Permitted Cellular Asset Swap or a
Permitted RCC Swap (as the case may be); and provided further
that with respect to any disposition of assets owned directly
by the Borrower, the Borrower shall, on or before the ninth day
following such <PAGE>
<PAGE> 2-10
disposition, (A) prepay an aggregate principal amount of the
Advances comprising part of the same Borrowing equal to 75% of
the Net Cash Proceeds of such disposition and apply the balance
of such Net Cash Proceeds to the prepayment of the 1993
Advances pursuant to the 1993 Credit Agreement or (B) invest an
amount equal to such Net Cash Proceeds in one or more
Restricted Subsidiaries. Any such prepayment made by the
Borrower under the foregoing further proviso shall reduce the
amount otherwise required to be paid on such 30th day following
the relevant disposition. In connection with any dispositions
of assets pursuant to which the Borrower or any Restricted
Subsidiary receives Net Cash Proceeds equal to or in excess of
$30,000,000, the Borrower shall deliver to the Lenders on or
before the 30th day following such disposition a certificate of
a Financial Officer of the Borrower setting forth (x) the Net
Cash Proceeds of such disposition, (y) the amount of the
prepayment required to be made in connection with such
disposition (after giving effect to any reduction in the amount
required to be prepaid resulting from Permitted Cellular Asset
Swaps or a Permitted RCC Swap) and (z) the aggregate amount
prepaid in connection with such disposition prior to such 30th
day.
(iii) All prepayments under this Section 2.07 shall be
made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Interest Rate Determination. (a) Each
Reference Lender agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Adjusted
CD Rate or LIBO Rate, as applicable. Subject to Section
2.02(b)(iii), if any one or more of the Reference Lenders shall
not furnish such timely information to the Administrative Agent
for the purpose of determining any such interest rate, the
Administrative Agent shall determine such interest rate on the
basis of timely information furnished by the remaining
Reference Lenders.
(b) The Administrative Agent shall give prompt notice
to the Borrower and the Lenders of the applicable interest rate
determined by the Administrative Agent for purposes of Section
2.06(a), (b) or (c), and the applicable rate, if any, furnished
by each Reference Lender for the purpose of determining the
applicable interest rate under Section 2.06(a) or (b).
SECTION 2.09. Increased Costs, Etc. (a) If, due to
either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve <PAGE>
<PAGE> 2-11
requirements included in the Adjusted CD Rate Reserve
Percentage or the LIBO Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other
governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Adjusted CD
Rate Advances or LIBO Rate Advances (as the case may be), then
the Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate as to the amount of
such increased cost, submitted to the Borrower by such Lender,
shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other governmental authority (whether or not having the
force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder (or similar contingent
obligations), then, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), the Borrower shall
pay to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender in the light of
such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower by
such Lender shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.10. Payments and Computations. (a) The
Borrower shall make each payment hereunder not later than 11:00
A.M. (New York City time) on the day when due in Dollars to the
Administrative Agent at the Administrative Agent's Account in
same day funds. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment fees under or in
respect of the Facility ratably (other than amounts payable
pursuant to Section 2.09, 2.11 or 8.04(c) or with respect to
payments under 8.04(d) that are deemed to be Base Rate
Advances) to the Lenders for the <PAGE>
<PAGE> 2-12
account of their Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any
Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms
of this Agreement. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.07(d), from and after the
effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder in
respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between
themselves.
(b) The Borrower hereby authorizes each Lender, if
and to the extent payment owed to such Lender is not made when
due hereunder, to charge from time to time against any or all
of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base
Rate and of commitment fees shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the Adjusted
CD Rate, the LIBO Rate or the Federal Funds Rate shall be made
by the Administrative Agent on the basis of a year of 360 days,
in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by
the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of
payment of interest or commitment fee (as the case may be);
provided, however, if such extension would cause payment of
interest on or principal of LIBO Rate Advances to be made in
the next following calendar month, such payment shall be made
on the next preceding Business Day.
(e) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which
any payment is due to any Lenders hereunder that the Borrower
will not make such payment in full, the Administrative Agent <PAGE>
<PAGE> 2-13
may assume that the Borrower has made such payment in full to
the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent
the Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the
Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.11. Taxes. (a) Any and all payments by
the Borrower hereunder shall be made, in accordance with
Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and each Agent,
taxes measured by its net income that are imposed on it by the
jurisdiction under the laws of which such Lender or such Agent
(as the case may be) is organized or qualified to do business
or any political subdivision thereof and, in the case of each
Lender, by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof and excluding any
gross receipts tax imposed on an Agent or Lender (as the case
may be) in lieu of a net income tax by a jurisdiction (other
than the United States) under the laws of which such Agent or
Lender is organized, is qualified to do business or has its
Applicable Lending Office or any political subdivision of any
such jurisdiction (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If the Borrower
shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender or any Agent, (i)
the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11)
such Lender or such Agent (as the case may be) receives an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other <PAGE>
<PAGE> 2-14
excise or property taxes, charges or similar levies that arise
from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and each
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.11) paid
by such Lender and such Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or such Agent
(as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative Agent,
at its address referred to in Section 8.02, the original or a
certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment hereunder, the
Borrower will furnish to the Administrative Agent, at such
address, a certificate from each appropriate taxing authority,
or an opinion of counsel acceptable to the Administrative
Agent, in either case stating that such payment is exempt from
or not subject to Taxes.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the date
of its execution and delivery of this Agreement in the case of
each initial Lender and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if
requested in writing by the Borrower (but only so long as such
Lender remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States
is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the
form provided by a Lender at the time such Lender first becomes
a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from "Taxes" as defined in
Section 2.11(a).
<PAGE>
<PAGE> 2-15
(f) For any period with respect to which a Lender has
failed to provide the Borrower with the appropriate form
described in Section 2.11(e) (other than if such failure is due
to a change in law occurring subsequent to the date on which a
form originally was required to be provided, or if such form
otherwise is not required under the preceding sentence), such
Lender shall not be entitled to indemnification under Section
2.11(a) with respect to Taxes imposed by the United States;
provided that should a Lender become subject to Taxes because
of its failure to deliver a form required hereunder, the
Borrower shall take such steps as the Lender shall reasonably
request to assist the Lender to recover such Taxes.
(g) Notwithstanding any contrary provisions of this
Agreement, in the event that a Lender that originally provided
such form as may be required under Section 2.11(e) thereafter
ceases to qualify for complete exemption from United States
withholding tax, such Lender may assign its interest under this
Agreement to any assignee and such assignee shall be entitled
to the same benefits under this Section 2.11 as the assignor
provided that the rate of United States withholding tax
applicable to such assignee shall not exceed the rate then
applicable to the assignor.
(h) Any Lender claiming any additional amounts
payable pursuant to this Section 2.11 shall use its best
efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would
avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in
the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.12. Sharing of Payments, Etc. If any
Lender shall obtain at any time any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or
otherwise) (a) on account of the Obligations due and payable to
such Lender hereunder at such time in excess of its ratable
share (according to the proportion of (i) the amount of such
Obligations due and payable to such Lender at such time to (ii)
the aggregate amount of the Obligations due and payable to all
Lenders hereunder and all 1993 Lenders under the 1993 Credit
Agreement at such time) of payments on account of the
Obligations due and payable to all Lenders hereunder and all
1993 Lenders under the 1993 Credit Agreement at such time
obtained by all the Lenders and 1993 Lenders at such time or
(b) on account of the Obligations <PAGE>
<PAGE> 2-16
owing (but not due and payable) to such Lender hereunder at
such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing (but not
due and payable) to such Lender at such time to (ii) the
aggregate amount of the Obligations owing (but not due and
payable) to all Lenders hereunder and all 1993 Lenders under
the 1993 Credit Agreement at such time) of payments on account
of the Obligations owing (but not due and payable) to all
Lenders hereunder and all 1993 Lenders under the 1993 Credit
Agreement at such time obtained by all the Lenders and 1993
Lenders at such time, such Lender shall forthwith purchase from
the other Lenders and the 1993 Lenders such participations in
the Obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender,
such purchase from each other Lender and each 1993 Lender shall
be rescinded and such other Lender or 1993 Lender shall repay
to the purchasing Lender the purchase price to the extent of
such other Lender's or 1993 Lender's ratable share (according
to the proportion of (i) the purchase price paid to such other
Lender or 1993 Lender to (ii) the aggregate purchase price paid
to all Lenders and 1993 Lenders) of such recovery together with
an amount equal to such other Lender's or 1993 Lender's ratable
share (according to the proportion of (i) the amount of such
other Lender's or 1993 Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The
Borrower agrees that any Lender so purchasing a participation
from another Lender or 1993 Lender pursuant to this Section
2.12 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.13. Use of Proceeds. The proceeds of the
Advances shall be available (and the Borrower agrees that it
shall use such proceeds) solely for the following purposes:
(a) to pay transaction costs and expenses;
(b) to refinance Indebtedness under the Existing Loan
Agreement and the Paging One Agreement;
<PAGE>
<PAGE> 2-17
(c) to make a capital contribution to Holdings to
enable Holdings to acquire LIN Shares through the Tender
Offer pursuant to the terms of the Offer to Purchase;
(d) to make payments with respect to Indebtedness;
(e) to make Targeted Acquisitions or to make capital
contributions to Restricted Subsidiaries to enable such
Restricted Subsidiaries to make Targeted Acquisitions;
(f) to provide working capital for the Borrower, the
Restricted Subsidiaries and Qualified Minority Entities;
(g) to construct plant and operating systems for, and
to make capital improvements to, Cellular Systems or RCC
Systems or to satisfy Indebtedness incurred by a Restricted
Subsidiary for the construction or operation of or capital
improvements to RCC Systems or Cellular Systems owned or
operated by any RCC Business or Cellular Entity (as the
case may be) in which a Restricted Subsidiary owns an RCC
Franchise Interest or a Franchise Interest;
(h) to purchase or to redeem the MCI Warrants at a
price that does not exceed the MCI Warrant Price;
(i) to make one or more Investments in Unrestricted
Subsidiaries (other than acquiring LIN Shares pursuant to
the Tender Offer), in an aggregate amount for all such
Investments not to exceed $100,000,000;
(j) to purchase RCC Assets in an aggregate amount for
all such RCC Assets not to exceed $200,000,000; provided
that an amount not to exceed $50,000,000 thereof may be
used by First-Tier Restricted Subsidiaries to make loans
that are permitted under Section 5.02(e)(vii) (in one or
more transactions) to a Cellular Entity owning an MSA
Franchise or Geographically-Related RSA Franchise; and
(k) to redeem and repay in full the Subject Debt (the
"Refinancing").
SECTION 2.14. Evidence of Indebtedness. (a) Each
Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower
to such Lender resulting from each Advance owing to such Lender
from time to time, including the amounts of <PAGE>
<PAGE> 2-18
principal and interest payable and paid to such Lender from
time to time hereunder.
(b) The Register maintained by the Administrative
Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made, the Type of Advances comprising
such Borrowing and any Interest Period applicable thereto,
(ii) the terms of each Assignment and Acceptance delivered to
and accepted by it, (iii) the amount of any principal or
interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iv) the amount of any
sum received by the Administrative Agent from the Borrower
hereunder and each Lender's share thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest error.
<PAGE>
<PAGE> 3-1
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make an Advance on
the occasion of the initial Borrowing is subject to the
following conditions precedent:
(a) The Lenders shall be satisfied with all
documentation relating to the charter and by-laws of the
Borrower and its corporate Subsidiaries and the
partnership, joint venture and other similar agreements of
its non-corporate Subsidiaries.
(b) There shall have occurred no material adverse
change in the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and the
Restricted Subsidiaries taken as a whole or in the cellular
industry generally since June 30, 1989.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of
its Subsidiaries pending or threatened before any court,
governmental agency or arbitrator that could, in the good
faith judgment of the Lenders, have a material adverse
effect on the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and the
Restricted Subsidiaries taken as a whole or that could, in
the good faith judgment of the Lenders, have a material
adverse effect on (i) the rights and remedies of the Agents
or the Lenders under any Loan Document or (ii) the ability
of the Borrower to perform its obligations under any Loan
Document, or that purports to affect the legality, validity
or enforceability of this Agreement, any other Loan
Document or the consummation of the transactions
contemplated hereby and thereby (other than the matters set
forth in Schedule VI (the "Disclosed Litigation")), and
there shall have been no adverse change in the status of,
or financial effect on the Borrower and the Restricted
Subsidiaries taken as a whole, of the Disclosed Litigation.
(d) The Borrower shall have paid all accrued fees and
expenses of the Agents and the Lenders (including the
accrued fees and disbursements of counsel to the Arranging
Agents).
<PAGE>
<PAGE> 3-2
(e) All governmental consents and approvals and third
party consents and approvals necessary in connection with
the Loan Documents and the transactions contemplated
thereby shall have been obtained (without the imposition of
any conditions or contingencies that are not acceptable to
the Lenders) and shall remain in effect, and all applicable
waiting periods shall have expired without any action being
taken by any competent authority and no law or regulation
shall be applicable that, in the good faith judgment of the
Lenders, restrains, prevents or imposes materially adverse
conditions upon the Loan Documents and the transactions
contemplated thereby.
(f) The Administrative Agent shall have received on
or before the day of the initial Borrowing (unless
otherwise specified) the following, each dated (unless
otherwise specified) on such date of delivery, in form and
substance satisfactory to the Lenders (unless otherwise
specified) and in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this
Agreement, each other Loan Document, and the Tender
Offer and of all documents evidencing other necessary
corporate action and governmental approvals, if any,
with respect to this Agreement, each other Loan
Document and the Tender Offer.
(ii) A copy of the charter of the Borrower and
each amendment thereto, certified (as of a date
reasonably near the date of the initial Borrowing
hereunder) by the Secretary of State of the State of
Delaware as being a true and correct copy thereof.
(iii) A copy of a certificate of the Secretary of
State of the State of Delaware, dated reasonably near
the date of the initial Borrowing hereunder, listing
the charter of the Borrower and each amendment thereto
on file in his office and certifying that (A) such
amendments are the only amendments to the Borrower's
charter on file in his office, (B) the Borrower has
paid all franchise taxes to the date of such
certificate and (C) the Borrower is duly incorporated
and in good standing under the laws of the State of
Delaware.
<PAGE>
<PAGE> 3-3
(iv) A certificate of the Borrower, signed on
behalf of the Borrower by its President or a Vice
President and the Secretary or any Assistant
Secretary, dated the date of the initial Borrowing
(the statements made in which shall be true on and as
of the date of such certificate), certifying as to (A)
the absence of any amendments to the charter of the
Borrower since the date of the Secretary of State's
certificate referred to in Section 3.01(f)(iii), (B) a
true and correct copy of the by-laws of the Borrower
as in effect on the date of such certificate, (C) the
due incorporation and good standing of the Borrower as
a corporation organized under the laws of the State of
Delaware, and the absence of any proceeding for the
dissolution or liquidation of the Borrower, (D) the
truth of the representations and warranties contained
in the Loan Documents as though made on and as of the
date of such certificate and (E) the absence of any
event occurring and continuing, or resulting from the
Borrowing to be made on the date of such certificate,
that constitutes a Default.
(v) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the
names and true signatures of the officers of the
Borrower authorized to sign this Agreement, each other
Loan Document and the other documents to be delivered
hereunder and thereunder.
(vi) A pledge agreement, in substantially the
form of Exhibit D hereto (as amended from time to time
in accordance with its terms, the "Pledge Agreement"),
duly executed by the Borrower, together with evidence
satisfactory to the Lenders that the Collateral Agent
shall have received:
(A) certificates and instruments
representing the Pledged Shares and the Pledged
Debt referred to therein accompanied by duly
executed instruments of transfer or assignment in
blank, in form and substance satisfactory to the
Collateral Agent;
(B) acknowledgment copies or stamped
receipt copies of proper financing statements,
duly filed on or before the day of the initial
Borrowing under the Uniform Commercial Code of
all jurisdictions that the Collateral Agent may <PAGE>
<PAGE> 3-4
deem necessary or desirable to perfect and
protect the first priority Liens created by the
Pledge Agreement, covering the Collateral
described in the Pledge Agreement;
(C) completed requests for information,
dated on or before the date of the initial
Borrowing, listing the financing statements
referred to in clause (B) above and all other
effective financing statements filed in the
jurisdictions referred to in clause (B) above
that name the Borrower as debtor, together with
copies of such other financing statements;
(D) evidence of the completion of all other
recordings and filings of or with
respect to the Pledge Agreement that the Collateral Agent may
deem necessary or desirable in order to perfect and protect the
first priority Liens created thereby; and
(E) evidence that all other action that the
Collateral Agent may deem necessary or desirable
in order to perfect and protect the first
priority Liens created by the Pledge Agreement
has been taken.
(vii) Such financial, business and other
information regarding the Borrower, LIN and their
respective Subsidiaries as the Lenders shall have
requested, including, without limitation, information
as to possible contingent liabilities, tax
information, environmental information, obligations
under ERISA, collective bargaining agreements and
other arrangements with employees, annual financial
statements dated December 31, 1988 and interim
financial statements dated the end of the most recent
fiscal quarter for which financial statements are
available.
(viii) Letters and certificates attesting to the
Solvency of the Borrower after giving effect to the
Tender Offer, and the other transactions contemplated
hereby, from (A) the chief financial officer of the
Borrower in form and substance satisfactory to the
Lenders and (B) a nationally recognized appraisal
firm, valuation consultant or investment banking firm
satisfactory to the Arranging Agents, such letter to
be substantially in the form of Exhibit E hereto.
<PAGE>
<PAGE> 3-5
(ix) Certified copies of all Material Agreements.
(x) A favorable opinion of Andrew A. Quartner,
Esq., Senior Vice President-Law of the Borrower, in
substantially the form of Exhibit F hereto, and as to
such other matters as any Lender through the
Administrative Agent may reasonably request.
(xi) Favorable opinions of Wiley, Rein &
Fielding, FCC counsel to the Borrower, in
substantially the form of Exhibit G hereto, and of
Mark Hamilton, Esq., Executive Vice President-External
Affairs of the Borrower, PUC counsel to the Borrower,
in substantially the form of Exhibit H hereto, and as
to such other matters as any Lender through the
Administrative Agent may reasonably request and such
other favorable opinions of such other FCC and PUC
counsel as any Lender through the Administrative Agent
may reasonably request.
(xii) A favorable opinion of special counsel to
the Arranging Agents, in substantially the form of
Exhibit I hereto.
(xiii) Such other documents as any Lender through
the Administrative Agent may reasonably request.
(g) The Borrower shall have paid all amounts payable
under each of the Existing Loan Agreement and the Paging
One Agreement and the Lenders shall be satisfied that each
of the Existing Loan Agreement and the Paging One Agreement
shall have been terminated.
SECTION 3.02. Conditions Precedent to LIN Borrowings.
The obligation of each Lender to make an Advance on the
occasion of a LIN Borrowing is subject to the following
conditions precedent (which conditions precedent shall be in
addition to those set forth in Section 3.01, Section 3.03 and
Section 3.04):
(a) All LIN Shares owned by the Borrower or any of
its Subsidiaries shall have been contributed to Holdings.
(b) As a consequence of the Tender Offer and the
contribution of the LIN Shares referred to in subsection
(a) above, Holdings shall have acquired at least a majority
(on a fully diluted basis) of LIN's issued and outstanding
common stock.
<PAGE>
<PAGE> 3-6
(c) The Lenders shall be satisfied in their sole
discretion that the restrictions in Section 203 of the
Delaware General Corporation Law and any super majority
charter provisions are not applicable to the acquisition of
the LIN Shares and to any subsequent transactions between
the Borrower or any of its Affiliates and LIN or any of its
Affiliates or that any conditions to avoiding the
restrictions contained therein have been satisfied.
(d) LIN's Board of Directors shall have redeemed the
Rights issued pursuant to the Rights Agreement or the
Lenders shall otherwise be satisfied that the Rights are
not applicable to the Tender Offer or any subsequent
transaction between the Borrower or any of its Affiliates
and LIN or any of its Affiliates.
(e) A Financial Officer of the Borrower shall have
determined in his or her good faith judgment (and shall
have delivered a certificate to the Lenders to such effect)
that the potential liabilities of LIN, including any
potential liabilities with respect to taxes, ERISA,
Environmental Law and other similar matters would not have
a material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of LIN and that LIN will be able to satisfy such
potential liabilities and its other liabilities from its
own assets and earnings; provided that, in computing
potential liabilities, it is intended that such liabilities
will be computed at the amount that, in light of all facts
and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual
or matured liability.
(f) There shall exist no action, suit, investigation,
litigation or proceeding affecting LIN pending or
threatened before any court, governmental agency or
arbitrator that could have a material adverse effect on the
business, condition (financial or otherwise), operations,
properties or prospects of the Borrower and the Restricted
Subsidiaries taken as a whole, or that could, in the good
faith judgment of the Lenders, have a material adverse
effect on (i) the rights and remedies of the Agents or the
Lenders under any Loan Document or (ii) the ability of the
Borrower to perform its obligations under any Loan
Document, or that purports to affect the legality, validity
or enforceability of this Agreement, any other Loan
Document or the consummation of the transactions
contemplated hereby (other than the matters described in
Schedule VI). There <PAGE>
<PAGE> 3-7
shall not exist any judgment, order or injunction which
restrains or prohibits the Borrower or Holdings from
consummating the Tender Offer.
(g) The Administrative Agent shall have received on
or before the date of the initial LIN Borrowing, each dated
not more than ten days prior to the date of
such LIN Borrowing, and in sufficient copies for each Lender,
Federal Reserve Forms U-1 provided for in Regulation U issued
by the Board of Governors of the Federal Reserve System, the
statements made in which shall be such as to permit the
transactions contemplated hereby in accordance with said
Regulation U.
