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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): April 1, 2000
RURAL CELLULAR CORPORATION
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(Exact name of Registrant as Specified in its Charter)
MINNESOTA
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(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
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Item 2. Acquisition or Disposition of Assets.
Effective April 1, 2000, the Registrant's wholly owned subsidiary, RCC Holdings,
Inc., completed the previously announced acquisition of the licenses,
operations, and related assets of Triton Cellular Partners, L.P. ("Triton
Cellular"), which includes 20 rural service areas in Alabama, Kansas,
Mississippi, Oregon and Washington and unbuilt PCS licenses in four basic
trading areas in Oregon.
As consideration for the acquisition of Triton Cellular, the Registrant paid
approximately $1.256 billion in cash, utilizing $135.8 million of net proceeds
from the February 2000 issuance of 140,000 shares of Junior Exchangeable
Preferred Stock, $1.012 billion in funds borrowed under a new $1.2 billion
credit facility arranged by TD Securities (USA) Inc. and $108.1 million of net
proceeds from its April 2000 issuance of 110,000 shares of Class M preferred
stock. The purchasers of Class M preferred stock included Madison Dearborn
Capital Partners III, L.P., Madison Dearborn Special Equity III, L.P., Special
Advisors Fund I, LLC (collectively, "Madison Dearborn"), Boston Ventures Limited
Partnership V ("Boston Ventures"), and Toronto Dominion Investments, Inc.
The Registrant had no affiliation with Triton Cellular prior to negotiations
regarding the acquisition, although the two entities did have agreements
regarding service on "roaming" traffic in their respective service areas. The
consideration was determined in arm's-length negotiations among Triton Cellular
and the Registrant and was determined to be fair and reasonable by the
Registrant's Board of Directors.
In order to comply with the FCC's rules regarding cross-ownership of cellular
licensees within a given market, the Registrant also issued shares of Class T
convertible preferred stock to Telephone & Data Systems, Inc. ("TDS") in
exchange for 43,000 shares of Class A Common Stock and 105,940 shares of Class B
Common Stock owned by TDS. An affiliate of TDS operates the competing cellular
licensee in two of the RSAs acquired by the Registrant from Triton Cellular. TDS
or the Registrant can convert the Class T preferred stock to Class A or Class B
Common Stock in the future if ownership by TDS of the Common Stock would then be
permissible under FCC rules. Under current FCC rules, TDS is not allowed to own
more than 5% of the outstanding Class A or Class B Common Stock.
Item 5. Other Events
Effective April 4, 2000, the Registrant announced the appointment of Paul
Finnegan and John Hunt to its Board of Directors. These appointments increase
the size of the Board to ten members.
The appointment of Mr. Finnegan and Mr. Hunt was required under the terms of the
Class M Preferred Stock pursuant to which Madison Dearborn and Boston Ventures
are each entitled to designate one member of the Registrant's Board of
Directors. Further information regarding Mr. Finnegan and Mr. Hunt is disclosed
in the Registrant's April 4, 2000 Press Release filed as exhibit 99.2 to this
report.
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Item 7. Financial Statements and Exhibits
(a) The Registrant intends to file the required financial statements for
Triton Cellular within the period provided for under Item 7 (a) (4) of
Form 8-K.
(b) The Registrant intends to file the required proforma financial
information within the period provided for under Item 7 (a) (4) of
Form 8-K.
(c) Exhibits
*2.1 (a) Asset Purchase Agreement among Triton Cellular
Partners, L.P. and Rural Cellular Corporation as of
November 8, 1999
*Filed as an exhibit to Registrant's Report on Form
10-Q for the quarter ended September 30, 1999 (SEC
No. 000-27416), filed November 15, 1999, and
incorporated herein by reference
4.1 (a) Recapitalization Agreement dated October 31, 1999
by and between Rural Cellular Corporation and
Telephone and Data Systems, Inc.
4.1 (b) First Amendment to Recapitalization Agreement dated
December 6, 1999 by and between Rural Cellular
Corporation and Telephone and Data Systems, Inc.
4.1 (c) Second Amendment to Recapitalization Agreement
dated March 31, 2000 by and between Rural Cellular
Corporation and Telephone and Data Systems, Inc.
4.1 (d) Registration Rights Agreement dated March 31, 2000
by and between Rural Cellular Corporation and
Telephone and Data Systems, Inc.
4.1 (e) Certificate of Designation of Voting Power,
Preferences and Relative Participating, Optional
and Other Special Rights, Qualifications, and
Restrictions of Class T Convertible Preferred Stock
of Rural Cellular Corporation
4.2 (a) Preferred Stock Purchase Agreement dated April 3,
2000 among Rural Cellular Corporation, Madison
Dearborn Capital Partners III, L.P., Madison
Dearborn Special Equity III, L.P., Special Advisors
Fund I, LLC, Boston Ventures Limited Partnership V
and Toronto Dominion Investments, Inc.
(collectively "Class M Investors")
4.2 (b) Certificate of Designation of Voting Power,
Preferences and Relative Participating, Optional
and Other Special Rights, Qualifications and
Restrictions of Class M Redeemable Voting
Convertible Preferred Stock of Rural Cellular
Corporation
4.2 (c) Registration Rights Agreement dated April 3, 2000
among Rural Cellular Corporation and Class M
Investors
10.1 (a) Second Amended and Restated Loan Agreement dated
April 3, 2000 among Rural Cellular Corporation and
certain financial institutions and Toronto Dominion
(Texas), Inc. as administrative agent
99.1 Press release dated April 3, 2000, announcing the
completion of the Triton Cellular Acquisition
99.2 Press release dated April 4, 2000, announcing the
addition of two new board members
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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.
