<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 1997
RURAL CELLULAR CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
Minnesota
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-27416 41-1693295
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(Commission File Number) (IRS Employer Identification No.)
3905 Dakota Street S.W., Alexandria, Minnesota 56308
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone number, Including Area Code: (320) 762-2000
----------------------------
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Former Name or Former Address, if Changed Since Last Report
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Effective May 1, 1997, the Registrant consummated the previously announced
acquisition of the Maine wireless telephone operations and related assets of
Unity Cellular Systems, Inc. ("Unicel") and related cellular and microwave
licenses from InterCel Licenses, Inc. Unicel and InterCel Licenses, Inc. are
wholly owned subsidiaries of InterCel, Inc. The Registrant will operate the
Maine operations through a wholly owned subsidiary known as MRCC, Inc.
The acquired cellular licenses cover the Bangor, Maine MSA and Maine RSA 3
(which includes Augusta, the state capitol). In addition, the Registrant
acquired Unicel's 51% interest in Northern Maine Cellular Partnership, which
holds a cellular license for Maine RSA 2.
As consideration for the acquisition, the Registrant paid approximately $77
million in cash. These funds were borrowed under a reducing revolving credit
facility with a group of banks headed by T. D. Securities (USA), Inc., formerly
known as The Toronto-Dominion Bank. The consideration was determined in arm's-
length negotiations among InterCel, Inc., Unicel, InterCel Licenses, Inc., and
the Registrant and was determined to be fair and reasonable by the Registrant's
Board of Directors. The Registrant had no affiliation with Unicel prior to
negotiations regarding the acquisition, although the two entities did have
agreements regarding service on "roaming" traffic in their respective service
areas.
The Company also acquired the remaining 49% interest in Northern Maine
Cellular Partnership ("Northern Maine") held by an affiliate of Bell Atlantic
NYNEX Mobile, Inc. ("BANM") for $7,357,350. This price was negotiated by the
Registrant and BANM and determined to be fair and reasonable by the Registrant's
Board of Directors. Funds for this purchase were also provided under the credit
facility. Prior to the acquisition, the Registrant had no affiliation with
Northern Maine or BANM except for agreements between the Registrant and BANM
covering service on "roaming" traffic within their respective service areas.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The Registrant intends to file the required financial statements
for Unicel and Northern Maine within the period provided for
under Item 7(a)(4) of Form 8-K.
(b) Proforma Financial Information.
The Registrant intends to file the required proforma financial
information within the period provided for under Item 7(a)(4)
of Form 8-K.
<PAGE>
(c) Exhibits.
2.1 Asset Purchase Agreement dated December 23, 1996 by and
among the Registrant, Unicel, InterCel Licenses, Inc.
and InterCel, Inc. (filed as an exhibit to Report on
Form 8-K dated December 23, 1996 and incorporated by
reference herein)
2.2 Partnership Interest Purchase Agreement dated April 18,
1997 by and between Cellco Partnership dba Bell Atlantic
NYNEX Mobile and MRCC, Inc.
10 Loan Agreement dated May 1, 1997 among the Registrant and
The Toronto-Dominion Bank, BankBoston, N.A., St. Paul Bank
for Cooperatives, CoBank, Fleet National Bank, First
National Bank of Maryland, Societe Generale, New York
Branch, and Merita Bank Ltd New York Branch (the "Banks"),
BankBoston, N.A. and St. Paul Bank for Cooperatives
(the "Co-Agents"), and Toronto Dominion (Texas), Inc.
(the "Administrative Agent")
*23 Consent of Arthur Andersen LLP
*To be filed by amendment
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
RURAL CELLULAR CORPORATION
By /s/ Richard P. Ekstrand
---------------------------------------
Richard P. Ekstrand
Its President and Chief Executive Officer
Dated: May 14, 1997
<PAGE>
PARTNERSHIP INTEREST PURCHASE AGREEMENT
This Partnership Interest Purchase Agreement (the "Agreement") is made as
of the 18th day of April, 1997, by and between CELLCO PARTNERSHIP DBA BELL
ATLANTIC NYNEX MOBILE ("Seller") a general partnership formed under the laws of
Delaware, at 180 Washington Valley Drive, Bedminster, New Jersey 07921, and
MRCC, INC., a wholly-owned subsidiary of Rural Cellular Corporation, a
corporation formed under the laws of the state of Maine ("Buyer") at 3905 Dakota
Street SW, Alexandria, Minnesota 56308.
RECITALS
--------
WHEREAS, Seller is the holder of a 49% partnership interest (the
"Interest") in the Northern Maine Cellular Partnership, a general partnership
formed under the laws of the state of Maine ("Partnership"); and
WHEREAS, Seller desires to sell, transfer and assign to Buyer all of
Seller's right, title and interest in the Interest to Buyer on the terms set
forth herein, and Buyer desires to buy the Interest;
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties mutually covenant and agree as follows:
TERMS
-----
1. PURCHASE OF INTEREST
At the Closing, as defined below, Seller shall sell, assign, transfer,
convey and deliver to Buyer all of Seller's right, title, and interest in and
to the Interest (the "Assignment"). In consideration of the sale, transfer,
assignment and conveyance of the Interest to Buyer, Buyer shall pay to Seller
the aggregate amount of $7,357,350, based upon the calculation of 143,000
POPs at $105 per POP multiplied by 49%. The purchase price shall be payable
in full at Closing via wire transfer of immediately available funds to an
account designated by Seller.
2. CLOSING/CONDITIONS PRECEDENT TO CLOSING/PENDING CLOSING
a. Closing under this Agreement (the "Closing") shall occur simultaneously
with the Closing of the purchase by MRCC, Inc. of Unity Cellular System,
Inc.'s 51% general partnership interest in the Partnership or within 10
business days after all conditions precedent have been satisfied, whichever
is later. To facilitate the closing, both parties will transmit executed
documents to a mutually agreed upon escrow agent in Minneapolis, which will
release each party's documents to the other party upon confirmation that
funds have been received by Seller.
b. Closing is subject to the following conditions precedent, any of which
may be waived in writing by Seller or Buyer as applicable:
<PAGE>
i. All required regulatory approvals, if any, shall have been
obtained.
ii. Buyer shall have completed acquisition of Unity Cellular System,
Inc.'s 51% partnership interest in the Partnership.
c. Pending Closing.
i. Neither Buyer nor Rural Cellular Corporation shall cause the
Partnership to make a capital call prior to the termination of this
Agreement or the Closing, whichever is earlier.
ii. Each of the Buyer and Seller will pay its own out-of-pocket
expenses (including legal, financial advisory and accounting fees and
expenses) in connection with the proposed transaction.
iii. Neither Buyer nor Seller is bound or will become bound by any
agreement under which the other party would be liable to any third party
for any fee, commission or other payment as a result of the execution of
this Agreement or the consummation of the proposed transaction.
3. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Seller represents and warrants to Buyer that each of the following are
true and correct on the date of this Agreement and will be true and correct
on the date of Closing:
a. Seller represents and warrants that it has good and marketable title
to the Interest, free and clear of any and all liens, security interests,
encumbrances, pledges or any other rights or interests of others and the
Interest is not the subject of any agreement other than this Agreement and
the Partnership Agreement.
b. Seller represents and warrants that it has full capacity and power to
enter into, execute and deliver this Agreement. This Agreement has been duly
executed by Seller and is a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
c. Seller represents and warrants that it is a party to the Partnership
Agreement and has not assigned, sold, hypothecated, encumbered or otherwise
disposed of any of its rights under the Partnership Agreement except pursuant to
this Agreement.
d. Seller represents and warrants that the execution, delivery and
performance by Seller of this Agreement will not conflict with or constitute
a default under any term of any agreement, instrument, judgment, order or
decree to which Seller is a party or by which Seller or the Interest is bound
or of any applicable law, ordinance, rule, or regulation of any governmental
authority.
e. Seller will do, execute, acknowledge and deliver all such further acts,
bills of sale, assignments, transfers, assurances, endorsements, applications or
other instruments as may
2
<PAGE>
reasonable be required by Buyer to assure, confirm, permit transfer of, or
evidence the title and interest of Buyer in and to the Interest.
f. Bell Atlantic NYNEX Mobile, Inc. ("BANM") is the sole managing general
partner of Seller and is duly authorized to execute this Agreement on
Seller's behalf without the need for any further action by the partnership or
its partners. The undersigned signator for BANM is duly authorized to
execute this Agreement on BANM's behalf.
4. BUYER'S REPRESENTATIONS AND WARRANTIES
a. Buyer has full authority, capacity and power to enter into and
execute and deliver this Instrument. This Agreement has been duly executed
by Buyer and is a legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms.
b. The undersigned is duly authorized to execute this Agreement on
Buyer's behalf.
5. INDEMNIFICATION BY SELLER
Seller shall indemnify and hold Buyer harmless from any damage, claim,
liability, loss, injury, judgment and expense, including, without limitation,
interest, penalties, and attorney's fees arising out of or related to (i)
Seller's acquisition and ownership of the Interest before the date of this
Agreement, and (ii) any breach of any representation or warranty of Seller or
any default in the performance by Seller of any covenant or agreement of
Seller contained in this Agreement. The obligations hereunder shall survive
Closing.
6. INDEMNIFICATION BY BUYER
Buyer hereby agrees to pay, perform and discharge, when due, each and
shall indemnify Seller from and against, every obligation, liability, and
commitment arising (i) after the date of this Agreement relating to or
arising in connection with Buyer's ownership of the Interest, and (ii) any
breach of any representation or warranty or covenant of Buyer contained
herein. The obligations hereunder shall survive Closing.
7. CONFIDENTIALITY AND PUBLICITY
Prior to Closing, neither Seller nor Buyer would disclose to the public or
to any third party the fact that Buyer is contemplating the purchase of the
Interest, or that Seller is contemplating the sale of the Interest to Buyer,
or the existence of this Agreement or the proposed terms and conditions of
the sale described herein, except:
a. As required by applicable law or the rules of any relevant stock
exchange, by order or decree of a court or regulatory body having
jurisdiction over such party, or in connection with such party's or its
affiliate's enforcement of any rights it may have at law or equity in
connection with obtaining regulatory approval for the consummation of the
transaction contemplated hereby.
b. On a "need to know" basis to persons within such party's organization,
or outside of such party's organization such as attorneys, accountants,
bankers, financial advisors and other
3
<PAGE>
consultants or persons at Unity Cellular Systems, Inc. or InterCel, Inc. who
may be assisting such party in connection with the transactions contemplated
hereby and who agree to be bound by the nondisclosure obligations o this
paragraph; or
c. With the express prior written consent of the other party.
8. SUCCESSORS AND ASSIGNS
All of this Agreement shall inure to the benefit of and be binding upon
the heirs, representations, successors and assigns of the parties hereto.
9. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Delaware, without giving effect to its rules on conflicts of law.
10. COUNTERPARTS
This Agreement may be executed in separate counterparts, each of which
shall constitute an original, all of which together shall constitute one and
the same Agreement binding on all parties.
11. TERMINATION
This Agreement may be terminated by either party by written notice to the
other if Buyer's purchase of Unity Cellular System, Inc.'s 51% interest in
the Partnership is not consummated by September 30, 1997, or by mutual
written agreement of the parties.
12. AMENDMENT
This Agreement, or any provision thereof, may only be amended, modified
or waived by the mutual written agreement of the parties, unless otherwise
stated herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
MRCC, Inc.
By: /s/ Richard P. Ekstrand
-----------------------
Title: President
CELLCO PARTNERSHIP
By Bell Atlantic NYNEX Mobile, Inc.
Its Managing General Partner
By: /s/ Mack Rupp
-------------------------------
Title: Vice President, Planning
& Business Development
4
<PAGE>
LOAN AGREEMENT
AMONG
RURAL CELLULAR CORPORATION (THE "BORROWER");
THE TORONTO-DOMINION BANK,
BANKBOSTON, N.A.,
ST. PAUL BANK FOR COOPERATIVES,
COBANK,
FLEET NATIONAL BANK,
FIRST NATIONAL BANK OF MARYLAND,
SOCIETE GENERALE, NEW YORK BRANCH,
AND
MERITA BANK LTD NEW YORK BRANCH
(COLLECTIVELY, THE "BANKS");
BANKBOSTON, N.A.,
AND
ST. PAUL BANK FOR COOPERATIVES
(COLLECTIVELY, THE "CO-AGENTS");
` AND
TORONTO DOMINION (TEXAS), INC.
(THE "ADMINISTRATIVE AGENT")
DATED AS OF MAY 1, 1997
POWELL, GOLDSTEIN, FRAZER & MURPHY
ATLANTA, GEORGIA
<PAGE>
INDEX
Page
ARTICLE 1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.1 The Loans. . . . . . . . . . . . . . . . . . . . . . 17
Section 2.2 Manner of Borrowing and Disbursement . . . . . . . . 17
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.4 Commitment Fees. . . . . . . . . . . . . . . . . . . 21
Section 2.5 Mandatory Commitment Reductions. . . . . . . . . . . 22
Section 2.6 Voluntary Commitment Reductions. . . . . . . . . . . 23
Section 2.7 Prepayments and Repayments . . . . . . . . . . . . . 24
Section 2.8 Notes; Loan Accounts . . . . . . . . . . . . . . . . 25
Section 2.9 Manner of Payment. . . . . . . . . . . . . . . . . . 25
Section 2.10 Reimbursement. . . . . . . . . . . . . . . . . . . . 26
Section 2.11 Pro Rata Treatment . . . . . . . . . . . . . . . . . 27
Section 2.12 Capital Adequacy . . . . . . . . . . . . . . . . . . 27
Section 2.13 Bank Tax Forms . . . . . . . . . . . . . . . . . . . 28
ARTICLE 3 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 29
Section 3.1 Conditions Precedent to Effectiveness of
Agreement. . . . . . . . . . . . . . . . . . . . . . 29
Section 3.2 Conditions Precedent to Each Advance . . . . . . . . 30
ARTICLE 4 Representations and Warranties . . . . . . . . . . . . . . . . 31
Section 4.1 Representations and Warranties . . . . . . . . . . . 31
Section 4.2 Survival of Representations and Warranties, etc. . . 38
ARTICLE 5 General Covenants. . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.1 Preservation of Existence and Similar Matters. . . . 38
Section 5.2 Business; Compliance with Applicable Law . . . . . . 39
Section 5.3 Maintenance of Properties. . . . . . . . . . . . . . 39
Section 5.4 Accounting Methods and Financial Records . . . . . . 39
Section 5.5 Insurance. . . . . . . . . . . . . . . . . . . . . . 39
Section 5.6 Payment of Taxes and Claims. . . . . . . . . . . . . 40
Section 5.7 Compliance with ERISA. . . . . . . . . . . . . . . . 40
Section 5.8 Visits and Inspections . . . . . . . . . . . . . . . 42
Section 5.9 Payment of Indebtedness; Loans . . . . . . . . . . . 42
<PAGE>
INDEX
Page
Section 5.10 Use of Proceeds. . . . . . . . . . . . . . . . . . . 42
Section 5.11 Real Estate. . . . . . . . . . . . . . . . . . . . . 43
Section 5.12 Indemnity. . . . . . . . . . . . . . . . . . . . . . 44
Section 5.13 Interest Rate Hedging. . . . . . . . . . . . . . . . 44
Section 5.14 Covenants Regarding Formation of Subsidiaries
and Acquisitions; Partnership, Subsidiaries . . . . 45
Section 5.15 Payment of Wages . . . . . . . . . . . . . . . . . . 45
Section 5.16 Further Assurances . . . . . . . . . . . . . . . . . 46
ARTICLE 6 Information Covenants. . . . . . . . . . . . . . . . . . . . . 46
Section 6.1 Quarterly Financial Statements and Information . . . 46
Section 6.2 Annual Financial Statements and Information . . . . 47
Section 6.3 Performance Certificates . . . . . . . . . . . . . . 47
Section 6.4 Copies of Other Reports. . . . . . . . . . . . . . . 47
Section 6.5 Notice of Litigation and Other Matters . . . . . . . 48
ARTICLE 7 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.1 Indebtedness of the Borrower and its Subsidiaries . 49
Section 7.2 Limitation on Liens. . . . . . . . . . . . . . . . . 50
Section 7.3 Amendment and Waiver . . . . . . . . . . . . . . . . 50
Section 7.4 Liquidation, Merger, or Disposition of Assets . . . 51
Section 7.5 Limitation on Guaranties . . . . . . . . . . . . . . 51
Section 7.6 Investments and Acquisitions . . . . . . . . . . . . 51
Section 7.7 Restricted Payments and Purchases. . . . . . . . . . 54
Section 7.8 Leverage Ratio . . . . . . . . . . . . . . . . . . . 54
Section 7.9 Operating Cash Flow to Fixed Charges Ratio . . . . . 54
Section 7.10 Annualized Operating Cash Flow to Interest
Expense. . . . . . . . . . . . . . . . . . . . . 54
Section 7.11 Affiliate Transactions . . . . . . . . . . . . . . . 55
Section 7.12 Real Estate. . . . . . . . . . . . . . . . . . . . . 55
Section 7.13 ERISA Liabilities. . . . . . . . . . . . . . . . . . 55
ARTICLE 8 Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 8.1 Events of Default. . . . . . . . . . . . . . . . . . 55
Section 8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.3 Payments Subsequent to Declaration of Event of
Default. . . . . . . . . . . . . . . . . . . . . 60
-ii-
<PAGE>
INDEX
Page
ARTICLE 9 The Administrative Agent . . . . . . . . . . . . . . . . . . . 61
Section 9.1 Appointment and Authorization. . . . . . . . . . . . 61
Section 9.2 Interest Holders . . . . . . . . . . . . . . . . . . 61
Section 9.3 Consultation with Counsel. . . . . . . . . . . . . . 61
Section 9.4 Documents. . . . . . . . . . . . . . . . . . . . . . 61
Section 9.5 Administrative Agent and Affiliates. . . . . . . . . 61
Section 9.6 Responsibility of the Administrative Agent . . . . . 62
Section 9.7 Administrative Agent . . . . . . . . . . . . . . . . 62
Section 9.8 Action by Administrative Agent . . . . . . . . . . . 62
Section 9.9 Notice of Default or Event of Default . . . . . . . 63
Section 9.10 Responsibility Disclaimed . . . . . . . . . . . . . 63
Section 9.11 Indemnification. . . . . . . . . . . . . . . . . . . 64
Section 9.12 Credit Decision. . . . . . . . . . . . . . . . . . . 64
Section 9.13 Successor Administrative Agent. . . . . . . . . . . 64
Section 9.14 Delegation of Duties . . . . . . . . . . . . . . . . 65
Section 9.15 No Responsibilities of Co-Agents . . . . . . . . . . 65
ARTICLE 10 Change in Circumstances Affecting LIBOR Advance . . . . 65
Section 10.1 LIBOR Basis Determination Inadequate or Unfair . . . 65
Section 10.2 Illegality . . . . . . . . . . . . . . . . . . . . . 65
Section 10.3 Increased Costs. . . . . . . . . . . . . . . . . . . 66
Section 10.4 Effect On Other Advances . . . . . . . . . . . . . . 67
ARTICLE 11 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 68
Section 11.1 Notices. . . . . . . . . . . . . . . . . . . . . . . 68
Section 11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . 69
Section 11.3 Waivers. . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.4 Set-Off. . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.5 Assignment . . . . . . . . . . . . . . . . . . . . . 71
Section 11.6 Accounting Principles. . . . . . . . . . . . . . . . 73
Section 11.7 Counterparts . . . . . . . . . . . . . . . . . . . . 73
Section 11.8 Governing Law. . . . . . . . . . . . . . . . . . . . 73
Section 11.9 Severability . . . . . . . . . . . . . . . . . . . . 74
Section 11.10 Interest . . . . . . . . . . . . . . . . . . . . . . 74
Section 11.11 Table of Contents and Headings . . . . . . . . . . . 74
Section 11.12 Amendment and Waiver . . . . . . . . . . . . . . . . 74
Section 11.13 Entire Agreement . . . . . . . . . . . . . . . . . . 75
-iii-
<PAGE>
INDEX
Page
Section 11.14 Other Relationships. . . . . . . . . . . . . . . . . 75
Section 11.15 Directly or Indirectly . . . . . . . . . . . . . . . 75
Section 11.16 Reliance on and Survival of Various
Provisions . . . . . . . . . . . . . . . . . . . . . 75
Section 11.17 Senior Debt. . . . . . . . . . . . . . . . . . . . . 76
Section 11.18 Obligations Several. . . . . . . . . . . . . . . . . 76
Section 11.19 Confidentiality. . . . . . . . . . . . . . . . . . . 76
ARTICLE 12 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . 76
Section 12.1 Waiver of Jury Trial . . . . . . . . . . . . . . . . 76
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<PAGE>
EXHIBITS*
Exhibit A - Form of Borrower's Pledge Agreement
Exhibit B - Form of Certificate of Financial Condition
Exhibit C - Form of Promissory Note
Exhibit D - Form of Request for Advance
Exhibit E - Form of Security Agreement
Exhibit F - Form of Subsidiary Pledge Agreement
Exhibit G - Form of Subsidiary Security Agreement
Exhibit H - Form of Use of Proceeds Letter
Exhibit I - Form of Borrower's Loan Certificate
Exhibit J - Form of Subsidiary Loan Certificate
Exhibit K - Form of Opinion of FCC Counsel to the Borrower
Exhibit L - Form of Opinion of General Counsel to the Borrower
Exhibit M - Form of Subsidiary Guaranty
Exhibit N - Form of Performance Certificate
Exhibit O - Form of Assignment and Assumption Agreement
SCHEDULES*
Schedule 1 - Licenses
Schedule 2 - Liens Existing on the Agreement Date
Schedule 3 - Licenses to be Transferred
Schedule 4 - Subsidiaries
Schedule 5 - Permitted Exceptions
Schedule 6 - Litigation
Schedule 7 - Affiliate Agreements
Schedule 8 - Addresses of Banks
-v-
* Exhibits and Schedules are not filed herewith as such do not contain
information material to an investment decision that is not otherwise
disclosed in the Loan Agreement.
<PAGE>
LOAN AGREEMENT
AMONG
RURAL CELLULAR CORPORATION (THE "BORROWER");
THE TORONTO-DOMINION BANK,
BANKBOSTON, N.A.,
ST. PAUL BANK FOR COOPERATIVES,
COBANK,
FLEET NATIONAL BANK,
FIRST NATIONAL BANK OF MARYLAND,
SOCIETE GENERALE, NEW YORK BRANCH,
AND
MERITA BANK LTD NEW YORK BRANCH
(COLLECTIVELY, THE "BANKS");
BANKBOSTON, N.A.,
AND
ST. PAUL BANK FOR COOPERATIVES
(COLLECTIVELY, THE "CO-AGENTS");
AND
TORONTO DOMINION (TEXAS), INC.
(THE "ADMINISTRATIVE AGENT")
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Banks make available
to the Borrower a revolving credit facility permitting advances of up to
One Hundred Forty Million Dollars ($140,000,000) at any one time
outstanding; and
WHEREAS, the Banks are willing to extend such financing to the
Borrower subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt, adequacy and
sufficiency of which are acknowledged by the parties hereto, it is
hereby agreed as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement:
-1-
<PAGE>
"ACQUISITION" shall mean (whether by purchase, lease, exchange,
issuance of stock or other equity or debt securities, merger,
reorganization or any other method) (i) any acquisition by the Borrower
or any of its Subsidiaries of any other Person, which Person shall then
become consolidated with the Borrower or any such Subsidiary in
accordance with GAAP or (ii) any acquisition by the Borrower or any of
its Subsidiaries of all or any substantial part of the assets of any
other Person.
"ADMINISTRATIVE AGENT" shall mean Toronto Dominion (Texas), Inc.,
in its capacity as Administrative Agent for the Banks or any successor
Administrative Agent appointed pursuant to Section 9.13 hereof.