(h) Neither the Borrower nor any of its Restricted
Subsidiaries shall have incurred any Indebtedness after the
date hereof the proceeds of which have been or will be
used, directly or indirectly, to acquire LIN Shares or any
other interest in LIN, other than Indebtedness hereunder.
(i) The acquisition of the LIN Shares by the Borrower
and Holdings shall have been approved by a Final Order of
the FCC or the Lenders shall have determined that there is
no reasonable basis for concluding that the FCC approval
shall not become a Final Order in due course, the
acquisition of the LIN Shares by the Borrower and Holdings
shall have been approved by an order or other authorization
of each of the governmental authorities listed in Schedule
VII hereto (or such authorities have determined that prior
approval was not required) which in each case has not been
appealed and is not the subject of any pending rehearing,
certiorari or other review proceeding or the Lenders shall
have determined that the absence of such approval or
approvals would not have a material adverse effect on the
business of the Borrower and the Restricted Subsidiaries
taken as a whole.
(j) The Lenders shall be satisfied that the Tender
Offer shall have been consummated in compliance with all
applicable law, rules and regulations, including, without
limitation, all conditions and requirements imposed by any
Regulatory Authority.
(k) Neither the Borrower nor any of the Restricted
Subsidiaries shall have entered into any arrangement with
or for the benefit of the shareholders of LIN other than
the Private Market Value Guarantee.
<PAGE>
<PAGE> 3-8
(l) The Lenders shall be satisfied that, and the
Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, in form and substance
satisfactory to the Lenders stating that after giving
effect to all amounts expended or to be expended by the
Borrower in connection with the Tender Offer, the sum of
(without duplication):
(i) the aggregate amount of (A) Cash Equivalents
(x) owned by the Borrower and the wholly-owned
Restricted Subsidiaries and (y) the Attributable Share
of the Cash Equivalents of each other Restricted
Subsidiary, plus (without duplication) (B) the market
value of Marketable Securities held by (x) the
Borrower and the wholly-owned Restricted Subsidiaries
and (y) the Attributable Share of the Marketable
Securities of each other Restricted Subsidiary on the
date of the initial LIN Borrowing;
(ii) $425,000,000 (representing the anticipated
Net Cash Proceeds from the McCaw Stock Sale) unless
before the date of the LIN Borrowing (A) the McCaw
Stock Sale has been consummated, (B) the McCaw Stock
Sale shall no longer be proceeding toward closing on
substantially the same terms as (or on terms no less
favorable to the Borrower and the Lenders than) those
set forth in the Agreement dated as of December 11,
1989 among the Borrower, Holdings and LIN or (C) March
31, 1990 shall have occurred; and
(iii) the amount of unused Available Commitments
after giving effect to any Borrowing to be made on
such date (assuming for purposes of making this
calculation that all conditions to Borrowing have been
satisfied);
equals at least $1,600,000,000.
(m) The Administrative Agent shall have received a
favorable opinion of Sullivan & Cromwell, special New York
counsel to the Borrower, in substantially the form of
Exhibit J hereto, and as to such other matters as any
Lender through the Administrative Agent may reasonably
request.
(n) The Administrative Agent shall have received a
favorable opinion of counsel acceptable to the <PAGE>
<PAGE> 3-9
Administrative Agent (which may include independent counsel
to the Borrower or the Company) as to the inapplicability
of Section 203 of the Delaware General Corporation Law, the
Rights Agreement and the Rights to the Tender Offer and the
other transactions contemplated thereby and as to such
other matters as any Lender through the Administrative
Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Each Borrowing.
The obligation of each Lender to make an Advance on the
occasion of each Borrowing (including the initial Borrowing)
shall be subject to the further conditions precedent that on
the date of such Borrowing:
(a) the following statement shall be true (and each
of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such
Borrowing or, in the event that the Borrower does not
deliver a Notice of Borrowing, the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute
a representation and warranty by the Borrower that on the
date of such Borrowing such statement is true): No event
has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds
therefrom, that constitutes a Default, and such Borrowing
has been duly authorized by all necessary corporate action;
(b) (other than in the case of the initial Borrowing
under the 1993 Credit Agreement) the Borrower shall have
made a simultaneous Borrowing under the 1993 Credit
Agreement (i) that shall be comprised of 1993 Advances of
the same Type as the Advances comprising such Borrowing,
(ii) with the same Interest Periods, (iii) that shall be
used for the same purpose as the Borrowing to be made
hereunder and (iv) that shall be in an amount equal to
one-third of the Borrowing to be made hereunder; and
(c) the Administrative Agent shall have received such
other approvals, opinions or documents as any Lender
through the Administrative Agent may reasonably request.
SECTION 3.04. Conditions Precedent to Certain
Borrowings. The obligation of each Lender to make an Advance
on the occasion of each Borrowing (including the initial
Borrowing) that would increase the aggregate outstanding amount
of Advances owing to such Lender immediately prior to the
making of such Advance shall be subject to the further <PAGE>
<PAGE> 3-10
condition precedent that on the date of such Borrowing the
following statement shall be true (and each of the giving of
the applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of
such Borrowing such statement is true): The representations
and warranties contained in each Loan Document are correct on
and as of the date of such Borrowing, before and after giving
effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, except to the
extent that any such representation or warranty by its terms
relates to a specified prior date.
SECTION 3.05. Determinations Under Sections 3.01,
3.02, 3.03 and 3.04. For purposes of determining compliance
with the conditions specified in Sections 3.01, 3.02, 3.03 and
3.04, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or
other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to the Lenders unless an
officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to a Borrowing or a LIN
Borrowing specifying its objection thereto (unless such
objection shall have been withdrawn by notice to the
Administrative Agent to that effect or such Lender shall have
made available to the Administrative Agent such Lender's
ratable portion of such Borrowing (as the case may be)).
<PAGE>
<PAGE> 4-1
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Organization of the Borrower. The Borrower
(i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in
which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would
not have a material adverse effect on its business,
condition (financial or otherwise), operations, properties
or prospects and (iii) has all requisite corporate power
and authority to own or lease and operate its properties
and to carry on its business as now conducted and as
proposed to be conducted.
(b) Organization of the Subsidiaries of the Borrower
and Minority Entities. Set forth in Schedule III hereto is
a complete and accurate list, as of the date hereof, of all
of the Subsidiaries of the Borrower and all of the Minority
Entities, with all First-Tier Restricted Subsidiaries,
Restricted Subsidiaries, Unrestricted Subsidiaries and
Minority Entities being identified as such, showing as of
the date hereof (as to each such Person) (i) for First-Tier
Restricted Subsidiaries, the jurisdiction of its
incorporation, the number of shares of each class of
capital stock outstanding and the percentage of the
outstanding shares of each such class owned by the Borrower
and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and
similar rights at the date hereof and (ii) for each other
Subsidiary and each Minority Entity, the percentage of
equity interests owned by and the percentage of voting
power held by, the Borrower and any of its Subsidiaries.
All of the outstanding capital stock of all First-Tier
Restricted Subsidiaries has been validly issued, is fully
paid and non-assessable and all such shares are owned by
the Borrower, free and clear of all Liens, except those
created by the Loan Documents and the 1993 Loan Documents.
Each such First-Tier Restricted Subsidiary (i) is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation or organization (as the case may be), (ii) is
duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which it owns or <PAGE>
<PAGE> 4-2
leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the
failure to so qualify or be licensed would not have a
material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole and (iii) has all requisite corporate
power and authority to own or lease and operate its
properties and to carry on its business as now conducted
and as proposed to be conducted.
(c) Compliance with Law. The execution, delivery and
performance by the Borrower of this Agreement, each other
Loan Document, each 1993 Loan Document and the Amendment,
and the consummation of the Tender Offer by the Borrower
and Holdings, the Contel Transaction by the Borrower, the
Refinancing by the Borrower and MCI and the other
transactions contemplated hereby and thereby are within the
respective corporate power of the Borrower, Holdings (with
respect to the Tender Offer) and MCI (with respect to the
Refinancing), have been duly authorized by all necessary
corporate action, and do not and will not upon the
consummation thereof (i) contravene the charter or by-laws
of the Borrower, Holdings (with respect to the Tender
Offer) or MCI (with respect to the Refinancing),
(ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934, as amended, the Racketeer
Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970, as amended, and the
Communications Act of 1934, as amended), rule, regulation
(including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, indenture,
mortgage, deed of trust, lease or any other material
contract or other agreement binding on or affecting the
Borrower or any of the Restricted Subsidiaries or any of
their respective properties or (iv) result in or require
the creation or imposition of any Lien upon or with respect
to any of the properties of the Borrower or any of its
Subsidiaries (other than the Liens created by the Loan
Documents and the 1993 Loan Documents). None of the
Borrower or any of its Subsidiaries is in violation of any
such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument, the violation or
breach of which could have a material adverse effect on the
business, <PAGE>
<PAGE> 4-3
condition (financial or otherwise), operations, properties
or prospects of the Borrower and the Restricted
Subsidiaries taken as a whole.
(d) Approvals. No authorization or approval or other
action by, and no notice to or filing with, any
governmental authority or regulatory body or any other
third party (including, without limitation, all Regulatory
Authorities) is required for the due execution, delivery
and performance by the Borrower of this Agreement or any
other Loan Document or the 1993 Loan Documents or for the
consummation of the Tender Offer by the Borrower and
Holdings, the Contel Transaction by the Borrower, the
Refinancing by the Borrower and MCI or the other
transactions contemplated hereby or thereby, except for the
authorizations, approvals, actions, notices and filings
listed in Schedule VII hereto, all of which have been duly
obtained, taken, given or made and are in full force and
effect. All applicable waiting periods in connection with
the Tender Offer, the Contel Transaction and the other
transactions contemplated hereby have expired, or prior to
the consummation thereof will have expired, without any
action having been taken by any competent authority
restraining, preventing or imposing materially adverse
conditions upon the Tender Offer, the Contel Transaction or
the rights of the Borrower or its Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of
them except as otherwise set forth in such Schedule VII.
This Agreement has been, and the Pledge Agreement when
delivered hereunder will have been, duly executed and
delivered by the Borrower.
(e) Legal Effect. This Agreement is, and each other
Loan Document when delivered hereunder or thereunder will
be, the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance
with its terms.
(f) Financial Information. (i) The Consolidated
balance sheets of the Borrower and its Subsidiaries, and
the consolidating balance sheets of the Borrower and the
Restricted Subsidiaries as a group and the Unrestricted
Subsidiaries as a group, as at December 31, 1992, and the
related Consolidated statements of income and changes in
financial position of the Borrower and its Subsidiaries,
and the related consolidating statements of income and
changes in financial position of the Borrower and its <PAGE>
<PAGE> 4-4
Subsidiaries as a group and the Core Properties as a group,
for the fiscal year then ended, certified by Arthur
Andersen & Co., independent public accountants and (ii) the
Consolidated balance sheets of the Borrower and its
Subsidiaries, and the consolidating balance sheets of the
Borrower and the Restricted Subsidiaries as a group and the
Unrestricted Subsidiaries as a group, as at September 30,
1993, and the related Consolidated statements of income and
statements of cash flow of the Borrower and its
Subsidiaries, and the related consolidating statements of
income and statements of cash flow of the Borrower and its
Subsidiaries as a group and the Core Properties as a group,
for the nine months then ended, duly certified by a
Financial Officer of the Borrower, copies of which have
been furnished to each Lender, fairly present, subject, in
the case of said balance sheets as at September 30, 1993,
and said statements of income and statements of cash flow
for the nine months then ended, to year-end audit
adjustments, the Consolidated financial condition of the
Borrower and its Subsidiaries, the consolidating financial
condition of the Borrower and the Restricted Subsidiaries
as a group and the Unrestricted Subsidiaries as a group and
the consolidating financial condition of the Borrower and
its Subsidiaries as a group and the Core Properties as a
group as at such dates and for the periods ended on such
dates, all in accordance with generally accepted accounting
principles applied on a consistent basis, and, since
September 30, 1993, there has been no material adverse
change in the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and the
Restricted Subsidiaries taken as a whole or in the cellular
industry generally.
(g) Disclosure. No information, exhibit or report
furnished by the Borrower to any Agent or any Lender in
connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any
material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements
contained therein, in light of the circumstances in which
they were made, not misleading; provided that, with respect
to financial projections and forecasts included therein,
the Borrower represents that such projections and forecasts
were prepared in good faith based on the assumptions stated
therein, which assumptions were fair and reasonable in
light of the conditions existing at the time of delivery of
such projections and forecasts, and represented, at the
time <PAGE>
<PAGE> 4-5
of delivery, the Borrower's best estimate of its future
financial performance.
(h) Material Litigation. Other than the Disclosed
Litigation, there is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of
its Subsidiaries pending or threatened before any court,
governmental agency or arbitrator that could have a
material adverse effect on (i) the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole, (ii) the rights and remedies of the
Agents or the Lenders under any Loan Document, the
Intercreditor Agreement or any 1993 Loan Document, or the
rights and remedies of the 1993 Lenders and the 1993 Agents
under the 1993 Loan Documents or the Intercreditor
Agreement or (iii) the ability of the Borrower to perform
its obligations under any Loan Document, the Intercreditor
Agreement or any 1993 Loan Document, or that purports to
affect the legality, validity or enforceability of the
Tender Offer, this Agreement, any other Loan Document, the
Intercreditor Agreement, any 1993 Loan Document or the
consummation of the transactions contemplated hereby and
thereby; and there has been no adverse change in the
status, or financial effect on the Borrower and the
Restricted Subsidiaries, of the Disclosed Litigation.
(i) Regulation U. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin
stock, in violation of Regulation U.
(j) ERISA Plans. Set forth in Schedule VIII hereto
is a complete and accurate list, as of the date hereof, of
all Plans, Multiemployer Plans and Welfare Plans with
respect to any employees of the Borrower or any of its
Subsidiaries.
(k) No Reportable Event. No ERISA Event has occurred
or is reasonably expected to occur with respect to any
Plan.
(l) Plan Funding. Neither the Borrower nor any ERISA
Affiliate is, as of the Amendment Effective Date, <PAGE>
<PAGE> 4-6
required to file with the Internal Revenue Service a
Schedule B (Actuarial Information) (Form 5500 Series) for
any Plan.
(m) Welfare Plan Costs. (i) The aggregate annualized
cost (including, without limitation, the cost of insurance
premiums) with respect to Welfare Plans that provided
benefits to retired or former employees of the Borrower or
any of its Subsidiaries, for which the Borrower and its
Subsidiaries are liable, does not exceed $35,000,000 and
(ii) as of December 3, 1993, the aggregate annualized cost
for the most recent twelve-month period incurred by the
Borrower and its Subsidiaries for benefits provided with
respect to Welfare Plans did not exceed $35,000,000.
(n) No Catastrophic Events. Neither the business nor
the properties of the Borrower or any of its Subsidiaries
are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance) that
could have a material adverse effect on the business,
condition (financial or otherwise), operations, properties
or prospects of the Borrower and the Restricted
Subsidiaries taken as a whole.
(o) Compliance with Environmental Law. The
operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all
Environmental Laws and neither utilize, contain nor are
affected by any Hazardous Materials, and neither the
Borrower nor any of its Subsidiaries has any material
liability, contingent or otherwise, under any Environmental
Law.
(p) No Burdensome Agreements. Neither the Borrower
nor any of its Subsidiaries is a party to any indenture,
loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate
restriction that could have a material adverse effect on
(i) the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and the
Restricted Subsidiaries taken as a whole, (ii) the rights
and remedies of the Agents or the Lenders under any Loan
Document or the Intercreditor Agreement or the rights and
remedies of the 1993 Lenders or the 1993 Agents under any
1993 Loan Documents or the Intercreditor Agreement or
(iii) the ability of the Borrower to carry <PAGE>
<PAGE> 4-7
out its obligations under any Loan Document or any 1993
Loan Document.
(q) Taxes. The Borrower and each of its Subsidiaries
have filed all tax returns (Federal, state and local)
required to be filed and paid all taxes shown thereon to be
due, including interest and penalties.
(r) Investment Company Act of 1940. Neither the
Borrower nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of
1940, as amended. Neither the making of any Advances, nor
the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions
contemplated hereby, will violate any provision of such Act
or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
(s) Solvency. The Borrower is Solvent.
(t) Condition of System. All of the material
properties, equipment and systems of each of the Borrower,
the Restricted Subsidiaries and the Qualified Minority
Entities are, and all material properties, equipment and
systems to be added in connection with any contemplated
system expansion or construction will be, in good repair,
working order and condition and are and will be in material
compliance with all applicable standards, rules or
requirements imposed by (i) any governmental agency or
authority (including, without limitation, any Regulatory
Authority), (ii) any material Franchise and (iii) any
agreements with telephone companies.
(u) Fees. The Borrower and each Restricted
Subsidiary and Qualified Minority Entity have paid all
franchise, license or other fees and charges that have
become due pursuant to any material Franchise in respect of
its Cellular Businesses and have made adequate provisions
for any such fees and charges which have accrued, except
where the failure to pay such fees and charges would not be
reasonably likely to (i) have a material adverse effect on
the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and the
Restricted Subsidiaries taken as a whole or (ii) result in
the revocation, termination or adverse modification of a
material Franchise held by the Borrower or any Restricted
Subsidiary or Qualified Minority Entity.
<PAGE>
<PAGE> 4-8
(v) Public Utility Holding Company Act. The Borrower
is not a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company"
or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
(w) Capital Stock. As of November 30, 1993, the
authorized capital stock of the Borrower consists of 400
million shares of Class A Common Stock, par value $.01
("Class A Shares"), 200 million shares of Class B Common
Stock, par value $.01 ("Class B Shares"), and 10 million
shares of preferred stock, of which (a) 147,852,055 Class A
Shares are issued and outstanding and 6,849,783 Class A
Shares are reserved for issuance pursuant to stock options
granted to certain Borrower employees and (b) 60,143,547
Class B Shares are issued and outstanding and 3,086,036
Class B Shares are reserved for issuance pursuant to stock
options granted to certain Borrower employees. On December
3, 1993, there are no commitments by the Borrower for the
sale or other disposition of, and no outstanding options to
purchase, the Class A Shares or Class B Shares outstanding
other than pursuant to the AT&T Merger Agreement, the BT
Purchase Agreement and the stock options referred to above.
Neither the Borrower nor any Restricted Subsidiary is
subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its
capital stock except, in the case of the Borrower,
(i) capital stock issued in connection with the acquisition
of Franchise Interests and (ii) pursuant to the BT Purchase
Agreement.
(x) No Limitations on Dividends. Neither the
Borrower nor any of the Restricted Subsidiaries is subject
or party to any agreement, Lien, charter, by-law,
regulatory or other provision (except for applicable
statutory corporate law) restricting, directly or
indirectly, the payment of dividends by a Restricted
Subsidiary or the making of advances or other cash payments
by any Restricted Subsidiary other than the limitations
contained in the agreements set forth in Schedule IX
hereto.
(y) Licenses. The Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities have
obtained all necessary Franchises from, and have filed all
required registrations, applications, reports and other
documents with, all Regulatory Authorities for <PAGE>
<PAGE> 4-9
their respective businesses as currently conducted. Each
such Franchise is valid and in full force and effect; no
event has occurred that would be reasonably likely to
(i) result in the revocation, termination or adverse
modification of any such Franchise, or (ii) materially and
adversely affect any rights of the Borrower or a Restricted
Subsidiary thereunder; the Borrower has no reason to
believe and no knowledge that such Franchises will not be
renewed in the ordinary course; and the Borrower and the
Restricted Subsidiaries have sufficient time, materials,
equipment, contract rights and other required resources to
complete, in a timely fashion and in full, construction of
all their Cellular Systems and RCC Systems in compliance
with all applicable technical standards and construction
requirements and deadlines of any applicable Regulatory
Authority.
(z) Regulation of the Lenders. Neither any Agent nor
any Lender will, by reason of the execution, delivery and
performance (other than the enforcement of remedies) of any
of the Loan Documents, any of the 1993 Loan Documents or
the Intercreditor Agreement, be subject to the regulation
or control of either the FCC or any other Regulatory
Authority.
(aa) Existing Indebtedness. Set forth in Schedule II
hereto is a complete and accurate list of all Existing
Indebtedness, showing as of the date hereof the principal
amount outstanding thereunder.
(bb) Material Agreements. Set forth in Schedule IV is
a complete and accurate list of all Material Agreements as
of the date hereof, showing the parties, subject matter and
term thereof. Each Material Agreement set forth in such
Schedule IV has been duly authorized, executed and
delivered by all parties thereto, has not been amended or
otherwise modified, is in full force and effect and is
binding upon and enforceable against all parties thereto in
accordance with its terms, and, to the best of the
Borrower's knowledge after due investigation, there exists
no default under any Material Agreement by any party
thereto. Each such Material Agreement complies with all
applicable rules, regulations and standards of the FCC and
other Regulatory Authorities.