Date: April 14, 2000
RURAL CELLULAR CORPORATION
/s/ Richard P. Ekstrand
RICHARD P. EKSTRAND
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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Exhibit 4.1(a)
RECAPITALIZATION AGREEMENT
This Recapitalization Agreement (the "Agreement") is made and entered into
as the 31st day of October, 1999, by and between Rural Cellular Corporation, a
Minnesota corporation (including its successors, assigns and subsidiaries,
"RCC") and Telephone & Data Systems, Inc., a Delaware corporation (including its
successors, assigns and subsidiaries, "TDS").
R E C I T A L S:
A. TDS presently owns (directly and indirectly) within the meaning of
the FCC Cross-Ownership Rule (defined below), five hundred
eighty-six thousand seven hundred ninety-nine (586,799) shares of
RCC's Class A Common Stock, par value $.01 per share (the "Class A
Common Stock") and one hundred thirty-two thousand five hundred
ninety-seven (132,597) shares of RCC's Class B Common Stock, par
value $.01 per share (the "Class B Common Stock"); and
B. TDS has an ownership interest in RCC through its ownership of the
Class A Common Stock and Class B Common Stock identified in Recital
A above and has an ownership interest through its subsidiary, United
States Cellular Corporation, in licenses in cellular channel blocks
in rural service areas OR-3 and OR-6; and
C. RCC is presently negotiating with Triton Cellular Partners, L.P.,
for the acquisition (the "Triton Acquisition") of FCC licenses and
related assets for the "A" frequency channel blocks, in, among other
rural service areas OR-3 and OR-6 (the "A" frequency channel blocks
in OR-3 and OR-6 are hereinafter referred to as the "Oregon
Competing Channel Blocks"); and
D. Pursuant to the Cross-Ownership Rule (defined below), the
acquisition by RCC of the FCC licenses for the Oregon Competing
Channel Blocks would be permissible under the Cross-Ownership Rule
only if TDS's ownership interest in RCC does not exceed five percent
(5%), with respect to each class of RCC's equity securities
outstanding; and
E. As of the date hereof TDS's ownership of Class A Common Stock and
Class B Common Stock exceeds the five percent limitation provided in
the Cross-Ownership Rule; and
F. TDS's ownership of Class A Common Stock and Class B Common Stock in
excess of the five percent limitation provided in the
Cross-Ownership Rule limits the opportunities of RCC and TDS to
acquire FCC licenses and related assets for certain channel blocks
in cellular markets where the other already controls or operates the
competing channel block for such cellular market (the "Cross
Ownership Issues"); and
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G. Remediating the Cross-Ownership Issues generally will also remediate
Cross-Ownership Issues with respect to RCC's possible acquisition of
the Oregon Competing Channel Blocks in connection with the Triton
Acquisition; and
H. RCC and TDS desire to consummate a transaction to remediate the
Cross-Ownership Issues generally, and specifically with regard to
the Triton Acquisition (i) if acceptable to the FCC in remediation
of Cross-Ownership Issues, through the exchange of the Excess Shares
(defined below) for RCC's convertible preferred stock pursuant to a
tax free recapitalization in accordance with the provisions of
Section 368(a)(1)(E), 354, 351(g) and other applicable provisions of
the Internal Revenue Code of 1986, as amended (the "FCC
Recapitalization"); or (ii) alternatively, in the event that the
transaction described in (i) of this Recital H is not acceptable to
the FCC in remediation of Cross-Ownership Issues, through the
issuance of a convertible subordinated debenture in exchange for the
Excess Shares, but only if RCC acquires the contract right to
acquire the FCC licenses and related assets for the "A" frequency
channel blocks in rural service areas OR-3 and OR-6 in the Triton
Acquisition (the "Triton Recapitalization"); and
I. RCC and TDS desire to enter into this Agreement pursuant to which,
under the terms and conditions set forth herein, RCC and TDS will
consummate a transaction to remediate the Cross-Ownership Issues.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Acquisition Agreement" means that certain Asset Purchase Agreement in
executable form between Triton Cellular Partners, L.P., a Delaware limited
partnership, designated wholly owned subsidiaries of Triton Cellular Partners,
L.P., defined as the "Triton Entities" (collectively defined as the "Triton
Parties") and RCC, subject to such amendments as are negotiated by the Triton
Parties and RCC prior to execution thereof.
"Class A Common Stock" has the meaning set forth in the Recitals;
"Class B Common Stock" has the meaning set forth in the Recitals;
"Closing" has the meanings given in Section 9.1;
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder;
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"Convertible Preferred Stock" means shares of RCC's convertible preferred
stock issued by RCC containing the terms and conditions set forth on the term
sheet attached hereto as Exhibit A, to be delivered by RCC to TDS on the FCC
Closing Date in accordance with the provisions of this Agreement;
"Cross-Ownership Issues" has the meaning given in the Recitals.
"Cross-Ownership Rule" means Subpart H of Part 22 of Title 47 of the Code
of Federal Regulations, Section 22.942 entitled "Limitations on interest in
licensees for both channel blocks in an area" as amended September 22, 1999,
scheduled to become effective November 6, 1999.
"Debenture" means a convertible subordinated debenture issued by RCC
containing the terms and conditions set forth on the term sheet attached hereto
as Exhibit B, to be delivered by RCC to TDS on the Triton Closing Date in
accordance with the provisions of this Agreement.