"ADMINISTRATIVE AGENT'S OFFICE" shall mean the office of the
Administrative Agent located at 909 Fannin Street, Suite 1700, Houston,
Texas 77010, or such other office as may be designated pursuant to the
provisions of Section 11.1 hereof.
"ADVANCE" shall mean amounts advanced by the Banks to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing and having
the same Interest Rate Basis and Interest Period; and "ADVANCES" shall
mean more than one Advance.
"AFFILIATE" shall mean, with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common
control with, such first Person. For purposes of this definition,
"control" when used with respect to any Person includes, without
limitation, the direct or indirect beneficial ownership of more than ten
percent (10%) of the voting securities or voting equity of such Person
or the power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT" shall mean this Loan Agreement, as amended,
supplemented, restated or otherwise modified from time to time.
"AGREEMENT DATE" shall mean May 1, 1997.
"ANNUALIZED OPERATING CASH FLOW" shall mean, as of any date, the
product of (a) Operating Cash Flow for the two (2) calendar quarters
ending immediately prior to or on the calculation date, as the case may
be, TIMES (b) two (2).
"APPLICABLE LAW" shall mean, in respect of any Person, all
provisions of constitutions, statutes, rules, regulations and orders of
governmental bodies or regulatory agencies applicable to such Person,
including, without limiting the foregoing, the Licenses, the
Communications Act and all Environmental Laws, and all orders,
decisions, judgments and decrees of all courts and arbitrators in
proceedings or actions to which the Person in question is a party or by
which it is bound.
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"AUTHORIZED SIGNATORY" shall mean such senior personnel of a
Person as may be duly authorized and designated in writing by such
Person to execute documents, agreements and instruments on behalf of
such Person.
"AVAILABLE COMMITMENT" shall mean, as of any date, the excess, if
any, of (a) the Commitment in effect on such date (after giving effect
to any reductions scheduled to take effect on such date pursuant to
Section 2.5(a) hereof) over (b) the Loans outstanding on such date
(after giving effect to any Advances requested to be made on such date).
"BANKS" shall mean the Persons whose names appear as "Banks" on
the signature pages hereof and any other Person which becomes a "Bank"
hereunder after the Agreement Date; and "BANK" shall mean any one of the
foregoing Banks.
"BASE RATE" shall mean, at any time, a fluctuating interest rate
per annum equal to the higher of (a) the rate of interest quoted from
time to time by the Administrative Agent as its "prime rate" or "base
rate" or (b) the Federal Funds Rate plus one-half of one percent (1/2%).
The Base Rate is not necessarily the lowest rate of interest charged to
borrowers of the Administrative Agent.
"BASE RATE ADVANCE" shall mean an Advance which the Borrower
requests to be made as a Base Rate Advance or is reborrowed as a Base
Rate Advance, in accordance with the provisions of Section 2.2 hereof,
and which shall be in a principal amount of at least $500,000, and in an
integral multiple of $100,000.
"BASE RATE BASIS" shall mean a simple interest rate equal to the
sum of (i) the Base Rate and (ii) the Applicable Margin for Base Rate
Advances. The Base Rate Basis shall be adjusted automatically as of the
opening of business on the effective date of each change in the Base
Rate to account for such change, and shall also be changed to reflect
changes in the Applicable Margin.
"BORROWER" shall mean Rural Cellular Corporation, a Minnesota
corporation.
"BORROWER'S PLEDGE AGREEMENT" shall mean that certain Borrower's
Pledge Agreement dated as of the Agreement Date between the Borrower and
the Administrative Agent, substantially in the form of EXHIBIT A
attached hereto, pursuant to which the Borrower has pledged to the
Administrative Agent all of the Borrower's stock ownership or membership
interests in each of its Subsidiaries.
"BTA" shall mean any "basic trading area" as defined and modified
by the FCC for the purpose of licensing personal communications services
telecommunications systems.
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"BUSINESS DAY" shall mean a day on which banks and foreign
exchange markets are open for the transaction of business required for
this Agreement in Houston, Texas and New York, New York, as relevant to
the determination to be made or the action to be taken.
"CAPITAL EXPENDITURES" shall mean, in respect of any Person,
expenditures for the purchase of assets of long-term use which would be
required to be capitalized on the balance sheet of such Person in
accordance with GAAP.
"CAPITAL STOCK" shall mean, as applied to any Person, any capital
stock of such Person, regardless of class or designation, and all
warrants, options, purchase rights, conversion or exchange rights,
voting rights, calls or claims of any character with respect thereto.
"CAPITALIZED LEASE OBLIGATION" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would
be required to be capitalized on the balance sheet of such lessee in
accordance with GAAP.
"CELLCO ACQUISITION" shall mean the Acquisition by the Borrower of
the 49% ownership interest in Northern Maine Cellular Partnership from
Cellco Partnership.
"CELLULAR SYSTEM" means a cellular mobile radio telephone system
constructed and operated in an MSA or an RSA, or a PCS System
constructed and operated in a BTA and shall include a microwave system
or a paging system operated in connection with (and in the same general
service area as) any of the foregoing systems.
"CERTIFICATE OF FINANCIAL CONDITION" shall mean a certificate,
substantially in the form of EXHIBIT B attached hereto, signed by the
chief financial officer of the Borrower, together with any schedules,
exhibits or annexes appended thereto.
"CO-AGENTS" shall mean BankBoston, N.A. and St. Paul Bank for
Cooperatives.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act of 1985 and any amendments thereto.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" shall mean any property of any kind constituting
collateral for the Obligations under any of the Security Documents.
"COMMITMENT" shall mean the several obligations of the Banks to
fund their respective portion of the Loans to the Borrower in accordance
with their respective Commitment Ratios
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in the aggregate sum of up to $140,000,000, pursuant to the terms hereof, as
such obligations may be reduced from time to time pursuant to the terms
hereof.
"COMMITMENT RATIOS" shall mean the percentages in which the Banks
are severally bound to fund their respective portion of Advances to the
Borrower under the Commitment, which are set forth below (together with
dollar amounts) as of the Agreement Date:
Bank Approximate Dollar
---- Percentage Commitment
----------- ----------
The Toronto-Dominion Bank 16.428571428% $23,000,000
BankBoston, N.A. 12.857142857% $18,000,000
St. Paul Bank for Cooperatives 12.857142857% $18,000,000
CoBank 11.785714285% $16,500,000
Fleet National Bank 11.785714285% $16,500,000
First National Bank of Maryland 11.785714285% $16,500,000
Societe Generale, New York Branch 11.785714285% $16,500,000
Merita Bank Ltd New York Branch 10.714285714% $15,000,000
------------- -----------
------------- -----------
TOTAL 100% $140,000,000
"COMMUNICATIONS ACT" shall mean the Communications Act of 1934,
and any similar or successor federal statute, and the rules and
regulations of the FCC thereunder, all as the same may be in effect from
time to time.
"COOPERATIVE BANK" shall mean CoBank and St. Paul Bank for
Cooperatives.
"DEFAULT" shall mean any Event of Default, and any of the events
specified in Section 8.1 hereof, regardless of whether there shall have
occurred any passage of time or giving of notice, or both, that would be
necessary in order to constitute such event an Event of Default.
"DEFAULT RATE" shall mean a simple per annum interest rate equal
to the sum of (a) the Base Rate, PLUS (b) the Applicable Margin for Base
Rate Advances PLUS (c) two percent (2%).
"EBITDA" shall mean, with respect to any Person for any period,
the earnings before interest, taxes, depreciation and amortization
expenses for such period, all as determined in accordance with GAAP.
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"EMPLOYEE PENSION PLAN" shall mean any Plan which (a) is maintained by
the Borrower, any of its Subsidiaries or any ERISA Affiliate and (b) is
subject to Part 3 of Title I of ERISA.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state or local
laws, statutes, rules, regulations or ordinances, codes, common law, consent
agreements, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder relating to public health, safety or the
pollution or protection of the environment, including, without limitation,
those relating to releases, discharges, emissions, spills, leaching, or
disposals to air, water, land or ground water, to the withdrawal or use of
ground water, to the use, handling or disposal of polychlorinated biphenyls,
asbestos or urea formaldehyde, to the treatment, storage, disposal or
management of hazardous substances (including, without limitation, petroleum,
crude oil or any fraction thereof, or other hydrocarbons), pollutants or
contaminants, to exposure to toxic, hazardous or other controlled,
prohibited, or regulated substances, including, without limitation, any such
provisions under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601 ET SEQ.), or the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section
6901 ET SEQ.).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect from time to time.
"ERISA AFFILIATE" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is a member of any group of organizations
(within the meaning of Code Sections 414(b), 414(c), 414(m), or 414(o)) of
which the Borrower is a member.
"EURODOLLAR RESERVE PERCENTAGE" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time,
as the maximum reserve requirement applicable with respect to Eurocurrency
Liabilities (as that term is defined in Regulation D), whether or not any
Bank has any such Eurocurrency Liabilities subject to such reserve
requirement at that time.
"EVENT OF DEFAULT" shall mean any of the events specified in Section 8.1
hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"EXCESS CASH FLOW" shall mean, as of the end of any fiscal year of the
Borrower based on the audited financial statements provided under Section 6.2
hereof for such fiscal year, the remainder of (a) Operating Cash Flow for
such fiscal year, MINUS (b) the sum of the following: (i) Capital
Expenditures made during such fiscal year exclusive of Investments by the
Borrower in Wireless Alliance permitted hereunder; (ii) Scheduled Loan
Payments made during such period; (iii) cash taxes paid by the Borrower and
its Subsidiaries during such fiscal year; (iv) Interest Expense during such
fiscal year; (v) principal payments
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in respect of Indebtedness for Money Borrowed (other than with respect to the
Loans) paid by the Borrower and its Subsidiaries during such year; (vi)
$1,000,000; and (vii) an extraordinary loss in connection with the sale of
the Borrower's ownership interest in Switch 2000.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"FEDERAL FUNDS RATE" shall mean, as of any date, the weighted average of
the rates on overnight federal funds transactions with the 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 which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three (3) federal funds brokers of recognized standing selected by
the Managing Agents.
"FIXED CHARGES" shall mean, as of any date of determination, the sum of
(a) Scheduled Loan Payments made during the period being tested, (b)
scheduled payments of principal on Indebtedness for Money Borrowed (other
than the Loans) paid during such period, (c) Interest Expense for such
period, (d) cash taxes paid during such period, and (e) Capital Expenditures
made during such period (exclusive of Investments by the Borrower in Wireless
Alliance permitted hereunder).
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles in the United States, consistently applied.
"GUARANTY" or "GUARANTEED," as applied to an obligation, shall mean and
include (a) a guaranty, direct or indirect, in any manner, of all or any part
of such obligation, and (b) any agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all
or any part of such obligation, including, without limiting the foregoing,
any reimbursement obligations as to amounts drawn down by beneficiaries of
outstanding letters of credit or capital call requirements.
"HEADQUARTER'S MORTGAGE" shall mean that certain Mortgage in favor of
the Administrative Agent (on behalf of the Banks) and pertaining to the
Borrower's headquarter's property located in Alexandria, Minnesota.
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"INDEBTEDNESS" shall mean, with respect to any Person, and without
duplication, (a) all items, except items of shareholders' and partners'
equity or capital stock or surplus or general contingency or deferred tax
reserves, which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet of such
Person, including, without limitation, to the extent of the higher of the
book value or fair market value of the property or asset securing such
obligation (if less than the amount of such obligation), secured non-recourse
obligations of such Person, (b) all direct or indirect obligations of any
other Person secured by any Lien to which any property or asset owned by such
Person is subject, but only to the extent of the higher of the fair market
value or the book value of the property or asset subject to such Lien (if
less than the amount of such obligation) if the obligation secured thereby
shall not have been assumed, (c) to the extent not otherwise included, all
Capitalized Lease Obligations of such Person and all obligations of such
Person with respect to leases constituting part of a sale and lease-back
arrangement, (d) all reimbursement obligations with respect to outstanding
letters of credit, and (e) to the extent not otherwise included, all
obligations subject to Guaranties of such Person or its Subsidiaries, and (f)
all obligations of such Person under Interest Hedge Agreements.
"INDEBTEDNESS FOR MONEY BORROWED" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all
obligations evidenced by bonds, debentures, notes or other similar
instruments, all Indebtedness upon which interest charges are customarily
paid, all Capitalized Lease Obligations, all reimbursement obligations with
respect to outstanding letters of credit, all Indebtedness issued or assumed
as full or partial payment for property or services (other than trade
payables arising in the ordinary course of business, but only if and so long
as such accounts are payable on customary trade terms), whether or not any
such notes, drafts, obligations or Indebtedness represent Indebtedness for
money borrowed, and, without duplication, Guaranties of any of the foregoing.
For purposes of this definition, interest which is accrued but not paid on
the scheduled due date for such interest shall be deemed Indebtedness for
Money Borrowed.
"INDEMNITEE" shall have the meaning ascribed thereto in Section 5.12
hereof.
"INTERCEL ASSET PURCHASE AGREEMENT" shall mean that certain Asset
Purchase Agreement dated December 23, 1996, among the Borrower, Unity
Cellular Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc.
"INTEREST EXPENSE" shall mean, for any period, all cash interest expense
(including imputed interest with respect to Capitalized Lease Obligations)
with respect to any Indebtedness for Money Borrowed of the Borrower and its
Subsidiaries on a consolidated basis during such period pursuant to the terms
of such Indebtedness for Money Borrowed, together with all fees payable in
respect thereof, all as calculated in accordance with GAAP.
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"INTEREST HEDGE AGREEMENTS" shall mean the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"INTEREST PERIOD" shall mean (a) in connection with any Base Rate
Advance, the period beginning on the date such Advance is made and ending on
the last day of the calendar quarter in which such Advance is made, provided,
however, that if a Base Rate Advance is made on the last day of any calendar
quarter, it shall have an Interest Period ending on, and its Payment Date
shall be, the last day of the following calendar quarter, and (b) in
connection with any LIBOR Advance, the term of such Advance selected by the
Borrower or otherwise determined in accordance with this Agreement.
Notwithstanding the foregoing, however, (i) any applicable Interest Period
which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day unless, with respect to LIBOR
Advances only, such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (ii)
any applicable Interest Period, with respect to LIBOR Advances only, which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end shall (subject to
clause (i) above) end on the last day of such calendar month, and (iii) the
Borrower shall not select an Interest Period which extends beyond the
Maturity Date or such earlier date as would interfere with the Borrower's
repayment obligations under Section 2.4, Section 2.6 or Section 2.7 hereof.
Interest shall be due and payable with respect to any Advance as provided in
Section 2.3 hereof.
"INTEREST RATE BASIS" shall mean the Base Rate Basis or the LIBOR Basis,
as appropriate.
"INVESTMENT" shall mean, with respect to the Borrower or any of its
Subsidiaries, (a) any loan, advance or extension of credit (other than to
customers in the ordinary course of business) by such Person to, or any
Guaranty or other contingent liability with respect to the capital stock,
Indebtedness or other obligations of, or any contributions to the capital of,
any other Person, or any ownership, purchase or other acquisition by such
Person of any interest in any capital stock, limited partnership interest,
general partnership interest, or other securities of any such other Person,
other than an Acquisition, (b) any acquisition by the Borrower or any of its
Subsidiaries of any assets relating to the wireless communications business,
and (c) all expenditures by the Borrower or any of its Subsidiaries relating
to the foregoing. "INVESTMENT" shall also include the total cost of any
future commitment or other obligation binding on any Person to make an
Investment or any subsequent Investment.
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"KNOWN TO THE BORROWER" or "TO THE KNOWLEDGE OF THE BORROWER" shall
mean known by or reasonably should have been known by the executive officers
of the Borrower (which shall include, without limitation, the chief executive
officer, the chief financial officer, the general counsel, or any vice
president of the Borrower).
"LEVERAGE RATIO" shall mean, as of any date, the ratio of (a) the Total
Debt of the Borrower and its Subsidiaries on a consolidated basis on such
date, to (b) Annualized Operating Cash Flow of the Borrower and its
Subsidiaries on a consolidated basis for the calendar quarter end being
tested or the most recently completed calendar quarter for which financial
statements are required to have been delivered pursuant to Section 6.1 or 6.2
hereof, as the case may be.
"LIBOR" shall mean, for any Interest Period, the average (rounded upward
to the nearest one-sixteenth (1/16th) of one percent) of the interest rates
per annum at which deposits in United States Dollars for such Interest Period
are offered to The Toronto-Dominion Bank, in the London interbank borrowing
market at approximately 11:00 a.m. (London time), two (2) Business Days
before the first day of such Interest Period, in an amount approximately
equal to the principal amount of, and for a length of time approximately
equal to the Interest Period for, the LIBOR Advance sought by the Borrower.
"LIBOR ADVANCE" shall mean an Advance which the Borrower requests to be
made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in
accordance with the provisions of Section 2.2 hereof, and which shall be in a
principal amount of at least $5,000,000 and in an integral multiple of
$1,000,000.
"LIBOR BASIS" shall mean a simple per annum interest rate equal to the
sum of (a) the quotient of (i) LIBOR divided by (ii) one minus the Eurodollar
Reserve Percentage, if any, stated as a decimal, plus (b) the Applicable
Margin for LIBOR Advances. The LIBOR Basis shall apply to Interest Periods
of one (1), two (2), three (3), six (6) months, and, subject to availability
as determined by the Administrative Agent, nine (9) and twelve (12) months
and, once determined, shall remain unchanged during the applicable Interest
Period, except for changes to reflect adjustments in the Eurodollar Reserve
Percentage and the Applicable Margin as adjusted pursuant to Section 2.3(f)
hereof. The LIBOR Basis for any LIBOR Advance shall be adjusted as of the
effective date of any change in the Eurodollar Reserve Percentage.
"LICENSES" shall mean any cellular telephone, microwave, personal
communications or other license, authorization, certificate of compliance,
franchise, approval or permit, whether for the construction or the operation
of any Cellular System, granted or issued by the FCC and held by the Borrower
or any of its Subsidiaries, all of which are listed as of the Agreement Date
on SCHEDULE 1 hereto.
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"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise,
and whether or not choate, vested or perfected.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Borrower's
Pledge Agreement, the Security Agreement, the Subsidiary Security Agreement,
the Subsidiary Guaranty, the Subsidiary Pledge Agreement, all fee letters,
all Requests for Advance, all Interest Hedge Agreements between the Borrower,
on the one hand, and the Administrative Agent and the Banks, or any of them,
on the other hand, and all other documents and agreements executed or
delivered in connection with or contemplated by this Agreement.
"LOANS" shall mean, collectively, the amounts advanced by the Banks to
the Borrower under the Commitment, not to exceed the Commitment, and
evidenced by the Notes.
"MAINE ACQUISITION" shall mean the Acquisition by the Borrower of
certain assets as more fully described in the InterCel Asset Purchase
Agreement and the Cellco Acquisition.
"MAJORITY BANKS" shall mean (i) at any time that no Loans are outstanding
hereunder, Banks the total of whose Commitment Ratios equals or exceeds
sixty-six and two-thirds percent (66-2/3%) of the Commitment Ratios of all Banks
entitled to vote hereunder, or (ii) at any time that there are Loans outstanding
hereunder, Banks the total of whose Loans outstanding equals or exceeds
sixty-six and two-thirds percent (66-2/3%) of the total principal amount of the
Loans then outstanding of all Banks entitled to vote hereunder.
"MATERIALLY ADVERSE EFFECT" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business prospects of the Borrower and its
Subsidiaries on a consolidated basis, taken as a whole, or (b) a material
adverse effect upon the binding nature, validity, or enforceability of this
Agreement and the Notes, or upon the ability of the Borrower and its
Subsidiaries to perform the payment obligations or other material obligations
under this Agreement or any other Loan Document, or upon the value of the
Collateral or upon the rights, benefits or interests of the Banks in and to
the Loans or the rights of the Administrative Agent and the Banks in the
Collateral; in either case, whether resulting from any single act, omission,
situation, status, event or undertaking, or taken together with other such
acts, omissions, situations, statuses, events or undertakings.
"MATURITY DATE" shall mean May 1, 2005, or as the case may be, such
earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitment to zero or otherwise).
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"MSA" shall mean any "metropolitan statistical area" as defined and
modified by the FCC for the purpose of licensing public cellular radio
telecommunications service systems.
"MULTIEMPLOYER PLAN" shall mean a multiemployer pension plan as defined
in Section 3(37) of ERISA to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate is or has been required to contribute subsequent to
September 25, 1980.
"NECESSARY AUTHORIZATIONS" shall mean all approvals and licenses from,
and all filings and registrations with, any governmental or other regulatory
authority, including, without limiting the foregoing, the Licenses and all
approvals, licenses, filings and registrations under the Communications Act,
necessary in order to enable the Borrower and its Subsidiaries to own,
construct, maintain, and operate Cellular Systems and to invest in other
Persons who own, construct, maintain, and operate Cellular Systems.
"NET INCOME" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis, for any period, net income determined in accordance with
GAAP.
"NET PROCEEDS" shall mean, with respect to any sale, lease, transfer or
other disposition of assets by the Borrower or any of its Subsidiaries, the
aggregate amount of cash received for such assets (including, without
limitation, any payments received for non-competition covenants, consulting
or management fees in connection with such sale, and any portion of the
amount received evidenced by a promissory note or other evidence of
Indebtedness issued by the purchaser), net of (i) amounts reserved, if any,
for taxes payable with respect to any such sale (after application of any
available losses, credits or other offsets), (ii) reasonable and customary
transaction costs properly attributable to such transaction and payable by
the Borrower or any of its Subsidiaries (other than to an Affiliate) in
connection with such sale, lease, transfer or other disposition of assets,
including, without limitation, commissions, and (iii) until actually received
by the Borrower or any of its Subsidiaries, any portion of the amount
received held in escrow or evidenced by a promissory note or other evidence
of Indebtedness issued by a purchaser or non-compete agreement or covenant or
otherwise for which compensation is paid over time. Upon receipt by the
Borrower or any of its Subsidiaries of (A) amounts referred to in item (iii)
of the preceding sentence, or (B) if there shall occur any reduction in the
tax reserves referred to in item (i) of the preceding sentence resulting in a
payment to the Borrower, such amounts shall then be deemed to be "Net
Proceeds."
"NOTES" shall mean, collectively, those certain promissory notes in the
aggregate original principal amount of $140,000,000, and issued to each of
the Banks by the Borrower, each one substantially in the form of EXHIBIT C
attached hereto, any other promissory note issued by the Borrower to evidence
the Loans pursuant to this Agreement, and any extensions, renewals, or
amendments to, or replacements of, the foregoing.
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"OBLIGATIONS" shall mean all payment and performance obligations of
every kind, nature and description of the Borrower, its Subsidiaries, and any
other obligors to the Banks, the Administrative Agent, or any of them, under
this Agreement and the other Loan Documents (including any interest, fees and
other charges on the Loans or otherwise under the Loan Documents that would
accrue but for the filing of a bankruptcy action with respect to the
Borrower, whether or not such claim is allowed in such bankruptcy action and
including Obligations to the Banks pursuant to Section 5.13 hereof) as they
may be amended from time to time, or as a result of making the Loans, whether
such obligations are direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, arising by
operation of law or otherwise, now existing or hereafter arising.