(cc) Ownership. Schedule III sets forth as of the
date hereof a complete and correct list of (i) each
Cellular Entity in which any Subsidiary of the Borrower has
a Franchise Interest and whether such Entity is a <PAGE>
<PAGE> 4-10
Cellular Licensee, Cellular Permittee or Cellular Tentative
Selectee, (ii) each MSA or RSA that such Cellular Entity is
authorized to serve, (iii) the name of each Subsidiary of
the Borrower that owns any such Franchise Interest,
(iv) the form, class and percentage ownership and voting
interest of each Subsidiary of the Borrower in such
Cellular Entity, (v) the population of each MSA or RSA
authorized to be served by each such Cellular Entity
according to the Donnelly Marketing Service population
estimates for 1989, (vi) the Attributable Share of the MSA
Pops or RSA Pops of each such Cellular Entity, (vii) the
expiration date of the Franchise of such Cellular Entity,
(viii) to the extent not otherwise set forth in Schedule
III, each ownership interest of the Borrower or any of its
Subsidiaries in any Person, and the form, class and
percentage of such ownership interest and (ix) the
percentage of all outstanding Franchise Interests owned or
subject to any agreement to purchase or sell or any option,
put or call to which the Borrower or any of its
Subsidiaries is a party.
(dd) Title to Property. The Borrower and each of the
Restricted Subsidiaries has good and sufficient title to
its respective properties and assets free and clear of all
Liens, other than Liens created or permitted by the Loan
Documents.
(ee) Calculations. During the period from the date
hereof through and including September 30, 1993, the
Borrower has (i) not applied any proceeds of Advances to
make Investments in Unrestricted Subsidiaries of the type
described in Section 2.13(i) hereof, (ii) applied proceeds
of Advances to make purchases of RCC Assets of the type
described in Section 2.13(j) hereof in an aggregate amount
of $15,297,000, (iii) made dispositions of assets of the
type described in Section 2.04(b)(iii)(G) hereof for which
the Borrower received Net Cash Proceeds in an aggregate
amount equal to $277,024,000, (iv) made dispositions of
Cellular Assets permitted by Section 5.02(d)(iv) hereof
that represent 1,938,500 Pops and (v) made Investments in
Unrestricted Subsidiaries pursuant to Section 5.02(e)(x)
hereof in an aggregate amount equal to $113,385,000.
Through and including September 30, 1993, the sum of the
amounts described in to clauses (A)-(F) of Section
5.02(e)(x) hereof is $840,906,600. During the period from
September 30, 1993 to, and including, December 3, 1993
there has been no change in the result of the foregoing
calculations other than those changes that, individually or
in the aggregate, are not material.
<PAGE>
<PAGE> 5-1
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Required
Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc. (i) Comply, and cause
each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation,
compliance with the Communications Act of 1934, as amended,
ERISA, all applicable Environmental Law and the Racketeer
Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970, as amended, and (ii)
obtain and maintain, and cause each of its Subsidiaries to
obtain and maintain, all licenses, permits, franchises or
other governmental authorizations and approvals necessary
to own, acquire or dispose of their respective properties,
to conduct their respective businesses or to comply with
the FCC's or any other Regulatory Authority's construction,
operating and reporting requirements, the violation of
which or the failure to obtain or maintain which could
materially adversely affect the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower and the Restricted Subsidiaries
taken as a whole.
(b) Payment of Taxes, Etc. Pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before
the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property;
provided that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in
good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause
each Restricted Subsidiary to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Restricted Subsidiary operates.
<PAGE>
<PAGE> 5-2
(d) Preservation of Corporate Existence, Etc.
Preserve and maintain, and cause each Restricted Subsidiary
to preserve and maintain, its corporate, partnership or
joint venture existence, rights (charter and statutory) and
franchises; provided that neither the Borrower nor any
Restricted Subsidiary shall be required to preserve any
right or franchise (other than any Franchise Interest) if
the Board of Directors of the Borrower or such Restricted
Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the
Borrower or such Restricted Subsidiary, as the case may be,
and if the loss thereof is not disadvantageous in any
material respect to the Borrower and the Restricted
Subsidiaries taken as a whole or to the Lenders or the 1993
Lenders.
(e) Visitation Rights. At any reasonable time and
from time to time, permit any Agent, or any of the Lenders
or any agents or representatives thereof, to examine and
make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and
any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and
with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account,
in which full and correct entries shall be made of all
financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each Restricted Subsidiary to maintain
and preserve, all of its properties that are used or useful
in the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and, from time
to time, make or cause to be made all appropriate and
proper repairs, renewals, replacements, additions and
improvements thereto, and keep all systems and equipment
which may now or in the future be subject to compliance
with any standards or rules (including, without limitation,
compliance with requirements as to the time periods in
which system construction must be completed) imposed by any
governmental agency or authority (including, without
limitation, the FCC or any other Regulatory Authority) in
material compliance with such standards or rules. The
equipment and systems shall also be installed and <PAGE>
<PAGE> 5-3
maintained by the Borrower and the Restricted Subsidiaries
in compliance with any material requirement imposed under
FCC or other Regulatory Authorities regulations, permits,
or licenses or under agreements affecting the Borrower or
any Restricted Subsidiary. The Borrower and the Restricted
Subsidiaries shall maintain, preserve and protect, and
renew, all material Franchises, service marks, trademarks
and trade names held by any of them that are useful or
necessary to operate their Cellular Systems and RCC
Systems.
(h) Performance of Material Agreements. Perform and
observe all the terms and provisions of each Material
Agreement to be performed or observed by it, maintain each
such Material Agreement in full force and effect, enforce
each such Material Agreement in accordance with its terms,
take all such action to such end as may be from time to
time requested by the Administrative Agent and, upon
request of the Administrative Agent, make to each other
party to each such Material Agreement such demands and
requests for information and reports or for action as the
Borrower is entitled to make under such Material Agreement,
and cause each Restricted Subsidiary to do so.
(i) Transactions with Affiliates. Conduct, and cause
each Restricted Subsidiary to conduct, all transactions
otherwise permitted under the Loan Documents with any of
their Affiliates on terms that in all material respects are
fair and reasonable and no less favorable to the Borrower
or such Restricted Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate, other than (i) transactions conducted in
accordance with the provisions of tax agreements that
comply with the provisions of Section 5.02(p), (ii)
transactions conducted in accordance with the Private
Market Value Guarantee, (iii) the Los Angeles Contribution
and (iv) transactions among the Borrower and the Restricted
Subsidiaries, other than any Restricted Subsidiary in which
an Affiliate (other than the Borrower or another Restricted
Subsidiary) has an equity or other ownership interest.
(j) Interest Rate Hedging. Within 120 days after the
date of the initial Borrowing and within 30 days after the
date of each subsequent Borrowing, enter into and maintain
Hedge Agreements with Persons that are acceptable to, and
that contain terms and conditions <PAGE>
<PAGE> 5-4
satisfactory to, the Arranging Agents, that cover a
notional amount of not less than 33% of the aggregate
amount of the Advances that are outstanding on the date on
which such Hedge Agreement is first required and that
provide protection against fluctuations in interest rates
for a period of no less than three years from the date of
the initial Borrowing; provided that if the Merger is not
consummated on or before September 30, 1994 then, on or
before October 30, 1994 and within 30 days after the date
of each Borrowing that occurs after September 30, 1994,
maintain Hedge Agreements in accordance with the provisions
of this Section 5.01(j) that provide such protection
against fluctuations in interest rates until a date not
earlier than September 30, 1997.
(k) Control of LIN. Use its best efforts to cause
Persons designated or approved by the Borrower to
constitute a majority of the Board of Directors of LIN as
promptly as practicable following consummation of the
Tender Offer.
(l) Reporting Requirements. Furnish to the Lenders:
(i) as soon as possible and in any event within
two days after the occurrence of each Default
continuing on the date of such statement, a statement
of a Financial Officer of the Borrower setting forth
details of such Default and the action that the
Borrower has taken and proposes to take with respect
thereto;
(ii-a) as soon as available and in any event within
60 days after the end of each fiscal quarter of each
fiscal year of the Borrower, a Consolidated balance
sheet of the Borrower and its Subsidiaries as of the
end of such quarter and Consolidated statements of
income and cash flows of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and
for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the
corresponding figures for the corresponding period of
the preceding fiscal year, all in reasonable detail
and duly certified (which certification may be subject
to year-end audit adjustments) by a Financial Officer
of the Borrower as having been prepared in conformity
with GAAP;
(ii-b) as soon as available and in any event within
60 days after the end of each fiscal quarter of each
fiscal year of the Borrower, a combined <PAGE>
<PAGE> 5-5
balance sheet of the Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities
(prepared on an Attributable Share basis) and a
balance sheet of each of the Borrower, the Restricted
Subsidiaries (as a group) and the Qualified Minority
Entities (as a group), in each case as of the end of
such quarter, a combined statement of income of the
Borrower, the Restricted Subsidiaries and the
Qualified Minority Entities (prepared on an
Attributable Share basis), a statement of income of
each of the Borrower, the Restricted Subsidiaries (as
a group) and the Qualified Minority Entities (as a
group), a statement of the aggregate amount of capital
expenditures of the Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities
(prepared on an Attributable Share basis) and a
statement of cash flow of the Borrower, in each case
for such quarter and for the period commencing at the
end of the previous fiscal year and ending with the
end of such quarter, setting forth in each case in
comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all
in reasonable detail and duly certified (which
certification may be subject to year-end audit
adjustments) by a Financial Officer of the Borrower as
having been prepared in accordance with GAAP, except
that such certification shall state that such
information has been presented on an Attributable
Share basis, together with (A) a certificate of a
Financial Officer of the Borrower setting forth the
Attributable Share of the aggregate number of
subscribers served by all Cellular Entities in which
the Borrower, a Restricted Subsidiary or a Qualified
Minority Entity has a Franchise Interest as of such
date, (B) a certificate of such Financial Officer
stating that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with
respect thereto and (C) a Compliance Certificate,
together with information sufficient to enable the
Lenders to verify the calculations therein;
(iii) as soon as available and in any event
within 120 days after the end of each fiscal year of
the Borrower, a copy of the annual audit report for
such year for the Borrower and its Subsidiaries, <PAGE>
<PAGE> 5-6
including therein a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such
fiscal year, Consolidated statements of income,
shareholders' equity and cash flow of the Borrower and
its Subsidiaries, in each case for such fiscal year
and certified in a manner acceptable to the Required
Lenders by Arthur Andersen & Co., any Approved
Accountant or any other independent public accountants
of recognized standing acceptable to the Required
Lenders, together with (A) a certificate of a
Financial Officer of the Borrower setting forth the
Attributable Share of the aggregate number of
subscribers served by all Cellular Entities in which
the Borrower, a Restricted Subsidiary or a Qualified
Minority Entity has a Franchise Interest, as of such
date, (B) a certificate of such accounting firm to the
Lenders stating that in the course of the regular
audit of the business of the Borrower and its
Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained
no knowledge that a Default has occurred and is
continuing or, if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a
statement as to the nature thereof, (C) a certificate
of such accounting firm to the Lenders stating that
(i) the financial statements of the Borrower, the
Restricted Subsidiaries and the Qualified Minority
Entities for the last quarter of such fiscal year
delivered pursuant to Section 5.01(l)(iii) were
prepared in conformity with GAAP (other than that such
financial information was presented on an Attributable
Share basis) and (ii) the reported financial results
of the Restricted Subsidiaries and the Qualified
Minority Entities were incorporated into the combined
financial statements of the Borrower, the Restricted
Subsidiaries and the Qualified Minority Entities in
accordance with this Agreement, (D) a Compliance
Certificate, together with information sufficient to
enable the Lenders to verify the calculations therein
and (E) concurrently with the delivery of the
financial statements for fiscal year 1996 and for each
fiscal year occurring thereafter, (x) a certificate of
a Financial Officer of the Borrower, in form
satisfactory to the Arranging Agents, setting forth
(1) the Excess Cash Flow for each such fiscal year and
the calculation thereof and (2) the reduction required
by Section 2.04(b)(ii) hereof and the percentage by
which the Lenders' Commitments will be reduced on each
Amortization Date and (y) a <PAGE>
<PAGE> 5-7
letter describing all Investments made during such
fiscal year and the Pops, if any, attributable to such
Investments;
(iv) promptly and in any event within fifteen
days after the Borrower or any ERISA Affiliate knows
or has reason to know that any ERISA Event has
occurred, a statement of a Financial Officer of the
Borrower describing such ERISA Event and the action,
if any, that the Borrower or such ERISA Affiliate
proposes to take with respect thereto;
(v) promptly and in any event within five
Business Days after receipt thereof by the Borrower or
any ERISA Affiliate, copies of each notice from the
PBGC stating its intention to terminate any Plan or to
have a trustee appointed to administer any Plan;
(vi) promptly and in any event within 30 days
after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series)
with respect to each Plan;
(vii) promptly and in any event within ten
Business Days after receipt thereof by the Borrower or
any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by
the Borrower or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability by any
Multiemployer Plan, (B) the reorganization or
termination, within the meaning of Title IV of ERISA,
of any Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by the
Borrower or any ERISA Affiliate in connection with any
event described in clause (A) or (B) above;
(viii) promptly upon receipt thereof, copies of all
material financial reports or material written
recommendations, if any, submitted to the Borrower by
its auditors, in connection with each annual or
interim audit or examination of its books or the books
of any Subsidiary;
(ix) promptly after the commencement thereof,
notice of all actions, suits and proceedings before
any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic <PAGE>
<PAGE> 5-8
or foreign, affecting the Borrower or any of the
Restricted Subsidiaries of the type described in
Section 4.01(h);
(x) promptly after the sending or filing
thereof, copies of all proxy statements, financial
statements and reports that the Borrower or any of the
Restricted Subsidiaries sends to its public
stockholders, and copies of all regular, periodic and
special reports, and all registration statements
(other than Registration Statements on Form S-8) that
the Borrower or any of its Subsidiaries files with,
and any comments or correspondence (other than those
of a routine nature) received by the Borrower or any
of its Subsidiaries from, the Securities and Exchange
Commission or any governmental authority that may be
substituted therefor, or with any national securities
exchange;
(xi) promptly after the furnishing thereof, (A)
any communication from any trustee, financial
institution or other Person acting in a similar
capacity pursuant to the terms of the 1993 Loan
Documents or any other indenture, loan or credit or
similar agreement with respect to a principal amount
of Indebtedness of $25,000,000 or more that relates to
the occurrence or continuance of an event of default,
the acceleration of Indebtedness or the amendment,
modification or waiver of any provision of any such
agreement and (B) any notices furnished pursuant to
the Contel Agreement;
(xii) promptly after the Borrower or any
Restricted Subsidiary has reason to know, a statement
of a Financial Officer describing in reasonable detail
any (A) refusal or failure by any instrumentality to
renew or extend any permit or Franchise with respect
to the Cellular Businesses of the Borrower and its
Subsidiaries, or (B) proposed abandonment or proposed
or actual revocation, termination or materially
adverse modification of any Franchise or any dispute
related thereto, or (C) denial or threatened denial or
revocation or material modification by any Regulatory
Authority of any Franchise including, without
limitation, by the FCC of any FCC Licenses, or (D)
notice from any Regulatory Authority of the imposition
of any fines or penalties or forfeitures, or (E)
threats, notices or requests by any Regulatory
Authority with respect <PAGE>
<PAGE> 5-9
to any of the foregoing, or with respect to any
proceeding or hearing relating to the foregoing, that
might result in any of the foregoing, either
individually or in the aggregate, being materially
adverse to the Borrower or any Restricted Subsidiary;
and
(xiii) promptly after request therefor, such other
information respecting the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower or any of its Subsidiaries
as any Lender may from time to time reasonably
request; provided that a Lender shall not be entitled
to receive any information the disclosure of which the
Borrower reasonably believes would violate the
restrictions regarding security imposed by the
government of the United States or any agency thereof
with respect to government contracts.
(m) Maintenance of Corporate Separateness. Conduct
its business and operations and the business and operations
of each Restricted Subsidiary separately from that of each
Unrestricted Subsidiary, and cause each Unrestricted
Subsidiary to conduct its business and operations
separately from that of the Borrower and the Restricted
Subsidiaries, including, without limitation, (i) not
commingling funds or other assets of an Unrestricted
Subsidiary with the funds or other assets of the Borrower
or a Restricted Subsidiary; (ii) maintaining separate
corporate and financial records and observing all corporate
formalities; (iii) causing each Unrestricted Subsidiary to
pay its liabilities from its assets; provided that this
clause shall not prohibit the Borrower or any Restricted
Subsidiary from making an Investment in an Unrestricted
Subsidiary that is otherwise permitted under this
Agreement; (iv) maintaining capitalization adequate to meet
the business needs of each Unrestricted Subsidiary; (v)
causing all reports and filings of the Borrower to refer to
each Unrestricted Subsidiary as a Subsidiary rather than as
a division; and (vi) causing each Unrestricted Subsidiary
to conduct its dealings with third parties in its own name
and as a separate and independent entity.
(n) Ownership of Unrestricted Subsidiaries. Cause
each Unrestricted Subsidiary to be a direct or indirect
Subsidiary of an Unrestricted Subsidiary in which all of
the equity interest is registered in the name of the
Borrower or otherwise directly owned by the Borrower.
<PAGE>
<PAGE> 5-10
(o) Metromedia Acquisition. Subject to its
obligations under applicable law and the Private Market
Value Guarantee, cause LIN either to consummate the
acquisition of the interests of Metromedia Company in
Cellular Telephone Company and Cellular Systems, Inc. or to
take such other actions as may be necessary or desirable to
enable the Borrower to be released from its obligations
under the Agreement of Purchase and Sale dated October 3,
1989 between the Borrower and Metromedia Company; provided
that the foregoing does not and shall not be deemed to
require the Borrower or LIN to breach their respective
contractual or legal obligations to Metromedia Company.
(p) LIN Dividend. Following the consummation of the
Tender Offer, promptly cause LIN to declare a dividend of
the Class A Shares purchased in connection with the McCaw
Stock Sale.
(q) McCaw Stock Sale. On or before March 31, 1990
(i) consummate the McCaw Stock Sale or (ii) effect such
transactions of the nature referred to in clauses (B)
through (F) of the proviso to Section 5.02(e)(x) as may be
necessary to yield additional assets of the type described
in clause (i) of Section 3.02(l) in an amount equal to the
difference between $1,600,000,000 and the result of the
calculation required under Section 3.02(l) on the date of
the initial LIN Borrowing (without including in such
calculation any amounts under clause (ii) thereof);
provided, however, that the aggregate amount permitted to
be invested in Unrestricted Subsidiaries pursuant to the
proviso to Section 5.02(e)(x) shall be reduced by the
amount, if any, credited toward the requirements of the
preceding clause (ii) until such time as the McCaw Stock
Sale shall have been consummated.
(r) Simultaneous Borrowings, Prepayments and
Commitment Reductions. On any date on which a Borrowing
under Section 2.01, a prepayment under Section 2.07 or a
reduction in the Commitments under Section 2.04 is made or
required to be made, make a simultaneous borrowing
(comprised of 1993 Advances of the same Type as Advances
comprising such Borrowing having the same Interest Periods
and used for the same purposes), prepayment or commitment
reduction, as the case may be, under the 1993 Credit
Agreement in an amount equal to one third of the amount of
the borrowing, prepayment or commitment reduction to be
made hereunder.
<PAGE>
<PAGE> 5-11
SECTION 5.02. Negative Covenants. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, without the
written consent of the Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to
exist, or permit any Restricted Subsidiary to create,
incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character
(including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file, or permit any
Restricted Subsidiary to sign or file, under the Uniform
Commercial Code of any jurisdiction, a financing statement
that names the Borrower or any Restricted Subsidiary as
debtor, or sign, or permit any Restricted Subsidiary to
sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or
permit any Restricted Subsidiary to assign, any accounts or
other right to receive income; excluding, however, from the
operation of the foregoing restrictions, the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) the Liens described on Schedule X;
(iv) (A) Liens incurred in connection with
Indebtedness permitted by Sections 5.02(b)(ii)(B)
through (E); (B) Liens incurred in connection with
Capitalized Leases of the Borrower, subject to the
limitations set forth in Section 5.02(b)(ii)(B); and
(C) purchase money Liens upon or in vehicles and
office equipment held or acquired by the Borrower in
the ordinary course of business to secure the purchase
price of such property or to secure Indebtedness
incurred by the Borrower solely for the purpose of
financing the acquisition of such property; provided
that no such Lien shall extend to or cover any
property other than (x) the property being acquired
and (y) in the case of Indebtedness permitted by
Section 5.02(b)(ii)(C), the equity interest of the
Borrower or any Restricted Subsidiary in the
Subsidiary (other than a First-Tier Restricted
Subsidiary) that owns such property;
(v) Liens on equity interests in Unrestricted
Subsidiaries other than Holdings;
<PAGE>
<PAGE> 5-12
(vi) Liens incurred in connection with
Indebtedness permitted by Section 5.02(b)(ii)(F);
provided that such Liens shall extend only to the
assets of the Person that has become a Restricted
Subsidiary or to the equity interests of the Borrower
or any Restricted Subsidiary in the Person that has
become a Restricted Subsidiary so long as such Person
has not become a First-Tier Restricted Subsidiary;
(vii) Liens created by the 1993 Loan Documents, to
the extent such Liens are pari passu in all respects
with the Liens created by the Loan Documents; and
(viii) the replacement, extension or renewal of any
Lien permitted by clause (iii) above upon or in the
same property theretofore subject thereto or the
replacement, extension or renewal (without increase of
principal amount) of the Indebtedness secured thereby.