"Excess Shares" means the aggregate number of whole (not fractional)
shares of Class A Common Stock and Class B Common Stock which are in excess of
five percent (5%) of the issued and outstanding shares of each respective class
of RCC common stock, determined as of the Closing Date; the calculation of the
aggregate number of said shares being made in accordance with the applicable
provisions of the Cross-Ownership Rule to reduce TDS's ownership interest in RCC
such that TDS shall have a direct or indirect ownership interest in RCC of not
more than five percent (5%) in accordance with Section 22.942(a) thereof.
"FCC" means the Federal Communications Commission.
"FCC Closing" means the closing of the FCC Recapitalization.
"FCC Closing Date" means the date on which the FCC Closing shall occur.
"FCC Recapitalization" has the meaning set forth in the recitals.
"Oregon Competing Channel Blocks" has the meaning given in the Recitals.
"Owned Entity" means any entity in which TDS or RCC , as applicable, has
an "ownership interest" as that term is used in subsection (d)(7) of the
Cross-Ownership Rule.
"Purchase Price" has the meaning set forth in Section 3.1.
"RCC" has the meaning set forth in the preamble.
"RCC Price" means $50 5/8 per Excess Share, which takes into consideration
the size of the block of shares, the low "float", and the recent volatility of
the market in RCC shares.
"Section 4.1 Payment" has the meaning set forth in Section 4.1.
"TDS" has the meaning set forth in the preamble.
"Triton Acquisition" has the meaning set forth in the recitals.
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"Triton Closing" means the closing of the Triton Recapitalization.
"Triton Closing Date" means the date on which the Triton Closing shall
occur.
"Triton Recapitalization" means the transactions contemplated by Article 3
and Article 4 of this Agreement, consummated on the terms and conditions set
forth herein.
ARTICLE 2
FCC RECAPITALIZATION
2.1 FCC Authorization to Proceed with Preferred Stock Recapitalization.
Notwithstanding any other provision of this Agreement to the contrary, the
parties shall consummate the transactions contemplated by this Agreement in the
form of the FCC Recapitalization if the issuance of Convertible Preferred Stock
by RCC to TDS on the terms set forth in Exhibit A is acceptable to the FCC to
remedy the existence of Cross-Ownership Issues generally, including any Cross
Ownership Issue with respect to RCC's possible acquisition of the Oregon
Competing Channel Blocks. It shall be conclusive to the parties that the
issuance of Convertible Preferred Stock by RCC to TDS on the terms set forth in
Exhibit A is acceptable to remedy such Cross-Ownership Issues (a) if the FCC
shall provide a written opinion stating its acceptance of such remedy, or (b) if
the FCC shall grant an application of RCC or TDS for the transfer of control or
the assignment of a cellular license in circumstances where a Cross-Ownership
Issue exists and such application expressly sets forth the issuance of
Convertible Preferred Stock by RCC to TDS on the terms set forth in Exhibit A as
a remedy of such Cross-Ownership Issue.
2.2 Exchange of Excess Shares for Preferred Stock. In the event parties
proceed with the FCC Recapitalization, on the FCC Closing Date RCC shall issue
Convertible Preferred Stock to TDS in exchange for the surrender by TDS of the
Excess Shares. The number of shares of Convertible Preferred Stock so delivered
to TDS on the FCC Closing Date shall be determined by multiplying the total
number of Excess Shares by the RCC Price and dividing the dollar amount so
determined by one thousand dollars ( fractional shares shall be permitted ).
2.3 Other Terms. In the event that the parties proceed with the FCC
Recapitalization, the provisions of Articles 3 and 4 shall not apply. All other
sections of this Agreement shall be applicable without any additional
considerations.
2.4 Tax Characterization. RCC and TDS shall treat the Convertible
Preferred Stock as equity for United States federal, state and local income tax
purposes and to take no position inconsistent with such characterization on any
tax return.
ARTICLE 3
TRITON RECAPITALIZATION
Except as provided in Article 2, on the Triton Closing Date, RCC agrees to
purchase the Excess Shares from TDS and TDS agrees to sell, assign, transfer and
deliver the Excess Shares to RCC, on the terms and conditions set forth below:
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3.1 Purchase Price. The "Purchase Price" for the Excess Shares shall be
the amount determined by multiplying the total number of Excess Shares by the
RCC Price.
3.2 Payment of Purchase Price. In the event the parties proceed with the
Triton Recapitalization, on the Triton Closing Date RCC shall issue to TDS the
Debenture in exchange for the surrender by TDS of the Excess Shares .The face
value of the Debenture to be so delivered to TDS on the Triton Closing Date
shall be equal to the Purchase Price (fractional issuance shall be permitted).
ARTICLE 4
ADDITIONAL COVENANTS TO TRITON RECAPITALIZATION
In the event that RCC purchases the Excess Shares pursuant to Article 3,
the following provisions shall apply:
4.1 RCC shall pay to TDS on the Closing Date the Section 4.1 Payment.
"Section 4.1 Payment" means an amount determined under the following formula:
Gain x TR/(1-TR)
where Gain means the excess of the fair market value of the Excess Shares on the
Closing Date over TDS's tax basis in the Excess Shares, and TR means 0.4. For
example, if the fair market value of the Excess Shares on the Closing Date was
$20 million and TDS's tax basis in the Excess Shares was $5 million, the Section
4.1 Payment would be equal to $10 million ($15 million Gain x 0.4/0.6). For
purposes of the foregoing calculation, the fair market value of the Excess
Shares on the Closing Date shall be assumed to be equal to the Purchase Price;
provided, however, that if, as a result of an audit or examination of TDS or any
of its subsidiaries, a taxing authority asserts that the fair market value of
the Excess Shares on the Closing Date exceeded the Purchase Price, the Section
4.1 Payment shall be redetermined accordingly and RCC shall pay to TDS the
difference between the revised Section 4.1 Payment and the originally determined
Section 4.1 Payment together with any interest and penalties resulting from such
redetermination and contest expenses relating thereto. RCC shall be given prompt
notice of any such audit and an opportunity to participate (at its own expense)
in the resolution of any issues that would affect it but only to the extent such
issue can be separated on audit from any other tax issues of TDS. TDS shall
vigorously contest any recharacterizations of the payments hereunder and payment
shall be due from RCC only after a final non-appealable determination with
respect thereto or a further contest becomes commercially unreasonable. For
purposes of the foregoing calculation, the Excess Shares shall constitute those
shares of the Class A Common Stock and Class B Common Stock owned by TDS which
have the highest tax basis, thereby resulting in the lowest taxable income to
TDS.
4.2 If at any time within five years following the Closing, TDS or any of
its subsidiaries sells or otherwise disposes of any of its shares of Class A
Common Stock or Class B Common Stock owned as of the Closing Date (excluding the
Excess Shares) in a taxable transaction, TDS will refund to RCC, in conjunction
with such sale, a portion of the Section 4.1 Payment in an amount equal to the
Section 4.1 Payment multiplied by a fraction, the numerator of which is the
number of shares of RCC stock sold or otherwise disposed of and the
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denominator of which is the total number of Excess Shares; provided, however,
that in no event shall the aggregate amount refunded pursuant to this Section
4.2 exceed the Section 4.1 Payment.
ARTICLE 5
FCC CROSS-OWNERSHIP COMPLIANCE
5.1 TDS Cross-Ownership Compliance. From the date of this Agreement until
(i) the earlier of the FCC Closing Date, the Triton Closing Date or the
termination of this Agreement, and (ii) if either the FCC Closing or the Triton
Closing occurs, then perpetually thereafter, TDS shall not take any action , or
cause any of its subsidiaries or Owned Entities to take any action, that will
result in TDS, any of its subsidiaries or any of its Owned Entities to be in
non-compliance with the Cross-Ownership Rule as applicable to competing channel
blocks for cellular markets that TDS and RCC may control or operate. The
preceding sentence shall not preclude any action taken subject to FCC approval
of such action (e.g., signing a transaction agreement which requires FCC
approval of the contemplated transaction as a condition precedent to the closing
of such transaction) or subject to coming into compliance with the
Cross-Ownership Rule (e.g. divestiture of one or more markets that cause the
non-compliance with the Cross-Ownership Rule).
In the event that TDS or its subsidiaries do acquire any additional
ownership interest in RCC, whether or not caused by TDS, TDS agrees that it will
promptly take such commercially reasonable action as it determines to be
necessary to cause the resulting non -compliance with the Cross Ownership Rule
as applicable to competing channel blocks for cellular markets that TDS and RCC
may control or operate to be remedied.
5.2 RCC Cross-Ownership Compliance. From the date this Agreement until (i)
the earlier of the FCC Closing Date, the Triton Closing Date or the termination
of this Agreement, and (ii) if either the FCC Closing or the Triton Closing
occurs, then perpetually thereafter, RCC shall not take any action , or cause
any of its subsidiaries or Owned Entities to take any action, that will result
in RCC, any of its subsidiaries or any of its Owned Entities to be in
non-compliance with the Cross-Ownership Rule as applicable to competing channel
blocks for cellular markets that TDS and RCC may control or operate. The
preceding sentence shall not preclude any action taken subject to FCC approval
of such action (e.g., signing a transaction agreement which requires FCC
approval of the contemplated transaction as a condition precedent to the closing
of such transaction) or subject to coming into compliance with the
Cross-Ownership Rule (e.g. divestiture of one or more markets that cause the
non-compliance with the Cross-Ownership Rule).
ARTICLE 6
CONDITIONS PRECEDENT TO PARTIES OBLIGATIONS TO TRITON RECAPITALIZATION
In the event that RCC consummates a transaction pursuant to the
Acquisition Agreement which does not include the Oregon Competing Channel
Blocks, or any other cellular license which would create the existence of a
cross-ownership interest prohibited by the Cross-
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Ownership Rule, neither RCC nor TDS shall be obligated to consummate the Triton
Recapitalization.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF RCC
As an inducement for TDS to enter into this Agreement and consummate the
transactions contemplated hereby, intending that TDS rely thereon in entering
into and performing this Agreement, RCC warrants and represents to TDS the
following:
7.1 Due Authorization. The execution, delivery and performance of this
Agreement, including the Convertible Preferred Stock, the Debenture and the
other documents, instruments and agreements to be executed and/or delivered by
RCC pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of RCC.
7.2 Valid Issuance. At the FCC Closing or the Triton Closing, as
applicable, RCC will deliver to TDS the Convertible Preferred Stock or the
Debenture, as applicable, and such securities of RCC will be legally binding,
validly issued and fully paid, securities of RCC enforceable against RCC in
accordance with their terms and applicable law.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF TDS
As an inducement for RCC to enter into this Agreement and consummate the
transactions contemplated hereby, intending that RCC rely thereon in entering
into and performing this Agreement, TDS warrants and represents to RCC the
following:
8.1 Due Authorization. The execution, delivery and performance of this
Agreement, including the documents, instruments and agreements to be executed
and/or delivered by TDS pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of TDS.
8.2 Clear Title. At the FCC Closing or the Triton Closing, as applicable,
TDS will convey to RCC title to the Excess Shares free and clear of any and all
liens, claims and encumbrances of any kind, nature or description whatsoever.