"OPERATING CASH FLOW" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis as of the end of any period, (a) Net
Income for such period (after eliminating any extraordinary gains and losses,
including gains and losses from the sale of assets), PLUS (b) to the extent
deducted in determining Net Income, the sum of the following for such period:
(i) depreciation and amortization expense, (ii) Interest Expense, (iii) tax
expense, and (iv) all other non-cash items, MINUS (c) EBITDA of Wireless
Alliance. In the case of an Acquisition permitted hereunder, Operating Cash
Flow of the Borrower and its Subsidiaries for the applicable test period
during which such Acquisition occurs shall be adjusted (A) to give effect to
such Acquisition, as if such Acquisition had occurred on the first day of
such test period, by excluding the Operating Cash Flow of such Acquisition
during such test period prior to the date of such Acquisition and adding to
the Operating Cash Flow of the Borrower, if positive, or subtracting from
such Operating Cash Flow, if negative, the product of (i) the actual
Operating Cash Flow of such Acquisition for that portion of such test period
from the date of such Acquisition to the last day of such period, multiplied
by (ii) a fraction the numerator of which is the number of calendar days in
such test period and the denominator of which is the number of days in such
test period from and including the date of such Acquisition through the last
day of such test period, and (B) by adding to the Operating Cash Flow of the
Borrower such expenses incurred by the Borrower and its Subsidiaries as the
Majority Banks may agree relate to such Acquisition. For purposes of
calculating Operating Cash Flow in connection with an Advance for any such
Acquisition, Operating Cash Flow for the Borrower and its Subsidiaries as of
the last day of the immediately preceding calendar quarter shall include
Operating Cash Flow for the Acquisition for the same period.
"PAYMENT DATE" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCS SYSTEM" shall mean any broad band personal communications services
telecommunications system operating on radio spectrum in a BTA, or a License
to operate such a system.
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"PERMITTED LIENS" shall mean, as applied to any Person:
(a) Any Lien in favor of the Administrative Agent given to secure
the Obligations;
(b) (i) Liens on real estate or other property for taxes,
assessments, governmental charges or levies not yet delinquent and (ii) Liens
for taxes, assessments, judgments, governmental charges or levies or claims
the non-payment of which is being diligently contested in good faith by
appropriate proceedings and for which adequate reserves have been set aside
on such Person's books, but only so long as no foreclosure, distraint, sale
or similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not yet due
or being diligently contested in good faith, if reserves or appropriate
provisions shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation and unemployment insurance which are
not overdue for more than sixty (60) days;
(e) Restrictions on the transfer of the Licenses or assets of the
Borrower or its Subsidiaries imposed by any of the Licenses as presently in
effect or by the Communications Act and any regulations thereunder;
(f) Easements, rights-of-way, and other similar encumbrances on the
use of real property which do not materially interfere with the ordinary conduct
of the business of such Person or the use of such property;
(g) Liens securing Indebtedness to the extent permitted pursuant
to Sections 7.1(f) and (g) hereof;
(h) Liens reflected by Uniform Commercial Code financing
statements filed in respect of Capitalized Lease Obligations permitted
pursuant to Section 7.1(g) hereof and true leases of the Borrower or any of
its Subsidiaries; and
(i) Liens set forth on SCHEDULE 2 attached hereto.
"PERSON" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, a government or any agency or political
subdivision thereof, or any other entity.
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"PLAN" shall mean an employee benefit plan within the meaning of Section
3(3) of ERISA or any other employee benefit plan maintained for employees of
the Borrower or any ERISA Affiliate of the Borrower, including the Subsidiaries.
"REPORTABLE EVENT" shall mean, with respect to any Employee Pension Plan,
an event described in Section 4043(b) of ERISA.
"REQUEST FOR ADVANCE" shall mean a certificate designated as a "Request
for Advance," signed by an Authorized Signatory of the Borrower requesting an
Advance hereunder, which shall be in substantially the form of EXHIBIT D
attached hereto, and shall, among other things, (i) specify the date of the
Advance, which shall be a Business Day, the amount of the Advance, the type
of Advance (LIBOR or Base Rate), and, with respect to LIBOR Advances, the
Interest Period selected by the Borrower, (ii) state that, to the knowledge
of the Person signing such request, there shall not exist, on the date of the
requested Advance and after giving effect thereto, a Default, as of the date
of such Advance and after giving effect thereto, and (iii) the Applicable
Margin.
"RESTRICTED PAYMENT" shall mean any direct or indirect distribution,
dividend or other payment to any Person (other than to the Borrower or any
majority-owned Subsidiary of the Borrower) on account of any general or
limited partnership or membership interest in, or shares of Capital Stock or
other securities of, the Borrower or any of its Subsidiaries (other than
dividends payable solely in stock of such Person and stock splits),
including, without limitation, any direct or indirect distribution, dividend
or other payment to any Person (other than to the Borrower or any Subsidiary
of the Borrower) on account of any warrants or other rights or options to
acquire shares of capital stock of the Borrower or any of its Subsidiaries.
"RESTRICTED PURCHASE" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption or other acquisition or retirement of any
general or limited partnership or membership interest in, or shares of
capital stock or other securities of the Borrower or any of the Borrower's
Subsidiaries, including, without limitation, any warrants or other rights or
options to acquire shares of capital stock of the Borrower or any of the
Borrower's Subsidiaries or any loan, advance, release or forgiveness of
Indebtedness by the Borrower or its Subsidiaries to any partner, shareholder
or Affiliate of any such Person.
"RSA" shall mean any "rural service area" as defined and modified by the
FCC for the purpose of licensing public cellular radio telecommunications
service systems.
"SCHEDULED LOAN PAYMENTS" shall mean, for any period, the excess, if any,
of (A) the highest amount of the Loans outstanding at any time during such
period, over (B) the amount of the Commitment on the last day of such period
(after giving effect to any reduction in the Commitment on such date pursuant to
Section 2.5(a) hereof).
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"SECURITY AGREEMENT" shall mean that certain Security Agreement dated as
of the Agreement Date between the Borrower and the Administrative Agent,
substantially in the form of EXHIBIT E attached hereto.
"SECURITY DOCUMENTS" shall mean the Borrower's Pledge Agreement, the
Security Agreement, the Subsidiary Guaranty, the Subsidiary Pledge Agreement,
the Headquarter's Mortgage, the Subsidiary Security Agreement, any other
agreement or instrument providing Collateral for the Obligations whether now
or hereafter in existence, and any filings (including, without limitation,
financing statements), instruments, agreements, and documents related thereto
or to this Agreement, and providing the Administrative Agent, for the benefit
of the Banks, with Collateral for the Obligations.
"SECURITY INTEREST" shall mean all Liens in favor of the Administrative
Agent, for the benefit of the Administrative Agent and the Banks, created
hereunder or under any of the Security Documents to secure the Obligations.
"SUBSIDIARY" shall mean, as applied to any Person, (a) any corporation
of which more than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a
majority of its board of directors, regardless of the existence at the time
of a right of the holders of any class or classes of securities of such
corporation to exercise such voting power by reason of the happening of any
contingency, or any partnership or limited liability company of which more
than fifty percent (50%) of the outstanding partnership or membership
interests, is at the time owned directly or indirectly by such Person, or by
one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person, or (b) any other entity which is directly or
indirectly controlled or capable of being controlled by such Person, or by
one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person. Notwithstanding the foregoing, Subsidiary shall
not include Wireless Alliance.
"SUBSIDIARY GUARANTY" shall mean that certain Master Subsidiary Guaranty
dated as of the Agreement Date in favor of the Administrative Agent and the
Banks, given by each Subsidiary of the Borrower, and shall include any
similar agreements executed pursuant to Section 5.14 hereof.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean that certain Master Subsidiary
Pledge Agreement dated as of the Agreement Date in substantially the form of
EXHIBIT F attached hereto between each Subsidiary of the Borrower having one
or more of its own Subsidiaries, on the one hand, and the Administrative
Agent, on the other hand, and shall include any similar agreements executed
pursuant to Section 5.14 hereof.
"SUBSIDIARY SECURITY AGREEMENT" shall mean that certain Master
Subsidiary Security Agreement dated as of the Agreement Date in substantially
the form of EXHIBIT G attached hereto between each of the Borrower's
Subsidiaries on the one hand, and the Administrative
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Agent, on the other hand, and shall include any similar agreements executed
pursuant to Section 5.14 hereof.
"SWITCH 2000" shall mean Switch 2000, L.L.C., a Minnesota limited
liability company.
"TOTAL DEBT" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis as of any date, the sum (without duplication) of (i) the
outstanding principal amount of the Loans and (ii) all other Indebtedness for
Money Borrowed.
"USE OF PROCEEDS LETTER" shall mean that certain Use of Proceeds Letter,
substantially in the form of EXHIBIT H attached hereto, to be delivered to
the Administrative Agent and the Banks on the date of any Advance hereunder.
"WIRELESS ALLIANCE" shall mean Wireless Alliance, L.L.C., a Minnesota
limited liability company.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended or supplemented from time to time in accordance
herewith.
ARTICLE 2
LOANS
Section 2.1 THE LOANS. The Banks agree, severally, in accordance with
their respective Commitment Ratios and not jointly, upon the terms and subject
to the conditions of this Agreement, to lend to the Borrower, prior to the
Maturity Date, an amount not at any one time outstanding to exceed, in the
aggregate, the Commitment. Subject to the terms and conditions hereof, Advances
under the Commitment may be repaid and reborrowed from time to time on a
revolving basis.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) CHOICE OF INTEREST RATE, ETC. Any Advance under the
Commitment shall, at the option of the Borrower, be made as a Base Rate
Advance or a LIBOR Advance; PROVIDED, HOWEVER, that at such time as there
shall have occurred and be continuing a Default hereunder, the Borrower shall
not have the right to receive a LIBOR Advance. Any notice given to the
Administrative Agent in connection with a requested Advance hereunder shall
be given to the Administrative Agent prior to 11:00 a.m. (New York time) in
order for such Business Day to count toward the minimum number of Business
Days required.
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(b) BASE RATE ADVANCES.
(i) ADVANCES. The Borrower shall give the Administrative Agent
in the case of Base Rate Advances at least one (1) Business Day's
irrevocable prior written notice in the form of a Request for Advance, or
telephonic notice followed immediately by a Request for Advance; PROVIDED,
HOWEVER, that the Borrower's failure to confirm any telephonic notice with
a Request for Advance shall not invalidate any notice so given if acted
upon by the Administrative Agent. Upon receipt of such notice from the
Borrower, the Administrative Agent shall promptly notify each Bank by
telephone or telecopy of the contents thereof.
(ii) REPAYMENTS AND REBORROWINGS. The Borrower may repay or
prepay a Base Rate Advance without regard to its Payment Date and (A) upon
at least one (1) Business Day's irrevocable prior written notice, reborrow
all or a portion of the principal amount thereof as a Base Rate Advance,
(B) upon at least three (3) Business Days' irrevocable prior written
notice, reborrow all or a portion of the principal thereof as one or more
LIBOR Advances, or (C) not reborrow all or any portion of such Base Rate
Advance. On the date indicated by the Borrower, such Base Rate Advance
shall be so repaid and, as applicable, reborrowed. The failure to give
timely notice hereunder with respect to the Payment Date of any Base Rate
Advance shall be considered a request for a Base Rate Advance.
(c) LIBOR ADVANCES.
(i) ADVANCES. Upon request, the Administrative Agent, whose
determination shall be conclusive, shall determine the available LIBOR
Bases and shall notify the Borrower of such LIBOR Bases. The Borrower
shall give the Administrative Agent in the case of LIBOR Advances at least
three (3) Business Days' irrevocable prior written notice in the form of a
Request for Advance, or telephonic notice followed immediately by a Request
for Advance; provided, however, that the Borrower's failure to confirm any
telephonic notice with a Request for Advance shall not invalidate any
notice so given if acted upon by the Administrative Agent. Upon receipt of
such notice from the Borrower, the Administrative Agent shall promptly
notify each Bank by telephone or telecopy of the contents thereof.
(ii) REPAYMENTS AND REBORROWINGS. At least three (3) Business
Days prior to the Payment Date for each LIBOR Advance, the Borrower shall
give the Administrative Agent written notice specifying whether all or a
portion of such LIBOR Advance (A) is to be repaid and then reborrowed in
whole or in part as one or more LIBOR Advances, (B) is to be repaid and
then reborrowed in whole or in part as a Base Rate Advance, or (C) is to be
repaid and not reborrowed. The failure to give such notice shall preclude
the Borrower from reborrowing such Advance as a
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LIBOR Advance on its Payment Date and shall be considered a request for a
Base Rate Advance. Upon such Payment Date such LIBOR Advance will, subject
to the provisions hereof, be so repaid and, as applicable, reborrowed.
(d) NOTIFICATION OF BANKS. Upon receipt of a Request for Advance,
or a notice from the Borrower with respect to any outstanding Advance prior
to the Payment Date for such Advance, the Administrative Agent shall promptly
but no later than the close of business on the day of such notice notify each
Bank by telephone or telecopy of the contents thereof and the amount of such
Bank's portion of the Advance. Each Bank shall, not later than 1:00 p.m.
(New York time) on the date of borrowing specified in such notice, make
available to the Administrative Agent at the Administrative Agent's Office,
or at such account as the Administrative Agent shall designate, the amount of
its portion of any Advance which represents an additional borrowing hereunder
in immediately available funds.
(e) DISBURSEMENT.
(i) Prior to 2:00 p.m. (New York time) on the date of an Advance
hereunder, the Administrative Agent shall, subject to the satisfaction of
the conditions set forth in Article 3 hereof, disburse the amounts made
available to the Administrative Agent by the Banks in like funds by (a)
transferring the amounts so made available by wire transfer pursuant to the
Borrower's instructions, or (b) in the absence of such instructions,
crediting the amounts so made available to the account of the Borrower
maintained with the Administrative Agent.
(ii) Unless the Administrative Agent shall have received notice
from a Bank prior to 12:00 noon (New York time) on the date of any Advance
that such Bank will not make available to the Administrative Agent such
Bank's ratable portion of such Advance, the Administrative Agent may assume
that such Bank has made or will make such portion available to the
Administrative Agent on the date of such Advance and the Administrative
Agent may in its sole discretion and in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to
the extent the Bank does not make such ratable portion available to the
Administrative Agent, such Bank agrees to repay to the Administrative Agent
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 the Federal
Funds Rate.
(iii) If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
portion of the applicable Advance for purposes of this Agreement. If such
Bank does not repay such corresponding amount immediately upon the
Administrative Agent's demand therefor, the Administrative Agent shall
notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent, with
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interest at the Federal Funds Rate. The failure of any Bank to fund its
portion of any Advance shall not relieve any other Bank of its obligation,
if any, hereunder to fund its respective portion of the Advance on the
date of such borrowing, but no Bank shall be responsible for any such
failure of any other Bank.
(iv) In the event that, at any time when the Borrower is not in
Default and has otherwise satisfied each of the conditions in Section 3.2
hereof, a Bank for any reason fails or refuses to fund its portion of an
Advance and such failure shall continue for a period in excess of thirty
(30) days, then, until such time as such Bank has funded its portion of
such Advance (which late funding shall not absolve such Bank from any
liability it may have to the Borrower), or all other Banks have received
payment in full from the Borrower (whether by repayment or prepayment) or
otherwise of the principal and interest due in respect of such Advance,
such non-funding Bank shall not have the right (A) to vote regarding any
issue on which voting is required or advisable under this Agreement or any
other Loan Document, and such Bank's portion of the Loans shall not be
counted as outstanding for purposes of determining "Majority Banks"
hereunder, and (B) to receive payments of principal, interest or fees from
the Borrower, the Administrative Agent or the other Banks in respect of its
portion of the Loans.
Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days for the actual number
of days elapsed and shall be payable at the Base Rate Basis for such Advance, in
arrears on the applicable Payment Date. Interest on Base Rate Advances then
outstanding shall also be due and payable on the Maturity Date.
(b) ON LIBOR ADVANCES. Interest on each LIBOR Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable at the LIBOR Basis for such Advance, in arrears on the
applicable Payment Date, and, in addition, if the Interest Period for a LIBOR
Advance exceeds three (3) months, interest on such LIBOR Advance shall also be
due and payable in arrears on every three-month anniversary of the beginning of
such Interest Period. Interest on LIBOR Advances then outstanding shall also be
due and payable on the Maturity Date.
(c) INTEREST IF NO NOTICE OF SELECTION OF INTEREST RATE BASIS.
If the Borrower fails to give the Administrative Agent timely notice of its
selection of a LIBOR Basis, or if for any reason a determination of a LIBOR
Basis for any Advance is not timely concluded, the Base Rate Basis shall apply
to such Advance.
(d) INTEREST UPON DEFAULT. Immediately upon the occurrence of
an Event of Default hereunder, the outstanding principal balance of the Loans
shall bear interest at the
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Default Rate. Such interest shall be payable on demand by the Majority Banks
and shall accrue until the earlier of (i) waiver or cure of the applicable
Event of Default, (ii) agreement by the Majority Banks (or, if applicable to
the underlying Event of Default, the Banks) to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations.
(e) LIBOR CONTRACTS. At no time may the number of outstanding
LIBOR Advances together with any outstanding Base Rate Advances exceed five
(5).
(f) APPLICABLE MARGIN. With respect to any Advance, the
Applicable Margin shall be as set forth in a certificate of the chief
financial officer of the Borrower delivered to the Administrative Agent based
upon the Leverage Ratio. Changes in the Applicable Margin shall be effective
as of the (i) the date of any Advance hereunder which results in a change in
the Leverage Ratio, and (ii) the second (2nd) Business Day after the
financial statements referred to in Section 6.1 or Section 6.2 hereof, as the
case may be, are furnished by the Borrower to the Administrative Agent and
each Bank for the fiscal quarter most recently ended, in each case, as
follows:
Base Rate Advance LIBOR Advance
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
A. Greater than to 6.00:1 0.875% 1.875%
B. Greater than 5.00:1, but less 0.625% 1.625%
than or equal to 6.00:1
C. Greater than 4.00:1, but less 0.375% 1.375%
than or equal to 5.00:1
D. Greater than 3.00:1, but less 0.250% 1.250%
than or equal to 4.00:1
D. Less than or equal to 3.00:1 0.000% 1.000%
Upon the occurrence of an Event of Default, the Applicable Margins shall not
be subject to downward adjustment and shall automatically revert to the
Applicable Margins set forth in part A of the above table until such time as
such Default is cured or waived. The Applicable Margin for the Advance to
fund the Maine Acquisition shall be determined using a Leverage Ratio based
upon combined Operating Cash Flow of the Borrower and of the operations of
the Maine Acquisition as of December 31, 1996.
Section 2.4 COMMITMENT FEES. Commencing on and at all times after
the Agreement Date, the Borrower agrees to pay to the Administrative Agent
for the account of each of the Banks in accordance with their respective
Commitment Ratios, a commitment fee on the aggregate unborrowed balance of
the Commitment for each day from the date hereof
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until the Maturity Date, at a rate of (a) three-eighths of one percent (0.375%)
per annum when the Leverage Ratio is greater than or equal to 5.00:1, and (b)
one-quarter of one percent (0.250%) per annum when the Leverage Ratio is less
than 5.00:1. Such commitment fee shall be computed on the basis of a year of
365/366 days for the actual number of days elapsed, shall be payable quarterly
in arrears on the last day of each calendar quarter, and shall be fully earned
when due, and shall be non-refundable when paid. A final payment of any
commitment fee then payable shall also be due and payable on the Maturity Date.
Section 2.5 MANDATORY COMMITMENT REDUCTIONS.
(a) SCHEDULED REDUCTIONS. Commencing on October 31, 1999, and on
each October 31, January 31, April 30 and July 31 thereafter, the Commitment
shall be automatically and permanently reduced as set forth below (which
reductions are in addition to those set forth in Sections 2.5(b), 2.5(c) and
2.6 hereof):
Quarterly Percentage
for Reduction of
Commitment as
Dates of Commitment Reduction of October 30, 1999
----------------------------- -------------------
October 31, 1999, January 31, 2000, April 30, 2000 and 1.786%
July 31, 2000
October 31, 2000, January 31, 2001, April 30, 2001 and 3.571%
July 31, 2001
October 31, 2001, January 31, 2002, April 30, 2002 and 4.464%
July 31, 2002
October 31, 2002, January 31, 2003, April 30, 2003 and 4.464%
July 31, 2003
October 31, 2003, January 31, 2004, April 30, 2004 and 5.357%
July 31, 2004
October 31, 2004 and January 31, 2005 7.143%
The Borrower shall make a repayment of the Loans outstanding, together with
accrued interest thereon, on or before the effective date of each reduction
in the Commitment under this Section 2.5(a), such that the aggregate
principal amount of the Loans outstanding at no time exceeds the Commitment
as so reduced. Any remaining unpaid principal and interest under the
Commitment shall be due and payable in full on the Maturity Date, and the
Commitment shall thereupon terminate.
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(b) REDUCTION FROM EXCESS CASH FLOW. On March 31, 2000, and on
each March 31 thereafter during the term of this Agreement, the Commitment
shall be permanently reduced by an amount equal to fifty percent (50%) of the
Borrower's Excess Cash Flow for the immediately preceding calendar year.
Reductions to the Commitment under this Section shall be applied to the
reductions set forth in Section 2.5(a) hereof in inverse order.
(c) REDUCTIONS FROM PERMITTED ASSET SALES. On the twelve month
anniversary of the date of receipt by the Borrower or any of its Subsidiaries
of the Net Proceeds of any asset disposition permitted pursuant to Section
7.4 hereof, the Commitment shall be automatically and permanently reduced by
an amount equal to such Net Proceeds; PROVIDED, HOWEVER, that there shall be
no reduction of the Commitment hereunder (i) with respect to a disposition of
assets in the ordinary course of the Borrower's or its Subsidiary's business,
(ii) with respect to dispositions of equipment, the Net Proceeds of which do
not exceed (A) $1,000,000 for any single transaction (or series of related
transactions), and (B) $3,000,000 in the aggregate during the term hereof,
(iii) in the event that Borrower delivers to the Administrative Agent
evidence that the Net Proceeds of such disposition have been used by the
Borrower or the Borrower's Subsidiaries to acquire (A) an asset as a
substitute or replacement of the asset disposed of or (B) a Cellular System
as otherwise permitted hereunder, or (iv) with respect to the disposition of
the Borrower's interest in Switch 2000. Reductions to the Commitment under
this Section shall be applied to the reductions set forth in Section 2.5(a)
hereof in inverse order.
Section 2.6 VOLUNTARY COMMITMENT REDUCTIONS. The Borrower shall have
the right, at any time and from time to time after the Agreement Date and
prior to the Maturity Date, upon at least three (3) Business Days' prior
written notice to the Administrative Agent, without premium or penalty, to
cancel or reduce permanently all or a portion of the Commitment, on a pro
rata basis among the Banks, PROVIDED, HOWEVER, that any such partial
reduction shall be made in an amount not less than $1,000,000 and in integral
multiples of not less than $1,000,000. As of the date of cancellation or
reduction set forth in such notice, the Commitment shall be permanently
reduced to the amount stated in the Borrower's notice for all purposes
herein, and the Borrower shall pay to the Administrative Agent for the Banks
the amount necessary to reduce the principal amount of the Loans then
outstanding under the Commitment to not more than the amount of the
Commitment as so reduced, together with accrued interest on the amount so
prepaid and commitment fees accrued through the date of the reduction with
respect to the amount reduced. Reductions in the Commitment pursuant to this
Section shall be applied pro rata to the then remaining reductions set forth
in Section 2.5(a).
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Section 2.7 PREPAYMENTS AND REPAYMENTS.
(a) PREPAYMENT. The principal amount of any Base Rate Advance
may be prepaid in full or ratably in part at any time, without penalty and
without regard to the Payment Date for such Advance. LIBOR Advances may be
prepaid prior to the applicable Payment Date, upon three (3) Business Days'
prior written notice to the Administrative Agent, provided that the Borrower
shall reimburse the Banks and the Administrative Agent, on demand by the
applicable Bank or the Administrative Agent, for any loss or out-of-pocket
expense incurred by any Bank or the Administrative Agent in connection with such
prepayment, as set forth in Section 2.10 hereof. Any prepayment hereunder shall
be in amounts of not less than $500,000 and in integral multiples of $100,000.
(b) REPAYMENTS.