(b) Indebtedness. (i) Create, incur, assume or
suffer to exist any Indebtedness unless, after giving
effect to the assumption or incurrence of such
Indebtedness, the Borrower and the Restricted Subsidiaries
are in compliance with the ratios set forth in Sections
5.03(a) and (d);
(ii) permit any Restricted Subsidiary to create,
incur, assume or suffer to exist any Indebtedness other
than the Indebtedness set forth below and provided that,
after giving effect to the assumption or incurrence of such
Indebtedness, the Borrower and the Restricted Subsidiaries
are in compliance with the ratios set forth in Sections
5.03(a) and (d):
(A) Existing Indebtedness and extensions,
renewals and refinancings thereof that are on terms
(other than interest rate, prepayment premiums, fees
and other similar financial terms) no less favorable
to the Lenders and such Restricted Subsidiary than
such Existing Indebtedness and that have a weighted
average life to maturity at least equal to the then
remaining weighted average life of such Existing
Indebtedness;
(B) Capitalized Leases and purchase money
Indebtedness in vehicles and office equipment held <PAGE>
<PAGE> 5-13
or acquired by any Core Property in the ordinary
course of business; provided that after giving effect
to the obligations of such Restricted Subsidiary with
respect to such Capitalized Leases and such
Indebtedness the obligations of the Borrower and all
Restricted Subsidiaries with respect to all
Capitalized Leases and such Indebtedness would not
exceed $125,000,000;
(C) except for Core Properties (which may not
incur Indebtedness pursuant to this clause),
Indebtedness incurred solely to finance the
acquisition of cellular equipment or the construction
of facilities to be used in connection with a Cellular
Business including Indebtedness incurred in connection
with the development of any newly acquired Cellular
Business and to provide related working capital to
such Cellular Business; provided that the amount of
such Indebtedness to be incurred by such Restricted
Subsidiary shall not exceed 150% of the amount
reasonably scheduled by agreement of the Borrower's
equipment vendors and contractors to be expended by
such Restricted Subsidiary for the acquisition or
construction of such equipment and facilities;
(D) Indebtedness incurred to finance Severable
Equipment in an aggregate outstanding amount for any
Cellular System not to exceed the greater of (x)
$25,000 in any Cellular System and (y) ten cents for
each Pop in such Cellular System;
(E) Indebtedness incurred to finance Subscriber
Equipment in an aggregate outstanding amount for any
Cellular System not to exceed fifty cents for each Pop
in such Cellular System;
(F) Indebtedness of a Person that was
outstanding at the time such Person becomes a
Restricted Subsidiary (provided that such Indebtedness
was not incurred in anticipation of becoming a
Restricted Subsidiary) and refinancings thereof on
terms (other than interest rate, prepayment premiums,
fees and other similar financial terms) no less
favorable to the Lenders and such Restricted
Subsidiary than such outstanding Indebtedness and that
has a weighted average life to maturity at least equal
to the then remaining weighted average life of such
outstanding Indebtedness;
<PAGE>
<PAGE> 5-14
(G) Indebtedness (other than described in clause
(C)) attributable to a Restricted Subsidiary by reason
of its holding or owning an interest in a Minority
Entity unless the partnership or other agreement
pursuant to which such Restricted Subsidiary holds or
owns its interest in such Minority Entity permits the
Borrower or such Restricted Subsidiary to prohibit the
incurrence of such Indebtedness;
(H) Indebtedness to the Borrower; provided that
such Indebtedness shall be evidenced by a promissory
note that has been pledged to the Collateral Agent for
the benefit of the Lenders under the Pledge Agreement;
and
(I) Indebtedness to another Restricted
Subsidiary; provided that promissory notes evidencing
such Indebtedness shall provide by their terms that
such Indebtedness shall, if not previously repaid,
automatically be cancelled upon any sale or other
disposition of the Restricted Subsidiary obligor
thereunder in connection with the exercise of remedies
under the Pledge Agreement; and
(iii) notwithstanding the foregoing, neither the
Borrower nor any of its Restricted Subsidiaries shall incur
any Indebtedness, the proceeds of which will be used
directly or indirectly to acquire any interest in LIN until
after the consummation of the Tender Offer, other than the
Indebtedness incurred under or in respect of the Loan
Documents.
(c) Mergers, Etc. Merge with or into, or consolidate
with or into, any Person (other than the Merger); or permit
any Restricted Subsidiary to merge with or into or
consolidate with or into any other Person, unless in the
case of a Restricted Subsidiary (i) immediately after
giving effect thereto, no event shall occur and be
continuing that constitutes a Default, (ii) if the
surviving entity is not a Restricted Subsidiary, the
disposition of such Restricted Subsidiary shall otherwise
have been permitted under Section 5.02(d) and any resulting
Investment shall otherwise be permitted by Section
5.02(e)(x) and (iii) the Borrower delivers to the
Administrative Agent a certificate of a Financial Officer
of the Borrower showing, in sufficient detail so as to
permit computation, that, immediately after giving effect
thereto, the Borrower and the Restricted <PAGE>
<PAGE> 5-15
Subsidiaries are in compliance with the ratios set forth in
Sections 5.03(a) and (d).
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any Restricted Subsidiary
to sell, lease, transfer or otherwise dispose of, any of
its assets, including, without limitation, substantially
all assets constituting the business of a division, branch
or other unit operation, except:
(i) dispositions of assets (other than Franchise
Interests) in the ordinary course of business;
(ii) the Contel Transaction and the Los Angeles
Contribution;
(iii) Permitted Cellular Asset Swaps;
(iv) dispositions of Cellular Assets (other than
Core Properties) that, in the aggregate for all such
sales, do not represent more than 7,500,000 MSA Pops
and RSA Pops; provided that the Net Cash Proceeds
thereof are applied (A) upon the reduction of the
Commitments required by Section 2.04(b)(iii) to prepay
the Facility as required by Section 2.07(b)(i) or (B)
to prepay the Facility if required by Section
2.07(b)(ii);
(v) dispositions of any assets if the Net Cash
Proceeds thereof are applied to prepay in full all
amounts payable by the Borrower under this Agreement
and the other Loan Documents and the Commitments of
the Lenders have been terminated;
(vi) dispositions of RCC Assets and assets that
are not Cellular Assets;
(vii) dispositions of Unrestricted Subsidiaries;
and
(viii) dispositions of assets (including capital
stock of a class registered under the Securities
Exchange Act of 1934, but excluding all other
Franchise Interests) to an Unrestricted Subsidiary;
provided that any resulting Investment in such
Unrestricted Subsidiary would not be prohibited by
Section 5.02(e)(x);
<PAGE>
<PAGE> 5-16
provided that, if any such sale, transfer or other
disposition of assets by the Borrower or any Restricted
Subsidiary would affect more than 1,000,000 Pops, prior to,
or simultaneously with, such sale, transfer or disposition,
the Borrower shall deliver to the Lenders a certificate of
a Financial Officer of the Borrower showing, in sufficient
detail so as to permit computation, that, immediately after
giving effect thereto the Borrower and the Restricted
Subsidiaries are in compliance with the ratios set forth in
Sections 5.03(a) and (d).
(e) Investments in Other Persons. Make, or permit
any Restricted Subsidiary to make, any Investment in any
Person, other than:
(i) acquisitions of Cash Equivalents or
repurchase agreements and reverse repurchase
agreements with any securities dealer with respect to
Cash Equivalents that are fully collateralized by Cash
Equivalents;
(ii) acquisitions of debt securities in an
aggregate amount for the Borrower and all Restricted
Subsidiaries not to exceed $50,000,000; provided that
no more than $25,000,000 of such debt securities shall
be securities of any single issuer;
(iii) the acquisition by Holdings of LIN Shares
pursuant to the Tender Offer and the Los Angeles
Contribution;
(iv) capital contributions or loans to a Minority
Entity in which a Restricted Subsidiary holds a
Franchise Interest; provided that unless the Borrower
or a Restricted Subsidiary owns or has the right to
acquire, pursuant to a binding contract, more than 50%
of the outstanding voting interests of such Minority
Entity, the Borrower's or such Restricted Subsidiary's
percentage of any capital contribution or loan to such
Minority Entity shall not exceed the Attributable
Share of such Minority Entity;
(v) Targeted Acquisitions by the Borrower or any
Restricted Subsidiary; provided that, without
limitation of the Borrower's ability to make Targeted
Acquisitions under clause (x), no such Acquisition
pursuant to this clause (v) shall be designated as an
Unrestricted Subsidiary;
<PAGE>
<PAGE> 5-17
(vi) Investments in Restricted Subsidiaries;
provided that any Indebtedness resulting therefrom
shall, to the extent it is owed to the Borrower, be
evidenced by a promissory note that has been pledged
to the Collateral Agent for the benefit of the Lenders
under the Pledge Agreement;
(vii) (x) loans and advances by First-Tier
Restricted Subsidiaries to Cellular Entities owning an
MSA Franchise or Geographically-Related RSA Franchise
that are fully secured by a first priority security
interest and that are in an aggregate amount not to
exceed $50,000,000 and (y) additional Investments
(other than loans, advances and similar Investments)
in Persons owning RCC Assets in an aggregate amount
for the Borrower and all Restricted Subsidiaries,
together with the amount of all loans and advances
under clause (x), not to exceed $200,000,000;
(viii) loans and advances to employees that in the
aggregate for the Borrower and the Restricted
Subsidiaries do not exceed $20,000,000;
(ix) other loans and advances in the ordinary
course of business that in the aggregate do not exceed
$20,000,000; and
(x) Investments in Unrestricted Subsidiaries;
provided that the aggregate amount invested (excluding
Investments pursuant to clauses (iii) of this Section
5.02(e), Investments by Restricted Subsidiaries in
additional LIN Shares and acquisitions by Restricted
Subsidiaries of Franchise Interests that result in the
direct or indirect ownership of additional outstanding
common equity of any Cellular Entity that was an
Unrestricted Subsidiary immediately prior to such
acquisition and did not become an Unrestricted
Subsidiary as a part of the same transaction or series
of related transactions with such acquisition, to the
extent, and solely to the extent, that any such
acquisition would constitute a Targeted Acquisition,
but including all other Investments in unrestricted
subsidiaries pursuant to this Section 5.02(e)) by the
Borrower and all Restricted Subsidiaries at any time
shall not exceed the sum of (A) $100,000,000, plus
(B) the net proceeds (including the fair market value
of non-cash proceeds as determined in good <PAGE>
<PAGE> 5-18
faith by a Financial Officer of the Borrower and set
forth in a certificate of such Financial Officer
delivered to the Arranging Agents and not objected to
by the Arranging Agents) of issuances by the Borrower
after October 20, 1989 of (1) common stock (other than
the McCaw Stock Sale), (2) preferred stock that is not
subject to mandatory redemption and does not pay
dividends in cash or in securities constituting
Indebtedness and (3) options or warrants to purchase
common stock or preferred stock referred to in clause
(2) above, plus (C) the net proceeds (as so
determined) received by the Borrower or a Restricted
Subsidiary of sales of the equity securities of
Unrestricted Subsidiaries (excluding LIN Shares) after
October 20, 1989, plus (D) cash dividends or
distributions received by the Borrower or a
Restricted Subsidiary after October 20, 1989 from any
Unrestricted Subsidiary, plus (E) the fair market
value (as determined in good faith by the Board of
Directors of the Borrower and set forth in a
certificate of a Financial Officer of the Borrower
delivered to the Lenders and not objected to by the
Arranging Agents or the Required Lenders within ten
days after delivery thereof) of the equity held or
owned by the Borrower or a Restricted Subsidiary in
any Unrestricted Subsidiary (excluding LIN Shares),
the principal assets of which consist of Franchise
Interests or RCC Assets, upon the conversion of such
Subsidiary into a Restricted Subsidiary or the fair
market value (as so determined) of such assets
distributed to the Borrower or such Restricted
Subsidiary, plus (F) proceeds deemed received by the
Borrower by conversion into common stock of
convertible Indebtedness that is not outstanding on
October 20, 1989 or of preferred stock (other than
preferred stock referred to in clause (B)(2) above);
and provided further that neither the Borrower nor any
Restricted Subsidiary shall directly or indirectly
make or hold any such Investment in the form of a
general partnership interest or other interest that
does not limit the liability of the Borrower and the
Restricted Subsidiaries thereunder;
provided that
(A) neither the Borrower nor any Restricted
Subsidiary shall make Investments in any Unrestricted
Subsidiary unless prior to such Investment a Financial
Officer of the Borrower or, <PAGE>
<PAGE> 5-19
with respect to Investments in any Person the total
assets of which have a fair market value of
$200,000,000 or more, the Board of Directors of the
Borrower has determined in his or its good faith
judgment (as the case may be) that such Unrestricted
Subsidiary will be able to satisfy its potential
liabilities and its other liabilities from its own
assets and earnings, including any potential
liabilities of such Unrestricted Subsidiary with
respect to taxes, ERISA, Environmental Law and other
similar matters; and
(B) if as a result of any Investment permitted
by this Section 5.02(e) the Borrower or any Restricted
Subsidiary will acquire more than 1,000,000 Pops,
prior to or simultaneously with such Investment, the
Borrower shall deliver to the Lenders a certificate of
a Financial Officer of the Borrower (1) showing, in
detail satisfactory to the Arranging Agents, that,
immediately after giving effect to such Investment,
the Borrower and the Restricted Subsidiaries are in
compliance with the ratios set forth in Sections
5.03(a) and (d) and (2) listing, for each Person that
is the subject of such Investment, (u) each Cellular
Entity in which such Person has a Franchise Interest
and whether such Cellular Entity is a Cellular
Licensee, Cellular Permittee or Cellular Tentative
Selectee, (v) each MSA or RSA such Cellular Entity is
authorized to serve, (w) the form, class and
percentage ownership and voting interest of such
Person in each such Cellular Entity, (x) the MSA Pops
or the RSA Pops, as the case may be, of each MSA or
RSA authorized to be served by each such Cellular
Entity (determined by reference to the most recent
Donnelly Marketing Service population estimates (or,
if no such estimates are available, according to the
estimates of a comparable service or publication,
which service or publication shall be acceptable to
the Lenders)), (y) the Attributable Share of the MSA
Pops or RSA Pops of each such Cellular Entity
immediately after giving effect to such Investment and
(z) the expiration date of each Franchise granted to
such Cellular Entity.
(f) Dividends, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for
value any of its capital stock or any warrants, rights or
options to acquire such capital stock, now or <PAGE>
<PAGE> 5-20
hereafter outstanding, return any capital to its
stockholders as such, or make any distribution of assets,
capital stock, warrants, rights, options, obligations or
securities to its stockholders as such, or permit any
Restricted Subsidiary to purchase, redeem, retire, defease
or otherwise acquire for value any capital stock of the
Borrower or any warrants, rights or options to acquire such
capital stock, except that the Borrower may (i) declare and
deliver dividends and distributions payable only in, or
purchase, redeem, retire, defease or otherwise acquire such
capital stock for value consisting of, common stock of the
Borrower or preferred stock that complies with the
provisions of Section 5.02(o) or warrants, rights or
options to purchase such stock of the Borrower, (ii) redeem
equity issued in connection with the acquisition of
Franchise Interests, (iii) repurchase employee common stock
and options in an aggregate amount not exceeding, in any
fiscal year of the Borrower, 1% of the issued and
outstanding common stock of the Borrower, (iv) redeem
common stock in accordance with the provisions of the
Borrower's certificate of incorporation as in effect on the
date hereof relating to the application of laws and
regulations governing foreign ownership or otherwise
enabling the Borrower to prevent the loss of a Franchise
and (v) repurchase Class A Shares and Class B Shares from
BT to maintain trading in the Class A Shares in accordance
with the terms of the BT Purchase Agreement as in effect on
the date hereof; provided that (A) immediately after giving
effect to each such purchase, repurchase, redemption or
distribution, no event shall occur and be continuing that
constitutes a Default, (B) with respect to purchases,
repurchases or redemptions (other than redemptions or
repurchases of stock that are permitted by clauses (iv) and
(v) hereof), such purchases, repurchases or redemptions are
made at a price that does not exceed the existing market
price and (C) with respect to purchases, redemptions or
repurchases of stock that are permitted by clauses (iv) and
(v), the cash consideration payable with respect thereto
shall not in the aggregate for all such redemptions or
repurchases exceed $250,000,000.
(g) Change in Nature of Business. Permit any of the
Restricted Subsidiaries to engage in any business other
than the Cellular Business and RCC Business and any other
business owned by a Restricted Subsidiary on the date
hereof or acquired incidental to the acquisition of
Cellular Businesses and RCC Businesses or permit any
Unrestricted Subsidiary to engage in any business other <PAGE>
<PAGE> 5-21
than the communications business and any other business
owned by an Unrestricted Subsidiary on the date hereof or
acquired incidental to the acquisition of communications
businesses; notwithstanding the foregoing authorization to
acquire incidental businesses, the Borrower and the
Restricted Subsidiaries, taken as a whole, shall remain at
all times primarily engaged in the business of owning and
operating Cellular Businesses and RCC Businesses.
(h) Compliance with ERISA. (i) Terminate, or permit
any ERISA Affiliate to terminate, any Plan so as to result
in any material liability of the Borrower and its ERISA
Affiliates as a whole to the PBGC or (ii) permit to
continue unremedied any Reportable Event (as defined in
Title IV of ERISA), or any other event or condition, that
presents a material risk of such a termination by the PBGC
of any Plan.
(i) Plan Amendments. Amend, modify or change in any
manner or permit its Subsidiaries to amend, modify or
change in any manner, any Plan, Multiemployer Plan or
Welfare Plan sponsored, maintained or contributed to by the
Borrower or its Subsidiaries, if such amendment,
modification or change, together with all other such
amendments, modifications and changes, would result in a
material increase in the costs and expenses in respect of
such Plans, Multiemployer Plans and Welfare Plans of the
Borrower and its Subsidiaries taken as a whole.
(j) Accounting Changes. Make or permit, or permit
any Subsidiary to make or permit, any significant change in
accounting policies or reporting practices, except as
required or permitted by GAAP.
(k) Prepayments, Amendments, Etc. of Debt. Prepay,
redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner any Subordinated
Debt, other than (i) prepayments with the proceeds of
refinancing thereof on terms no less favorable to the
Lenders and the Borrower than such Subordinated Debt and
having a weighted average life to maturity at least equal
to the then remaining weighted average life of such
Subordinated Debt, (ii) in connection with the Refinancing
or (iii) purchases or redemptions of the Convertible
Debentures, make any payment in violation of any
subordination terms of any Subordinated Debt or amend,
modify or change in any manner any term or condition of any
Subordinated Debt or the MCI Debt if such amendment would
be adverse to the <PAGE>
<PAGE> 5-22
Lenders, or permit any of the Restricted Subsidiaries to do
any of the foregoing.
(l) Amendments, Etc. (x) Amend, modify, or change
in any manner any term or condition of or accept any
consent, waiver or approval under any 1993 Loan Document
unless simultaneously with the effectiveness thereof the
same amendment, modification or waiver will become
effective with respect to the Loan Documents or (y) amend,
modify, or change in any manner any term or condition of,
give any consent, waiver or approval under or waive any
default under or breach of any term or condition of its
charter or by-laws or any Material Agreement, except
amendments, modifications and waivers that would not (in
the good faith judgment of the Lenders) have a material
adverse effect on (i) the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower and the Restricted Subsidiaries taken as a whole,
(ii) the rights and remedies of the Agents or the Lenders
under any Loan Document or the Intercreditor Agreement or
the rights and remedies of the 1993 Agents or the 1993
Lenders under the 1993 Loan Documents or the Intercreditor
Agreement, or (iii) the ability of the Borrower to perform
its obligations under any Loan Document, any 1993 Loan
Document or the Intercreditor Agreement, or permit any
Restricted Subsidiary to do any of the foregoing.
(m) Transfer of LIN Shares. Own or control directly,
or permit any of its Subsidiaries, other than Holdings, to
own or control directly or indirectly, any LIN Shares,
unless at such time Holdings owns a majority (on a fully
diluted basis) of all issued and outstanding LIN Shares.
(n) Negative Pledge. (i) Enter into or suffer to
exist any agreement prohibiting the creation or assumption
of any Lien upon any of its property or assets other than
in favor of the Agents or the Lenders and the 1993 Agents
or the 1993 Lenders to the extent that the prohibition on
Liens in favor of the 1993 Agents or the 1993 Lenders is
the same as the prohibition in favor of the Agents or the
Lenders; or (ii) permit any Restricted Subsidiary to enter
into or suffer to exist any agreement prohibiting the
creation or assumption of any Lien upon any of the
properties or assets of such Restricted Subsidiary other
than in connection with (A) any Existing Indebtedness and
any Indebtedness outstanding on the date such Person first
becomes a Restricted Subsidiary, <PAGE>
<PAGE> 5-23
(B) any Indebtedness permitted by Sections 5.02(b)(ii)(B),
(C), (D) and (E) hereof and (C) any partnership agreements
or other similar agreements to which such Restricted
Subsidiary is subject on the date hereof.
(o) Preferred Stock. Issue or authorize the issuance
of, or permit any Restricted Subsidiary to issue or
authorize the issuance of, any preferred stock other than
preferred stock of the Borrower issued in connection with
an Investment permitted by Section 5.02 or preferred stock
of the Borrower that (i) is either not convertible or is
convertible only into common stock of the Borrower, (ii) is
not accorded voting rights, either before or after
conversion or the occurrence of any other event, that would
result in a change of control contemplated by Section
6.01(i) or 6.01(j) and (iii) is not subject to mandatory
redemption earlier than 180 days following the Final
Maturity Date.
(p) Tax Consolidation. File or consent to or permit
the filing of any consolidated income tax return on behalf
of it or any Restricted Subsidiary with any Person (other
than a consolidated return of the Borrower and its
Restricted Subsidiaries), unless such Person shall be
subject to a tax sharing agreement or arrangement with the
Borrower and the Restricted Subsidiaries pursuant to which
the Borrower and the Restricted Subsidiaries will not be
required to pay income taxes or amounts in lieu of income
taxes greater than the amount that the Borrower and the
Restricted Subsidiaries would have been required to pay if
the Borrower and the Restricted Subsidiaries had filed
income tax returns on a consolidated basis as a separate
affiliated group (as such term is defined in Section
1504(a) of the Code) of corporations consisting of only the
Borrower and the Restricted Subsidiaries.