ARTICLE 9
CLOSING; ADDITIONAL COVENANTS
9.1 Closing Date. The closing of the transaction contemplated by this
Agreement (the "Closing") shall be effected by the delivery of such documents
and instruments as are contemplated by this Agreement as of the FCC Closing Date
or the Triton Closing Date, as applicable. The FCC Closing Date shall be the
date established for the FCC Closing by written notice given by RCC to TDS, or
by TDS to RCC, but in no event shall such FCC Closing Date be less than ten
business days after receipt of such notice by the receiving party. The Triton
Closing Date shall be the "Closing Date" of the Acquisition Agreement, and shall
be established
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by written notice given by RCC to TDS, but in no event shall such Triton Closing
Date be less than four business days after receipt of such notice by TDS.
9.2 Pre-Closing. Three business days prior to the anticipated FCC Closing
Date or Triton Closing Date, as applicable, ("Pre-Closing Date"), TDS and RCC
shall each execute and deliver to an escrow agent which shall be mutually
acceptable to RCC and TDS their respective closing documents described in
Section 9.4, which documents and instruments shall be held in escrow pending the
Closing.
9.3 Effective Time. The Closing of the transaction contemplated by this
Agreement shall be effective as of the beginning of business on the FCC Closing
Date or Triton Closing Date, as applicable. In the event the transactions
contemplated by the Acquisition Agreement are not consummated within ten
business days following the Pre-Closing Date, then the escrow shall be
terminated and the closing documents executed by each respective party shall be
returned thereto, but such event shall not result in a termination of this
Agreement except as expressly provided in Section 10.11 hereof.
9.4 Closing Documents.
(a) Documents to be Delivered by TDS. At the Closing, TDS shall
execute, where necessary or appropriate, and deliver to RCC the
certificates evidencing the Excess Shares duly endorsed in blank or
accompanied by Assignments Separate from Certificate duly executed in
blank.
(b) Documents to be Delivered by RCC. At the Closing, RCC shall
execute, where necessary or appropriate, and deliver to TDS each and all
of the following:
(i) The Convertible Preferred Stock, if the transaction is
consummated in accordance with the provisions of Article
2; or a Debenture in the amount of the Purchase Price,
duly endorsed by an authorized officer of RCC if the
transaction is consummated in accordance with the
provisions of Article 3.
(ii) If the transaction is consummated by issuing the
Debenture, a cash payment delivered by wire transfer of
immediately available funds to an account or accounts
designated by TDS in an amount equal to the Section 4.1
Payment.
(iii) A copy certified by the Secretary of RCC of the duly
adopted resolutions of the Board of Directors of RCC
approving this Agreement and authorizing the execution
and delivery of this Agreement, including the
Convertible Preferred Stock or Debenture, as applicable,
and other documents, instruments and agreements to be
executed and/or delivered by RCC pursuant hereto, and
the consummation of the transactions contemplated hereby
and thereby.
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ARTICLE 10
MISCELLANEOUS
10.1 Further Acts and Assurances. Each party will, at any time from time
to time, on and after the FCC Closing or the Triton Closing, as applicable, upon
reasonable request of the other party, do all such further acts and things and
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any and all papers, documents, instruments, agreements, deeds,
assignments, transfers, assurances and conveyances as may be necessary or
desirable carryout and give effect to the provisions of this Agreement and (a)
with respect to further acts by TDS, to vest, perfect and confirm of record in
RCC, its successors and assigns, title to the Excess Shares, and (b) with
respect to further acts by RCC, to vest, perfect and confirm of record in TDS,
it successors and assigns, title to the Convertible Preferred Stock or the
Debenture, as applicable.
10.2 Entire Agreement. This Agreement, including the documents,
instruments and agreements to be executed by the parties pursuant hereto,
contains the entire agreement of the parties hereto and supersedes all prior or
contemporaneous agreements and understandings, oral or written between the
parties hereto with respect to the subject matter hereof.
10.3 Specific Performance. Each party acknowledges that the other party
will have no adequate remedy at law if it shall fail to perform any of its
obligations hereunder, and (a) with respect to TDS's possible failure to
perform, including but not limited to surrendering the Excess Shares in
accordance with this Agreement, and (b) with respect to RCC's possible failure
to perform, including but not limited to, the issuance of Convertible Preferred
Stock in accordance with Article 2 or the issuance of the Debenture in
accordance with Article 3. In such event, each party shall have the right, in
addition to any other rights it may have, to specific performance of this
Agreement.
10.4 Amendments. No purported amendment, modification or waiver of any
provision of this Agreement or any of the documents, instruments or agreements
to be executed by the parties pursuant hereto shall be effective unless in a
writing specifically referring to this Agreement and signed by both parties.
10.5 Notices. All notices or other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been given upon receipt)
by delivery in person against receipt by overnight courier service, by facsimile
transmission, or by registered or certified mail (return receipt requested and
postage prepaid) with an acknowledgement of receipt signed by the addressee or
authorized representative thereof, addressed as follows (or to such other
address for a party as shall be specified by like notice):
If to TDS: Telephone & Data Systems, Inc.
30 North LaSalle Street
Chicago, Illinois 60602
Attn: LeRoy T. Carlson, Chairman
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With a copy to: Sidley & Austin
Bank One Plaza
10 South Dearborn
Chicago, Illinois 60603
Attention: William S. DeCarlo, Esq.
If to RCC: Rural Cellular Corporation
3905 Dakota Street S.W.
Alexandria, MN 56308
Attn: Ann K. Newhall, Esq.