(i) LOANS IN EXCESS OF COMMITMENT. If, at any time, the amount
of the Loans then outstanding shall exceed the Commitment, the Borrower
shall, on such date and subject to Sections 2.10 and 2.11 hereof, make a
repayment of the principal amount of the Loans in an amount equal to such
excess, together with any accrued interest and fees with respect thereto.
(ii) EXCESS CASH FLOW. On March 31, 2000, and on each March 31
thereafter during the term of this Agreement, the Borrower shall make a
repayment of the Loans then outstanding in an amount equal to the
difference between (A) fifty percent (50%) of the Borrower's Excess Cash
Flow for the immediately preceding calendar year minus (B) the amount of
any prepayments made by the Borrower pursuant to Section 2.7(a) hereof
during the immediately preceding calendar year.
(iii) ASSET SALES. On the twelve month anniversary of the date
of receipt by the Borrower or any of its Subsidiaries of the Net Proceeds
of any asset sale permitted pursuant to Section 7.4 hereof, the Borrower
shall make a repayment of the Loans then outstanding in an amount equal to
such Net Proceeds; PROVIDED, HOWEVER, that the Borrower shall not be
required to make a repayment hereunder (i) with respect to a sale of assets
in the ordinary course of the Borrower's or its Subsidiary's business, (ii)
with respect to sales of equipment, the Net Proceeds of which do not exceed
(A) $1,000,000 for any single transaction (or series of related
transactions), and (B) $3,000,000 in the aggregate during the term hereof
or (iii) in the event that Borrower delivers to the Administrative Agent
evidence that the Net Proceeds of such sale have been used by the Borrower
or the Borrower's Subsidiaries to acquire a Cellular System as otherwise
permitted hereunder.
(iv) MATURITY DATE. In addition to the foregoing, a final
payment of all Obligations then outstanding shall be due and payable on the
Maturity Date.
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Section 2.8 NOTES; LOAN ACCOUNTS.
(a) The Loans shall be repayable in accordance with the terms
and provisions set forth herein and shall be evidenced by the Notes. One
Note shall be payable to the order of each Bank, in accordance with such
Bank's respective Commitment Ratio. The Notes shall be issued by the
Borrower to the Banks and shall be duly executed and delivered by one or more
Authorized Signatories.
(b) Each Bank may open and maintain on its books in the name
of the Borrower a loan account with respect to its portion of the Loans and
interest thereon. Each Bank which opens such a loan account shall debit such
loan account for the principal amount of its portion of each Advance made by
it and accrued interest thereon, and shall credit such loan account for each
payment on account of principal of or interest on its Loans. The records of
a Bank with respect to the loan account maintained by it shall be PRIMA FACIE
evidence of its portion of the Loans and accrued interest thereon absent
manifest error, but the failure of any Bank to make any such notations or any
error or mistake in such notations shall not affect the Borrower's repayment
obligations with respect to such Loans.
Section 2.9 MANNER OF PAYMENT.
(a) Each payment (including any prepayment) by the Borrower
on account of the principal of or interest on the Loans, commitment fees and
any other amount owed to the Banks or the Administrative Agent or any of them
under this Agreement or the Notes shall be made not later than 1:00 p.m. (New
York time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office, for the account of
the Banks or the Administrative Agent, as the case may be, in lawful money of
the United States of America in immediately available funds. Any payment
received by the Administrative Agent after 1:00 p.m. (New York time) shall be
deemed received on the next Business Day. Receipt by the Administrative
Agent of any payment intended for any Bank or Banks hereunder prior to 1:00
p.m. (New York time) on any Business Day shall be deemed to constitute
receipt by such Bank or Banks on such Business Day. In the case of a payment
for the account of a Bank, the Administrative Agent will promptly, but no
later than the close of business on the date such payment is deemed received,
thereafter distribute the amount so received in like funds to such Bank. If
the Administrative Agent shall not have received any payment from the
Borrower as and when due, the Administrative Agent will promptly notify the
Banks accordingly. In the event that the Administrative Agent shall fail to
make distribution to any Bank as required under this Section 2.9, the
Administrative Agent agrees to pay such Bank interest from the date such
payment was due until paid at the Federal Funds Rate.
(b) The Borrower agrees to pay principal, interest, fees and
all other amounts due hereunder or under the Notes without set-off or
counterclaim or any deduction whatsoever.
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(c) Prior to the declaration of an Event of Default under
Section 8.2 hereof, if some but less than all amounts due from the Borrower
are received by the Administrative Agent with respect to the Obligations, the
Administrative Agent shall distribute such amounts in the following order of
priority, all on a pro rata basis to the Banks: (i) to the payment on a pro
rata basis of any fees or expenses then due and payable to the Administrative
Agent, the Banks, or any of them; (ii) to the payment of interest then due
and payable on the Loans; (iii) to the payment of all other amounts not
otherwise referred to in this Section 2.9(c) then due and payable to the
Administrative Agent or the Banks, or any of them, hereunder or under the
Notes or any other Loan Document; and (iv) to the payment of principal then
due and payable on the Loans.
(d) Subject to any contrary provisions in the definition of
Interest Period, if any payment under this Agreement or any of the other Loan
Documents is specified to be made on a day which is not a Business Day, it
shall be made on the next Business Day, and such extension of time shall in
such case be included in computing interest and fees, if any, in connection
with such payment.
Section 2.10 REIMBURSEMENT.
(a) Whenever any Bank shall sustain or incur any losses or
reasonable out-of-pocket expenses in connection with (i) failure by the
Borrower to borrow any LIBOR Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason
of the Borrower's election not to proceed or the non-fulfillment of any of
the conditions set forth in Article 3), or (ii) prepayment (or failure to
prepay after giving notice thereof) of any LIBOR Advance in whole or in part
for any reason, the Borrower agrees to pay to such Bank, upon such Bank's
demand, an amount sufficient to compensate such Bank for all such losses and
out-of-pocket expenses. Such Bank's good faith determination of the amount
of such losses or reasonable out-of-pocket expenses, as set forth in writing
and accompanied by calculations in reasonable detail demonstrating the basis
(which need not reflect the purchase of deposits in the relevant market
bearing interest at the rate applicable to such Advance and having a maturity
identical to the Interest Period for such Advance) for its demand, shall be
presumptively correct absent manifest error.
(b) Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, lost margins, expenses
incurred by any Bank or any participant of such Bank permitted hereunder in
connection with the re-employment of funds prepaid, paid, repaid, not
borrowed, or not paid, as the case may be, and will be payable whether the
Maturity Date is changed by virtue of an amendment hereto (unless such
amendment expressly waives such payment) or as a result of acceleration of
the Obligations.
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Section 2.11 PRO RATA TREATMENT.
(a) ADVANCES. Each Advance from the Banks hereunder, shall
be made pro rata on the basis of the respective Commitment Ratios of the
Banks.
(b) PAYMENTS. Each payment and prepayment of principal of
the Loans, and, except as provided in Section 2.2(e) and Article 10 hereof,
each payment of interest on the Loans, shall be made to the Banks pro rata on
the basis of their respective unpaid principal amounts outstanding under the
Notes immediately prior to such payment or prepayment. If any Bank shall
obtain any payment (whether involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans in excess of its ratable share
of the Loans under its Commitment Ratio, such Bank shall forthwith purchase
from the other Banks such participations in the portion of the Loans made by
them as shall be necessary to cause such purchasing Bank 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
Bank, such purchase from each Bank shall be rescinded and such Bank shall
repay to the purchasing Bank the purchase price to the extent of such
recovery. The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.11(b) 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 Bank were the
direct creditor of the Borrower in the amount of such participation.
(c) At the election of the Borrower, amounts to be applied,
pursuant to Sections 2.7(b)(ii) or (iii) hereof, to prepayment of principal
bearing interest at the LIBOR Basis may be remitted into a specifically
designated "Deposit Account" and shall not be applied to such prepayment
until the end of the Interest Period ending after the date such payment would
otherwise be required, so as to avoid incurrence of costs required pursuant
to Section 2.10 which might otherwise be incurred upon prepayment. In the
event the aggregate amount to be prepaid by reason of Section 2.7(b)(ii) or
(iii) hereof exceeds the amount of principal to be prepaid at the end of the
first such Interest Period to terminate after the relevant date of reduction,
the excess shall remain in such specifically designated Deposit Account until
the end of the next Interest Period, and so on, until the full amount
required to be repaid under Section 2.7(b)(i), (ii) or (iii) hereof has been
applied to the Loans. As used herein, the aforesaid "DEPOSIT ACCOUNT" shall
be an interest-bearing account maintained with the Administrative Agent as
part of the Collateral, and Borrower hereby authorizes the Administrative
Agent to apply as set forth above or, at any time during the continuance of
an Event of Default, without further authorization from the Borrower, the
balance of said Deposit Account to the prepayments required hereunder.
Section 2.12 CAPITAL ADEQUACY. If after the date hereof, the
adoption of any Applicable Law regarding the capital adequacy of banks
or bank holding companies, or any change in Applicable Law (whether
adopted before or after the Agreement Date) or any change in the
interpretation or administration thereof by any governmental authority,
central
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bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank with any directive regarding capital
adequacy (whether or not having the force of law) of any such governmental
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on any Bank's capital as a consequence of its
obligations hereunder with respect to the Loans and the Commitment to a level
below that which it could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy immediately before such adoption, change or compliance and
assuming that such Bank's capital was fully utilized prior to such adoption,
change or compliance) by an amount reasonably deemed by such Bank to be
material, then, if such Bank exercises its capital adequacy protection rights
(if any) generally for borrowers situated similarly to the Borrower and upon
demand by such Bank, the Borrower shall promptly pay to such Bank such
additional amounts as shall be sufficient to compensate such Bank for such
reduced return, together with interest on such amount from the fourth (4th)
day after the date of demand or the Maturity Date, as applicable, until
payment in full thereof at the Default Rate. A certificate of such Bank
setting forth the amount to be paid to such Bank by the Borrower as a result
of any event referred to in this paragraph and supporting calculations in
reasonable detail shall be presumptively correct absent manifest error.
Section 2.13 BANK TAX FORMS. On or prior to the Agreement Date and on
or prior to the first Business Day of each calendar year thereafter, each
Bank which is organized in a jurisdiction other than the United States shall
provide each of the Administrative Agent and the Borrower with a properly
executed originals of Forms 4224 or 1001 (or any successor form) prescribed
by the Internal Revenue Service or other documents satisfactory to the
Borrower and the Administrative Agent, and properly executed Internal Revenue
Service Forms W-8 or W-9, as the case may be, certifying (i) as to such
Bank's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Bank
hereunder and under the Notes or (ii) that all payments to be made to such
Bank hereunder and under the Notes are subject to such taxes at a rate
reduced to zero by an applicable tax treaty. Each such Bank agrees to
provide the Administrative Agent and the Borrower with new forms prescribed
by the Internal Revenue Service upon the expiration or obsolescence of any
previously delivered form, or after the occurrence of any event requiring a
change in the most recent forms delivered by it to the Administrative Agent
and the Borrower.
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ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. The
obligation of the Banks to undertake the Commitment and the effectiveness of
this Agreement are subject to the prior or contemporaneous fulfillment of
each of the following conditions:
(a) The Administrative Agent and the Banks shall have received
each of the following:
(i) the loan certificate of the Borrower dated as of the
Agreement Date, in substantially the form attached hereto as EXHIBIT I,
including a certificate of incumbency with respect to each Authorized
Signatory of such Person, together with the following items: (A) a true,
complete and correct copy of the Certificate of Incorporation and By-laws
of the Borrower as in effect on the Agreement Date, (B) certificates of
good standing for the Borrower issued by the Secretary of State or similar
state official for the state of incorporation of the Borrower and for each
state in which the Borrower is required to qualify to do business, (C) a
true, complete and correct copy of the corporate resolutions of the
Borrower authorizing the Borrower to execute, deliver and perform this
Agreement and the other Loan Documents, and (D) a true, complete and
correct copy of any shareholders' agreements or voting trust agreements in
effect with respect to the stock of the Borrower;
(ii) loan certificates of each Subsidiary of the Borrower dated
as of the Agreement Date and in substantially the form of EXHIBIT J
attached hereto, including a certificate of incumbency with respect to each
Authorized Signatory of such Subsidiary, together with the following items:
(A) a true, complete and correct copy of the Certificate/Articles of
Incorporation and By-Laws of such Subsidiary as in effect on the Agreement
Date, (B) certificates of good standing for such Subsidiary issued by the
Secretary of State or similar state official for the state of incorporation
of such Subsidiary and for each state in which such Subsidiary is required
to qualify to do business, (C) a true, complete and correct copy of the
corporate resolutions of such Subsidiary authorizing such Subsidiary to
execute, deliver and perform such Loan Documents to which it is a party,
and (D) a true, complete and correct copy of any shareholders' agreements
or voting trust agreements in effect with respect to the Capital Stock or
membership interests of such Subsidiary;
(iii) duly executed Notes;
(iv) copies of insurance binders or certificates covering the
assets of the Borrower and its Subsidiaries, and otherwise meeting the
requirements of Section 5.5 hereof, together with copies of the underlying
insurance policies;
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(v) legal opinions of (A) Lukas, McGowan, Nace & Gutierrez, FCC
counsel to the Borrower and its Subsidiaries, and (B) Moss & Barnett,
special counsel to the Borrower and its Subsidiaries, in the forms attached
hereto as EXHIBIT K and EXHIBIT L, each as counsel to the Borrower and its
Subsidiaries, addressed to each Bank and the Administrative Agent, and
dated as of the Agreement Date;
(vi) duly executed Certificate of Financial Condition for the
Borrower and its Subsidiaries on a consolidated and consolidating basis;
(vii) any required FCC consents or other required consents to the
closing of this Agreement and the Maine Acquisition or to the execution,
delivery and performance of this Agreement and the other Loan Documents,
each of which shall be in form and substance satisfactory to the
Administrative Agent and the Banks;
(viii) duly executed Security Documents;
(ix) duly executed Subsidiary Guaranty with respect to each
Subsidiary as of the Agreement Date;
(x) duly executed UCC-3 termination statements and releases
with respect to any Liens (other than Permitted Liens, if any) existing on
the properties or assets being acquired in connection with the InterCel
Acquisition; and
(xi) all such other documents as either the Administrative Agent
or any Bank may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if so requested.
(b) The Administrative Agent and the Banks shall have received
evidence satisfactory to them that all Necessary Authorizations, including
all necessary consents to the closing of this Agreement, have been obtained
or made, are in full force and effect and are not subject to any pending or,
to the knowledge of the Borrower, threatened reversal or cancellation, and
the Administrative Agent and the Banks shall have received a certificate of
an Authorized Signatory so stating.
(c) Each of the representations and warranties in Article 4 hereof
are true and correct as of the Agreement Date and no Default or Event of
Default then exists or is continuing.
Section 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE. The obligation of
the Banks to make each Advance on or after the Agreement Date which increases
the principal amount of the Loans outstanding is subject to the fulfillment
of each of the following conditions immediately prior to or contemporaneously
with such Advance:
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(a) All of the representations and warranties of the Borrower
under this Agreement and the other Loan Documents (including, without
limitation, all representations and warranties with respect to the Borrower's
Subsidiaries), which, pursuant to Section 4.2 hereof, are made at and as of
the time of such Advance, shall be true and correct at such time in all
material respects, both before and after giving effect to the application of
the proceeds of such Advance, and after giving effect to any updates to
information provided to the Banks in accordance with the terms of such
representations and warranties, and no Default hereunder shall then exist or
be caused thereby;
(b) With respect to Advances which, if funded, would increase the
aggregate principal amount of Loans outstanding hereunder, the Administrative
Agent shall have received a duly executed Request for Advance which shall
contain evidence satisfactory to the Administrative Agent that the Borrower
is, as of the date of such Advance and after giving effect thereto, in
compliance with Sections 7.8, 7.9 and 7.10 hereof (which, with respect to the
Maine Acquisition, shall be based upon financial operations of the Borrower
and of the operations conducted with the assets subject to the Maine
Acquisition as of the calendar quarter ended December 31, 1996;
(c) Each of the Administrative Agent and the Banks shall have
received all such other certificates, reports, statements, opinions of
counsel (if such Advance is in connection with an Acquisition) or other
documents as the Administrative Agent or any Bank may reasonably request;
(d) With respect to any Advance relating to any Acquisition or the
formation of any Subsidiary which is permitted hereunder, the Administrative
Agent and the Banks shall have received such documents and instruments
relating to such Acquisition or formation of a new Subsidiary as are
described in Section 5.14 hereof or otherwise required herein; and
(e) No Materially Adverse Effect shall have occurred and no event
shall have occurred which, in the reasonable opinion of the Majority Banks,
may be expected to have a Materially Adverse Effect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby
agrees, represents and warrants, upon the Agreement Date, and at all times
thereafter as required pursuant to the terms hereof, in favor of the
Administrative Agent and each Bank that:
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(a) ORGANIZATION; OWNERSHIP; POWER; QUALIFICATION. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being and
as proposed hereafter to be conducted. Each Subsidiary of the Borrower is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of the state of its incorporation or formation, as
the case may be, and has the corporate or partnership power, as the case may
be, and authority to own its properties and to carry on its business as now
being and as proposed hereafter to be conducted. The Borrower and each of its
Subsidiaries are duly qualified, in good standing and authorized to do
business in each jurisdiction in which the character of their respective
properties or the nature of their respective businesses requires such
qualification or authorization.
(b) AUTHORIZATION; ENFORCEABILITY. The Borrower has the corporate
power and has taken all necessary corporate action to authorize it to borrow
hereunder, to execute, deliver and perform this Agreement and each of the
other Loan Documents to which it is a party in accordance with their
respective terms, and to consummate the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by the Borrower
and is, and each of the other Loan Documents to which the Borrower is a party
is, a legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms, subject, as to enforcement of
remedies, to the following qualifications: (i) an order of specific
performance and an injunction are discretionary remedies and, in particular,
may not be available where damages are considered an adequate remedy at law;
(ii) enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement
of creditors' rights generally (insofar as any such law relates to the
bankruptcy, insolvency or similar event of the Borrower); and (iii) a court,
on equitable grounds, may decline to enforce certain provisions or allow the
exercise of certain remedies based upon the facts and circumstances that may
exist at the time the enforcement or exercise is sought.
(c) SUBSIDIARIES; AUTHORIZATION; ENFORCEABILITY. The Borrower's
Subsidiaries and the Borrower's direct and indirect ownership thereof as of
the Agreement Date are as set forth on SCHEDULE 4 attached hereto, and to the
extent such Subsidiaries are corporations, the Borrower has the unrestricted
right to vote the issued and outstanding shares of the Subsidiaries shown
thereon and such shares of such Subsidiaries have been duly authorized and
issued and are fully paid and nonassessable. Each Subsidiary of the Borrower
has the corporate or partnership power and has taken all necessary corporate
or partnership action to authorize it to execute, deliver and perform each of
the Loan Documents to which it is a party in accordance with their respective
terms and to consummate the transactions contemplated by this Agreement and
by such Loan Documents. Each of the Loan Documents to which any Subsidiary
of the Borrower is a party is a legal, valid and binding obligation of such
Subsidiary enforceable against such Subsidiary in accordance with its terms,
subject, as to enforcement of remedies, to the following qualifications: (i)
an order of
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specific performance and an injunction are discretionary remedies and, in
particular, may not be available where damages are considered an adequate
remedy at law; (ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates
to the bankruptcy, insolvency or similar event of any such Subsidiary) and
(iii) a court, on equitable grounds, may decline to enforce certain
provisions or allow the exercise of certain remedies based upon the facts and
circumstances that may exist at the time the enforcement or exercise is
sought. The Borrower's ownership interest in each of its Subsidiaries
represents a direct or indirect controlling interest of such Subsidiary for
purposes of directing or causing the direction of the management and policies
of each Subsidiary.
(d) COMPLIANCE WITH OTHER LOAN DOCUMENTS AND CONTEMPLATED TRANSACTIONS.
The execution, delivery and performance, in accordance with their respective
terms, by the Borrower of this Agreement and the Notes, and by the Borrower
and its Subsidiaries of each of the other Loan Documents to which they are
respectively party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained, (ii) violate any Applicable
Law respecting the Borrower or any Subsidiary of the Borrower, (iii) conflict
with, result in a breach of, or constitute a default under the certificate or
articles of incorporation or by-laws or partnership agreements, as the case
may be, as amended, of the Borrower or of any Subsidiary of the Borrower, or
under any material indenture, agreement, or other instrument, including,
without limitation, the Licenses, to which the Borrower or any of its
Subsidiaries is a party or by which any of them or their respective
properties may be bound, or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries, except for
Permitted Liens.
(e) BUSINESS. The Borrower, together with its Subsidiaries, is engaged
in the business of owning, constructing, managing, operating, and investing
in Cellular Systems.
(f) LICENSES. ETC. The Licenses have been duly issued and are in full
force and effect. The Borrower and its Subsidiaries are in compliance in all
material respects with all of the provisions thereof. The Borrower and its
Subsidiaries have secured all Necessary Authorizations and all such Necessary
Authorizations are in full force and effect. Except as set forth in SCHEDULE
5 attached hereto, neither any License nor any Necessary Authorization is the
subject of any pending or, to the best of the Borrower's knowledge,
threatened revocation.
(g) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries are in
substantial compliance with all Applicable Laws.
(h) TITLE TO ASSETS. As of the Agreement Date, the Borrower and each
of its Subsidiaries have good, legal and marketable title to, or a valid
leasehold interest in, all of
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its material assets. None of the properties or assets of the Borrower or any
of its Subsidiaries is subject to any Liens, except for Permitted Liens.
Except for financing statements evidencing Permitted Liens, no financing
statement under the Uniform Commercial Code as in effect in any jurisdiction
and no other filing which names the Borrower or any of its Subsidiaries as
debtor or which covers or purports to cover any of the assets of the Borrower
or any of its Subsidiaries is currently effective and on file in any state or
other jurisdiction, and neither the Borrower nor any of its Subsidiaries has
signed any such financing statement or filing or any security agreement
authorizing any secured party thereunder to file any such financing statement
or filing.
(i) LITIGATION. There is no action, suit, proceeding or investigation
pending against, or, to the knowledge of the Borrower, threatened against or
in any other manner relating adversely to, the Borrower or any of its
Subsidiaries or any of their respective properties, including without
limitation the Licenses, in any court or before any arbitrator of any kind or
before or by any governmental body (including without limitation the FCC)
except as set forth on SCHEDULE 6 attached hereto (as such schedule may be
updated with the consent of the Majority Banks from time to time). No such
action, suit, proceeding or investigation (i) calls into question the
validity of this Agreement or any other Loan Document, or (ii) individually
or collectively involves the possibility of any judgment or liability not
fully covered by insurance which, if determined adversely to the Borrower or
any of its Subsidiaries, would have a Materially Adverse Effect.
(j) TAXES. All federal, state and other tax returns of the Borrower
and each of its Subsidiaries required by law to be filed have been duly filed
and all federal, state and other taxes, including, without limitation,
withholding taxes, assessments and other governmental charges or levies
required to be paid by the Borrower or any of its Subsidiaries or imposed
upon the Borrower or any of its Subsidiaries or any of their respective
properties, income, profits or assets, which are due and payable, have been
paid, except any such taxes (i) (x) the payment of which the Borrower or any
of its Subsidiaries is diligently contesting in good faith by appropriate
proceedings, (y) for which adequate reserves have been provided on the books
of the Borrower or the Subsidiary of the Borrower involved, and (z) as to
which no Lien other than a Permitted Lien has attached and no foreclosure,
distraint, sale or similar proceedings have been commenced, or (ii) which may
result from audits not yet conducted. The charges, accruals and reserves on
the books of the Borrower and each of its Subsidiaries in respect of taxes
are, in the judgment of the Borrower, adequate.