(q) Management Fees. Except for management fees
payable by a Restricted Subsidiary to the Borrower or
payable by a Restricted Subsidiary to a wholly-owned
Restricted Subsidiary or reasonable management fees payable
by a Restricted Subsidiary to another Restricted Subsidiary
that is not a wholly-owned Restricted Subsidiary, enter
into any management agreement or directly or indirectly pay
or become liable to any Person for any sum or property for
fees for management or similar services rendered, or permit
any Restricted Subsidiary to do so, other than management
agreements <PAGE>
<PAGE> 5-24
with a Restricted Subsidiary that are automatically
terminated upon the exercise of remedies by the Collateral
Agent, the Administrative Agent or the Lenders under any of
the Loan Documents.
(r) Holding Company Status. Own directly or acquire
any assets other than shares of capital stock of
wholly-owned First-Tier Restricted Subsidiaries and
wholly-owned Unrestricted Subsidiaries, promissory notes of
Restricted Subsidiaries that have been pledged to the
Lenders pursuant to the Pledge Agreement and immaterial
amounts of other assets.
(s) Minority Entities. Permit any of the Restricted
Subsidiaries to own, hold, acquire or commit to acquire,
directly or indirectly any equity or other ownership
interest in, any Minority Entity or any Investment in any
other Person that is not a Restricted Subsidiary if, after
giving effect to such ownership, holding or acquisition,
(x) the Attributable Share of the Pops of all Minority
Entities and such Persons would be greater than ten percent
(10%) of (y) the Attributable Share of all Pops of the
Borrower, the Restricted Subsidiaries and all Minority
Entities; provided that, for purposes of determining
compliance with this Section 5.02(s), the Attributable
Share of the Pops of any Minority Entity or such Person
shall not be included in clause (x) if (i) the Borrower or
any Restricted Subsidiary owns or has the right to acquire,
pursuant to a binding and enforceable written agreement or
agreements:
(A) 50% of the outstanding voting interests in such
Minority Entity or such Person and such Minority
Entity or such Person has the power to vote to
direct or control the management of the Cellular
Entity serving any of the following MSAs:
Buffalo, New York; Indianapolis, Indiana;
Milwaukee, Wisconsin; and San Francisco/San Jose,
California ("Named MSAs") and in any other MSA
that is held by the same Cellular Entity and (1)
is adjacent to a Named MSA, (2) is operated as a
single cellular cluster with such Named MSA and
(3) was owned by such Cellular Entity at the time
the Borrower or a Restricted Subsidiary first
obtained an ownership interest in such Cellular
Entity, or
<PAGE>
<PAGE> 5-25
(B) more than 50% of the outstanding voting interests
in such Minority Entity or such Person,
or (ii) the Borrower or any Restricted Subsidiary has equal
participation or greater on a committee consisting of two
or more partners that controls such Minority Entity or such
Person.
(t) Acquire LIN Shares. Until after the consummation
of the Tender Offer, acquire LIN Shares, unless, in the
sole judgment of the Lenders, all conditions precedent set
forth in Section 3.02 shall have been satisfied.
(u) Unrestricted Subsidiaries. At any time (i)
become, or permit any Restricted Subsidiary to become,
liable for, directly or indirectly, any Indebtedness or
other obligations of any nature of an Unrestricted
Subsidiary other than as permitted by Section 5.02(e)(x),
(ii) permit any Unrestricted Subsidiary to own any
Indebtedness of, or equity interests in, the Borrower or
any Restricted Subsidiary or (iii) acquire, or permit any
Restricted Subsidiary to acquire, any property, goods or
services from an Unrestricted Subsidiary or provide, or
permit any Restricted Subsidiary to provide, any property,
goods or services to an Unrestricted Subsidiary other than
transactions conducted in compliance with Section 5.01(i).
SECTION 5.03. Financial Covenants. So long as any
Advance remains unpaid or any Lender shall have any Commitment
hereunder, the Borrower will, and will cause the Restricted
Subsidiaries to, unless the Required Lenders shall otherwise
consent in writing:
(a) Debt-to-Pops Ratio. Maintain ownership of
sufficient Franchise Interests and limit Indebtedness so
that at all times the ratio of (i) the sum of (without
duplication) Adjusted Combined Debt and the Attributable
Share of the Indebtedness of all Minority Entities less
Cash Equivalents (determined as set forth below) to (ii)
the Attributable Share of the Pops of the Borrower, the
Restricted Subsidiaries and all Minority Entities shall not
exceed 97.50 to 1.
For purposes of this Section 5.03(a), Cash Equivalents
shall mean the sum of (a) Cash Equivalents owned by the
Borrower and the wholly-owned Restricted Subsidiaries <PAGE>
<PAGE> 5-26
plus (b) the Attributable Share of the Cash Equivalents of
each other Restricted Subsidiary plus (c) the Attributable
Share of the aggregate Cash Equivalents of the Qualified
Minority Entities, but only to the extent that such amount
of Cash Equivalents does not exceed the Attributable Share
of the Senior Debt of the Qualified Minority Entities.
(b) Cash Flow to Debt Service Ratio. Cause, on the
date of the initial Borrowing and on the last day of each
fiscal quarter thereafter, the ratio of Adjusted Combined
Cash Flow to Pro Forma Combined Debt Service to be equal to
or greater than 1.0.
(c) Debt to Cash Flow Ratio. Not allow on the last
day of any fiscal quarter set forth below the ratio of
Senior Debt (SD) and Combined Debt (CD) to Adjusted
Combined Cash Flow (ACCF) to be greater than the amount set
forth below for each such date:
Period Ending SD/ACCF CD/ACCF
09/30/93 6.50 6.50
12/31/93 6.50 6.50
03/31/94 6.50 6.50
06/30/94 6.50 6.50
09/30/94 6.50 6.50
12/31/94 6.25 6.50
03/31/95 6.00 6.25
06/30/95 5.75 6.25
09/30/95 5.50 6.00
12/31/95 5.25 6.00
03/31/96 and 5.00 6.00
thereafter
For purposes of this Section 5.03(c), Adjusted Combined
Cash Flow shall be further adjusted upward or downward, as
the case may be, on each date of determination to include
the Attributable Share (measured as of such date) of the
Cash Flow for the period of the two fiscal quarters set
forth in the most recent Compliance Certificate delivered
by the Borrower, multiplied by two, of any business or
assets that were acquired by the Borrower or by a
Restricted Subsidiary (so long as such business or assets
are not designated as an Unrestricted Subsidiary) since the
last day of the second such fiscal quarter and to exclude
the Cash Flow attributable to any business or assets that
were disposed of by the Borrower or a Restricted Subsidiary
since the last day of such
<PAGE>
<PAGE> 5-27
second fiscal quarter; provided, however, that, until the
Borrower has delivered to the Lenders a certificate of a
Financial Officer of the Borrower, in form satisfactory to
the Arranging Agents, setting forth the Cash Flow of all
businesses and assets acquired or disposed of since the
last day of such second fiscal quarter, the Borrower shall
not allow Senior Debt or Combined Debt to exceed the
amounts permitted on the basis of the information contained
in such Compliance Certificate or in any preceding
certificate of a Financial Officer of the Borrower.
(d) Incurrence Test. Not create, incur or assume any
Indebtedness (including, without limitation, any
Indebtedness hereunder) or allow any Restricted Subsidiary
to create, incur or assume any Indebtedness unless the
ratio of Combined Debt (CD), after giving effect to the
creation, incurrence or assumption of all Indebtedness to
be created, incurred or assumed on such date of
determination to Adjusted Combined Cash Flow (ACCF) set
forth in the most recent Compliance Certificate delivered
by the Borrower is less than or equal to the amount set
forth in Section 5.03(c) for the most recent fiscal quarter
ended prior to such date of determination.
For purposes of this Section 5.03(d), Adjusted
Combined Cash Flow shall be further adjusted upward or
downward, as the case may be, on each date of determination
to include the Attributable Share (measured as of such
date) of the Cash Flow for the period of the two fiscal
quarters set forth in the most recent Compliance
Certificate delivered by the Borrower, multiplied by two,
of any business or assets that were acquired by the
Borrower or by a Restricted Subsidiary (so long as such
business or assets are not designated as an Unrestricted
Subsidiary) since the last day of the second such fiscal
quarter and to exclude the Cash Flow attributable to any
business or assets that were disposed of by the Borrower or
a Restricted Subsidiary since the last day of such second
fiscal quarter; provided, however, that, until the Borrower
has delivered to the Lenders a certificate of a Financial
Officer of the Borrower, in form satisfactory to the
Arranging Agents, setting forth the Cash Flow of all
businesses and assets acquired or disposed of since the
last day of such second fiscal quarter, neither the
Borrower nor any Restricted Subsidiary shall create, incur
or assume Indebtedness in excess of the amounts permitted
on the basis of the information contained in such
Compliance Certificate or in any preceding certificate of a
Financial Officer of the Borrower.<PAGE>
<PAGE> 5-28
(e) Contel Proceeds. For purposes of making all
calculations pursuant to this Section 5.03, during the
period from the date hereof to, but excluding, the earliest
to occur of (i) the date on which the Contel Transaction is
consummated, (ii) the date on which the Contel Transaction
no longer continues to proceed toward closing on
substantially the same terms as set forth in the Contel
Agreement (or on terms no less favorable to the Borrower
and the Lenders than those set forth in the Contel
Agreement) and (iii) June 30, 1990, it shall be assumed
that the Contel Transaction shall have been consummated on
January 1, 1990 (and the Pops, income, Indebtedness and
other measured characteristics attributable to the assets
that are the subject of the Contel Transaction shall be
excluded from such calculations), and that the Borrower has
received $1,200,000,000 in Net Cash Proceeds and applied
such amount to reduce any Indebtedness outstanding under
this Agreement.
<PAGE>
<PAGE> 6-1
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of,
or interest on, any Advance, or the Borrower shall fail to
make any other payment under any Loan Document, in each
case when the same becomes due and payable; or
(b) Any representation or warranty made by the
Borrower or any of its Subsidiaries (or any of their
officers) under or in connection with any Loan Document or
any certificate or financial information delivered pursuant
thereto shall prove to have been incorrect in any material
respect when made; or
(c) (i) The Borrower shall fail to perform or observe
any term, covenant or agreement contained in Sections
5.01(d), (i), (j), (l), (r), 5.02(a), (b), (c), (d), (e),
(f), (g), (h), (i), (k), (l), (m), (n), (o), (q), (r), (t),
(u) or 5.03; or (ii) the Borrower shall fail to perform any
other term, covenant or agreement contained in any Loan
Document on its part to be performed or observed if such
failure shall remain unremedied for ten days after written
notice thereof shall have been given to the Borrower by any
Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall
fail to pay any principal of, premium or interest on or
other amounts payable in respect of the 1993 Credit
Agreement or Indebtedness in an aggregate outstanding
principal amount of $25,000,000 or more (but excluding
Indebtedness outstanding hereunder) of the Borrower or such
Subsidiary (as the case may be), when the same becomes due
and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating
to such Indebtedness; or any other event shall occur or
condition shall exist under any agreement or instrument
relating to any such Indebtedness and shall continue after
the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure,
event or condition is to <PAGE>
<PAGE> 6-2
accelerate, or to permit the acceleration of, the maturity
of such Indebtedness or any such Indebtedness shall be
declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated
maturity thereof; or
(e) The Borrower or any of its Material Restricted
Subsidiaries shall generally not pay its debts as such
debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or any of
its Material Restricted Subsidiaries seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its
property and, in the case of any proceeding instituted
against it (but not instituted by it) that is being
diligently contested by it in good faith, such proceeding
shall remain undismissed or unstayed for a period of 45
days; or the Borrower or any of its Material Restricted
Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e);
or
(f) Any judgments or orders for the payment of money
in the aggregate equal to or in excess of $5,000,000 shall
be rendered against the Borrower or any of the Restricted
Subsidiaries and there shall be any period of 60
consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(g) Any non-monetary judgment or order shall be
rendered against the Borrower or any of its Subsidiaries
that could have a material adverse effect on (i) the
business, condition (financial or otherwise), operations,
properties or prospects of the Borrower and the Restricted
Subsidiaries taken as a whole, (ii) the ability of the
Borrower or any of the Restricted Subsidiaries to perform
its obligations under any Loan <PAGE>
<PAGE> 6-3
Document to which it is a party or (iii) the rights and
remedies of the Agents or the Lenders under any Loan
Document or the Intercreditor Agreement or the rights and
remedies of the 1993 Agents or the 1993 Lenders under the
1993 Loan Documents or the Intercreditor Agreement, and
there shall be any period of ten consecutive days during
which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in
effect; or
(h) The Pledge Agreement after delivery thereof shall
for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority Lien
on the Collateral purported to be covered thereby; provided
that with respect to Collateral that does not relate to any
Core Property and that, (i) individually or in the
aggregate, represents less than 5% (as of the date of such
lapse) of all Pops held by the Borrower and the Restricted
Subsidiaries or (ii) evidences Indebtedness in an aggregate
outstanding principal amount of less than $25,000,000, an
Event of Default shall not have been deemed to have
occurred unless the Borrower shall have failed to create a
valid and perfected first priority Lien on such Collateral
within 10 days after the date on which the Borrower first
becomes aware of such lapse; or
(i) At any time before the consummation of the
Merger, Craig O. McCaw or a Designated Party, and at any
time after the consummation of the Merger, AT&T shall fail
to have the right to cause the election of his or its
nominees to a majority of the directorships of the Board of
Directors of the Borrower; or
(j) (i) At any time before the consummation of the
Merger, the McCaw Family shall at any time for any reason
cease to be the legal and beneficial owner of at least
20,000,000 Class B Shares (or such other number of Class B
Shares as may be determined after adjustment to give effect
to increases or decreases in such number of Class B Shares
including, without limitation, increases or decreases
resulting from stock dividends, stock splits,
reclassifications or combinations effected with respect to
such Class B Shares, such adjustments to be calculated in a
manner approved by the Arranging Agents) or (ii) at any
time after the consummation of the Merger, AT&T shall for
any reason cease to have Economic Ownership of Voting Stock
representing in the aggregate at least 51% of the combined
voting power of all Voting Stock of the Borrower; or
<PAGE>
<PAGE> 6-4
(k) Any ERISA Event shall have occurred with respect
to a Plan and, 30 days after notice thereof shall have been
given to the Borrower by the Administrative Agent, (i) such
ERISA Event shall still exist and (ii) the sum (determined
as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and
all other Plans with respect to which an ERISA Event shall
have occurred and then exist (or in the case of a Plan with
respect to which a Termination Event described in
clauses (c) through (f) of the definition of ERISA Event
shall have occurred and then exist, the liability related
thereto) is equal to or greater than $25,000,000; or
(l) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the
Borrower and its ERISA Affiliates in connection with
Withdrawal Liabilities (determined as of the date of such
notification), exceeds $25,000,000 and any part of such
Withdrawal Liability shall not have been paid when the same
becomes due and payable; or
(m) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as
a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then
in reorganization or being terminated have been or will be
increased over the amounts contributed to such
Multiemployer Plans for the plan year of each such
Multiemployer Plan immediately preceding the plan year in
which such reorganization or termination occurs by an
amount exceeding $25,000,000; or
(n) The Borrower or any ERISA Affiliate shall have
committed a failure described in Section 302(f)(l) of ERISA
and the amount determined under Section 302(f)(3) of ERISA
is equal to or greater than $25,000,000; or
(o) There shall occur any material adverse change in
the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and the
Restricted Subsidiaries taken as a whole;
<PAGE>
<PAGE> 6-5
then, and in any such event, the Administrative Agent (i) shall
at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the obligation of
each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request,
or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Advances, all interest thereon and
all other amounts payable under this Agreement and the other
Loan Documents to be forthwith due and payable, whereupon the
Advances, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided that in the event of
an actual or deemed entry of an order for relief with respect
to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically
be terminated and (B) the Advances, all such interest and all
such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
<PAGE>
<PAGE> 7-1
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender
hereby appoints and authorizes each Agent to take such action
as agent on its behalf and to exercise such powers and
discretion under this Agreement, the other Loan Documents and
the Intercreditor Agreement as are delegated to such Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided
for by the Loan Documents or the Intercreditor Agreement
(including, without limitation, enforcement or collection of
the Indebtedness resulting from the Advances), none of the
Agents shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders and,
under certain circumstances specified herein, the Majority
Lenders and under the circumstances specified in the Pledge
Agreement, the Required Secured Lenders, and such instructions
shall be binding upon all Lenders and all 1993 Lenders;
provided that none of the Agents shall be required to take any
action that exposes any Agent to personal liability or that is
contrary to this Agreement, the 1993 Credit Agreement or
applicable law. The Administrative Agent agrees to give to
each Lender and to the 1993 Administrative Agent prompt notice
of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. No Agent or any
of their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it, under
or in connection with the Loan Documents, the 1993 Loan
Documents or the Intercreditor Agreement, except for its or
their own gross negligence or wilful misconduct. Without
limitation of the generality of the foregoing, each Agent:
(i) may treat the Lender that made any Advance as the holder of
the Indebtedness resulting therefrom until the Administrative
Agent receives and accepts an Assignment and Acceptance entered
into by such Lender, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 8.07; (ii) may consult with
legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or
representation to any <PAGE>
<PAGE> 7-2
Lender or any 1993 Lender and shall not be responsible to any
Lender or any 1993 Lender for any statements, warranties or
representations made in or in connection with the Loan
Documents, the 1993 Loan Documents or the Intercreditor
Agreement; (iv) shall not have any duty to ascertain or to
inquire as to (x) the performance or observance of any of the
terms, covenants or conditions of any Loan Document or any 1993
Loan Document on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower or
(y) the performance or observance of any of the terms,
covenants or conditions of the Intercreditor Agreement on the
part of any Agent, Lender, 1993 Agent or 1993 Lender; (v) shall
not be responsible to any Lender or any 1993 Lender for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document, any 1993 Loan
Document, the Intercreditor Agreement or any other instrument
or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of any Loan Document, any 1993
Loan Document or the Intercreditor Agreement by acting upon any
notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopier, cable or telex) believed
by it to be genuine and signed or sent by the proper party or
parties.
SECTION 7.03. The Toronto-Dominion Bank Trust
Company, Morgan, Kansallis, Provident and Toronto-Dominion and
Affiliates. With respect to the Commitments and the Advances
made by each of them, Morgan, Kansallis, Provident and
Toronto-Dominion shall have the same rights and powers under
the Loan Documents, the 1993 Loan Documents and the
Intercreditor Agreement as any other Lender, 1993 Lender or
1993 Agent (as the case may be) and may exercise the same as
though it were not the Administrative Agent, an Arranging Agent
or a 1993 Agent (as the case may be) and The Toronto-Dominion
Bank Trust Company were not the Collateral Agent (as the case
may be); and the term "Lender," "Lenders," "1993 Lender" or
"1993 Lenders" shall, unless otherwise expressly indicated,
include each of Morgan, Kansallis, Provident and
Toronto-Dominion in its individual capacity. Each of The
Toronto-Dominion Bank Trust Company, Morgan, Kansallis,
Provident and Toronto-Dominion and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures
of, accept investment banking engagements from and generally
engage in any kind of business with the Borrower, any of its
Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if
each of The Toronto-Dominion Bank Trust Company, Morgan,
Kansallis, Provident and Toronto-Dominion <PAGE>
<PAGE> 7-3
were not the Collateral Agent, the Administrative Agent, an
Arranging Agent or a 1993 Agent (as the case may be) and
without any duty to account therefor to the Lenders or 1993
Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance
upon the Agents, any Lender, any 1993 Agent or any 1993 Lender
and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision
to enter into this Agreement and the Intercreditor Agreement.
Each Lender also acknowledges that it will, independently and
without reliance upon the Agents, any Lender, any 1993 Agent or
any 1993 Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement and the Intercreditor Agreement.
SECTION 7.05. Indemnification. The Lenders and the
1993 Lenders will indemnify each Agent (to the extent not
promptly reimbursed by the Borrower), according to the
proportion that the sum of the principal amounts of the
Advances and the 1993 Advances then owing to each such Lender
bears to the aggregate principal amount of the sum of the
Advances and the 1993 Advances then outstanding (or if no
Advances and 1993 Advances are at the time outstanding or if
any Advances or 1993 Advances are then owing to Persons that
are not Lenders or 1993 Lenders, according to the proportion
that the sum of such Lender's or 1993 Lender's Commitment and
its 1993 Commitment bears to the sum of the Commitments and the
1993 Commitments) or, in the case of the Collateral Agent,
according to the proportion that the sum of (a) the principal
amounts of the Advances then owing to such Lender, (b) the
respective amounts of such Lender's then unused Commitment and
(c) the Agreement Values of the Secured Hedge Agreements for
such Lender bears to the sum of (i) the sum of the Advances and
the 1993 Advances then outstanding, (ii) the sum of the unused
Commitments and the unused 1993 Commitments and (iii) the sum
of the Agreement Values and the 1993 Agreement Values, from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent (as the
case may be) in any way relating to or arising out of the Loan
Documents or the Intercreditor Agreement or in the case of the
Collateral Agent, the 1993 <PAGE>
<PAGE> 7-4
Loan Document or any action taken or omitted by such Agent
under the Loan Documents or the Intercreditor Agreement;
provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting
from such Agent's gross negligence or wilful misconduct.