With a copy to: Moss & Barnett
A Professional Association
4800 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4129
Attn: Richard J. Kelber, Esq.
10.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and the respective successors and
permitted assigns, but nothing in this Agreement is to be construed as an
authorization or right of any party to assign its rights or delegate its duties
under this Agreement without the prior written consent of the other party
hereto.
10.7 Costs. RCC shall pay its own costs and expenses and promptly
reimburse TDS for its costs and expenses incurred in connection with negotiating
and preparing this Agreement and consummating the transactions contemplated
hereby (including the consummation of the Closing of the exchange of the Excess
Shares for the Convertible Preferred Stock or the Debenture, as applicable, and
the consummation of the closing of the conversion of the Convertible Preferred
Stock or Debenture for Class A Common Stock or Class B Common Stock, as
applicable), including but not limited to fees and disbursements of their
attorneys and accountants.
10.8 Counterparts; Facsimile Signatures. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement. Facsimile signatures
on this Agreement shall be deemed to be original signatures.
10.9 Severability. In the event that any provision of this Agreement is
declared or held by any court of competent jurisdiction to be invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceablity shall not be construed to have any effect on, the remaining
provisions of this Agreement, unless such invalid or unenforceable provision
goes to the essence of this Agreement, in which case the entire Agreement may be
declared invalid and not binding upon any of the parties.
10
<PAGE>
10.10 Incorporation of Recitals. The Recitals set forth above are
incorporate in this Agreement as if fully set forth herein and shall constitute
an expression of the intent of the parties and shall act as an aid in the
construction of this Agreement.
10.11 Termination. This Agreement may be terminated (i) at any time, by
the mutual written agreement of the parties; or (ii) upon thirty (30) days prior
written notice by either party if neither the FCC Closing nor the Triton Closing
shall have occurred on or before the first anniversary of this Agreement.
10.12 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota without giving effect to the
conflicts of laws principles thereof and without regard to any rules of
construction or interpretation as to which party drafted this Agreement.
10.13 Confidentiality of Agreement and Acquisition Agreement. Each party
shall keep secret and retain in strictest confidence, and shall not, without the
express prior written consent of an executive officer of the other party,
directly or indirectly disclose the terms, conditions or existence of this
Agreement (and TDS shall also keep secret and retain in strict confidence the
Acquisition Agreement, including the negotiations and transaction contemplated
thereby) except, with respect to this Agreement, to: (i) its representatives,
and, with respect to RCC, to Triton Cellular Partners, L.P. and its
representatives (who shall be informed of the confidential nature of such
information and who shall agree to keep such information confidential); (ii) the
FCC, subject to Section 10.16; and (iii) as otherwise required by applicable
law, including securities or communications laws. In the event a party breaches,
or threatens to commit a breach, of the provisions of this Section 10.13, the
non-breaching party or non-threatening party, as applicable, shall have the
right, in addition to any other rights and remedies available to such
non-breaching or non-threatening party, as applicable, at law or in equity, to
equitable relief, including injunctions, against such breach or threatened
breach, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable harm to such non-breaching or non-threatening
party, as applicable, and that money damages would not be an adequate remedy to
such non-breaching or non-threatening party, as applicable.
10.14 Alternative Transaction. Following the date hereof and continuing
thereafter until the Pre-Closing Date or the termination of this Agreement prior
to the Pre-Closing Date by mutual agreement, TDS and RCC will work together in
good faith to determine an alternative approach to consummating the transactions
contemplated by the Triton Recapitalization, the purpose being to develop, if
possible, the terms and conditions of a transaction in remediation of
Cross-Ownership Issues with respect to the Oregon Competing Channel Blocks which
will mitigate, to the maximum extent possible, the Section 4.1 Payment which
would result from consummating the Triton Recapitalization, and if a mutually
agreeable alternative approach is so determined, to amend this Agreement, as
appropriate, to incorporate the terms of such alternative approach and to
implement that approach as soon as practicable.
10.15 Arbitration. The parties intend this Agreement to be a legally
binding agreement. If any term of this Agreement is unclear or incomplete and
the parties cannot resolve the issue through negotiation expeditiously, the
parties shall resolve their differences as to the interpretation hereof by
arbitration pursuant to the rules of the American Arbitration Association,
11
<PAGE>
held in Minneapolis, Minnesota . The arbitrator shall be a practicing attorney
specializing in corporate finance or a certified public accountant , in each
case with at least twenty years of experience.
10.16 Redaction. This Agreement shall not be filed with the FCC without
first being redacted to eliminate references to Triton or its property, direct
or indirect, or by which it might be identified.
10.17 Reasonable Efforts. The parties agree to use all commercially
reasonable efforts to put this Agreement into effect expeditiously, including
preparation of documents, application to the FCC for a ruling, and all other
necessary actions.