(k) FINANCIAL STATEMENTS. The Borrower has furnished or caused to be
furnished to the Administrative Agent and the Banks as of the Agreement Date,
its audited financial statements and audited financial statements of its
Subsidiaries on a consolidated basis for the fiscal year ended December 31,
1996, all of which have been prepared in accordance with GAAP and present
fairly in all material respects the financial position of the Borrower and
its Subsidiaries on a consolidated and consolidating basis, as the case may
be, on and as at such dates and the results of operations for the periods
then ended. Neither the Borrower
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nor any of its Subsidiaries has any material liabilities, contingent or
otherwise, other than as disclosed in the financial statements referred to in
the preceding sentence or as set forth or referred to in this Agreement, and
there are no material unrealized losses of the Borrower or any of its
Subsidiaries and no material anticipated losses of the Borrower or any of its
Subsidiaries other than (i) in connection with the sale of the Borrower's
interest in Switch 2000 and (ii) those which have been previously disclosed
in writing to the Administrative Agent and the Banks and identified as such.
(l) NO MATERIAL ADVERSE CHANGE. There has occurred no event since
December 31, 1996 which has or which could reasonably be expected to have a
Materially Adverse Effect.
(m) ERISA. The Borrower and each Subsidiary of the Borrower and each
of their respective Plans are in material compliance with ERISA and the Code.
Neither the Borrower nor any of its ERISA Affiliates, including its
Subsidiaries, has incurred any accumulated funding deficiency with respect to
any Employee Pension Plan within the meaning of ERISA or the Code. Neither
the Borrower nor any of its Subsidiaries has made any promises of retirement
or other benefits to employees, except as set forth in the Plans, in written
agreements with such employees, or in the Borrower's employee handbook and
memoranda to employees. Neither the Borrower nor any of its ERISA
Affiliates, including its Subsidiaries, has incurred any material liability
to PBGC in connection with any such Plan; have suffered the imposition of a
lien under Section 412(m) of the Code; or have been required to provide
security as a result of any amendment to any such Plan as required by Section
401(a)(29) of the Code. The assets of each such Plan which is subject to
Title IV of ERISA are sufficient to provide the benefits under such Plan, the
payment of which PBGC would guarantee if such Plan were terminated, and such
assets are also sufficient to provide all other "benefit liabilities" (within
the meaning of Section 4041 of ERISA) due under the Plan upon termination.
No Reportable Event which would cause a Materially Adverse Effect has
occurred and is continuing with respect to any such Plan. No such Plan or
trust created thereunder, or party in interest (as defined in Section 3(14)
of ERISA), or any fiduciary (as defined in Section 3(21) of ERISA), has
engaged in a "prohibited transaction" (as such term is defined in Section 406
of ERISA or Section 4975 of the Code) which would subject such Plan or any
other Plan of the Borrower or any of its Subsidiaries, any trust created
thereunder, or any such party in interest or fiduciary, or any party dealing
with any such Plan or any such trust, to the tax or penalty on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code
which would cause a Materially Adverse Effect. Neither the Borrower nor any
of its ERISA Affiliates, including its Subsidiaries, is or has been obligated
to make any payment to a Multiemployer Plan.
(n) COMPLIANCE WITH REGULATIONS G, T, U AND X. Neither the Borrower
nor any of the Borrower's Subsidiaries is engaged principally or as one of
its important activities in the business of extending credit for the purpose
of purchasing or carrying, and neither the Borrower nor any of the Borrower's
Subsidiaries owns or presently intends to acquire, any
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"margin security" or "margin stock" as defined in Regulations G, T, U, and X
(12 C.F.R. Parts 207, 220, 221 and 224) of the Board of Governors of the
Federal Reserve System (herein called "margin stock"). None of the proceeds
of the Loans will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute this transaction
a "purpose credit" within the meaning of said Regulations G, T, U, and X.
The Borrower has not taken, caused or authorized to be taken, and will not
take any action which might cause this Agreement or the Notes to violate
Regulation G, T, U, or X or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Securities Exchange Act of 1934,
in each case as now in effect or as the same may hereafter be in effect. If
so requested by the Administrative Agent, the Borrower will furnish the
Administrative Agent with (i) a statement or statements in conformity with
the requirements of Federal Reserve Forms G-3 and/or U-1 referred to in
Regulations G and U of said Board of Governors and (ii) other documents
evidencing its compliance with the margin regulations, reasonably requested
by the Administrative Agent. Neither the making of the Loans nor the use of
proceeds thereof will violate, or be inconsistent with, the provisions of
Regulation G, T, U, or X of said Board of Governors.
(o) INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance
by the Borrower and its Subsidiaries of this Agreement and the Loan Documents
nor the issuance of the Notes violates any provision of such Act or requires
any consent, approval or authorization of, or registration with, the
Securities and Exchange Commission or any other governmental or public body
or authority pursuant to any provisions of such Act.
(p) GOVERNMENTAL REGULATION. Neither the Borrower nor any of its
Subsidiaries is required to obtain any consent, approval, authorization,
permit or license which has not already been obtained from, or effect any
filing or registration which has not already been effected with, any federal,
state or local regulatory authority in connection with the execution and
delivery of this Agreement or any other Loan Document. Neither the Borrower
nor any of its Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with,
any federal, state or local regulatory authority in connection with the
performance, in accordance with their respective terms, of this Agreement or
any other Loan Document.
(q) ABSENCE OF DEFAULT, ETC. The Borrower and its Subsidiaries are in
compliance in all respects with all of the provisions of their respective
partnership agreements, Certificates or Articles of Incorporation and
By-Laws, as the case may be, and no event has occurred or failed to occur
(including, without limitation, any matter which could create a Default
hereunder by cross-default) which has not been remedied or waived,
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the occurrence or non-occurrence of which constitutes, (i) a Default or (ii)
a material default by the Borrower or any of its Subsidiaries under any
indenture, agreement or other instrument relating to Indebtedness of the
Borrower or any of its Subsidiaries in the amount of $1,000,000 or more in
the aggregate, any License, or any judgment, decree or order to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower or
any of its Subsidiaries or any of their respective properties may be bound or
affected. Neither the Borrower nor any of its Subsidiaries is a party to or
bound by any contract or agreement continuing after the Agreement Date, or
bound by any Applicable Law, that could have a Materially Adverse Effect or
result in the loss of any License issued by the FCC.
(r) ACCURACY AND COMPLETENESS OF INFORMATION. All information,
reports, prospectuses and other papers and data relating to the Borrower or
any of its Subsidiaries and furnished by or on behalf of the Borrower or any
of its Subsidiaries to the Administrative Agent or the Banks were, at the
time furnished, true, complete and correct in all material respects to the
extent necessary to give the Administrative Agent and the Banks true and
accurate knowledge of the subject matter.
(s) AGREEMENTS WITH AFFILIATES. Except for agreements or arrangements
with Affiliates wherein the Borrower or one or more of its Subsidiaries
provides services to such Affiliates for fair consideration or which are set
forth on SCHEDULE 7 attached hereto, neither the Borrower nor any of its
Subsidiaries has (i) any written agreements or binding arrangements of any
kind with any Affiliate or (ii) any management or consulting agreements of
any kind with any Affiliate.
(t) PAYMENT OF WAGES. The Borrower and each of its Subsidiaries are in
compliance with the Fair Labor Standards Act, as amended, in all material
respects, and to the knowledge of the Borrower and each of its Subsidiaries,
such Persons have paid all minimum and overtime wages required by law to be
paid to their respective employees.
(u) PRIORITY. The Security Interest is a valid and perfected first
priority security interest in the Collateral in favor of the Administrative
Agent, for the benefit of itself and the Banks, securing, in accordance with
the terms of the Security Documents, the Obligations, and the Collateral is
subject to no Liens other than Permitted Liens. The Liens created by the
Security Documents are enforceable as security for the Obligations in
accordance with their terms with respect to the Collateral subject, as to
enforcement of remedies, to the following qualifications: (i) an order of
specific performance and an injunction are discretionary remedies and, in
particular, may not be available where damages are considered an adequate
remedy at law, and (ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates
to the bankruptcy, insolvency or similar event of the Borrower or any of its
Subsidiaries, as the case may be).
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(v) INDEBTEDNESS. Except as shown on the financial statements of the
Borrower for the fiscal year ended December 31, 1996, neither the Borrower
nor any of its Subsidiaries has outstanding, as of the Agreement Date, and
after giving effect to the initial Advances hereunder on the Agreement Date,
any Indebtedness for Money Borrowed other than the Loans.
(w) SOLVENCY. As of the Agreement Date and after giving effect to the
transactions contemplated by the Loan Documents (i) the property of the
Borrower, at a fair valuation, will exceed its debt; (ii) the capital of the
Borrower will not be unreasonably small to conduct its business; (iii) the
Borrower will not have incurred debts, or have intended to incur debts,
beyond its ability to pay such debts as they mature; and (iv) the present
fair salable value of the assets of the Borrower will be materially greater
than the amount that will be required to pay its probable liabilities
(including debts) as they become absolute and matured. For purposes of this
Section, "debt" means any liability on a claim, and "claim" means (i) the
right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, undisputed,
legal, equitable, secured or unsecured, or (ii) the right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and any other Loan
Document shall be deemed to be made, and shall be true and correct, at and as
of the Agreement Date and on the date of each Advance except to the extent
previously fulfilled in accordance with the terms hereof and to the extent
relating specifically to the Agreement Date. All representations and
warranties made under this Agreement and the other Loan Documents shall
survive, and not be waived by, the execution hereof by the Banks and the
Administrative Agent, any investigation or inquiry by any Bank or the
Administrative Agent, or the making of any Advance under this Agreement.
ARTICLE 5
GENERAL COVENANTS
So long as any of the Obligations is outstanding and unpaid or the Banks
have an obligation to fund Advances hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Majority Banks,
or such greater number of Banks as may be expressly provided herein, shall
otherwise consent in writing:
Section 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. The
Borrower will, and will cause each of its Subsidiaries to:
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(a) preserve and maintain its existence, and its material rights,
franchises, licenses and privileges in the state of its incorporation,
including, without limiting the foregoing, the Licenses and all other
Necessary Authorizations; and
(b) qualify and remain qualified and authorized to do business in
each jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization.
Section 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW. The Borrower
will, and will cause each of its Subsidiaries to, (a) engage in the business
of owning, constructing, managing, operating and investing in Cellular
Systems and other wireless communications and related businesses and no
unrelated activities, and (b) comply in all material respects with the
requirements of all Applicable Law.
Section 5.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in the
ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used in their respective
businesses (whether owned or held under lease), other than obsolete equipment
or unused assets, and from time to time make or cause to be made all needed
and appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto, except as to leased properties where the landlord is
required to make such repairs, in which event Borrower shall be under no
obligation to do so unless the particular lease permits the Borrower to do so
in the absence of the landlord complying with its obligations.
Section 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower
will, and will cause each of its Subsidiaries on a consolidated and
consolidating basis to, maintain a system of accounting established and
administered in accordance with GAAP, keep adequate records and books of
account in which complete entries will be made in accordance with GAAP and
reflecting all transactions required to be reflected by GAAP and keep
accurate and complete records of their respective properties and assets. The
Borrower and its Subsidiaries will maintain a fiscal year ending on December
31.
Section 5.5 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to:
(a) Maintain insurance including, but not limited to,
business interruption coverage and public liability coverage insurance from
responsible companies in such amounts and against such risks to the Borrower
and each of its Subsidiaries as is standard for similarly situated companies
engaged in the cellular telephone and wireless communications industry.
(b) Keep their respective assets insured by insurers on terms
and in a manner reasonably acceptable to the Administrative Agent against
loss or damage by fire,
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flood, theft, burglary, loss in transit, explosions and hazards insured
against by extended coverage, in amounts which are prudent for the cellular
telephone and wireless communications industry and reasonably satisfactory to
the Administrative Agent, all premiums thereon to be paid by the Borrower and
its Subsidiaries.
(c) Require that each insurance policy provide for at least
thirty (30) days' prior written notice to the Administrative Agent of any
termination of or proposed cancellation or nonrenewal of such policy, and
name the Administrative Agent as additional named lender loss payee and, as
appropriate, additional insured, to the extent of the Obligations.
Section 5.6 PAYMENT OF TAXES AND CLAIMS. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge all taxes, including,
without limitation, withholding taxes, assessments and governmental charges
or levies required to be paid by them or imposed upon them or their income or
profits or upon any properties belonging to them, prior to the date on which
penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, might become a Lien or charge upon any of their
properties; except that no such tax, assessment, charge, levy or claim need
be paid which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books, but only so long as such tax, assessment, charge, levy or
claim does not become a Lien or charge other than a Permitted Lien and no
foreclosure, distraint, sale or similar proceedings shall have been
commenced. The Borrower will, and will cause each of its Subsidiaries to,
timely file all information returns required by federal, state or local tax
authorities.
Section 5.7 COMPLIANCE WITH ERISA.
(a) The Borrower shall, and shall cause its Subsidiaries to,
make all contributions to any Employee Pension Plan when such contributions
are due and not incur any "accumulated funding deficiency" within the meaning
of Section 412(a) of the Code, whether or not waived, and will otherwise
comply with the requirements of the Code and ERISA with respect to the
operation of all Plans, except to the extent that the failure to so comply
could not have a Materially Adverse Effect.
(b) The Borrower shall, and shall cause its Subsidiaries to,
comply in all respects with the requirements of COBRA with respect to any
Plans subject to the requirements thereof, except to the extent that the
failure to so comply could not have a Materially Adverse Effect.
(c) The Borrower shall furnish to the Administrative Agent
(i) within thirty (30) days after any officer of the Borrower obtains
knowledge that a "prohibited transaction" (within the meaning of Section 406
of ERISA or Section 4975 of the Code) has occurred with respect to any Plan
of the Borrower or its ERISA Affiliates, including its Subsidiaries,
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that any Reportable Event has occurred with respect to any Employee Pension
Plan or that PBGC has instituted or will institute proceedings under Title IV
of ERISA to terminate any Employee Pension Plan or to appoint a trustee to
administer any Employee Pension Plan, a statement setting forth the details
as to such prohibited transaction, Reportable Event or termination or
appointment proceedings and the action which it (or any other Employee
Pension Plan sponsor if other than the Borrower) proposes to take with
respect thereto, together with a copy of the notice of such Reportable Event
given to PBGC if a copy of such notice is available to the Borrower, any of
its Subsidiaries or any of its ERISA Affiliates, (ii) promptly after receipt
thereof, a copy of any notice the Borrower, any of its Subsidiaries or any of
its ERISA Affiliates or the sponsor of any Plan receives from PBGC, or the
Internal Revenue Service or the Department of Labor which sets forth or
proposes any action or determination with respect to such Plan, (iii)
promptly after the filing thereof, any annual report required to be filed
pursuant to ERISA in connection with each Employee Pension Plan subject to
Title IV of ERISA maintained by the Borrower or any of its ERISA Affiliates,
including the Subsidiaries, and (iv) promptly upon the Administrative Agent's
request therefor, such additional information concerning any such Plan as may
be reasonably requested by the Administrative Agent.
(d) The Borrower will promptly notify the Administrative
Agent of any excise taxes which have been assessed or which the Borrower, any
of its Subsidiaries or any of its ERISA Affiliates has reason to believe may
be assessed against the Borrower, any of its Subsidiaries or any of its ERISA
Affiliates by the Internal Revenue Service or the Department of Labor with
respect to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries.
(e) Within the time required for notice to the PBGC under
Section 302(f)(4)(A) of ERISA or Section 412(m)(4) of the Code, as the case
may be, the Borrower will notify the Administrative Agent of any lien arising
under Section 302(f) of ERISA or Section 412(m) of the Code in favor of any
Plan of the Borrower or its ERISA Affiliates, including its Subsidiaries.
(f) The Borrower will not, and will not permit any of its
Subsidiaries or any of its ERISA Affiliates to take any of the following
actions or permit any of the following events to occur if such action or
event together with all other such actions or events would subject the
Borrower, any of its Subsidiaries, or any of its ERISA Affiliates to any tax,
penalty, or other liabilities which could have a Materially Adverse Effect:
(1) engage in any transaction in connection with which the
Borrower, any of its Subsidiaries or any ERISA Affiliate could be subject
to either a civil penalty assessed pursuant to Section 502(i) of ERISA or
a tax imposed by Section 4975 of the Code;
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(2) terminate any Employee Pension Plan in a manner, or take any
other action, which could result in any liability of the Borrower, any of
its Subsidiaries or any ERISA Affiliate to the PBGC;
(3) fail to make full payment when due of all amounts which,
under the provisions of any Employee Pension Plan, the Borrower, any of its
Subsidiaries or any ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any accumulated funding deficiency within the
meaning of Section 412(a) of the Code, whether or not waived, with respect
to any Employee Pension Plan;
(4) permit the present value of all benefit liabilities under
all Employee Pension Plans which are subject to Title IV of ERISA to exceed
the present value of the assets of such Plans allocable to such benefit
liabilities (within the meaning of Section 4041 of ERISA), except as may be
permitted under actuarial funding standards adopted in accordance with
Section 412 of the Code; or
(5) requires the provision of security in favor of any Plan
maintained by the Borrower or its ERISA Affiliates, including its
Subsidiaries under Section 401(a)(29) of the Code.
Section 5.8 VISITS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, permit representatives of the
Administrative Agent and any of the Banks, upon reasonable notice, to (i)
visit and inspect the properties of the Borrower or any of its Subsidiaries
during business hours, (ii) inspect and make extracts from and copies of
their respective books and records, and (iii) discuss with their respective
principal officers their respective businesses, assets, liabilities,
financial positions, results of operations and business prospects. The
Borrower and each of its Subsidiaries will also permit representatives of the
Administrative Agent and any of the Banks to discuss with their respective
accountants the Borrower's and the Borrower's Subsidiaries' businesses,
assets, liabilities, financial positions, results of operations and business
prospects.
Section 5.9 PAYMENT OF INDEBTEDNESS; LOANS. Subject to any
provisions herein or in any other Loan Document, the Borrower will, and will
cause each of its Subsidiaries to, pay any and all of their respective
Indebtedness when and as it becomes due or to the extent of trade payables of
such Persons otherwise in accordance with ordinary business practices
customary for the wireless communications industry, other than amounts
diligently disputed in good faith and for which adequate reserves have been
set aside in accordance with GAAP.
Section 5.10 USE OF PROCEEDS. The Borrower will use the aggregate
proceeds of all Advances under the Loans directly or indirectly:
(a) to fund Capital Expenditures;
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(b) for working capital needs and other corporate purposes of
the Borrower and its Subsidiaries (including, without limitation, the fees
and expenses incurred in connection with the execution and delivery of this
Agreement) which do not otherwise conflict with this Section 5.10;
(c) to fund the Maine Acquisition in an aggregate amount not
to exceed $90,000,000 on substantially the terms and conditions set forth in
the InterCel Asset Purchase Agreement and the purchase agreement for the
Cellco Acquisition and the fees and expenses incurred by the Borrower in
connection with the Maine Acquisition;
(d) to fund Acquisitions as permitted under Section 7.6(e)
hereof;
(e) to make Investments in Wireless Alliance as permitted
pursuant to Section 7.6(f) hereof; and
(f) to refinance any Indebtedness for Money Borrowed other
than the Loans.
No proceeds of Advances hereunder shall be used for the purchase or carrying
or the extension of credit for the purpose of purchasing or carrying, any
margin stock within the meaning of Regulations G, T, U, and X of the Board of
Governors of the Federal Reserve System.
Section 5.11 REAL ESTATE. Subject to Section 7.12 hereof, the
Borrower will, and will cause its Subsidiaries to, grant a mortgage to the
Administrative Agent securing the Obligations or such amount thereof as is
equal to the fair market value of such real estate, in form and substance
reasonably satisfactory to the Administrative Agent, covering (a) any parcel
of real estate not subject to a Permitted Lien described in clause (i) of the
definition thereof or covered by the Headquarter's Mortgage having a fair
market value, exclusive of equipment acquired by the Borrower or any of its
Subsidiaries after the Agreement Date, the value of which exceeds $1,500,000
individually, and (b) all parcels of real estate owned by the Borrower and
its Subsidiaries not subject to a Permitted Lien described in clause (i) of
the definition thereof or covered by the Headquarter's Mortgage at such time
as the aggregate fair market value of all such real estate equals or exceeds
$4,500,000. The Borrower will, and will cause its Subsidiaries to, deliver
to the Administrative Agent all documentation, including opinions of counsel
and policies of title insurance, which in the reasonable opinion of the
Administrative Agent are appropriate with each such grant, including any
phase I environmental audit requested by the Majority Banks. The Borrower
and the Banks hereby agree that although the Headquarter's Mortgage will not
be recorded on the Agreement Date the Administrative Agent may, at the
direction of the Majority Banks after the occurrence and during the
continuance of an Event of Default, cause the Headquarter's Mortgage to be
recorded in the appropriate jurisdiction and further agree that upon becoming
aware of any change in the recording tax in the State of Minnesota such that
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the recording costs for the Headquarter's Mortgage do not exceed $10,000, the
Administrative Agent shall promptly cause the Headquarter's Mortgage to be
recorded in the appropriate jurisdiction. The Borrower agrees to take any
action including, without limitation, the execution and delivery of any
additional mortgage documents or amendments thereto as may be necessary to
permit the actions set forth in the preceding sentence. Any recording taxes
or fees paid by the Administrative Agent in connection with the Headquarter's
Mortgage shall be expenses hereunder and shall be subject to reimbursement
under Sections 9.11 and 11.2 hereof.
Section 5.12 INDEMNITY. The Borrower agrees to indemnify and hold
harmless each Bank and the Administrative Agent, and each of their respective
affiliates, employees, representatives, shareholders, officers and directors
(any of the foregoing shall be an "Indemnitee") from and against any and all
claims, liabilities, losses, damages, actions, reasonable attorneys' fees and
expenses (as such fees and expenses are incurred) and demands by any party,
including the costs of investigating and defending such claims, whether or
not the Borrower, any Subsidiary or the Person seeking indemnification is the
prevailing party (a) resulting from any breach or alleged breach by the
Borrower or any Subsidiary of the Borrower of any representation or warranty
made hereunder; or (b) otherwise arising out of (i) the Commitment or
otherwise under this Agreement, any Loan Document or any transaction
contemplated hereby or thereby, including, without limitation, the use of the
proceeds of Loans hereunder in any fashion by the Borrower or the performance
of their respective obligations under the Loan Documents by the Borrower or
any of its Subsidiaries, (ii) allegations of any participation by the Banks
or the Administrative Agent, or any of them, in the affairs of the Borrower
or any of its Subsidiaries, or allegations that any of them has any joint
liability with the Borrower or any of its Subsidiaries arising out of the
Commitment or otherwise under this Agreement or any Loan Document (or the
rights of such Person arising thereunder); (iii) any claims against the Banks
or the Administrative Agent, or any of them, by any shareholder or other
investor in or lender to the Borrower or any Subsidiary, by any brokers or
finders or investment advisers or investment bankers retained by the Borrower
or by any other third party, arising out of the Commitment or otherwise under
this Agreement; or (c) in connection with taxes (not including federal or
state income taxes or other taxes based solely upon the revenues of such
Persons), fees, and other charges payable in connection with the Loans, or
the execution, delivery, and enforcement of this Agreement, the Security
Documents, the other Loan Documents, any amendments thereto or waivers of any
of the provisions thereof; unless the Person seeking indemnification
hereunder is determined in such case to have acted with gross negligence or
willful misconduct, in any case, by a final, non-appealable judicial order.
The obligations of the Borrower under this Section 5.12 are in addition to,
and shall not otherwise limit, any liabilities which the Borrower might
otherwise have in connection with any warranties or similar obligations of
the Borrower in any other Loan Document.