Without limitation of the foregoing, each Lender agrees to
reimburse each Agent promptly upon demand for its ratable share
of any costs and expenses payable by the Borrower under Section
8.04 (other than any costs and expenses payable to the
financial institution acting as such Agent in its capacity as a
Lender), to the extent that such Agent is not promptly
reimbursed for such costs and expenses by the Borrower.
SECTION 7.06. Successor Collateral Agent or
Administrative Agent; Successor Arranging Agents. (a) The
Collateral Agent or Administrative Agent may resign at any time
by giving written notice thereof to each of the Lenders and the
Borrower and in the case of the Collateral Agent, the 1993
Lenders and may be removed at any time with or without cause by
the Majority Lenders in the case of the Administrative Agent or
the Required Lenders in the case of the Collateral Agent. Upon
any such resignation or removal, the Required Lenders shall
have the right to appoint a successor Collateral Agent and the
Majority Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Agent shall have been
appointed by the Required Lenders in the case of the Collateral
Agent or the Majority Lenders, in the case of the
Administrative Agent, and shall have accepted such appointment,
within 30 days after the retiring Collateral Agent's or
Administrative Agent's giving of notice of resignation or the
Required Lenders' or Majority Lenders' (as the case may be)
removal of the retiring Collateral Agent or Administrative
Agent, then the retiring Collateral Agent or Administrative
Agent (as the case may be) may, on behalf of the Lenders,
appoint a successor Collateral Agent or Administrative Agent
(as the case may be), which shall be a commercial bank
organized under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least
$100,000,000 and with respect to the Collateral Agent shall be
the Collateral Agent under the 1993 Loan Documents. Upon the
acceptance of any appointment as Collateral Agent or
Administrative Agent hereunder by a successor Collateral Agent
or Administrative Agent, such successor Collateral Agent or
Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges and
duties of the retiring Collateral Agent or <PAGE>
<PAGE> 7-5
Administrative Agent, and the retiring Collateral Agent or
Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring
Collateral Agent's or Administrative Agent's resignation or
removal hereunder as Collateral Agent or Administrative Agent,
the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it
was Collateral Agent or Administrative Agent under this
Agreement.
(b) Any Arranging Agent may resign at any time by
giving written notice thereof to each of the Lenders and the
Borrower and may be removed at any time with or without cause
by the Majority Lenders. Upon any such resignation or removal,
the Majority Lenders shall have the right to appoint a
successor Arranging Agent. If at any time, more than two
Arranging Agents have been removed or have delivered a notice
of resignation and have not been replaced, within 30 days after
the first date on which such circumstance exists, then the
remaining Arranging Agents may, on behalf of the Lenders,
appoint a successor Arranging Agent or successor Arranging
Agents (as the case may be). Each such successor Arranging
Agent shall be a commercial bank organized under the laws of
the United States or of any state thereof and having a combined
capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Arranging Agent hereunder by a
successor Arranging Agent, such successor Arranging Agent shall
thereupon succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the remaining
Arranging Agents and the retiring Arranging Agent shall be
discharged from its duties and obligations under the Loan
Documents. After any retiring Arranging Agent's resignation or
removal hereunder as Arranging Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Arranging Agent under
this Agreement.
SECTION 7.07. The Managing Agents, Co-Agents,
Co-Managers, Managers and Participants. The Lenders whose
names are set forth on the signature pages hereof under the
headings "Managing Agents," "Co-Agents," "Co-Managers,"
"Managers" and "Participants" have been so designated in
recognition of their respective Commitments, and the use of
such title does not impose on such Lenders any duties or
obligations greater than those of any other Lender.
<PAGE>
<PAGE> 8-1
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to any
departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders
and all the 1993 Lenders, do any of the following: (i) waive
any of the conditions specified in Section 3.01 or 3.02, or, in
the case of the initial Borrowing, Section 3.03 or 3.04,
(ii) change the percentage of the Commitments or 1993
Commitments or of the aggregate unpaid principal amount of the
Advances or the 1993 Advances, or the number of Lenders or 1993
Lenders, that shall be required for the Lenders or any of them
to take any action hereunder, (iii) release any Collateral;
provided that Lenders and 1993 Lenders holding at least 85% of
the aggregate unpaid principal amount of the Advances and the
1993 Advances outstanding or, if no such principal amount is
outstanding, Lenders and 1993 Lenders having at least 85% of
the sum of the Commitments and the 1993 Commitments, may
release (A) any Collateral if, after giving effect to such
release, Adjusted Combined Cash Flow from the remaining
Collateral is equal to or greater than 125% of Pro Forma
Combined Debt Service or (B) any Collateral that, together with
all Collateral previously released under this proviso
represents, in the aggregate for all Collateral released under
this provision or Section 8.01(iii)(B) of the 1993 Credit
Agreement, less than 10% of Adjusted Combined Cash Flow, the
value of such previously released Collateral to be determined
at the time of release, (iv) amend this Section 8.01,
(v) increase the Commitments or the 1993 Commitments of the
Lenders or the 1993 Lenders or subject the Lenders or the 1993
Lenders to any additional obligations, (vi) reduce the
principal of, or interest on, the Advances or the 1993 Advances
or any fees or other amounts payable hereunder or under the
1993 Credit Agreement or (vii) postpone any date fixed for any
payment of principal of, or interest on, the Advances or the
1993 Advances or any fees or other amounts payable hereunder or
under the 1993 Credit Agreement; provided, further, that no
amendment, waiver or consent shall, unless in writing and
signed by the Collateral Agent, the Administrative Agent or
each Arranging Agent (as the case may be) in addition to the
Lenders and the <PAGE>
<PAGE> 8-2
1993 Lenders required above to take such action, affect the
rights or duties of the Collateral Agent, the Administrative
Agent or the Arranging Agents (as the case may be) under this
Agreement or under the 1993 Credit Agreement. Notwithstanding
the foregoing, no amendment or waiver or consent to departure
by the Borrower therefrom shall in any event be effective
unless such amendment, waiver or consent complies with the
requirements of Section 5.02(l). No amendment or waiver of any
provision of the Intercreditor Agreement, or any consent to or
departure therefrom, that would adversely affect the Borrower
in any significant respect shall in a event be effective unless
the same shall have been accepted and agreed to by the
Borrower.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy or telex communication) and
telegraphed, telecopied, telexed, mailed or delivered, if to
the Borrower, at its address at 5400 Carillon Point, Kirkland,
Washington 98033, Attention: Chief Financial Officer; with a
copy to Andrew A. Quartner, Senior Vice President-Law, McCaw
Cellular Communications, Inc., 1250 Connecticut Avenue, N.W.,
4th Floor, Washington, D.C. 20036; if to any Lender that is a
signatory hereto, at its Domestic Lending Office specified
opposite its name in Schedule I hereto; if to any other Lender,
at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; if to the
Collateral Agent, at its address at 42 Wall Street, New York,
New York 10005, Attention: Vice President-Agency; with a copy
to The Toronto-Dominion Bank, 31 West 52nd Street, New York,
New York 10019, Attention: Managing Director, Communications
Finance; if to the Administrative Agent, at its address at 60
Wall Street, New York, New York 10260, Attention: William A.
Hoglund; and if to any Arranging Agent, at its Domestic Lending
Office or, as to the Borrower or the Administrative Agent, at
such other address as shall be designated by such party in a
written notice to the other parties and, as to each other
party, at such other address as shall be designated by such
party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications
shall, when telegraphed, telecopied, telexed or mailed, be
effective when delivered to the telegraph company, when
transmitted by telecopier, when confirmed by telex answerback
or five days after being deposited in the mails, respectively,
except that notices and communications to the Administrative
Agent pursuant to Article II, III or VII and any Compliance
Certificate delivered pursuant to Section 5.01(l) shall not be
effective until received by the Administrative Agent.
<PAGE>
<PAGE> 8-3
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Lender or the Agents to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower
agrees to pay on demand (i) all costs and expenses of the
Agents in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan
Documents, the 1993 Loan Documents and the Intercreditor
Agreement including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit,
consultant, search, filing and recording fees and expenses and
(B) the reasonable fees and expenses of counsel for the Agents
with respect thereto and with respect to advising any of the
Agents as to their respective rights and responsibilities, or
the perfection, protection or preservation of rights or
interests, under the Loan Documents and the Intercreditor
Agreement and with respect to negotiations with the Borrower
regarding any Default or any events or circumstances that may
give rise to a Default and (ii) all costs and expenses of the
Agents and the Lenders in connection with the enforcement of
the Loan Documents, the 1993 Loan Documents or the
Intercreditor Agreement whether in any action, suit or
litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally or otherwise
(including, without limitation, the reasonable fees and
expenses of counsel for any Agent or any Lender with respect
thereto).
(b) The Borrower agrees to indemnify and hold
harmless each Agent and each Lender and each of their
Affiliates and their respective officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and
expenses of counsel for the Lenders as a group; provided that
any Lender or group of Lenders that has determined in good
faith that due to potential conflicts of interest such Lender
or group of Lenders cannot be adequately represented by such
counsel may retain separate counsel to represent such Lender or
group of Lenders, such representation to be limited, to the
extent practicable, to the issues to which such potential
conflict relates) that may be incurred by or asserted or
awarded against any Indemnified <PAGE>
<PAGE> 8-4
Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense
of, any investigation, litigation or proceeding arising out of,
related to or in connection with any acquisition or proposed
acquisition of all or any portion of the stock or substantially
all the assets of any Person, any of the other transactions
contemplated hereby (including, without limitation, the 1993
Credit Agreement) and any use made or proposed to be made by
the Borrower or any of its Subsidiaries of all or any portion
of a Borrowing hereunder (including, without limitation, the
Refinancing) whether or not such investigation, litigation or
proceeding is brought by the Borrower, the Borrower's
shareholders or creditors or any other Lender or 1993 Lender or
an Indemnified Party or an Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated
hereby are consummated, except to the extent such claim,
damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party's gross negligence or
wilful misconduct.
(c) If any payment of principal of any LIBO Rate
Advance or Adjusted CD Rate Advance is made by the Borrower to
or for the account of a Lender other than on the last day of
the Interest Period for such Advance, as a result of a payment
pursuant to Section 2.07, acceleration of the maturity of the
Advances pursuant to Section 6.01 or for any other reason, or
by an Eligible Assignee to a Lender other than on the last day
of the Interest Period for such Advance if a Lender is required
to assign its rights and obligations under this Agreement
pursuant to Section 8.07 as a result of a demand by the
Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) If the Borrower fails to pay when due any costs
or other amounts under any Loan Document including, without
limitation, expenses, fees, attorneys' fees and disbursements,
indemnities and any other similar amount <PAGE>
<PAGE> 8-5
payable by the Borrower, such amount may be paid by any Agent
or any Lender (in their sole discretion) on behalf of the
Borrower and, if such amounts are not immediately reimbursed by
the Borrower, such amounts will constitute an Advance of such
Agent or such Lender hereunder.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of Default
and (b) the making of the request or the granting of the
consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable
pursuant to the provisions of Section 6.01, each Lender is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time
owing by such Lender or any branch, agency, Subsidiary or
Affiliate of such Lender to or for the credit or the account of
the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under or in respect of this
Agreement, irrespective of whether such Lender shall have made
any demand under this Agreement and although such obligations
may be unmatured. Each Lender agrees promptly to notify the
Borrower 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. The
rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
SECTION 8.06. Binding Effect; Survival. This
Agreement shall become effective when it shall have been
executed by the Borrower, the Collateral Agent and the
Administrative Agent and when the Administrative Agent shall
have been notified by each Lender that such Lender has executed
this Agreement and the Intercreditor Agreement and thereafter
shall be binding upon and inure to the benefit of the Borrower,
the Agents and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the
prior written consent of the Lenders. Without prejudice to the
survival of the other agreements of the Borrower hereunder, the
agreements of the Borrower contained in Sections 2.09, 2.11,
and 8.04 shall survive the payment in full of the obligations
of the Borrower hereunder.
SECTION 8.07. Assignments and Participations.
(a) Each Lender may (subject to the provisions of Section <PAGE>
<PAGE> 8-6
8.07(f)), and, if demanded by the Borrower (following a demand
by such Lender pursuant to Section 2.09 or 2.11, or notice by
such Lender pursuant to Section 2.02(b)(ii) or within 60 days
after such Lender's failure to grant a consent or waiver, or to
execute an amendment, which consent, waiver or amendment was
requested by the Borrower in writing) upon at least ten
Business Days' notice to such Lender and the Administrative
Agent, shall, promptly assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of
its Commitment and the Advances owing to it); provided that
(i) with respect to any partial assignment, the amount of the
Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment)
shall in no event be less than $10,000,000 or shall be an
integral multiple of $1,000,000 in excess thereof, (ii) with
respect to any such assignment (other than an assignment made
as a result of a demand by the Borrower pursuant to this
Section 8.07(a)) by a Lender that is an original signatory
hereto, such Lender shall, unless the Borrower shall otherwise
consent in writing, retain a Commitment that is equal to 35% of
such Lender's Commitment on the date of execution and delivery
of this Agreement, provided that the foregoing requirement
shall be satisfied if, and to the extent, that the sum of such
Lender's Commitment under this Agreement plus its 1993
Commitment is equal to or greater than 35% of the sum of such
Lender's Commitment on the date of exeuction and delivery of
this Agreement and such Lender's 1993 Commitment on the date of
execution and delivery of the 1993 Credit Agreement, (iii) each
such assignment shall be to an Eligible Assignee, (iv) each
such assignment made as a result of a demand by the Borrower
pursuant to this Section 8.07(a) (A) shall be arranged by the
Borrower after consultation with the Administrative Agent, (B)
shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such
assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement,
except that the provisions of Sections 2.09, 2.11 and 8.04
shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was a Lender under this Agreement,
and (C) if demanded by the Borrower due to the failure of such
Lender to grant a consent or waiver or to execute an amendment
requested by the Borrower, which consent, waiver or amendment
has not been approved by the Required Lenders, all the rights
and obligations of each <PAGE>
<PAGE> 8-7
other Lender that has failed to grant such consent or waiver or
execute such amendment shall have been assigned to one or more
Lenders and/or Eligible Assignees who shall have granted such
consent or waiver or executed such amendment (or, in the case
of an Eligible Assignee that is not a Lender at such time,
shall have agreed to grant such consent or waiver or to execute
such amendment), (v) no Lender shall be obligated to make any
such assignment as a result of a demand by the Borrower
pursuant to this Section 8.07(a) unless and until such Lender
shall have received one or more payments from either the
Borrower or one or more Eligible Assignees in an aggregate
amount at least equal to the aggregate outstanding principal
amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Lender
under the Loan Documents, (vi) the parties to each such
assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and
recordation fee of $2500.00 (which, in the case of any
Assignment made as a result of a demand by the Borrower under
this Section 8.07(a), shall be payable by the Borrower) and
(vii) each such assignment shall be of a uniform and not a
varying percentage of all rights and obligations under this
Agreement. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, (A) the assignee thereunder shall be
a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender
hereunder and (B) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, <PAGE>
<PAGE> 8-8
sufficiency or value of this Agreement or any other instrument
or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or any Restricted Subsidiary or the performance or
observance by the Borrower or any Restricted Subsidiary of any
of its obligations under this Agreement or any other instrument
or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in
Section 4.01, the Intercreditor Agreement and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee agrees that it
will, independently and without reliance upon the Agents, such
assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Agents to take such action as agent
on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Agents by the terms
hereof, together with such powers and discretion as are
reasonably incidental thereto; (vii) such assignee agrees that
it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to
be performed by it as a Lender; and (viii) such assignee agrees
to perform its obligations under and be bound by the terms of
the Intercreditor Agreement.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Advances
owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agents
and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee <PAGE>
<PAGE> 8-9
representing that it is an Eligible Assignee, the
Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in the form of Exhibit B hereto with
such immaterial changes as are acceptable to the Administrative
Agent, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii)
give prompt notice thereof to the Borrower.
(e) Each Lender may (subject to the provisions of
Section 8.07(f)) sell participations to one or more banks or
other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Advances
owing to it); provided that (i) such Lender's obligations under
this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the
Borrower, the Agents and the other Lenders shall continue to
deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and
(iv) if such sale includes the right to approve any amendment
or waiver of any provision of any Loan Document or the
Intercreditor Agreement, or any consent to any departure by the
Borrower therefrom (except approval rights relating to any such
amendment, waiver or consent that would reduce the principal
of, or interest on, the Advances or any fees or other amounts
payable hereunder, postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, or any release of the Collateral as
provided in Section 8.01) the amount of the Commitment being
sold shall in no event be less than $10,000,000.
(f) Notwithstanding any other provisions of this
Section 8.07, each Lender agrees that it shall not offer to
assign or assign (other than assignments to an Affiliate),
offer to sell or sell participations in any portion of its
rights and obligations under this Agreement including, without
limitation, any portion of its Commitments and the Advances
owing to it until March 2, 1990.
(g) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation
pursuant to this Section 8.07, disclose to the assignee or
participant or proposed assignee or participant any information
relating to the Borrower furnished to such <PAGE>
<PAGE> 8-10
Lender by or on behalf of the Borrower; provided that, prior to
any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the
Borrower received by it from such Lender.
(h) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to
it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 8.09. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 8.10. Confidentiality of Financial
Information. The Agents and the Lenders agree that they will
not disclose Financial Information (as defined below) without
the prior consent of the Borrower (other than to their
directors, employees, auditors or counsel); provided that any
Agent and any Lender is authorized to make such disclosure of
Financial Information without any consent of the Borrower (a)
as may be required by law (such as pursuant to any subpoena or
civil investigative demand) and as may be requested or required
by any state or federal authority, examiner, regulatory body or
agency having jurisdiction over any Agent or any Lender, (b) as
permitted by Section 8.07(g) and (c) as specifically provided
in Section 12 of the Pledge Agreement. Any Agent or Lender
authorized to disclose Financial Information pursuant to the
preceding proviso shall use its best efforts to give the
Borrower prior notice of such disclosure (other than with
respect to any disclosure requested or required by any state or
federal authority, examiner, regulatory body or agency having
jurisdiction over such Agent or Lender). The term "Financial
Information" means any information delivered by the Borrower
under any <PAGE>
<PAGE> 8-11
provision of this Agreement, including, without limitation,
Section 5.01(l), that relates to the business, operations or
financial condition of the Borrower or its Subsidiaries or any
competitor of the Borrower or with respect to a proposed
acquisition by the Borrower other than information (a) that is,
or generally becomes, available to the public, (b) that was
available to any Agent or any Lender on a nonconfidential basis
prior to its disclosure to such Agent or such Lender (as the
case may be) by the Borrower or any Affiliate or (c) that
becomes available to any Agent or any Lender from a Person or
other source that is not, to the best knowledge of such Agent
or such Lender (as the case may be) otherwise bound by a
confidentiality agreement with the Borrower.
SECTION 8.11. Waiver of Jury Trial. Each of the
Borrower, the Agents and the Lenders hereby irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the
Advances or the action of any Agent or any Lender in the
negotiation, administration, performance or enforcement
thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
McCAW CELLULAR COMMUNICATIONS,
INC.
By /s/ Wayne M. Perry
Title: Vice Chairman
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as
Administrative Agent,
Arranging Agent and Lender
By /s/ William A. Hoglund
Title: Managing Director
<PAGE>
<PAGE> 8-12
THE TORONTO-DOMINION BANK TRUST
COMPANY, as Collateral Agent
By /s/ Martha L. Gariepy
Title: Vice President and
Secretary
Arranging Agents and Lenders
THE TORONTO-DOMINION BANK,
Cayman Islands Branch
By /s/ Peter J. Foley
Title: Director
KANSALLIS-OSAKE-PANKKI
By /s/ Peter Modeen
Title: Executive Vice President
By /s/ Timo Aittola
Title: Senior Vice President
PROVIDENT NATIONAL BANK
By /s/ Caren Zinman
Title: Vice President
Managing Agents and Lenders
BANK OF MONTREAL, Chicago Branch
By /s/ Yvonne Bos
Title: Vice President
<PAGE>
<PAGE> 8-13
BARCLAYS BANK PLC
By /s/ Paul Manca
Title: Vice President
By /s/ Daniel Chiles
Title: Senior Vice President
THE BANK OF NEW YORK
By /s/ Karen J. Linder
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ Sharon Bishop Bloch
Title: Representative
BANKERS TRUST COMPANY
By /s/ Gregory R. Paul
Title: Vice President
CITIBANK, N.A.
By /s/ Peter Dillon
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jacqueline Vitello
Title: Assistant Vice President
<PAGE>
<PAGE> 8-14
Co-Agents and Lenders
CANADIAN IMPERIAL
BANK OF COMMERCE
By /s/ Samuel H. Lou
Title: Vice President
THE NIPPON CREDIT
BANK, LTD.
By /s/ Yutaka Takeuchi
Title: Vice President &
Manager
THE FUJI BANK, LTD.,
Los Angeles Agency
By /s/ Ikuro Morishita
Title: General Manager
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD.
By /s/ Junzo Tomii
Title: Deputy General Manager
THE ROYAL BANK OF CANADA,
New York Branch
By /s/ Scott Niemann
Title: Manager
<PAGE>
<PAGE> 8-15
THE BANK OF TOKYO TRUST
COMPANY
By /s/ S. Oshima
Title: Vice President
BANQUE PARIBAS
By /s/ Paul A. Runge
Title: General Manager
By /s/ Emmanuel Krakaris
Title: Senior Vice President
THE CHASE MANHATTAN
BANK, N.A.
By /s/ Andrew Dry
Title: Vice President
THE INDUSTRIAL BANK
OF JAPAN, LTD.