ARTICLE 11
NON-DILUTION PROVISION
11.1 Non -Dilution Provision. As a holder of the Convertible Preferred
Stock or the Debenture, as applicable, TDS's right as a holder of such
securities to convert the same into Class A Common Stock or Class B Common
Stock, as applicable, shall be protected from dilution under the circumstances
and in the manner set forth in the following sentences (the "Non-Dilution
Provision"):
In the event that, at any time after the exchange of the Excess Shares and
prior to the conversion of the Convertible Preferred Stock or the
Debenture, as applicable, RCC shall effect (i) a dividend upon its Class A
Common Stock or its Class B Common Stock payable in its Class A Common
Stock or its Class B Common Stock or other property other than cash,
including common stock, preferred stock or other securities of a
subsidiary corporation, (ii) a combination of its outstanding Class A
Common Stock or its Class B Common Stock into a smaller number of such
Class A Common Stock or Class B Common Stock, (iii) a subdivision of its
outstanding Class A Common Stock or Class B Common Stock into a larger
number of such Class A Common Stock or Class B Common Stock or (iv) any
reorganization or reclassification of its Class A Common Stock or Class B
Common Stock, or any liquidation, consolidation or merger with another
corporation, or the sale of all or substantially all of its assets to
another corporation, in such a way that the holders of its outstanding
Class A Common Stock or Class B Common Stock shall be entitled to receive
(either directly, or upon subsequent liquidation) stock, securities or
other property (including cash) with respect to or in exchange for such
Class A Common Stock or Class B Common Stock, (any such event set forth in
(i) - (iv) above referred to as a "Diluting Event"), then as a condition
of such Diluting Event lawful and adequate provisions shall be made
whereby TDS shall be entitled to receive, (under the same terms otherwise
applicable to TDS' receipt of RCC's Class A Common Stock or Class B Common
Stock) upon TDS' conversion of the Convertible Preferred Stock or the
Debenture, as applicable, (the "RCC Convertible Shares"), the following:
(i) if the Diluting Event results in an exchange of RCC's Class A Common
Stock or its Class B Common Stock for other property, TDS shall be
entitled to receive in lieu of the RCC Convertible Shares to which TDS was
entitled immediately prior to the Diluting Event but which TDS had not yet
received, such shares of stock, securities or other property as may be
issued or payable by virtue of the Diluting Event in exchange for that
number of
12
<PAGE>
RCC Convertible Shares to which TDS was entitled immediately prior to the
Diluting Event but which it had not yet received; (ii) if the Diluting
Event results in an issuance or payment with respect to RCC's Class A
Common Stock or its Class B Common Stock, TDS shall be entitled to
receive, in addition to the RCC Convertible Shares to which it was
entitled immediately prior to the Diluting Event but which it had not yet
received, such shares of stock, securities or other property as may be
issued or payable by virtue of the Diluting Event with respect to that
number of RCC Convertible Shares to which TDS was entitled immediately
prior to the Diluting Event but which it had not yet received. If any
Diluting Event occurs, provision shall be made with respect to TDS' rights
and interests resulting from the application of this Section to ensure
that this Section applies as well to any shares of stock, securities or
other property deliverable to TDS as a result of such Diluting Event.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by duly authorized representatives as of the day, month and year first
above-written.
RURAL CELLULAR CORPORATION
By /s/ Richard P. Ekstrand
Its President
TELEPHONE & DATA SYSTEMS, INC.
By /s/ LeRoy T. Carlson
Its Chairman
Signature Page to Recapitalization Agreement relating to
Telephone & Data System's Inc.'s Ownership Interest in
Rural Cellular Corporation dated October 31, 1999
<PAGE>
AMENDED EXHIBIT A
TERM SHEET FOR CONVERTIBLE PREFERRED STOCK
o Class: The convertible preferred stock shall be a separate class of
preferred stock. Only TDS, affiliates of TDS or TDS Owned Entities or
their respective successors and assigns shall hold such separate class of
preferred stock.
o Date of Issuance: Issuance of the convertible preferred stock shall be
conditioned upon the FCC's acceptance of the issuance of such convertible
preferred stock as a remedy for the Cross-Ownership Issues (the "FCC
Closing Date").
o Liquidation Preference: The convertible preferred stock shall have a
liquidation preference of $1,000.00 per share.
o Amount: The Excess Shares shall be exchangeable for convertible preferred
stock based on a ratio determined by dividing the product of $50 5/8 (the
RCC common stock price as of October 22, 1999 ) times the number of Excess
Shares by $1,000.00.
o Term: The preferred stock is mandatorily redeemable by the Company for
cash on the first day following the twentieth ( 20th ) anniversary of the
date of issuance.
o Payment of Dividends: Dividends on the convertible preferred stock shall
be cumulative, with a fixed coupon rate of four percent (4%) per annum.
Dividends would be payable at the end of the term , at which point they
would be declared and paid unless prohibited by law . In the event of
conversion prior to the end of the term , dividends would not be declared
. The convertible preferred stock will also participate on a current basis
in dividends, if any, declared with respect to the Company's Class A
Common Stock or Class B Common Stock.
o Conversion: The convertible preferred stock shall convert in the aggregate
into the same number of shares of Class A and Class B Common Stock as the
number of Excess Shares originally exchanged. Partial conversions shall be
effected on a proportionate basis. The Non-Dilution Provision shall apply.
The convertible preferred stock shall be convertible at any time prior to
the twentieth ( 20th ) anniversary at the option of either TDS or the
Company, in whole or in part, so long as the issuance of shares of the
Company's Class A Common Stock and/or Class B Common Stock shall not
violate the then applicable FCC rules on cross-ownership.
o Subordination: The convertible preferred stock shall be subordinate, at
the option of the Company as exercised from time to time , to any or all
classes of preferred stock and debt, whether now outstanding or hereafter
issued, with respect to the liquidation preference and the payment of
dividends.
o Transferability: The convertible preferred stock shall be transferable by
TDS to the extent permitted under applicable securities laws, provided
that notice of any proposed
<PAGE>
transfer must be provided to the Company at least 30 days in advance and,
if the Company so requires, an opinion of counsel satisfactory to the
Company that such transfer does not violate the registration requirements
of federal or state securities laws, and, further provided, that such
transfer shall not be in violation of any FCC rule nor result in a Cross
Ownership Issue between RCC and the transferee . To the extent that any
shares of convertible preferred stock which are convertible into Class B
Common Stock are transferred to a person that is not an affiliate of TDS
(as the term "affiliate" is defined in RCC's Articles of Incorporation,)
such share(s) of convertible preferred stock transferred shall thereafter
be convertible only into Class A Common Stock. The conversion rights will
not be transferable separate from the convertible preferred stock.
o Registration Rights: The convertible preferred stock shall not be
registered under federal or state securities laws.