Section 5.13 INTEREST RATE HEDGING. Within ninety (90) days of the
Agreement Date, the Borrower shall enter into (and shall at all times
thereafter maintain) one or more Interest
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Hedge Agreements with respect to the Borrower's interest obligations on not
less than fifty percent (50%) of the principal amount of the Loans outstanding
from time to time. Such Interest Hedge Agreements shall provide interest rate
protection in conformity with ISDA standards and for an average period of at
least three (3) years from the date of such Interest Hedge Agreements or, if
earlier, until the Maturity Date on terms reasonably acceptable to the
Administrative Agent, such terms to include consideration of the
creditworthiness of the other party to the proposed Interest Hedge Agreement.
All Obligations of the Borrower to either Administrative Agent or any of the
Banks pursuant to any Interest Hedge Agreement and all Liens granted to secure
such Obligations shall rank PARI PASSU with all other Obligations and Liens
securing such other Obligations; and any Interest Hedge Agreement between the
Borrower and any other Person shall be unsecured.
Section 5.14 COVENANTS REGARDING FORMATION OF SUBSIDIARIES AND
ACQUISITIONS; PARTNERSHIP, SUBSIDIARIES. At the time of (i) any Acquisition
permitted hereunder or (ii) the formation of any new Subsidiary of the
Borrower or any of its Subsidiaries which is permitted under this Agreement,
the Borrower will, and will cause its Subsidiaries, as appropriate, to (a)
provide to the Administrative Agent an executed Subsidiary Security Agreement
for such new Subsidiary, in substantially the form of EXHIBIT G attached
hereto, together with appropriate UCC-1 financing statements, as well as an
executed Subsidiary Guaranty for such new Subsidiary, in substantially the
form of EXHIBIT M attached hereto, which shall constitute both Security
Documents and Loan Documents for purposes of this Agreement, as well as a
loan certificate for such new Subsidiary, substantially in the form of
EXHIBIT J attached hereto, together with appropriate attachments; (b) pledge
to the Administrative Agent all of the stock or partnership interests (or
other instruments or securities evidencing ownership) of such Subsidiary or
Person which is acquired or formed, beneficially owned by the Borrower or any
of the Borrower's Subsidiaries, as the case may be, as additional Collateral
for the Obligations to be held by the Administrative Agent in accordance with
the terms of the Borrower's Pledge Agreement, an existing Subsidiary Pledge
Agreement, or a new Subsidiary Pledge Agreement in substantially the form of
EXHIBIT F attached hereto, and execute and deliver to the Administrative
Agent all such documentation for such pledge as, in the reasonable opinion of
the Administrative Agent, is appropriate; and (c) provide revised financial
projections for the remainder of the fiscal year and for each subsequent year
until the Maturity Date which reflect such Acquisition or formation,
certified by the chief financial officer of the Borrower, together with a
statement by such Person that, to the knowledge of the Borrower, no Default
exists or would be caused by such Acquisition or formation, and all other
documentation, including one or more opinions of counsel, reasonably
satisfactory to the Administrative Agent which in its reasonable opinion is
appropriate with respect to such Acquisition or the formation of such
Subsidiary. Any document, agreement or instrument executed or issued
pursuant to this Section 5.14 shall be a "Loan Document" for purposes of this
Agreement.
Section 5.15 PAYMENT OF WAGES. The Borrower shall and shall cause
each of its Subsidiaries to at all times comply, in all material respects,
with the requirements of the Fair
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Labor Standards Act, as amended, including, without limitation, the provisions
of such Act relating to the payment of minimum and overtime wages as the same
may become due from time to time.
Section 5.16 FURTHER ASSURANCES. The Borrower will promptly cure, or
cause to be cured, defects in the creation and issuance of any of the Notes
and the execution and delivery of the Loan Documents (including this Agreement),
resulting from any acts or failure to act by the Borrower or any of the
Borrower's Subsidiaries or any employee or officer thereof. The Borrower at its
expense will promptly execute and deliver to the Administrative Agent and the
Banks, or cause to be executed and delivered to the Administrative Agent and the
Banks, all such other and further documents, agreements, and instruments in
compliance with or accomplishment of the covenants and agreements of the
Borrower in the Loan Documents, including this Agreement, or to correct any
omissions in the Loan Documents, or more fully to state the obligations set out
herein or in any of the Loan Documents, or to obtain any consents, all as may be
necessary or appropriate in connection therewith and as may be reasonably
requested.
ARTICLE 6
INFORMATION COVENANTS
So long as any of the Obligations is outstanding and unpaid or the Banks
have an obligation to fund Advances hereunder (whether or not the conditions
to borrowing have been or can be fulfilled) and unless the Majority Banks
shall otherwise consent in writing, the Borrower will furnish or cause to be
furnished to each Bank and the Administrative Agent, at their respective
offices:
Section 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. Within
forty-five (45) days after the last day of each of the first three (3)
quarters of each fiscal year of the Borrower, commencing with the quarter
ending June 30, 1997, the balance sheets of the Borrower on a consolidated
and consolidating basis with its Subsidiaries as at the end of such quarter
and as of the end of the preceding fiscal year, and the related statements of
operations and the related statements of cash flows of the Borrower on a
consolidated and consolidating basis with its Subsidiaries for such quarter
and for the elapsed portion of the year ended with the last day of such
quarter, which shall set forth in comparative form such figures as at the end
of and for such quarter and appropriate prior period and shall be certified
by the chief financial officer of the Borrower to have been prepared in
accordance with GAAP and to present fairly in all material respects the
financial position of the Borrower on a consolidated and consolidating basis
with its Subsidiaries as at the end of such period and the results of
operations for such period, and for the elapsed portion of the year ended
with the last day of such period, subject only to normal year-end and audit
adjustments.
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Section 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION. Within one
hundred twenty (120) days after the end of each fiscal year of the Borrower,
the audited consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such fiscal year and the related audited consolidated and
unaudited consolidating statements of operations for such fiscal year and for
the previous fiscal year, the related audited consolidated statements of cash
flow and stockholders' equity for such fiscal year and for the previous
fiscal year, which shall be accompanied by an opinion which shall be in scope
and substance reasonably satisfactory to the Administrative Agent of
independent certified public accountants of recognized national standing
acceptable to the Administrative Agent, together with a statement of such
accountants that in connection with their audit, nothing came to their
attention that caused them to believe that the Borrower was not in compliance
with the terms, covenants, provisions or conditions of Articles 7 and 8
hereof insofar as they relate to accounting matters.
Section 6.3 PERFORMANCE CERTIFICATES. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2, a certificate of
the president or chief financial officer of the Borrower as to its financial
performance, in substantially the form attached hereto as EXHIBIT N:
(a) setting forth as and at the end of such quarterly period
or fiscal year, as the case may be, the arithmetical calculations required to
establish (i) any adjustment to the Applicable Margins, as provided for in
Section 2.3(f) hereof, and (ii) whether or not the Borrower was in compliance
with the requirements of Sections 7.8, 7.9 and 7.10 hereof;
(b) setting forth on a consolidated basis for the Borrower
and its Subsidiaries for each such fiscal quarter (i) the number of subscribers
at the beginning of the quarter, (ii) the number of gross new subscribers added
and deactivated subscribers lost during the quarter, and (iii) the number of
subscribers at the end of the quarter; and
(c) stating that, to the best of his or her knowledge, no
Default has occurred as at the end of such quarterly period or year, as the
case may be, or, if a Default has occurred, disclosing each such Default and
its nature, when it occurred, whether it is continuing and the steps being
taken by the Borrower with respect to such Default.
Section 6.4 COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower by the Borrower's independent public accountants
regarding the Borrower, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.2.
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(b) Promptly upon receipt thereof, copies of any material
adverse notice or report regarding any License from the FCC.
(c) From time to time and promptly upon each request, such
data, certificates, reports, statements, documents or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations or business prospects of the Borrower or any of its
Subsidiaries, as the Administrative Agent or any Bank may reasonably request.
(d) Annually within ninety (90) days of the last day of each
fiscal year of the Borrower, certificates of insurance indicating that the
requirements of Section 5.5 hereof remain satisfied for such fiscal year,
together with copies of any new or replacement insurance policies obtained
during such year.
(e) Prior to January 31 of each year, the annual budget for
the Borrower and the Borrower's Subsidiaries, including forecasts of the
income statement, the balance sheet and a cash flow statement for such year,
on a quarter by quarter basis.
(f) Promptly after the sending thereof, copies of all
statements, reports and other information which the Borrower or any of its
Subsidiaries sends to security holders of the Borrower generally or files
with the Securities and Exchange Commission or any national securities
exchange.
Section 6.5 NOTICE OF LITIGATION AND OTHER MATTERS. Notice specifying
the nature and status of any of the following events, promptly, but in any
event not later than fifteen (15) days (or, in the case of Section 6.5(d)
hereof, ten (10) days) after the occurrence of any of the following events
becomes known to the Borrower:
(a) the commencement of all proceedings and investigations by or
before any governmental body and all actions and proceedings in any court
or before any arbitrator against, or to the extent known to the Borrower,
in any other way relating materially adversely to the Borrower or any
Subsidiary of the Borrower, or any of their respective properties, assets
or businesses or any License;
(b) any material adverse change with respect to the business,
assets, liabilities, financial position, results of operations or business
prospects of the Borrower or any Subsidiary of the Borrower other than
changes in the ordinary course of business which have not had and would not
reasonably be expected to have a Materially Adverse Effect;
(c) any material adverse amendment or change to the financial
projections or annual budget provided to the Banks by the Borrower;
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(d) any Default or the occurrence or nonoccurrence of any event
(i) which constitutes, or which with the passage of time or giving of
notice or both would constitute a default by the Borrower or any Subsidiary
of the Borrower under any material agreement other than this Agreement and
the other Loan Documents to which the Borrower or any Subsidiary of the
Borrower is party or by which any of their respective properties may be
bound, or (ii) which could have a Materially Adverse Effect, giving in each
case the details thereof and specifying the action proposed to be taken
with respect thereto;
(e) the occurrence of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section
4975 of the Code) with respect to any Plan of the Borrower or any of its
Subsidiaries or the institution or threatened institution by PBGC of
proceedings under ERISA to terminate or to partially terminate any such
Plan or the commencement or threatened commencement of any litigation
regarding any such Plan or naming it or the trustee of any such Plan with
respect to such Plan or any action taken by the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate of the Borrower to withdraw or
partially withdraw from any Plan or to terminate any Plan; and
(f) the occurrence of any event subsequent to the Agreement Date
which, if such event had occurred prior to the Agreement Date, would have
constituted an exception to the representation and warranty in Section
4.1(m) of this Agreement.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations is outstanding and unpaid or the Banks
have an obligation to fund Advances hereunder (whether or not the conditions
to borrowing have been or can be fulfilled) and unless the Majority Banks, or
such greater number of Banks as may be expressly provided herein, shall
otherwise give their prior consent in writing:
Section 7.1 INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES. The
Borrower shall not, and shall not permit any of its Subsidiaries to, create,
assume, incur or otherwise become or remain obligated in respect of, or
permit to be outstanding, any Indebtedness except:
(a) the Obligations;
(b) operating accounts payable, accrued expenses and customer
advance payments and accrued Plan contributions incurred in the ordinary course
of business;
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(c) Indebtedness secured by Permitted Liens;
(d) Obligations under Interest Hedge Agreements with respect
to the Loans;
(e) Indebtedness of the Borrower or any of its Subsidiaries
to the Borrower or any other Subsidiary so long as the corresponding debt
instruments are pledged to the Administrative Agent as security for the
Obligations and Indebtedness expressly permitted pursuant to Section 7.5
hereof;
(f) Other Indebtedness which does not exceed $5,000,000 in
the aggregate at any one time outstanding; provided such additional
Indebtedness is (i) purchase money Indebtedness of the Borrower or any of its
Subsidiaries that is incurred or assumed to finance part or all of (but not
more than) the purchase price of a tangible asset in which neither the
Borrower nor such Subsidiary had at any time prior to such purchase any
interest other than a security interest or an interest as lessee under an
operating lease, or (ii) Capitalized Lease Obligations;
(g) (i) Other secured Indebtedness of the Borrower which does
not exceed $5,000,000 in the aggregate at any one time outstanding, and/or
(ii) other unsecured Indebtedness of the Borrower which does not exceed
$5,000,000 in the aggregate at any one time outstanding; PROVIDED, HOWEVER,
that the sum of (1) the aggregate amount of secured Indebtedness permitted
pursuant to this Section 7.1(g), PLUS (2) the aggregate amount of unsecured
Indebtedness permitted pursuant to this Section 7.1(g) shall not exceed
$5,000,000 in the aggregate at any one time outstanding, on terms and
conditions reasonably satisfactory to the Administrative Agent; and
(h) Obligations arising out of switch user agreements with
Switch 2000.
Section 7.2 LIMITATION ON LIENS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, create, assume, incur or permit to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its properties or assets, whether now owned or
hereafter acquired, except for Permitted Liens.
Section 7.3 AMENDMENT AND WAIVER. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any amendment of, or agree
to or accept or consent to any waiver of any of the material provisions of
(a) its articles or certificate of incorporation or partnership agreement, as
appropriate, (b) its By-Laws or Membership Agreement, or (c) the membership
agreement for Wireless Alliance.
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Section 7.4 LIQUIDATION, MERGER, OR DISPOSITION OF ASSETS.
(a) DISPOSITION OF ASSETS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time sell, lease, abandon, or
otherwise dispose of any assets (other than assets disposed of in the
ordinary course of business) without the prior written consent of the Banks;
PROVIDED, HOWEVER, that the prior written consent of the Banks shall not be
required for (i) the transfer of assets (including cash or cash equivalents)
among the Borrower and its Subsidiaries (excluding Wireless Alliance) or for
the transfer of assets (including cash or cash equivalents but excluding the
Licenses) between or among Subsidiaries (excluding Wireless Alliance) of the
Borrower, (ii) any issuance of equity interest in the Borrower for the
purposes described in Section 7.6(c) and (h) hereof, or (iii) dispositions of
assets the proceeds of which are applied pursuant to Section 2.5(c) hereof
(provided that, with respect to such sales under Section 2.5(c)(iii), the
Borrower provides to the Administrative Agent and the Banks on the date of
such sale a certificate reflecting compliance with the terms and provisions
of Sections 7.8, 7.9 and 7.10 hereof both before and after giving effect to
such sale or transfer).
(b) LIQUIDATION OR MERGER. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time liquidate or dissolve
itself (or suffer any liquidation or dissolution) or otherwise wind up, or
enter into any merger, other than (i) a merger or consolidation among the
Borrower and one or more Subsidiaries, provided the Borrower is the surviving
corporation, or (ii) a merger between or among two or more Subsidiaries, or
(iii) in connection with an Acquisition permitted hereunder effected by a
merger in which the Borrower or, in a merger in which the Borrower is not a
party, a Subsidiary, is the surviving corporation.
Section 7.5 LIMITATION ON GUARANTIES. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time Guaranty, assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business,
(b) obligations under agreements of the Borrower or any of its Subsidiaries
entered into in connection with leases of real property or the acquisition of
services, supplies and equipment in the ordinary course of business of the
Borrower or any of its Subsidiaries, (c) Guaranties of Indebtedness incurred
as permitted pursuant to Section 7.1 hereof, (d) as may be contained in any
Loan Document including, without limitation, the Subsidiary Guaranty, or (e)
in its capacity as a general partner in any of its Subsidiaries.
Section 7.6 INVESTMENTS AND ACQUISITIONS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly make
any loan or advance, or otherwise acquire for consideration evidences of
Indebtedness, capital stock or other securities of any Person or other assets
or property (other than assets or property in the ordinary course of
business), or make any Acquisition or Investment, except that so long as no
Default then exists or would be caused thereby:
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(a) The Borrower and its Subsidiaries may, directly or
through a brokerage account (i) purchase marketable, direct obligations of
the United States of America, its agencies and instrumentalities maturing
within three hundred sixty-five (365) days of the date of purchase, (ii)
purchase commercial paper issued by corporations, each of which shall have a
combined net worth of at least $100 million and each of which conducts a
substantial part of its business in the United States of America, maturing
within two hundred seventy (270) days from the date of the original issue
thereof, and rated "P-2" or better by Moody's Investors Service, Inc. or
"A-2" or better by Standard and Poor's Ratings Group, a division of
McGraw-Hill, Inc., and (iii) purchase repurchase agreements, bankers'
acceptances, and certificates of deposit maturing within three hundred
sixty-five (365) days of the date of purchase which are issued by, or time
deposits maintained with, a United States national or state bank the deposits
of which are insured by the Federal Deposit Insurance Corporation or the
Federal Savings and Loan Insurance Corporation and having capital, surplus
and undivided profits totaling more than $100 million and rated "A" or better
by Moody's Investors Service, Inc. or Standard and Poor's Corporation;
(b) Subject to compliance with Section 5.14 hereof, the
Borrower or any of its Subsidiaries may complete the Maine Acquisition;
(c) The Borrower may use the cash proceeds of any issuance of
equity interest in the Borrower (to the extent permitted hereunder), for the
acquisition (including reasonable and customary costs and expenses related to
such Acquisition) of not less than fifty and one one-hundredth percent
(50.01%) of the ownership interest in Cellular Systems, or the right to
construct a Cellular System (including without limitation, associated
construction costs), in an RSA or an MSA or a BTA (in the case of a PCS
System) which is primarily within the same geographic area as or contiguous
to a Cellular System then owned by the Borrower or any of its Subsidiaries,
Capital Expenditures and general working capital purposes without the consent
of the Banks; PROVIDED, that, (i) the Borrower shall not enter into any
binding agreement with respect to an Acquisition with such proceeds unless
(A) the Borrower shall have received sufficient funds to make such
Acquisition or (B) such agreement shall contain a commercially reasonable
liquidated damages provision, (ii) prior to entering into any binding
agreement with respect to such Acquisition, the Borrower shall deliver to the
Administrative Agent and the Banks a certificate reflecting pro forma
projections and compliance with the terms and conditions of this Agreement
from the date of such Acquisition through the Maturity Date after giving
effect to such Acquisition and using reasonable assumptions in the opinion of
the Majority Banks, (iii) contemporaneously with the completion of the
Acquisition, the Borrower shall grant to the Administrative Agent a first
priority Lien upon any assets (including without limitation, capital stock
and partnership interests) acquired in connection with such Acquisition to
the same extent as required hereunder for existing Subsidiaries of the
Borrower, and (iv) if a binding agreement for such Acquisition is not
executed within twelve (12) months from the date of receipt of the proceeds
of the issuance of such equity interest in the Borrower or such Indebtedness,
as the case may be, or such Acquisition is not concluded within eighteen (18)
months from the date
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of receipt of the proceeds of the issuance of equity or Indebtedness, as the
case may be, the consent of the Majority Banks shall be required for such
Acquisition. The Borrower agrees to grant to the Administrative Agent (on
behalf of the Banks) a security interest in the proceeds of the issuance of
such equity interest in the Borrower or such Indebtedness, as the case may
be, until such time as such proceeds are used in connection with an
Acquisition;
(d) Subject to compliance with Section 5.14 hereof, the
Borrower may issue equity interests in the Borrower in exchange for ownership
interests in any Person operating a Cellular System; PROVIDED, that, to the
extent that the Borrower has acquired less than or equal to fifty percent
(50%) of the total ownership interests in such Person, no such acquired
ownership interest subjects the Borrower to any obligation to fund additional
capital or otherwise make any investment (in cash or otherwise) in such
Person;
(e) Subject to compliance with Section 5.14 hereof, the
Borrower may use Advances in an amount not to exceed $17,500,000 in the
aggregate in whole or in part for the Acquisition (including reasonable and
customary costs and expenses related to such Acquisition) of not less than
fifty and one one-hundredth percent (50.01%) of the ownership interest (after
giving effect to any ownership interest acquired on or prior to the date of
such Acquisition as permitted hereunder) in Cellular Systems, or the right to
construct a Cellular System (including, without limitation, associated
construction costs), in an RSA or an MSA or a BTA (in the case of a PCS
System) which is primarily within the same geographic area as or contiguous
to a Cellular System then owned by the Borrower or any of its Subsidiaries
without the consent of the Banks;
(f) After the Agreement Date, the Borrower (or any of its
Subsidiaries) may make Investments in Wireless Alliance in an aggregate
amount not to exceed $30,000,000; PROVIDED, that (i) in the case of any
equity investment, any equity interests received in connection with such
Investment are pledged as Collateral for the Obligations and (ii) in the case
of any loan or extension of Indebtedness, such loan is evidenced by a
promissory note which is assigned as Collateral for the Obligations;
(g) Such other Investments or Acquisitions as may be approved
in writing by the Majority Banks; and
(h) During such time as any Cooperative Bank shall be a Bank,
the Borrower may purchase such non-voting equity interests in such Cooperative
Bank represented by participation certificates of such Cooperative Bank as such
Cooperative Bank may from time to time require in accordance with such
Cooperative Bank's bylaws and "Loan-Based Capital Plan." Each Cooperative Bank
shall have a statutory first Lien on the equity in such Cooperative Bank to
secure all obligations of the Borrower to such Cooperative Bank, and such Lien
shall be deemed to constitute a "Permitted Lien" hereunder. No Cooperative Bank
shall be obligated to set off or otherwise apply such equities to the Borrower's
obligations to the Cooperative Bank.
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Section 7.7 RESTRICTED PAYMENTS AND PURCHASES. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly
declare or make any Restricted Payment or Restricted Purchase, except that so
long as no Default hereunder then exists or would be caused thereby, so long
as a Subsidiary of the Borrower is not obligated on any Indebtedness to the
Borrower or a Subsidiary of the Borrower, such Subsidiary may make distributions
to (i) any partner or shareholder of such Subsidiary holding a minority position
with respect to such Subsidiary, so long as such Subsidiary makes a
contemporaneous pro rata distribution to the Borrower or any of its
Subsidiaries, and such partner or shareholder is not an Affiliate of the
Borrower or (ii) the Borrower or any of its Subsidiaries.
Section 7.8 LEVERAGE RATIO. (a) As of the end of any calendar
quarter, and (b) at the time of any Advance hereunder (after giving effect to
such Advance), the Borrower shall not permit its Leverage Ratio to exceed the
ratios set forth below during the periods indicated:
Period Ratio
------ -----
Agreement Date through 6.50:1
December 31, 1997
January 1, 1998, through 6.00:1
December 31, 1998
January 1, 1999, through 5.00:1
December 31, 1999
January 1, 2000, and thereafter 4.50:1
Section 7.9 OPERATING CASH FLOW TO FIXED CHARGES RATIO. (a) As of
the end of any calendar quarter, and (b) at the time of any Advance hereunder
(after giving effect to such Advance), the Borrower shall not permit the
ratio of (i) the sum of (A) its Operating Cash Flow for the twelve (12)
calendar month period ending (as of the calendar quarter end being tested in
the case of Section 7.9(a) hereof, or as of the most recently completed
calendar quarter for which financial statements are required to have been
delivered pursuant to Section 6.1 or 6.2 hereof, as the case may be, in the
case of Section 7.9(b) hereof), and (B) the Available Commitment on such
calculation date to (ii) its Fixed Charges for the same period of time, to be
less than 1.10 to 1.
Section 7.10 ANNUALIZED OPERATING CASH FLOW TO INTEREST EXPENSE. (a) As
of the end of any calendar quarter, and (b) at the time of any Advance hereunder
(after giving effect to such Advance), the Borrower shall not permit the ratio
of (i) its Annualized Operating Cash Flow (as of the calendar quarter end being
tested in the case of Section 7.10(a) hereof, or as of the most recently
completed calendar quarter end for which financial
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statements are required to have been delivered pursuant to Section 6.1 or 6.2
hereof, as the case may be, in the case of Section 7.10(b) hereof) to (ii)
its Interest Expense for the same period of time to be less than 1.50 to 1.