By /s/ Mitsuo Iwamoto
Title: Senior Vice President
and Senior Manager
THE MITSUBISHI BANK, LIMITED,
Chicago Branch
By /s/ Hayao Shiraishi
Title: General Manager
NATIONAL BANK OF CANADA,
New York Branch
By /s/ Theresa Carasco
Title: Vice President
<PAGE>
<PAGE> 8-16
NATIONAL WESTMINSTER BANK USA
By /s/ Fernando J. Viana
Title: Vice President
NCNB NATIONAL BANK OF NORTH
CAROLINA
By /s/ J. Timothy Byan
Title: Vice President
Co-Managers and Lenders
BANQUE INDOSUEZ
By /s/ Ken I. Mackay
Title: Senior Vice President
By /s/ Richard Hagemann
Title: First Vice President
CREDIT LYONNAIS, Cayman Islands
Branch
By /s/ Bruce M. Yeager
Title: Vice President
DNC AMERICA BANKING CORPORATION
By /s/ Julie Y. Kim
Title: Assistant Treasurer
<PAGE>
<PAGE> 8-17
HELLER FINANCIAL, INC.
By /s/ Linda Willenborg Wolf
Title: Vice President
Managers and Lenders
THE SUMITOMO BANK, LTD.,
Chicago Branch
By /s/ Naoyoshi Takeshita
Title: General Manager
PITTSBURGH NATIONAL BANK
By /s/ Alan L. McCrum
Title: Vice President
Participants and Lenders
BANK OF HAWAII
By /s/ Gabriel S.H. Lee
Title: Assistant Vice President
THE CHUO TRUST & BANKING CO., LTD.,
Los Angeles Agency
By /s/ Toshiro Harada
Title: Senior Manager
<PAGE>
<PAGE> 8-18
CIC-UNION EUROPEENNE,
INTERNATIONAL ET CIE
By /s/ Marcus Edward
Title: Corporate Finance
Executive
By /s/ Eric Longuet
Title: Corporate Finance
Executive
CRESTAR BANK
By /s/ Jon W. Lunsford
Title: Vice President
FIRST NATIONAL BANK
OF MARYLAND
By /s/ Mark L. Cook
Title: Vice President
MARINE MIDLAND BANK, N.A.
By /s/ Adam H. Bester
Title: Assistant Vice President
MELLON BANK, N.A.
By /s/ Stephen D. Lackey
Title: Vice President
MERIDIAN BANK
By /s/ David W. Mills
Title: Assistant Vice President
<PAGE>
<PAGE> 8-19
THE MITSUI BANK, LIMITED,
Los Angeles Agency
By /s/ Susumu Hoshiba
Title: Senior Deputy
General Manager
THE MITSUI TRUST & BANKING
CO., LTD.
By /s/ Kazuoki Sone
Title: General Manager & Agent
SEATTLE-FIRST NATIONAL BANK
By /s/ Marc Wright
Title: Vice President
U.S. BANK OF WASHINGTON, N.A.
By /s/ Peggy McKasy
Title: Vice President
MERITOR SAVINGS BANK
By /s/ Sarah S. Doody
Title: Vice President
THE BANK OF YOKOHAMA, LTD.,
Los Angeles Agency
By /s/ Yoshiki Yamazaki
Title: Deputy General Manager
March 23, 1989
Mr. Peter L.S. Currie
1349 Lexington Avenue
New York, New York
Dear Peter:
I believe it is appropriate to put in writing our offer of
employment as a Senior Vice President ("SVP") of McCaw Cellular
Communications, Inc. ("MCCI") and its subsidiaries. Putting this
offer in writing will assure that we have covered all of the
necessary parameters of the benefits which will flow to you as a
result of and (except as specified herein) during your employment
with MCCI.
1. Salary. A salary of $130,000 per year.
2. Bonus. You will receive a signing bonus of $150,000.
MCCI anticipates that your annual bonus would range from $50,000
to $80,000, although because the bonus will depend on
performance, these amounts are not guaranteed. Traditionally,
anticipated bonuses at MCCI are disclosed to executives in
January following the end of each year.
3. Moving Costs. MCCI will reimburse you for all
reasonable actual moving costs incurred in moving you and your
family from New York to the greater Puget Sound area. It is
specifically contemplated that there may be one or more separate
moves to move all of your belongings from New York.
4. Stock. On the date hereof, you win be granted outright
20,000 shares of MCCI Class A Common Stock. Such stock shall not
vest upon grant, but shall vest in 25% increments on each of the
first four anniversaries of this letter, provided that you remain
a full-time employee of the Company on each such anniversary.
Pending completion of the vesting period as to any shares, the
actual certificates for such shares shall remain held in trust
for you by the Secretary of MCCI and shall be forfeited back to
MCCI in the event of your termination of employment prior to
vesting. Subject to the foregoing, upon each such anniversary,
certificates representing the shares which have then vested shall
be delivered to you. Such stock shall be "Restricted Stock" under
MCCI's Amended and Restated Equity Purchase Program and this
letter shall constitute the "Restricted Stock Agreement" referred
to therein.
5. Stock Options. On the date hereof you will be granted
an option to purchase 20,000 shares of MCCI Class A Common Stock
at $37.50 per share. Only 25% of such options shall vest upon
grant, and the remainder shall vest in 25% increments on each of
the second, third and fourth anniversaries of this letter,
provided that you remain a full-time employee of the Company on
each such anniversary and therefore similarly subject to
forfeiture in the event of termination of employment. These
options shall be granted pursuant to the Amended and Restated
Equity Purchase Program and shall be evidenced by a separate
stock option agreement in the form provided for under such plan.
In addition, it is anticipated that on each of the first four
anniversaries of this agreement you will be granted additional
options to purchase shares of MCCI Class A Common Stock at the
market price on each date of grant, each of such grants to have
no further vesting requirements. MCCI anticipates that these
annual grants will range from 30,000 to 40,000 shares, although
because the grants will depend on performance, these amounts are
not guaranteed.
6. General Benefits. As a Senior Vice President of MCCI,
you will be entitled to the general benefits package applicable
to all senior executives of MCCI. A copy of our existing general
benefits package wi]l be sent you shortly under separate cover.
7. Non-Disclosure; Non-Competition. Upon your
commencement of employment, you agree to execute and delivery to
the Company a non-disclosure, non-competition agreement.
Please signify your acceptance of the terms of your
employment by signing where designated below.
Very truly yours,
McCAW CELLULAR COMMUNICATIONS, INC.
WAYNE M. PERRY
Wayne M. Perry
President
Accepted:
PETER L.S. CURRIE
Peter L. S. Currie
McCaw Employee Plans
1. There is hereby established a bonus pool consisting in
the aggregate of $113 million which shall be payable to employees
of the Company and its subsidiaries as of the date hereof,
conditioned on closing under the Agreement, in such amounts as
shall be determined by the Committee described below, provided that
such bonuses shall be payable in three installments, 50% to be paid
at such closing, 25% to be paid on the first anniversary of
closing, and 25% to be paid on the second anniversary (except in
the case of any such person entitled to receive $5,000 or less in
the aggregate, in which case such bonus shall be payable in two
equal installments, one such installment to be paid at closing and
the second to be paid on the first anniversary of closing), in each
case to such persons who remain employed by, or serve as an officer
of, the Company, AT&T or any of their subsidiaries at such times.
The amount of such payment to any person shall be based upon such
person's compensation, overall contributions to the Company,
longevity with the Company and such other factors as may be
determined appropriate by the Committee in its discretion.
2. (a) There is hereby established an Executive Separation
Plan for certain highly-compensated executives of the Company and
its Subsidiaries. Such plan will provide a benefit in an aggregate
amount not to exceed $35.5 million which will be paid to certain of
such executives in the event such executive is terminated (other
than for cause) on or after such closing or such executive
voluntarily or involuntarily terminates his employment within six
months following an adverse change in such executive's working
conditions on or after such closing. With respect to any
executive, the amount of such benefit payment would be based upon
such executive's compensation, overall contributions to the
Company, longevity with the Company and such other factors as may
be determined appropriate by the Committee in its discretion. The
amount payable to any executive in the event of termination on or
prior to February 28, 1995 (the "Initial Amount") shall be
determined by the Committee; the amount payable to any executive in
the event of termination after February 28, 1995 shall be 60% of
the Initial Amount and after February 28, 1996 shall be 25% of the
Initial Amount. No benefit payment shall be made after February
28, 1997. For purposes of the foregoing, an executive shall not be
deemed to be terminated if such executive remains employed by, or
serves as an officer of, the Company, AT&T or any of their
subsidiaries.
(b) There is also hereby established a severance
process under which payments will be paid to certain employees who
earned less than $115,000 in 1993 in the event such employee is
terminated (other than for cause) on or after such closing or such
employee voluntarily or involuntarily terminates his employment
within six months following an adverse change in such employee's
working conditions on or after such closing. The amount payable to
any employee in the event of termination on or prior to February
28, 1995 (the "Initial Amount") shall be 200% of such employee's
total 1993 compensation; the amount payable to any employee in the
event of termination after February 28, 1995 shall be 60% of the
Initial Amount and after February 28, 1996 shall be 25% of the
Initial Amount. No severance payment shall be made after February
28, 1997. For purposes of the foregoing, an employee shall not be
deemed to be terminated if such employee remains employed by, or
serves as an officer of, the Company, AT&T or any of their
subsidiaries.
(c) In addition, such employees and executives would
also receive any unpaid installment of the bonus pool provided for
above unless such person was terminated by the Company for
consistently poor performance (and such person has received
substantially contemporaneous written notices of the alleged
instances of such poor performance). In the event it shall be
determined that all or any portion of any severance or benefit
payment or any accelerated installment of the bonus pool
(individually and collectively a "Payment"), would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any successor provision
thereto, including any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and
penalties, being hereafter collectively referred to as the "Excise
Tax") then such person shall be entitled to receive an additional
payment or payments (individually and collectively, a "Gross-Up
Payment"). The Gross-Up Payment shall be in an amount such that,
after payment by such person of all taxes (including any interest
or penalties imposed with respect to such taxes), including,
without limitation, any Excise Tax and federal, state and local
income taxes imposed upon the Gross-Up Payment, such person retains
an amount of the Gross-Up Payment equal to the "Resulting Excise
Tax." The Resulting Excise Tax shall be computed by first
determining the Excise Tax that would be payable by such person if
all compensation and benefits from the Company and any affiliate,
excluding the severance payments and any accelerated installment of
the bonus pool, were taken into account, and subtracting the result
from the Excise Tax that would be payable by such person if all
compensation and benefits from the Company and any affiliate were
taken into account. For purposes of computing the Gross-Up
Payment, all taxes shall be assumed to be imposed at the highest
relevant tax rate. The Company shall remit the Gross-Up Payment to
such person within 30 business days following notice from such
person requesting such payment, together with reasonable
documentation of such person's determination of the amount thereof
(including, if so requested by the Company and at the Company's
expense, a certification from a reputable accountant, chosen by the
Company, as to the liability of such person for such Excise Tax).
(d) Any purported adverse change in any employee's or
executive's working conditions shall be communicated in writing to
the Company, and shall indicate in reasonable detail the facts and
circumstances claimed to constitute such adverse change. The
Company shall have up to 30 days to remedy the purported adverse
change prior to such event being considered an adverse change for
purposes of this Agreement.
(e) For purposes of the foregoing:
(i) "For cause" means:
(x) commission of act(s) or omission(s) which
have, have had, or are likely to have a material
adverse effect on the business, operations,
financial conditions or reputation of the Company;
(y) conviction (including a plea of guilty or
nolo contendere) of a felony or any crime of theft,
dishonesty or moral turpitude;
(z) gross omission or gross dereliction of
any statutory or common-law duty of loyalty to the
Company.
(ii) "Adverse change in such employee's or
executive's working conditions" means the occurrence,
without such person's express consent, of any of the
following:
(w) a reduction in such person's annual base
salary or annual salary increases or bonus
opportunities in the absence of overall poor
performance as documented in the annual performance
review (if such person has received substantially
contemporaneous written notices of the alleged
instances of such poor performance);
(x) a material reduction in such person's
scope of responsibility, authority or other
conditions of employment;
(y) a notice of change of such person's job
location to one more than 40 miles from his present
location; and
(z) a decrease in executive perquisites (if
applicable) or other employee benefits in the
aggregate, except changes in the general welfare
and benefit plans of the Company in a manner
consistent with similar plans applicable to AT&T
employees in general, which changes on the whole
(after consideration of any additional benefits
provided after closing) are not material decreases.
3. Any dispute under the foregoing resolutions or the letter
referred to in paragraph 4 below as concerns any person shall be
referred for a decision to a Review Board, consisting of
representatives of both the Company and AT&T, which shall fully
examine, consider and report upon all issues raised therein within
30 days after request by such persons. If such person remains
unsatisfied, such dispute thereafter shall be settled exclusively
by arbitration by a neutral arbitrator selected by the parties,
held in accordance with the rules of the American Arbitration
Association and conducted in the city nearest to such person's
place of employment in which there is an office of the American
Arbitration Association. The decision of the neutral arbitrator
shall be final, conclusive and binding on all interested parties
and no action at law or in equity shall be instituted or further
prosecuted. The Company shall pay on a current basis all legal
expenses incurred by such person in connection with such
arbitration unless the arbitrator finds the Company to be without
liability, in which case such person and Company shall each bear
all its own costs.
4. The amount of each such payment under paragraphs 1 and 2
above for each person shall be determined by a Committee composed
of Craig McCaw and Wayne Perry by September 30, 1993, provided the
amount determined for Craig McCaw and Wayne Perry shall be set by
the Compensation Committee. Promptly upon the determination of
such amounts, the appropriate officers of the Company shall confirm
to each person his entitlement to the bonus and severance payments
established pursuant to and in accordance with the terms and
conditions of this resolution by an appropriate letter, which
letter shall be binding upon the Company.
McCAW CELLULAR COMMUNICATIONS, INC.
DEFERRED COMPENSATION PLAN
(Dated: December 15, 1993)
<PAGE>
<PAGE> TABLE OF CONTENTS
Page
1. Introduction..............................................1
2. Effective Date............................................1
3. Eligible Employees........................................1
4. Procedure.................................................1
A. Salary Deferral.......................................1
B. Bonus Deferrals.......................................2
C. Form of Payment.......................................2
D. Timing of Payment.....................................2
E. Limit on Payments.....................................3
5. Investment of Deferred Compensation........................3
6. Deferred Compensation Accounting...........................3
7. Death Benefit; Designation of Beneficiary..................4
8. Amendment or Termination...................................4
9. Assignment.................................................4
10. Financial Hardship.........................................5
11. Taxes......................................................5
12. No Employment Agreement....................................5
13. Unfunded...................................................5
14. Vesting....................................................5
15. Duties Upon Insolvency.....................................5
16. Claim Procedures...........................................6
<PAGE>
<PAGE> 1
McCAW CELLULAR COMMUNICATIONS, INC.
DEFERRED COMPENSATION PLAN
1. Introduction.
This Deferred Compensation Plan (the "Plan") provides
competitive fringe benefit planning to key employees of McCaw
Cellular Communications, Inc. (the "Employer") by permitting such
employees to defer the receipt of compensation. The election to
defer must be irrevocable and must be made in accordance with the
terms of this Plan.
2. Effective Date.
The effective date of the Plan is December 1, 1993.
3. Eligible Employees.
As of the Effective Date, all officers of the Employer are
eligible to participate Plan ("Eligible Employee(s)" or
"Participant"). Other officers or key employees may become
eligible to participate if so notified by the Administrative
Committee of the Employer s 401(k) Plan, hereinafter "Committee."
4. Procedure.
A. Salary Deferral.
On or prior to December 31 of each year that this Plan is
in effect, any Eligible Employee may elect to defer receipt of all
or any portion (subject to any minimum deferral limitation
established by the Committee) of his or her compensation coming due
in the calendar year following the year of election. The election
shall be in writing, on a form provided by the Committee, and shall
be irrevocable as to any compensation payable in the next year. Any
new election with respect to future years compensation must be
filed with the Committee prior to the end of the year preceding the
year in which the change is to take effect. For purposes of this
Plan, compensation shall refer to any officer s salary, excluding
bonuses.
Notwithstanding the previous paragraph, an Eligible Employee
may elect to defer receipt of all or any portion of his or her
remaining compensation coming due in the current calendar year if
such election is made in writing within thirty (30) days after he
or she is notified of his or her eligibility to participate in this
Plan by the Committee.
<PAGE>
<PAGE> 2
B. Bonus Deferrals.
On or prior to July 31 of each year this Plan is in
effect or such other times as designated by the Committee, any
Eligible Employee may elect to defer receipt of all or any portion
(subject to any minimum deferral limitation established by the
Committee) of his or her bonus for services performed during the
current Plan Year that will be payable later in such year or in
the following Plan year. The election shall be in writing, on a
form provided by the Committee and shall be irrevocable as to any
bonus payable with respect to services performed for such year. Any
new election with respect to future years bonuses must be filed
with the Committee prior to the July 31 of the year for which the
bonus relates, or prior to such other time as designated by the
Committee.
Notwithstanding the previous paragraph, an Eligible Employee
may elect to defer receipt of all or any portion of any bonus if
such election is made in writing within thirty (30) days after he
or she is notified, by the Committee, of his or her eligibility to
participate in this Plan.
C. Form of Payment.
Subject to the limitations contained in Paragraph E
below, a Participant s account determined in accordance with
Paragraph 6 hereof shall be paid in installments or as a lump sum
in accordance with the Participant s deferral election, unless the
Committee, in its sole discretion, elects to accelerate installment
payments upon the occurrence of a financial hardship in accordance
with Paragraph 10.
D. Timing of Payment.
A distribution of a Participant s account shall begin on
the first day of the month following sixty (60) days (or as soon
thereafter as administratively possible) after the occurrence of
the earliest of: (i) termination of employment (voluntary or
involuntary); (ii) disability; (iii) passage of the stated period
of time stated on the Participant s deferral election; or (iv)
subject to the provisions of Paragraph 8 hereof, termination of the
Plan.
For purposes of determining commencement of payments due to
disability, disability shall mean the inability of a Participant to
perform the normal functions of his position, which inability is
expected to be of a permanent nature or long lasting duration. The
existence of a participant s disability shall be determined by the
Committee in its discretion.
<PAGE>
<PAGE> 3
E. Limit on Payments.
No amount will be paid hereunder if such payment will
cause the Employer to pay excessive remuneration to such Employee
as that term is defined by Section 162(m) of the Internal Revenue
Code of 1986, as amended ("Code"). Payments hereunder will be
reduced to the extent necessary to avoid the limitations of Section
162(m). Amounts not paid due to such limitations, shall be deferred
and paid in the following year(s).
5. Investment of Deferred Compensation.
The Committee shall select investment funds for amounts
deferred hereunder. The Committee shall initially select three
funds: (1) a bond fund; (2) an equity fund; and (3) a short-term
fixed income fund. Funds can be added or subtracted by the
Committee, in its sole discretion. All taxes (including interest
and penalties) levied or assessed with respect to the funds or the
income thereon, shall be paid by the Company, unless under other
applicable tax law, such taxes are deemed an obligation of the
Participant, in which case the Participant will pay.
A Participant shall direct the Committee to invest his or her
account among the various funds selected. A Participant shall have
the right to direct the Committee at least quarterly. Such
direction shall be made in writing on a form and in the time and
manner established by the Committee. In the event no direction is
received, the Committee shall invest a Participant s account in the
short-term income fund.
The Committee shall have no responsibility or liability for
investments made at the direction of the Participant.
6. Deferred Compensation Accounting.
All compensation deferred hereunder shall be credited to a
special account on the books of the Employer in the name of the
Participants, and/or deposited in a grantor trust on behalf of such
Participants. The Committee shall invest the amounts credited to
the account, in accordance with the instructions from Participants,
in the investment funds that have been established from time to
time by the Committee. A Participant s account will be increased by
his or her proportionate share of all income and investment gains
realized by the funds and decreased by all administrative expenses
and investment losses realized by the funds. A Participant is
entitled to a statement of his or her account, at least annually,
within ninety (90) days after the close of the calendar year.
<PAGE>
<PAGE> 4
7. Death Benefit; Designation of Beneficiary.
Any amount due to a Participant which is unpaid upon his or
her death shall be paid to the beneficiary designated on a form
provided by the Committee. The designated beneficiary may be
changed from time to time by filing a new beneficiary designation
with the Committee. A spouse must consent to a designation if more
than fifty percent (50%) of the account will be paid to a
beneficiary other than the spouse. The designation last filed shall
control. If a Participant fails to designate a beneficiary, or if
the person or persons designated on the beneficiary designation
predecease the Participant, and the beneficiary designation form
does not indicate who receives the amount due, the amount owing
shall be paid in the following order:
a. surviving spouse;
b. estate of deceased Participant.
Payments to the beneficiary of a deceased Participant shall be made
in the manner described in Paragraphs 4(c) and 4(d), as if the
beneficiary were the Participant.
8. Amendment or Termination.
The Plan may be terminated by the Committee within three years
of: (i) a "change in control" as defined by Section 13(d) of the
Deferred Compensation Trust Agreement, dated December 15, 1993; or
(ii) a significant change in the tax laws governing either the
Employer and the Participant. Notwithstanding the foregoing, this
Plan may be amended or terminated at any time by the Committee,
provided that no amendment or termination shall effect the rights
of Participants to receive amounts deferred but unpaid as of such
termination or amendment. The Plan shall be administered by the
Committee. Any member of the Committee who is a Participant shall
not vote or act on any matter relating solely to himself. If the
Plan is terminated, unless the Committee determines that accounts
shall be frozen and payable in accordance with the original
election, amounts deferred hereunder shall be distributed pursuant
to Paragraph 4(c) and 4(d) of this Plan.