Section 7.11 AFFILIATE TRANSACTIONS. Except as specifically provided
herein and as may be described on SCHEDULE 7 attached hereto, the Borrower
shall not, and shall not permit any of its Subsidiaries to, at any time
engage in any transaction with an Affiliate, or make an assignment or other
transfer of any of its properties or assets to any Affiliate, on terms less
advantageous to the Borrower or such Subsidiary than would be the case if
such transaction had been effected with a non-Affiliate.
Section 7.12 REAL ESTATE. Subject to Section 5.11 hereof, the Borrower
and its Subsidiaries may purchase real estate solely for use in the business of
the Borrower and its Subsidiaries.
Section 7.13 ERISA LIABILITIES. The Borrower shall not, and shall
cause each of its ERISA Affiliates not to, (i) permit the assets of any of
their respective Employee Pension Plans to be less than the amount necessary
to provide all accrued benefits under such Plans, or (ii) enter into any
Multiemployer Plan.
ARTICLE 8
DEFAULT
Section 8.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement or
any other Loan Document shall prove incorrect or misleading in any material
respect when made or deemed to be made pursuant to Section 4.2 hereof;
(b) The Borrower shall default in the payment of: (i) any
interest under any of the Notes or fees or other amounts payable to the Banks
and the Administrative Agent under any of the Loan Documents, or any of them,
when due, and such Default shall not be cured by payment in full within five
(5) Business Days from the due date; or (ii) any principal under any of the
Notes when due;
(c) The Borrower shall default (i) in the performance or
observance of any agreement or covenant contained in Sections 5.2(a), 5.10,
6.5, 7.1 (if the event causing such default is consensual in nature), 7.2 (if
the event causing such default is consensual in
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nature), 7.4, 7.5, 7.6, 7.7, 7.8, 7.9 and 7.10 hereof; or (ii) in providing
any financial statement or report under Article 6, and, with respect to this
clause (ii) only, such Default shall not be cured by delivery thereof within
a period of fifteen (15) days from the later of (x) occurrence of such
Default and (y) the date on which such Default became known to the Borrower;
(d) The Borrower shall default in the performance or observance
of any other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 8.1, and such default shall not be cured
within a period of thirty (30) days from the later of (i) occurrence of such
default and (ii) the date on which such default became known to the Borrower;
(e) There shall occur any default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or
as otherwise provided in Section 8.1 of this Agreement) by the Borrower, any
of its Subsidiaries, or any other obligor thereunder, which shall not be
cured within a period of thirty (30) days from the later of (i) occurrence of
such default and (ii) the date on which such default became known to the
Borrower;
(f) There shall be entered and remain unstayed a decree or
order for relief in respect of the Borrower or any of the Borrower's
Subsidiaries under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official of the Borrower or any of the
Borrower's Subsidiaries, or of any substantial part of their respective
properties, or ordering the winding-up or liquidation of the affairs of the
Borrower, or any of the Borrower's Subsidiaries; or an involuntary petition
shall be filed against the Borrower or any of the Borrower's Subsidiaries and
a temporary stay entered, and (i) such petition and stay shall not be
diligently contested, or (ii) any such petition and stay shall continue
undismissed for a period of sixty (60) consecutive days;
(g) The Borrower or any of the Borrower's Subsidiaries shall
file a petition, answer or consent seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable Federal or state bankruptcy law or other similar law, or the
Borrower or any of the Borrower's Subsidiaries shall consent to the
institution of proceedings thereunder or to the filing of any such petition
or to the appointment or taking of possession of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Borrower or any of the Borrower's Subsidiaries or of any substantial part of
their respective properties, or the Borrower or any of the Borrower's
Subsidiaries shall fail generally to pay their respective debts as they
become due or shall be adjudicated insolvent; the Borrower shall suspend or
discontinue its business; the Borrower or any of the Borrower's Subsidiaries
shall have concealed, removed any of its property with the intent to hinder
or defraud its creditors or shall have made a fraudulent or
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preferential transfer under any applicable fraudulent conveyance or bankruptcy
law, or the Borrower or any of the Borrower's Subsidiaries shall take any action
in furtherance of any such action;
(h) A judgment not covered by insurance or indemnification,
where the indemnifying party has agreed to indemnify and is financially able
to do so, shall be entered by any court against the Borrower or any of the
Borrower's Subsidiaries for the payment of money which exceeds singly or in
the aggregate with other such judgments, $1,000,000, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower or any of the Borrower's Subsidiaries which,
together with all other such property of the Borrower or any of the
Borrower's Subsidiaries subject to other such process, exceeds in value
$1,000,000 in the aggregate, and if, within thirty (30) days after the entry,
issue or levy thereof, such judgment, warrant or process shall not have been
paid or discharged or stayed pending appeal or removed to bond, or if, after
the expiration of any such stay, such judgment, warrant or process shall not
have been paid or discharged or removed to bond;
(i) (i) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect
to any Plan maintained by the Borrower or any of its Subsidiaries or any
ERISA Affiliate, or to which the Borrower or any of its Subsidiaries or any
ERISA Affiliate has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer
any such Plan; or (ii) PBGC shall institute proceedings to terminate any such
Plan; or (iii) the Borrower or any of its Subsidiaries or any ERISA Affiliate
shall incur any liability to PBGC in connection with the termination of any
such Plan; or (iv) any Plan or trust created under any Plan of the Borrower
or any of its Subsidiaries or any ERISA Affiliate shall engage in a
"prohibited transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which would subject any such Plan, any trust
created thereunder, any trustee or administrator thereof, or any party
dealing with any such Plan or trust to the tax or penalty on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code
which has or could be reasonably likely to have a Materially Adverse Effect
and which is not cured to the reasonable satisfaction of the Majority Banks
within thirty (30) days from the later of (A) the occurrence of such event or
(B) the date on which such event became known to the Borrower; or (v) the
Borrower or any of its Subsidiaries or any ERISA Affiliate shall adopt or
otherwise contribute to a Multiemployer Plan.
(j) Any event not referred to elsewhere in this Section 8.1
shall occur which has a Materially Adverse Effect and such event shall not be
cured within a period of thirty (30) days from the later of (i) occurrence of
such event and (ii) the date on which such event became known to the Borrower;
(k) There shall occur (i) any acceleration of the maturity of any
Indebtedness of the Borrower or any of the Borrower's Subsidiaries in an
aggregate principal
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amount exceeding $1,000,000, or, as a result of a failure to comply with the
terms thereof, such Indebtedness shall otherwise become due and payable; (ii)
any event or condition the occurrence of which would permit such acceleration
of such Indebtedness, or which, as a result of a failure to comply with the
terms thereof, would make such Indebtedness otherwise due and payable, and
which event or condition has not been cured within any applicable cure period
or waived in writing prior to any declaration of an Event of Default or
acceleration of the Loans hereunder; or (iii) any material default under any
Interest Hedge Agreement which would permit the obligation of the Borrower to
make payments to the counterparty thereunder to be then due and payable;
(l) The FCC shall deliver to the Borrower or any of its
Subsidiaries an order to show cause why an order of revocation should not be
issued based upon any alleged attribution of alien ownership (within the
meaning of 47 U.S.C. Section 310(b) and any interpretation of the FCC
thereunder) to the Borrower or any of its Subsidiaries and (i) such order
shall not have been rescinded within thirty (30) days after such delivery or
(ii) in the reasonable judgment of the Majority Banks, proceedings by or
before the FCC related to such order are reasonably likely to result in one
or more orders of revocation and would constitute an Event of Default under
Section 8.1(m) hereof;
(m) One or more Licenses shall be terminated or revoked or
substantially adversely modified such that the Borrower and its Subsidiaries
are no longer able to operate the related Cellular System or Systems or
portions thereof and retain the revenue received therefrom or any such
License shall fail to be renewed at the stated expiration thereof such that
the Borrower and its Subsidiaries are no longer able to operate the related
Cellular System or Systems or portions thereof and retain the revenue
received therefrom, and the overall effect of such termination, revocation or
failure to renew would be to reduce Operating Cash Flow (determined as at the
last day of the most recently ended fiscal year of the Borrower) by ten
percent (10%) or more;
(n) Any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
twenty-five percent (25%) or more of the voting or economic Capital Stock of
the Borrower;
(o) Any Loan Document or any material provision thereof,
shall at any time and for any reason be declared by a court of competent
jurisdiction to be null and void, or a proceeding shall be commenced by the
Borrower or any of the Borrower's Subsidiaries or by any governmental
authority having jurisdiction over the Borrower or any of the Borrower's
Subsidiaries seeking to establish the invalidity or unenforceability thereof
(exclusive of questions of interpretation of any provision thereof), or the
Borrower or any of
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the Borrower's Subsidiaries shall deny that it has any liability or obligation
for the payment of principal or interest purported to be created under any Loan
Document;
(p) Any Security Document shall for any reason, fail or cease
(except by reason of lapse of time) to create a valid and perfected and
first-priority Lien on or Security Interest in any portion of the Collateral
purported to be covered thereby;
(q) The Borrower shall fail (i) to furnish on or prior to
July 31, 1997, evidence satisfactory to the Administrative Agent that an
application has been made to the FCC to assign the Licenses set forth on
SCHEDULE 3 attached hereto to a wholly-owned Subsidiary of the Borrower, if
FCC approval for such an assignment is required, and (ii) to conclude on or
prior to October 31, 1997, the assignments described in clause (i) hereof; or
(r) The order from the FCC with respect to the Maine
2-Somerset Rural Service Area (Market 464B(1)) shall fail to become a final
order on May 21, 1997 and (i) the Borrower shall be unable to recover, in a
manner satisfactory to the Majority Banks, the cash flow with respect to the
portion of such License being acquired in the Cellco Acquisition or (ii) the
FCC shall require the sale of the assets acquired in the Cellco Acquisition.
Section 8.2 REMEDIES.
(a) If an Event of Default specified in Section 8.1 (other
than an Event of Default under Section 8.1(f) or Section 8.1(g)) shall have
occurred and shall be continuing, the Administrative Agent, at the request of
the Majority Banks subject to Section 9.8(a) hereof, shall (i) terminate the
Commitment, and/or (ii) declare the principal of and interest on the Loans
and the Notes and all other amounts owed to the Banks and the Administrative
Agent under this Agreement, the Notes and any other Loan Documents to be
forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, anything in
this Agreement, the Notes or any other Loan Document to the contrary
notwithstanding, and the Commitment shall thereupon forthwith terminate.
(b) Upon the occurrence and continuance of an Event of
Default specified in Section 8.1(f) or Section 8.1(g), all principal,
interest and other amounts due hereunder and under the Notes, and all other
Obligations, shall thereupon and concurrently therewith become due and
payable and the Commitment shall forthwith terminate and the principal amount
of the Loans outstanding hereunder shall bear interest at the Default Rate,
all without any action by the Administrative Agent or the Banks or the
Majority Banks or any of them and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or in the other Loan Documents to the contrary notwithstanding.
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(c) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, above, the Administrative Agent and the Banks
shall have all of the post-default rights granted to them, or any of them, as
applicable under the Loan Documents and under Applicable Law.
(d) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative Agent, upon request of the
Majority Banks, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Subsidiaries, and the Borrower,
for itself and on behalf of its Subsidiaries, hereby consents to such rights
and such appointment and hereby waives any objection the Borrower or any
Subsidiary may have thereto or the right to have a bond or other security
posted by the Administrative Agent on behalf of the Banks, in connection
therewith. The rights of the Administrative Agent under this Section 8.2(e)
shall be subject to its prior compliance with the Communications Act and the
FCC rules and policies promulgated thereunder to the extent applicable to the
exercise of such rights.
(e) The rights and remedies of the Administrative Agent and
the Banks hereunder shall be cumulative, and not exclusive.
Section 8.3 PAYMENTS SUBSEQUENT TO DECLARATION OF EVENT OF
DEFAULT. Subsequent to the acceleration of the Loans under Section 8.2
hereof, payments and prepayments under this Agreement made to any of the
Administrative Agent and the Banks or otherwise received by any of such
Persons (from realization on Collateral for the Obligations or otherwise)
shall be paid over to the Administrative Agent (if necessary) and distributed
by the Administrative Agent as follows: FIRST, to the reasonable costs and
expenses, if any, incurred by the Banks or the Administrative Agent in
connection with the collection of such payment or prepayment, including,
without limitation, any reasonable costs incurred by any of them in
connection with the sale or disposition of any Collateral for the Obligations
and all amounts under Section 11.2(b) and (c); SECOND, to the Banks and the
Administrative Agent for any fees hereunder or under any of the other Loan
Documents then due and payable; THIRD, to the Banks pro rata on the basis of
their respective unpaid principal amounts (except as provided in Section
2.2(e)), to the payment of any unpaid interest which may have accrued on the
Obligations; FOURTH, to the Banks pro rata until all Loans have been paid in
full (and, for purposes of this clause, obligations under Interest Hedge
Agreements with the Banks or any of them shall be paid on a pro rata basis
with the Loans); FIFTH, to the Banks pro rata on the basis of their
respective unpaid amounts, to the payment of any other unpaid Obligations;
and SIXTH, to the Borrower or as otherwise required by law.
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ARTICLE 9
THE ADMINISTRATIVE AGENT
Section 9.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably appoints and authorizes, and hereby agrees that it will require
any transferee of any of its interest in its portion of the Loans and in its
Note irrevocably to appoint and authorize the Administrative Agent to take
such actions as its agents on its behalf and to exercise such powers
hereunder and under the other Loan Documents as are delegated by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. Neither the Administrative Agent nor any of its directors,
officers, employees or agents, shall be liable for any action taken or
omitted to be taken by it hereunder or in connection herewith, except for its
own gross negligence or willful misconduct as determined by a final,
non-appealable judicial order of a court of competent jurisdiction.
Section 9.2 INTEREST HOLDERS. The Administrative Agent may treat
each Bank, or the Person designated in the last notice filed with the
Administrative Agent, as the holder of all of the interests of such Bank in
its portion of the Loans and in its Note until written notice of transfer,
signed by such Bank (or the Person designated in the last notice filed with
the Administrative Agent) and by the Person designated in such written notice
of transfer, in form and substance satisfactory to the Administrative Agent,
shall have been filed with the Administrative Agent.
Section 9.3 CONSULTATION WITH COUNSEL. The Administrative Agent may
consult with Powell, Goldstein, Frazer & Murphy, Atlanta, Georgia, special
counsel to the Administrative Agent, or with other legal counsel selected by
them and shall not be liable for any action taken or suffered by them in good
faith in consultation with the Majority Banks and in reasonable reliance on
such consultations.
Section 9.4 DOCUMENTS. The Administrative Agent shall be under no
duty to examine, inquire into, or pass upon the validity, effectiveness or
genuineness of this Agreement, any Note, any other Loan Document, or any
instrument, document or communication furnished pursuant hereto or in
connection herewith, and the Administrative Agent shall be entitled to assume
that they are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be.
Section 9.5 ADMINISTRATIVE AGENT AND AFFILIATES. With respect to the
Commitment and the Loans, the Administrative Agent shall have the same rights
and powers hereunder as any other Bank, and the Administrative Agents and
Affiliates of the Administrative Agent may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower, any of its
Subsidiaries or any Affiliates of, or Persons doing business with, the
Borrower, as if they were not affiliated with the Administrative Agent and
without any
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obligation to account therefor. The foregoing sentence shall apply with
equal force to the Administrative Agent.
Section 9.6 RESPONSIBILITY OF THE ADMINISTRATIVE AGENT. The duties
and obligations of the Administrative Agent under this Agreement are only
those expressly set forth in this Agreement. The Administrative Agent shall
be entitled to assume that no Default or Event of Default has occurred and is
continuing unless it has actual knowledge, or has been notified in writing by
the Borrower, of such fact, or has been notified by a Bank in writing that
such Bank considers that a Default or an Event of Default has occurred and is
continuing, and such Bank shall specify in detail the nature thereof in
writing. The Administrative Agent shall not be liable hereunder for any
action taken or omitted to be taken except for its own gross negligence or
willful misconduct as determined by a final, non-appealable judicial order of
a court of competent jurisdiction. The Administrative Agent shall provide
each Bank with copies of such documents received from the Borrower as such
Bank may reasonably request.
Section 9.7 ADMINISTRATIVE AGENT. The Administrative Agent is hereby
authorized to act on behalf of the Banks, in its own capacity and through
other agents and sub-agents appointed by it, under the Security Documents,
provided that the Administrative Agent shall not agree to the release of any
Collateral, or any property encumbered by any mortgage, pledge or security
interest, except in compliance with Section 11.12 hereof.
Section 9.8 ACTION BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any
rights which may be vested in them or any of them by, and with respect to
taking or refraining from taking any action or actions which they may be able
to take under or in respect of, this Agreement, unless the Administrative
Agent shall have been instructed by the Majority Banks to exercise or refrain
from exercising such rights or to take or refrain from taking such action;
PROVIDED that the Administrative Agent shall not exercise any rights under
Section 8.2(a) of this Agreement without the request of the Majority Banks
(or, where expressly required, all the Banks) unless time is of the essence,
in which case, such action can be taken at the request of the Administrative
Agents. The Administrative Agent shall incur no liability under or in
respect of this Agreement with respect to anything which it may do or refrain
from doing in the reasonable exercise of its judgment or which may seem to it
to be necessary or desirable in the circumstances, except for its gross
negligence or willful misconduct as determined by a final, nonappealable
judicial order of a court having jurisdiction over the subject matter.
(b) The Administrative Agent shall not be liable to the Banks
or to any Bank or the Borrower or any of the Borrower's Subsidiaries in
acting or refraining from acting under this Agreement or any other Loan
Document in accordance with the instructions of the Majority Banks (or, where
expressly required, all the Banks), and any action taken or failure to act
pursuant to such instructions shall be binding on all Banks. The
Administrative
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Agent shall not be obligated to take any action which is contrary to law or
which would in such Person's reasonable opinion subject such Person to
liability.
Section 9.9 NOTICE OF DEFAULT OR EVENT OF DEFAULT. In the event that
the Administrative Agent or any Bank shall acquire actual knowledge, or shall
have been notified, of any Default or Event of Default, the Administrative
Agent or such Bank shall promptly notify the Banks and the Administrative
Agent, as applicable (provided failure to give such notice shall not result
in any liability on the part of such Bank or Administrative Agent), and the
Administrative Agent shall take such action and assert such rights under this
Agreement and the other Loan Documents as the Majority Banks shall request in
writing, and the Administrative Agent shall not be subject to any liability
by reason of their acting pursuant to any such request. If the Majority
Banks shall fail to request the Administrative Agent to take action or to
assert rights under this Agreement or any other Loan Documents in respect of
any Default or Event of Default within ten (10) days after their receipt of
the notice of any Default or Event of Default from the Administrative Agent
or any Bank, or shall request inconsistent action with respect to such
Default or Event of Default, the Administrative Agent may, but shall not be
required to, take such action and assert such rights (other than rights under
Article 8 hereof) as it deems in its discretion to be advisable for the
protection of the Banks, except that, if the Majority Banks have instructed
the Administrative Agent not to take such action or assert such right, in no
event shall the Administrative Agent act contrary to such instructions unless
time is of the essence.
Section 9.10 RESPONSIBILITY DISCLAIMED. The Administrative Agent
shall not be under any liability or responsibility whatsoever as
Administrative Agent:
(a) To the Borrower or any other Person as a consequence of
any failure or delay in performance by or any breach by, any Bank or Banks of
any of its or their obligations under this Agreement;
(b) To any Bank or Banks, as a consequence of any failure or
delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or the Notes or any other Loan Document, or
(ii) any Subsidiary of the Borrower or any other obligor under any other Loan
Document;
(c) To any Bank or Banks, for any statements, representations
or warranties in this Agreement, or any other document contemplated by this
Agreement or any information provided pursuant to this Agreement, any other
Loan Document, or any other document contemplated by this Agreement, or for
the validity, effectiveness, enforceability or sufficiency of this Agreement,
the Notes, any other Loan Document, or any other document contemplated by
this Agreement; or
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(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative
Agent as determined by a final, non-appealable judicial order of a court of
competent jurisdiction.
Section 9.11 INDEMNIFICATION. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses (other than the loss of principal and
interest hereunder in the event of a bankruptcy or out-of-court 'work-out' of
the Loans), damages, penalties, actions, judgments, suits, costs, expenses
(including fees and expenses of experts, agents, consultants and counsel), or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating
to or arising out of this Agreement, any other Loan Document, or any other
document contemplated by this Agreement or any other Loan Document or any
action taken or omitted by the Administrative Agent under this Agreement, any
other Loan Document, or any other document contemplated by this Agreement,
except that no Bank shall be liable to the Administrative Agent for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements resulting from
the gross negligence or willful misconduct of the Administrative Agent as
determined by a final, non-appealable judicial order of a court having
jurisdiction over the subject matter.
Section 9.12 CREDIT DECISION. Each Bank represents and warrants to
each other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and
to make its portion of the Loans it has independently taken whatever steps it
considers necessary to evaluate the financial condition and affairs of the
Borrower and that it has made an independent credit judgment, and that it has
not relied upon the Administrative Agent or information provided by the
Administrative Agent (other than information provided to the Administrative
Agent by the Borrower and forwarded by the Administrative Agent to the
Banks); and
(b) So long as any portion of the Loans remains outstanding
or such Bank has an obligation to make its portion of Advances hereunder, it
will continue to make its own independent evaluation of the financial
condition and affairs of the Borrower.
Section 9.13 SUCCESSOR ADMINISTRATIVE AGENT. Subject to the
appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower and may be
removed at any time for cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to
appoint a successor Administrative Agent which appointment shall, prior
to an Event of Default, be subject to the consent of the Borrower,
acting reasonably. If (a) no successor Administrative Agent shall have
been so
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appointed by the Majority Banks or (b) if appointed, no successor Administrative
Agent shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent gave notice of resignation or the Majority Banks
removed the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent
which shall be any Bank or a commercial bank organized under the laws of the
United States of America or any political subdivision thereof which has combined
capital and reserves in excess of $250,000,000, which appointment shall, prior
to an Event of Default, be subject to the consent of the Borrower, acting
reasonably. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative
Agent the provisions of this Article shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent.
Section 9.14 DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties under the Loan Documents by or through agents or
attorneys selected by it using reasonable care, and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.
Section 9.15 NO RESPONSIBILITIES OF CO-AGENTS. The Co-Agents shall
have no responsibilities hereunder or under any of the other Loan Documents
in their capacities as Co-Agents.
ARTICLE 10
Change in Circumstances
AFFECTING LIBOR ADVANCES
Section 10.1 LIBOR BASIS DETERMINATION INADEQUATE OR UNFAIR. If with
respect to any proposed LIBOR Advance for any Interest Period, the
Administrative Agent determines after consultation with the Banks that
deposits in dollars (in the applicable amount) are not being offered to each
of the Banks in the relevant market for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such situation no longer exist, the
obligations of any affected Bank to make its portion of such type of LIBOR
Advances shall be suspended.
Section 10.2 ILLEGALITY. If after the date hereof, the adoption of
any Applicable Law, or any change in any Applicable Law (whether adopted
before or after the Agreement Date),
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or any change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Bank with any directive
(whether or not having the force of law) of any such authority, central bank
or comparable agency, shall make it unlawful or impossible for any Bank to
make, maintain or fund its portion of LIBOR Advances, such Bank shall so
notify the Administrative Agent, and the Administrative Agent shall forthwith
give notice thereof to the other Banks and the Borrower. Before giving any
notice to the Administrative Agent pursuant to this Section 10.2, such Bank
shall designate a different lending office if such designation will avoid the
need for giving such notice and will not, in the sole judgment of such Bank,
be otherwise materially disadvantageous to such Bank. Upon receipt of such
notice, notwithstanding anything contained in Article 2 hereof, the Borrower
shall repay in full the then outstanding principal amount of such Bank's
portion of each affected LIBOR Advance, together with accrued interest
thereon, on either (a) the last day of the then current Interest Period
applicable to such affected LIBOR Advances if such Bank may lawfully continue
to maintain and fund its portion of such LIBOR Advance to such day or (b)
immediately if such Bank may not lawfully continue to fund and maintain its
portion of such affected LIBOR Advances to such day. Concurrently with
repaying such portion of each affected LIBOR Advance, the Borrower may borrow
a Base Rate Advance from such Bank, and such Bank shall make such Advance, if
so requested, in an amount such that the outstanding principal amount of the
affected Note held by such Bank shall equal the outstanding principal amount
of such Note or Notes immediately prior to such repayment.
Section 10.3 INCREASED COSTS.
(a) If after the date hereof, the adoption of any Applicable
Law, or any change in any Applicable Law (whether adopted before or after the
Agreement Date), or any interpretation or change in interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof
or compliance by any Bank with any directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(1) shall subject any Bank to any tax, duty or other charge with
respect to its obligation to make its portion of LIBOR Advances, or its
portion of existing Advances, or shall change the basis of taxation of
payments to any Bank of the principal of or interest on its portion of
LIBOR Advances or in respect of any other amounts due under this Agreement,
in respect of its portion of LIBOR Advances or its obligation to make its
portion of LIBOR Advances (except for changes in the rate or method of
calculation of tax on the overall net income of such Bank); or
(2) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System, but excluding any included in an applicable
Eurodollar Reserve Percentage), special deposit, capital adequacy,
assessment or other requirement or condition against
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assets of, deposits with or for the account of, or commitments or credit
extended by, any Bank or shall impose on any Bank or the London interbank
borrowing market any other condition affecting its obligation to make its
portion of such LIBOR Advances or its portion of existing Advances;
and the result of any of the foregoing is to increase the cost to such Bank
of making or maintaining any of its portion of LIBOR Advances, or to reduce
the amount of any sum received or receivable by such Bank under this
Agreement or under its Note with respect thereto, then, if such Bank
exercises comparable rights (if any) for borrowers situated similarly to the
Borrower, within ten (10) days after demand by such Bank, the Borrower agrees
to pay to such Bank such additional amount or amounts as will compensate such
Bank for such increased costs. Each Bank will promptly notify the Borrower
and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Bank to compensation
pursuant to this Section 10.3 and will designate a different lending office
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of such Bank made in good
faith, be otherwise disadvantageous to such Bank.
(b) Any Bank claiming compensation under this Section 10.3
shall provide the Borrower with a written certificate setting forth the
additional amount or amounts to be paid to it hereunder and calculations
therefor in reasonable detail. Such certificate shall be presumptively
correct absent manifest error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods. If any Bank demands
compensation under this Section 10.3, the Borrower may at any time, upon at
least five (5) Business Days' prior notice to such Bank, prepay in full such
Bank's portion of the then outstanding LIBOR Advances, together with accrued
interest thereon to the date of prepayment, along with any reimbursement
required under Section 2.10 hereof. Concurrently with prepaying such portion
of LIBOR Advances the Borrower may borrow a Base Rate Advance, or a LIBOR
Advance not so affected, from such Bank, and such Bank shall, if so
requested, make such Advance in an amount such that the outstanding principal
amount of the affected Note or Notes held by such Bank shall equal the
outstanding principal amount of such Note or Notes immediately prior to such
prepayment.
Section 10.4 EFFECT ON OTHER ADVANCES. If notice has been given
pursuant to Section 10.1, 10.2 or 10.3 suspending the obligation of any Bank
to make its portion of any type of LIBOR Advance, or requiring such Bank's
portion of LIBOR Advances to be repaid or prepaid, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
repayment no longer apply, all amounts which would otherwise be made by such
Bank as its portion of LIBOR Advances shall, unless otherwise notified by the
Borrower, be made instead as Base Rate Advances. Any Base Rate Advance for
this purpose shall not be counted in the number of Advances permitted under
Section 2.3(e).
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ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES.
(a) Except as otherwise expressly provided herein, all
notices and other communications under this Agreement and the other Loan
Documents (unless otherwise specifically stated therein) shall be in writing
and shall be deemed to have been given three (3) Business Days after deposit
in the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one (1) Business Day after being entrusted to a reputable
commercial overnight delivery service for next day delivery, or when sent on
a Business Day prior to 5:00 p.m. (New York time) by telecopy addressed to
the party to which such notice is directed at its address determined as
provided in this Section 11.1. All notices and other communications under
this Agreement shall be given to the parties hereto at the following
addresses:
(1) If to the Borrower, to it at:
Rural Cellular Corporation
3905 Dakota Street, S.W.
Alexandria, Minnesota 56308
Attn: Richard Ekstrand,
President and CEO
Telecopy No.: (320) 808-2102
with a copy to:
Moss & Barnett
4800 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4129
Attn: James A. Rubenstein, Esq.
Telecopy No.: (612) 339-6686
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(2) If to the Administrative Agent, to it at:
Toronto Dominion (Texas), Inc.
c/o The Toronto-Dominion Bank
909 Fannin Street, Suite 900
Houston, Texas 77010
Attn: Manager, Agency
Telecopy No.: (713) 951-9921
with a copy to:
Powell, Goldstein, Frazer & Murphy LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Douglas S. Gosden, Esq.
Telecopy No.: (404) 572-6999
(3) If to the Co-Agents and the Banks, to them at the
addresses set forth on SCHEDULE 8 attached hereto.
Copies shall be provided to persons other than parties hereto only in the
case of notices under Article 8 hereof and the failure to provide such copies
shall not affect the validity of the notice given to the primary recipient.
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 EXPENSES. The Borrower will promptly pay, or
reimburse:
(a) all reasonable out-of-pocket expenses of the Administrative
Agent in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Documents, and the transactions contemplated
hereunder and thereunder and the making of the initial Advance hereunder
(whether or not such Advance is made), including, but not limited to, the
reasonable fees and disbursements of Powell, Goldstein, Frazer & Murphy, special
counsel for the Administrative Agent;
(b) all reasonable out-of-pocket expenses of the Administrative
Agent in connection with the restructuring and "work out" of the transactions
contemplated in this Agreement or the other Loan Documents, and the preparation,
negotiation, execution and delivery of any waiver, amendment or consent by the
Administrative Agent and the Banks, or any of them, relating to this Agreement
or the other Loan Documents, including, but not
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limited to, the reasonable fees and disbursements of any experts, agents or
consultants and, prior to the occurrence and continuance of an Event of
Default, of a single law firm acting as special counsel for the Administrative
Agent and the Banks, and during the occurrence and continuance of an Event of
Default a law firm for Administrative Agent; and
(c) all out-of-pocket costs and expenses of the Administrative
Agent and the Banks of enforcement under this Agreement or the other Loan
Documents and all out-of-pocket costs and expenses of collection if an Event of
Default occurs in the payment of the Notes, which in each case shall include
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent and the Banks.
Section 11.3 WAIVERS. The rights and remedies of the Administrative
Agent and the Banks under this Agreement and the other Loan Documents shall
be cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Administrative Agent, the
Majority Banks, or the Banks, or any of them, in exercising any right, shall
operate as a waiver of such right. The Administrative Agent and the Banks
expressly reserve the right to require strict compliance with the terms of
this Agreement in connection with any future funding of a Request for
Advance. In the event the Banks decide to fund a Request for Advance at a
time when the Borrower is not in strict compliance with the terms of this
Agreement, such decision by the Banks shall not be deemed to constitute an
undertaking by the Banks to fund any further Request for Advance or preclude
the Banks or the Administrative Agent from exercising any rights available
under the Loan Documents or at law or equity. Any waiver or indulgence
granted by the Administrative Agent, the Banks, or the Majority Banks, shall
not constitute a modification of this Agreement or any other Loan Document,
except to the extent expressly provided in such waiver or indulgence, or
constitute a course of dealing at variance with the terms of this Agreement
or any other Loan Document such as to require further notice of their intent
to require strict adherence to the terms of this Agreement or any other Loan
Document in the future.
Section 11.4 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default and during the continuation
thereof, the Administrative Agent and each of the Banks are hereby authorized
by the Borrower at any time or from time to time, without notice to the
Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits
(general or special, time or demand, including, but not limited to,
Indebtedness evidenced by certificates of deposit, in each case whether
matured or unmatured) and any other Indebtedness at any time held or owing by
any Bank or the Administrative Agent to or for the credit or the account of
the Borrower or any of its Subsidiaries, against and on account of the
obligations and liabilities of the Borrower to the Banks and the
Administrative Agent, including, but not limited to, all Obligations and any
other claims of any nature or description arising out of or connected with
this Agreement, the Notes or any other Loan Document, irrespective of whether
(a) any Bank or the Administrative Agent shall have made any demand hereunder
or
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(b) any Bank or the Administrative Agent shall have declared the principal of
and interest on the Loans and other amounts due hereunder to be due and
payable as permitted by Section 8.2 and although such obligations and
liabilities or any of them shall be contingent or unmatured. Upon direction
by the Administrative Agent with the consent of the Banks, each Bank holding
deposits of the Borrower or any of its Subsidiaries shall exercise its
set-off rights as so directed; and, within one (1) Business Day following any
such setoff, the Administrative Agent shall give notice thereof to the
Borrower.
Section 11.5 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its
rights or obligations hereunder, under the Notes or under any other Loan
Document without the prior written consent of each Bank.
(b) Each Bank may sell (i) assignments of any amount of its
interest hereunder to any Bank, or (ii) assignments or participations of one
hundred percent (100%) (or, with the consent of the Borrower, a smaller
percentage) of its interest hereunder to (A) one or more wholly-owned
Affiliates of the parent company of such Bank (provided that, if such
Affiliate is not a financial institution, such Bank shall be obligated to
repurchase such assignment if such Affiliate is unable to honor its
obligations hereunder), or (B) any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve Bank
(no assignment shall relieve such Bank from its obligations hereunder).
(c) Each of the Banks may at any time enter into assignment
agreements or participations with one or more other banks or other Persons
pursuant to which each Bank may assign or participate its interest under this
Agreement and the other Loan Documents, including, its interest in any
particular Advance or portion thereof, PROVIDED, that (1) all assignments
(other than assignments described in clause (b) hereof) shall be in minimum
principal amounts of the LESSER of (X) $5,000,000, and (Y) the amount of such
Bank's Commitment (in a single assignment only), and (2) all assignments
(other than assignments described in clause (b) hereof) and participations
hereunder shall be subject to the following additional terms and conditions:
(1) No assignment (except assignments permitted in Section
11.5(b) hereof) shall be sold without the prior consent of the
Administrative Agent and prior to the occurrence and continuation of an
Event of Default, the consent of the Borrower, which consents shall not be
unreasonably withheld;
(2) Any Person purchasing a participation or an assignment of
any portion of the Loans from any Bank shall be required to represent and
warrant that its purchase shall not constitute a "prohibited transaction"
(as defined in Section 4.1(m) hereof);
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(3) The Borrower, the Banks, and the Administrative Agent agree
that assignments permitted hereunder (including the assignment of any
Advance or portion thereof) may be made with all voting rights, and shall
be made pursuant to an Assignment and Assumption Agreement substantially in
the form of EXHIBIT O attached hereto. An administrative fee of $2,000
shall be payable to the Administrative Agent by the assigning Bank at the
time of any assignment under this Section 11.5(b);
(4) No participation agreement shall confer any rights under
this Agreement or any other Loan Document to any purchaser thereof, or
relieve any issuing Bank from any of its obligations under this Agreement,
and all actions hereunder shall be conducted as if no such participation
had been granted; PROVIDED, HOWEVER, that any participation agreement may
confer on the participant the right to approve or disapprove decreases in
the interest rate, increases in the principal amount of the Loans
participated in by such participant, decreases in fees, extensions of the
Maturity Date or other principal payment date for the Loans or of the
scheduled reduction of the Commitment and releases of Collateral;
(5) Each Bank agrees to provide the Administrative Agent and the
Borrower with prompt written notice of any issuance of participations in or
assignments of its interests hereunder;
(6) No assignment, participation or other transfer of any rights
hereunder or under the Notes shall be effected that would result in any
interest requiring registration under the Securities Act of 1933, as
amended, or qualification under any state securities law;
(7) No such assignment may be made to any bank or other
financial institution (x) with respect to which a receiver or conservator
(including, without limitation, the Federal Deposit Insurance Corporation,
the Resolution Trust Company or the Office of Thrift Supervision) has been
appointed or (y) that is not "adequately capitalized" (as such term is
defined in Section 131(b)(1)(B) of the Federal Deposit Insurance
Corporation Improvement Act as in effect on the Agreement Date); and
(8) If applicable, each Bank shall, and shall cause each of its
assignees to, provide to the Administrative Agent on or prior to the
effective date of any assignment an appropriate Internal Revenue Service
form as required by Applicable Law supporting such Bank's or assignee's
position that no withholding by the Borrower or the Administrative Agent
for U.S. income tax payable by such Bank or assignee in respect of amounts
received by it hereunder is required. For purposes of this Agreement, an
appropriate Internal Revenue Service form shall mean Form 1001 (Ownership
Exemption or Reduced Rate Certificate of the U.S. Department of Treasury),
or Form 4224 (Exemption from Withholding of Tax on Income Effectively
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Connected with the Conduct of a Trade or Business in the United States), or
any successor or related forms adopted by the relevant U.S. taxing
authorities.
(d) Except as specifically set forth in Section 11.5(b) and
(c) hereof, nothing in this Agreement or the Notes, expressed or implied, is
intended to or shall confer on any Person other than the respective parties
hereto and thereto and their successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other claim
under this Agreement or the Notes.
(e) In the case of any participation, all amounts payable by
the Borrower under the Loan Documents shall be calculated and made in the
manner and to the parties hereto as if no such participation had been sold.
(f) The provisions of this Section 11.5 shall not apply to
any purchase of participations among the Banks pursuant to Section 2.11
hereof.
Section 11.6 ACCOUNTING PRINCIPLES. All references in this Agreement
to GAAP shall be to such principles as in effect from time to time. All
accounting terms used herein without definition shall be used as defined
under GAAP. The Borrower shall deliver to the Banks at the same time as the
delivery of any quarterly or annual financial statements required pursuant to
Section 6.1 or 6.2 hereof, as applicable, (a) a description in reasonable
detail of any material variation between the application of GAAP employed in
the preparation of such statements and the application of GAAP employed in
the preparation of the next preceding quarterly or annual financial
statements, as applicable, and (b) reasonable estimates of the differences
between such statements arising as a consequence thereof. If, within thirty
(30) days after the delivery of the quarterly or annual financial statements
referred to in the immediately preceding sentence, the Majority Banks shall
object in writing to the Borrower's determining compliance hereunder on such
basis, (1) calculations for the purposes of determining compliance hereunder
shall be made on a basis consistent with those used in the preparation of the
latest financial statements as to which such objection shall not have been
made, or (2) if requested by the Borrower, the Majority Banks will negotiate
in good faith to amend the covenants herein to give effect to the changes in
GAAP in a manner consistent with this Agreement.
Section 11.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 GOVERNING LAW. This Agreement and the Notes
shall be construed in accordance with and governed by the internal laws
of the State of New York applicable to agreements made and to be
performed in New York. If any action or proceeding shall be brought by
the Administrative Agent or any Bank hereunder or under any other Loan
Document in order to enforce any right or remedy under this Agreement or
under any Note
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or any other Loan Document, the Borrower hereby consents and will, and the
Borrower will cause each Subsidiary to, submit to the jurisdiction of any
state or federal court of competent jurisdiction sitting within the area
comprising the Southern District of New York on the date of this Agreement.
The Borrower, for itself and on behalf of its Subsidiaries, hereby agrees
that service of the summons and complaint and all other process which may be
served in any such suit, action or proceeding may be effected by mailing by
registered mail a copy of such process to the offices of the Borrower at the
address given in Section 11.1 hereof and that personal service of process
shall not be required. Nothing herein shall be construed to prohibit service
of process by any other method permitted by law, or the bringing of any suit,
action or proceeding in any other jurisdiction. The Borrower agrees that
final judgment in such suit, action or proceeding shall be conclusive and may
be enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by Applicable Law.
Section 11.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.10 INTEREST.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by
the Borrower or inadvertently received by the Administrative Agent or any
Bank, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the Administrative Agent or such Bank, in
writing, that it elects to have such excess sum returned forthwith. It is
the express intent hereof that the Borrower not pay and the Administrative
Agent and the Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid by the
Borrower under Applicable Law.
(b) Notwithstanding the use by the Banks of the Base Rate and
LIBOR as reference rates for the determination of interest on the Loans, the
Banks shall be under no obligation to obtain funds from any particular source
in order to charge interest to the Borrower at interest rates related to such
reference rates.
Section 11.11 TABLE OF CONTENTS AND HEADINGS. The Table of Contents
and the headings of the various subdivisions used in this Agreement are for
convenience only and shall not in any way modify or amend any of the terms or
provisions hereof, nor be used in connection with the interpretation of any
provision hereof.
Section 11.12 AMENDMENT AND WAIVER. Neither this Agreement nor any
Loan Document nor any term hereof or thereof may be amended orally, nor may
any provision hereof or thereof be waived orally but only by an instrument in
writing signed by or at the
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direction of the Majority Banks and, in the case of an amendment, by the
Borrower, except that in the event of (a) any increase in the amount of any
Bank's portion of the Commitment, (b) any delay or extension in the terms of
repayment of the Loans provided in Section 2.5 or 2.7 hereof, (c) any
reduction in principal, interest or fees due hereunder or postponement of the
payment thereof without a corresponding payment of such principal, interest
or fee amount by the Borrower, (d) any release of any portion of the
Collateral for the Loans, (e) any waiver of any Default due to the failure by
the Borrower to pay any sum due to any of the Banks hereunder, (f) any
release of any Guaranty of all or any portion of the Obligations, except in
connection with a merger, sale or other disposition otherwise permitted
hereunder (in which case, such release shall require no further approval by
the Banks), (g) any amendment to the pro rata treatment of the Banks set
forth in Section 2.11 hereof, or (h) any amendment of this Section 11.12, of
the definition of Majority Banks, or of any Section herein to the extent that
such Section requires action by all Banks, any amendment or waiver or consent
may be made only by an instrument in writing signed by each of the Banks and,
in the case of an amendment, by the Borrower. Any amendment to any provision
hereunder governing the rights, obligations, or liabilities of the
Administrative Agent, in its capacity as such, may be made only by an
instrument in writing signed by such affected Person and by each of the Banks.
Section 11.13 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated
herein will embody the entire agreement and understanding among the parties
hereto and thereto and supersede all prior agreements and understandings
relating to the subject matter hereof and thereof.
Section 11.14 OTHER RELATIONSHIPS. No relationship created hereunder
or under any other Loan Document shall in any way affect the ability of the
Administrative Agent and each Bank to enter into or maintain business
relationships with the Borrower or any of its Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.15 DIRECTLY OR INDIRECTLY. If any provision in this
Agreement refers to any action taken or to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, whether
or not expressly specified in such provision.
Section 11.16 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All
covenants, agreements, statements, representations and warranties made herein
or in any certificate delivered pursuant hereto (i) shall be deemed to have
been relied upon by the Administrative Agent and each of the Banks
notwithstanding any investigation heretofore or hereafter made by them, and
(ii) shall survive the execution and delivery of the Notes and shall continue
in full force and effect so long as any Note is outstanding and unpaid. Any
right to indemnification hereunder, including, without limitation, rights
pursuant to Sections 2.10,
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2.12, 5.12, 10.3 and 11.2 hereof, shall survive the termination of this
Agreement and the payment and performance of all Obligations.
Section 11.17 SENIOR DEBT. The Obligations are secured by the Security
Documents and is intended by the parties hereto to be in parity with the
Interest Hedge Agreements and senior in right of payment to all other
Indebtedness of the Borrower.
Section 11.18 OBLIGATIONS SEVERAL. The obligations of the
Administrative Agent and each of the Banks hereunder are several, not joint.
Section 11.19 CONFIDENTIALITY. All information furnished to the
Administrative Agent or the Banks concerning the Borrower and its
Subsidiaries is presumed to be non-public proprietary or confidential unless
otherwise identified by the Person furnishing the information. The Banks and
the Administrative Agent shall hold all non-public, proprietary or
confidential information obtained pursuant to the requirements of this
Agreement in accordance with their customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices; however, the Banks may make disclosure of any such
information to their examiners, Affiliates, outside auditors, counsel,
consultants, appraisers and other professional advisors in connection with
this Agreement or as reasonably required by any proposed syndicate member or
any proposed transferee or participant in connection with the contemplated
transfer of any Note or participation therein or as required or requested by
any governmental authority or representative thereof or in connection with
the enforcement hereof or of any Loan Document or related document or
pursuant to legal process or with respect to any litigation between or among
the Borrower and any of the Banks so long as any such recipient is advised of
the non-public, proprietary or confidential nature of the information and of
the Bank's obligations under this Section. Unless specifically requested by
the Borrower, no Bank shall be obligated or required to return any materials
furnished to it by the Borrower. The foregoing provisions shall not apply to
a Bank with respect to information that (i) is or becomes generally available
to the public (other than through such Bank), or (ii) is already in the
possession of such Bank on a nonconfidential basis.
ARTICLE 12
WAIVER OF JURY TRIAL
Section 12.1 WAIVER OF JURY TRIAL. THE BORROWER, FOR ITSELF AND ON
BEHALF OF THE SUBSIDIARIES, AND THE ADMINISTRATIVE AGENT AND THE BANKS,
HEREBY AGREE TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY
COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY
OF THE BORROWER'S SUBSIDIARIES, ANY OF THE BANKS, THE ADMINISTRATIVE AGENT,
OR ANY OF THEIR
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RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS
SECTION 12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT
WAIVES ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED
TO IN THIS SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO
THIS AGREEMENT (i) CERTIFIES THAT NEITHER ANY REPRESENTATIVE, AGENT OR
ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY BANK HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY BANK WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION. THE PROVISIONS OF THIS SECTION HAVE BEEN
FULLY DISCLOSED BY AND TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT TO
NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY
OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused it to be executed by their duly authorized officers,
all as of the day and year first above written.
BORROWER: RURAL CELLULAR CORPORATION
By: /s/ Richard P. Ekstrand
------------------------------
Its: President and CEO
-----------------------
ADMINISTRATIVE AGENT: TORONTO DOMINION (TEXAS), INC.
By: /s/ Kimberly Burleson
------------------------------
Its: Vice President
-------------------------
CO-AGENTS: BANKBOSTON, N.A.
By: /s/ Cindy Chen
------------------------------
Its: Director
-------------------
ST. PAUL BANK FOR COOPERATIVES
By: /s/ Stuart S. Peterson
------------------------------
Its: Senior Vice President
-------------------------
BANKS: THE TORONTO-DOMINION BANK
By: /s/ Kimberly Burleson
------------------------------
Its: Vice President
-------------------------
<PAGE>
BANKS BANKBOSTON, N.A.
(continued)
By: /s/ Cindy Chen
------------------------------
Its: Director
-------------------------
ST. PAUL BANK FOR COOPERATIVES
By: /s/ Stuart S. Peterson
------------------------------
Its: Senior Vice President
-------------------------
COBANK
By: /s/ Robert F. West
------------------------------
Its: Vice President
-------------------------
FLEET NATIONAL BANK
By: /s/ Chris Swindell
------------------------------
Its: Vice President
-------------------------
FIRST NATIONAL BANK OF MARYLAND
By: /s/ W. Blake Hampson
------------------------------
Its: Vice President
-------------------------
<PAGE>
SOCIETE GENERALE, NEW YORK BRANCH
By: /s/ John Sadik-Khan
------------------------------
Its: Vice President
-------------------------
MERITA BANK LTD NEW YORK BRANCH
By: /s/ Eric I. Mann
------------------------------
Its: Vice President
-------------------------
By: /s/ Charles Landsdowne
------------------------------
Its: Vice President
-------------------------