9. Assignment.
No amounts deferred hereunder shall be assignable in whole or
in part, either by voluntary or involuntary act or operation of
law. Rights hereunder are not subject to anticipation, alienation,
sale, transfer, assignment, pledge or encumbrance, and such rights
may not be subject to the debts, contracts, liabilities,
engagements or torts of the Participant or his beneficiary. All
amounts deferred hereunder remain the unrestricted assets of the
Employer. Any assets purchased shall remain the sole property of
the Employer subject to the claims of its general creditors and
shall be available for the Employer s use for whatever purpose<PAGE>
<PAGE> 5
desired. No Participant hereunder shall have any right other than
the unsecured promise of the Employer to pay deferred compensation
in the future. No Participant hereunder shall have any voice in the
use, disposition, or investment of the assets of the Plan.
10. Financial Hardship.
If financial hardship in the nature of an emergency is
established to the satisfaction of the Committee (or such
individual as the Committee may authorize), the Committee may make
emergency payments to the Participant on a date earlier than his
deferred compensation would otherwise be payable. Such emergency
payments may not exceed the amount determined by the Committee (or
its authorized delegate) to be reasonably necessary to meet the
financial hardship and in no event may exceed the amount of the
Participant s deferred compensation plus interest credited thereon.
At the time his deferred compensation is subsequently payable, the
Participant will be entitled to his deferred compensation plus
interest, less prior emergency payments. Financial hardship in the
nature of an emergency includes, but is not limited to, medical and
hospital needs not covered by any insurance program, purchase of a
principal residence, payment of tuition for the next twelve (12)
months of schooling for the Participant, spouse or dependent, and
payments required by any Court order. A Participant shall not make
another deferral election hereunder for at least twelve (12) months
following a hardship distribution.
11. Taxes.
When payments are made pursuant to Paragraph 4 above, such
payments are subject to income tax withholding.
12. No Employment Agreement.
Nothing in this Agreement shall be construed as creating a
right in the Participant to continued employment with the Employer.
13. Unfunded.
The amounts credited hereunder shall at all times be subject
to the general creditors of the Employer. Amounts may, however, be
deposited in a grantor trust.
14. Vesting.
Amounts deferred hereunder will always be one hundred percent
(100%) vested and nonforfeitable.
15. Duties Upon Insolvency.
The Employer shall be considered "insolvent" if: (i) Employer
is unable to pay its debts as they become due, or (ii) the
Employer is subject to a pending proceeding as a debtor under the<PAGE>
<PAGE> 6
United States Bankruptcy Code. Upon the occurrence of insolvency,
the Board of Directors and the Chief Executive Officer of the
Employer shall have the duty to inform the Committee and any
Trustee holding Plan assets of the Employer s insolvency. Upon
insolvency, the Committee and the Trustee shall hold the assets of
the Trust for the benefit of the Employer s general creditors.
Nothing hereunder shall diminish the rights of Plan Participants or
their beneficiaries to pursue their rights as a general creditors
with respect to benefits due under the Plan.
Benefit payments will resume to participants and Beneficiaries
when the Board of Directors and the Chief Executive Officer inform
the Committee and any Trustee that the Employer is no longer
insolvent. Provided there are sufficient Employer assets when
payments subsequently resume, the first payment following a
discontinuance hereunder shall include the aggregate amount of all
payments due to the Plan Participants or the beneficiaries under
the terms of the Plan for the period of such discontinuance.
16. Claim Procedures.
Disputes arising hereunder shall be resolved utilizing the
claims procedures adopted by the Employer s 401(k) Plan. Such
procedures are hereby incorporated by reference.
This Plan is adopted to be effective as of the first day of
December, 1993, by McCaw Cellular Communications, Inc.
McCAW CELLULAR COMMUNICATIONS, INC.
By:
Its:
By:
Steve Hooper
By:
Jeff Lyman
By:
Kerry Larson
By:
John Thompson
By:
Scott Morris
By:
Lynn Thomsen
EXHIBIT 21
McCaw Corporations
Cellular
ACC/Affiliated Cellular of Salt Lake City, Inc. (Utah)
Access Plus, Inc. (27.47%)
Affiliated Cellular of Fresno, Inc. (California)
Affiliated Cellular of Minneapolis, Inc. (Minnesota)
Affiliated Cellular of Sacramento, Inc. (California)
Affiliated Cellular of San Antonio, Inc. (Texas)
Bellingham Cellular Telephone, Inc. (Washington)
Boise Cellular Services, Inc. (Idaho)
B-CS Cellular Telephone Co., Inc. (Delaware)
Cagal Cellular Communications Corp. (Delaware) (85.49%)
California InterCell, Inc. (California)
Carson City Cellular, Inc. (Nevada)
Cellular Mobile Services of New York, Inc. (New York)
Cellular Mobile Systems of the Bay Area, Inc. (California)
Cellular Mobile Systems of Missouri, Inc. (Missouri)
Cellular Mobile Systems of Texas, Inc. (Texas)
Cellular Services of Buffalo, Inc. (Delaware)
Chase Cellular of West Palm Beach, Inc. (Florida)
Chico MSA Cellular, Inc. (California)
Citrus RSA Acquisition Corporation (Delaware)
Continental InterCell, Inc. (Delaware)
Denver Cellular, Inc. (Delaware)
Eugene Cellular Telephone Company, Inc. (Texas)
FCJ, Inc. (Georgia)
First Cellular Group Incorporated (Delaware)
First Cellular Group of Lakeland-Winter Haven, Inc. (Delaware)
First Cellular Group of Oxnard, Inc. (Delaware)
First Cellular Group of Shreveport, Inc. (Delaware)
Fort Smith Cellular, Inc. (Arkansas)
Jackson Cellular Services, Inc. (Mississippi)
Kings County Cellular, Inc. (California)
Lafayette Communications, Inc. (Delaware)
LIN Broadcasting Corporation (Delaware) (51.9%)
Little Rock Cellular Corporation (Arkansas)
Longview Cellular, Inc. (Delaware)
Maui Cellular Telephone Company, Inc. (Wisconsin)
MCCI Acquisitions, Inc. (Delaware)
McCaw Cellular Communications, Inc. (Delaware)
McCaw Cellular Communications of Argentina, Inc. (Nevada)
McCaw Cellular Communications of Colombia, Inc. (Nevada)
McCaw Cellular Communications of Florida, Inc. (Florida)
McCaw Cellular Communications of Israel, Inc. (Nevada)
McCaw Cellular Communications of San Francisco/San Jose, Inc.
(California)
McCaw Cellular Communications of Spain, Inc. (Nevada)
McCaw Cellular Communications of Texas, Inc. (Texas)
McCaw Cellular Communications of Venezuela, Inc.
McCaw Cellular Equipment, Inc. (Washington)
McCaw Cellular, Inc. (Washington)
McCaw Cellular Interests, Inc. (Washington)
McCaw Cellular of California, Inc. (California)
McCaw Cellular Management, Inc. (Washington)
McCaw Cellular One of Kansas City, Inc. (Missouri)
McCaw Communications of Anchorage, Inc. (Alaska)
McCaw Communications of Bradenton, Inc. (Florida)
McCaw Communications of Bremerton, Inc. (Washington)
McCaw Communications of Bryan, Inc. (Texas)
McCaw Communications of Buffalo, Inc.
McCaw Communications of Central Texas (Texas)
McCaw Communications of Cincinnati, Inc. (Washington)
McCaw Communications of Colorado Springs, Inc. (Colorado)
McCaw Communications of Dallas, Inc. (Nevada)
McCaw Communications of Davenport, Inc. (Iowa)
McCaw Communications of Daytona Beach, Inc. (Delaware)
McCaw Communications of Decatur, Inc. (Illinois)
McCaw Communications of Denver, Inc. (Colorado)
McCaw Communications of Ecuador, Inc. (Washington)
McCaw Communications of Enid, Inc. (Oklahoma)
McCaw Communications of Erie, Inc. (Pennsylvania)
McCaw Communications of Flint, Inc. (Michigan) Will be reinstated
McCaw Communications of Florida, Inc. (Florida)
McCaw Communications of Fort Collins, Inc. (Colorado)
McCaw Communications of Fort Pierce, Inc. (Florida)
McCaw Communications of Fresno, Inc. (California)
McCaw Communications of Gainesville, TX, Inc. (Texas)
McCaw Communications of Greeley, Inc. (Colorado)
McCaw Communications of Houma, Inc. (Louisiana)
McCaw Communications of Huntington, Inc. (West Virginia)
McCaw Communications of Johnstown, Inc. (Pennsylvania)
McCaw Communications of Killeen-Temple, Inc. (Texas)
McCaw Communications of LaCrosse, Inc. (Wisconsin)
McCaw Communications of Lafayette, Inc. (Louisiana)
McCaw Communications of Latin America, Inc. (Washington)
McCaw Communications of Lawrence, Inc. (Kansas)
McCaw Communications of Long Branch, Inc. (New Jersey)
McCaw Communications of Longview, Inc. (Texas)
McCaw Communications of the Mid-South, Inc. (Delaware)
McCaw Communications of the Midwest, Inc. (Missouri)
McCaw Communications of Minneapolis, Inc. (Minnesota)
McCaw Communications of Modesto, Inc. (California)
McCaw Communications of Nevada, Inc. (Nevada)
McCaw Communications of New Brunswick, Inc. (New Jersey)
McCaw Communications of the Northeast, Inc. (Washington)
McCaw Communications of Northeast Pennsylvania, Inc.
(Pennsylvania)
McCaw Communications of the Northwest, Inc. (Washington)
McCaw Communications of Oklahoma City, Inc. (Oklahoma)
McCaw Communications of Olympia, Inc. (Washington)
McCaw Communications of Orlando, Inc. (Washington)
McCaw Communications of Orlando II, Inc. (Florida)
McCaw Communications of Oxnard, Inc. (California)
McCaw Communications of the Pacific, Inc. (California)
McCaw Communications of the Pacific Northwest, Inc.
(Washington)
McCaw Communications of Pennsylvania, Inc. (Washington)
McCaw Communications of Pittsburgh, Inc. (Pennsylvania)
McCaw Communications of Provo, Inc. (Utah)
McCaw Communications of Puerto Rico, Inc. (Puerto Rico)
McCaw Communications of Redding, Inc. (California)
McCaw Communications of Reno, Inc. (Nevada)
McCaw Communications of Rochester, Inc. (Minnesota)
McCaw Communications of Sacramento, Inc. (California)
McCaw Communications of Salem, Inc. (Oregon)
McCaw Communications of Salt Lake City, Inc. (Utah)
McCaw Communications of San Antonio, Inc. (Texas)
McCaw Communications of Sarasota, Inc. (Florida)
McCaw Communications of Sherman, Inc. (Texas)
McCaw Communications of Spain, Inc. (Nevada)
McCaw Communications of Spokane, Inc. (Washington)
McCaw Communications of St. Joseph, Inc. (Kansas)
McCaw Communications of Steubenville, Inc. (Ohio)
McCaw Communications of Tampa, Inc. (Washington)
McCaw Communications of Tampa II, Inc. (Washington)
McCaw Communications of Texarkana, Inc. (Arkansas)
McCaw Communications of Texas, Inc. (Texas)
McCaw Communications of Topeka, Inc. (Kansas)
McCaw Communications of Tulsa, Inc. (Oklahoma)
McCaw Communications of Utah, Inc. (Utah)
McCaw Communications of Venezuela, Inc. (Delaware)
McCaw Communications of Visalia, Inc. (California)
McCaw Communications of Waco, Inc. (Delaware)
McCaw Communications of West Palm Beach, Inc. (Washington)
McCaw Communications of Wheeling, Inc. (West Virginia)
McCaw Communications of Worcester, Inc. (Washington)
McCaw Communications of Yuba City, Inc. (California)
McCaw Construction Services, Inc. (Washington)
McCaw Data Transmission, Inc. (Washington)
McCaw Far East Holdings, Inc. (Washington)
McCaw Information Services, Inc. (Washington)
McCaw National Accounts, Inc. (Washington)
McCaw Nevada, Inc. (Nevada)
McCaw Pacific Northwest, Inc. (Washington)
McCaw Retail of Utah, Inc. (Washington)
McCaw Upper Midwest Region, Inc. (Pennsylvania)
Medford Cellular Telephone Company, Inc. (Delaware) (90.78%)
Medford Oregon Cellular Telephones, Inc. (Oregon)
MFC, Inc. (Virginia) (not to be confused with McCaw Family Corp.)
Minnesota Cellular, Inc. (Minnesota)
Monroe Cellular, Inc. (Louisiana)
NJ-2 Cellular, Inc. (New Jersey)
North American Cellular Network, Inc. (Delaware)
Ocala Cellular Partners, Inc. (Florida)
Ocala Cellular Telephone Company, Inc. (Delaware) (87.27%)
OK-3 Cellular, Inc. (Oklahoma)
OK-5 Cellular, Inc. (Oklahoma)
Olympia Cellular Telephone Company, Inc. (Delaware (86.23%)
Pacific Northwest/Rocky Mountain Region, Inc. (Washington)
Pacific Porta-Phone, Inc. (Oregon)
Parkersburg Cellular Telephone Co., Inc. (Delaware) (98.02%)
Pine Bluff Cellular, Inc. (Delaware) (80.82%)
Pine Bluff Cellular Services, Inc. (Arkansas)
Pueblo Cellular Telephone, Inc. (Colorado)
Pueblo Cellular Communications, Inc. (Delaware) (75.01%)
RSA # 339, Inc. (California)
RSA # 343, Inc. (California)
RSA # 350 Cellular, Inc. (Colorado)
RSA # 673 Cellular, Inc. (Delaware)
RSA # 693 Cellular, Inc. (Delaware)
RSA # 697 Cellular, Inc. (Delaware)
RSA # 698 Cellular, Inc. (Washington)
St. Cloud Cellular, Inc. (Minnesota)
Santa Barbara Cellular, Inc. (California)
Sherman/Denison Cellular Telephone Company, Inc. (Delaware)
Simmons Cellular of Washington, Inc. (Washington)
St. Cloud Cellular Telephone Company, Inc. (Delaware) (69.26%)
Stockton Cellular Telephone Company, Inc. (California)
Talcom, Inc. (Florida)
Tri-Cities Cellular Services, Inc. (Delaware)
TWR Cellular, Inc. (Maryland)
United States Cellular Radio Corporation of California
(Dist. of Col.)
United States Cellular Radio Corporation of Delaware
(Dist. of Col.)
United States Cellular Radio Corporation of Massachusetts
(Dist. of Col.)
Wichita Telephone Company (Delaware)
Yakima Cellular Telephone, Inc. (Washington)
<PAGE>
McCAW CORPORATIONS
RCC
Airsignal, Inc. (Delaware)
Airsignal of California, Inc. (California)
McCaw Communications of Portland, Inc. (Oregon)
McCaw Holding, Inc. (Washington)
McCaw Messaging of Mexico, Inc. (Nevada)
McCaw Paging One, Inc. (Washington)
McCaw RCC Communications, Inc. (Washington)
McCaw RCC Communications of Kansas City, Inc. (Kansas)
McCaw RCC Communications of the Midwest, Inc. (Oklahoma)
McCaw RCC Communications of Utah, Inc. (Utah)
McCaw RCC of Colorado, Inc. (Colorado)
McCaw RCC of New Mexico, Inc. (New Mexico)
McCaw RCC of Wichita (Kansas)
McCaw 900 MHz Communications, Inc. (Washington)
Mid-South Leasing, Inc. (Delaware)
Mobilfone Service, Inc. (Texas)
Radio Communications, Inc. (Alaska)
Vegas Instant Page (Nevada)
Western Telepage, Inc. (Washington)
<PAGE>
McCAW CORPORATIONS
General
ACI-FEB Investments, Inc. (Delaware)
ACI-FRDC Investments, Inc. (Delaware)
ACI Investments, Inc. (Delaware)
ACI-MLC Investments, Inc. (Delaware)
ATG I, Inc. (Delaware)
ATG II, Inc. (Delaware)
BTO Investments, Inc. (Washington)
C-S Rental Agency, Inc. (Florida)
CLD Co.
Cellular One Development, Inc. (Delaware)
Globe Pequot Press, Inc. (Delaware)
LTF, Inc. (Nevada)
McCaw Communications Companies, Inc. (Washington)
McCaw Development Corporation (Delaware)
McCaw Holdings, Inc. (Washington)
McCaw Property Investments, Inc. (Washington)
McCaw Unrestricted Holdings, Inc. (Delaware)
McCaw Wireless Data, Inc. (Delaware)
MCC-1099, Inc. (Washington)
MMM Holdings, Inc.
MobileMount, Inc. (Washington)
Space Technologies Investments, Inc. (Washington)
<PAGE>
McCAW CORPORATIONS
Cable
McCaw Cablevision, Inc. (Washington)
McCaw Communications of Columbia County, Inc. (Oregon)
McCaw Communications of Hawaii Kai, Inc. (Hawaii)
McCaw Communications of Homer, Inc. (Alaska)
McCaw Communications of North Bend, Inc. (Washington)
McCaw Communications of North Bend/Cle Elum, Inc.
(Washington)
McCaw Communications of Seward, Inc. (Alaska)
McCaw Olympic Communications, Inc. (Washington)
McCaw Satellite Programming Investments, Inc. (Washington)
Whatcom County Cablevision, Inc. (Washington)
Whidbey Island Cablevision, Inc. (Washington)
Exhibit 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K into the
Company's previously filed Registration Statements File Nos. 33-
20985, 33-27820, 33-43772, 33-55812, 33-66078 and 33-50317.
ARTHUR ANDERSEN & CO.
Seattle, Washington
March 30, 1994
EXHIBIT 23.2
Consent of Ernst & Young, Independent Auditors
We consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos. 33-20985, 33-27820, 33-43772, 33-55812
and 33-66078 and Form S-4 No. 33-50317) of McCaw Cellular
Communications, Inc., and in the related Prospectuses of our
report dated February 4, 1994, with respect to the consolidated
financial statements of LIN Broadcasting Corporation and
subsidiaries, and our report dated February 4, 1994, with respect
to the combined financial statements and schedules of LIN
Broadcasting Corporation's Unconsolidated Affiliates, included in
the Annual Report (Form 10-K) of McCaw Cellular Communications,
Inc., for the year ended December 31, 1993.
ERNST & YOUNG
Seattle, Washington
March 28, 1994
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement Nos. 33-20985, 33-27820, 33-43772, 33-55812, and 33-
66078 of McCaw Cellular Communications, Inc. on Form S-8, and in
Amendment No. 2 to Registration Statement No. 33-50317 of McCaw
Cellular Communications, Inc. on Form S-4 of our report dated
February 18, 1994 (relating to the consolidated financial
statements of AWACS, Inc. and subsidiaries as of December 31,
1993 and 1992 and for the years then ended, not presented
separately herein) appearing as an Exhibit to this Annual Report
on Form 10-K of McCaw Cellular Communications, Inc. for the year
ended December 31, 1993.
DELOITTE & TOUCHE
Philadelphia, Pennsylvania
March 29, 1994
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To McCaw Cellular Communications, Inc.
As independent public accounts, we hereby consent to the
incorporation of our report dated February 23, 1994 on Garden
State Cablevision L.P. and included in McCaw Cellular
Communications, Inc.'s Form 10-K into previously filed
Registration Statements File no. 33-20985; File No. 33-27820;
File No. 33-43772; File No. 33-55812; File No. 33-66078; File No.
33-50317. It should be noted that we have not audited any
financial statements of Garden State Cablevision L.P. subsequent
to December 31, 1993 or performed any audit procedures subsequent
to the date of our report.
ARTHUR ANDERSEN & CO.
Philadelphia, Pa.
March 30, 1994
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
CRAIG O. McCAW
Name: Craig O. McCaw
Dated: March 30, 1994<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
STEVEN W. HOOPER
Name: Steven W. Hooper
Dated: March 9, 1994<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
WAYNE M. PERRY
Name: Wayne M. Perry
Dated: March 30, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
JAMES L. BARKSDALE
Name: James L. Barksdale
Dated: March 30, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
JOHN W. STANTON
Name: John W. Stanton
Dated: March 15, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
JOHN E. McCAW, JR.
Name: John E. McCaw, Jr.
Dated: March 8, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
BRUCE R. McCAW
Name: Bruce R. McCaw
Dated: March 30, 1994<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
HAROLD S. EASTMAN
Name: Harold S. Eastman
Dated: March 8, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
HAROLD W. ANDERSEN
Name: Harold W. Andersen
Dated: March 8, 1994<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
DANIEL J. EVANS
Name: Daniel J. Evans
Dated: March 7, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
JOHN C. McDONALD
Name: John C. McDonald
Dated: March 8, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
STUART M. SLOAN
Name: Stuart M. Sloand
Dated: March 15, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
MALCOLM ARGENT
Name: Malcolm Argent
Dated: March 30, 1994
<PAGE>
<PAGE> POWER OF ATTORNEY
The person whose signature appears below hereby constitutes
and appoints Wayne M. Perry, Tom A. Alberg and Andrew A.
Quartner, or any of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K, for the
fiscal year ending December 31, 1993 for McCaw Cellular
Communications, Inc., and to sign any and all amendments to such
Form 10-K, and other documents in connection therewith, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each said attorneys-in-fact and agents,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each
of said attorneys-in-fact and agents or his substitutes, may
lawfully do or cause to be done by virtue thereof.
BRUCE R. BOND
Name: Bruce R. Bond
Dated: March 30, 1994