(See also the First Amendment with regard to a potential "Additional Dividend")
2
<PAGE>
EXHIBIT B
TERM SHEET FOR SUBORDINATED CONVERTIBLE DEBENTURES
o Date of Issuance: Issuance of the convertible debentures shall be
conditioned upon and concurrent with the closing of the Acquisition
Agreement (the "Triton Closing Date").
o Amount: The dollar amount of the subordinated convertible debenture shall
be determined as of the Triton Closing Date and shall equal the number of
shares to be redeemed in exchange for the debenture times the RCC Price.
o Term: The debenture will mature on the first day after the twentieth
(20th) anniversary of the date of issuance.
o Interest Rate: Interest shall accrue at the Applicable Federal Rate (as
defined in the Internal Revenue Code and regulations) for long-term
instruments, fixed as of the Closing Date (the "Interest Rate").
o Payment of Interest: Interest shall be payable, at the Company's option,
either in cash or by issuance of additional subordinated convertible
debentures ("PIK") in an amount equal to the dollar amount of the interest
due. With respect to any interest payment due the holder payable in PIK,
the holder shall be paid an "Additional Amount of Interest" on the
principal in accordance with the following formula:
(Interest Rate X .4 X .09) / .6
For example, if the Interest Rate is 6.39%, the Additional Amount of
Interest would be .383%, determined as follows: (6.39% X .4 X .09) / .6 =
.383%
o Conversion. The debenture shall be convertible, in the aggregate, into the
same number of shares of Class A Common Stock and Class B Common Stock, as
the number of Excess Shares originally exchanged therefor; provided,
however, that if any interest payment due the holder was not paid in cash,
the holder shall be entitled upon conversion to an additional number of
shares of Class A Common Stock and Class B Common Stock, as applicable, in
an amount equal to Additional Amount of Interest X $1,000 per $1,000
amount of debenture (under the above example, $3.83 / $1,000) for each
year the debenture was outstanding and interest was not paid in cash. For
purposes of determining such additional number of shares of Class A Common
Stock and Class B Common Stock, as applicable, such applicable dollar
amount shall be divided by the average closing price of Class A Common
Stock for the five trading days immediately prior to the conversion date.
Partial conversions shall be effected on a proportionate basis. The
Non-Dilution Provision shall apply. The debentures shall be convertible at
any time at the option of either TDS or the Company, in whole or in part,
so long as the issuance of the shares shall not violate the then
applicable FCC rules on cross-ownership.
<PAGE>
o Subordination: The debentures shall be deeply subordinated to all classes
of preferred stock and debt of RCC, whether now or hereafter issued, with
respect to the liquidation preference and payment of interest.
o Transferability: The debentures shall be transferable by TDS to the extent
permitted under applicable securities laws, provided that notice of any
proposed transfer must be provided to the Company at least 30 days in
advance and, if the Company so requires, an opinion of counsel
satisfactory to the Company that such transfer does not violate the
registration requirements of federal or state securities laws, and,
further provided, that such transfer shall not be in violation of any FCC
rule nor result in a Cross Ownership Issue between RCC and the transferee.
To the extent that any debenture is transferred to a person that is not an
affiliate of TDS (as the term "affiliate" is defined in RCC's Articles of
Incorporation), such debenture shall thereafter be convertible only into
Class A Common Stock. The conversion rights will not be transferable
separate from the debentures.
o Registration Rights: The debentures shall not be registered under federal
or state securities laws. No registration rights shall attach to the
debentures.
<PAGE>
Exhibit 4.1(b)
FIRST AMENDMENT
TO
RECAPITALIZATION AGREEMENT
This First Amendment to Recapitalization Agreement (the "Amendment") is
made and entered into as of the 6th day of December 1999, by and between Rural
Cellular Corporation, a Minnesota corporation (including its successors, assigns
and affiliates "RCC") and Telephone & Data Systems, Inc., a Delaware
corporation, (including its successors, assigns and affiliates, "TDS").
R E C I T A L S:
A. RCC and TDS entered into that certain Recapitalization Agreement
dated the 31st day of October 1999 (the "Agreement"); and
B. The Parties desire to amend the Agreement for the purpose of
amending and restating the terms of the Convertible Preferred Stock
which would be issued by RCC in the event the FCC Recapitalization
is consummated.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
1. Defined Terms. Capitalized terms used, but not defined herein, shall
have the meaning ascribed thereto in the Agreement.
2. Amendment and Restatement of Terms of Convertible Preferred Stock.
Exhibit A entitled "Term Sheet for Convertible Preferred Stock" attached to the
Agreement, is hereby amended and restated in its entirety as set forth in the
Amended Exhibit A attached hereto.
3. Tax Position. TDS acknowledges that RCC's tax advisors have recommended
to RCC that, under the Code, the dividends due at the end of the term of the
Convertible Preferred Stock should not be deemed taxable income to TDS until and
unless the dividends are actually declared at the end of the term. TDS and RCC
agree that the position recommended is justified and agree to file their federal
and other applicable income tax returns in a manner consistent with that
position. If, as a result of an audit or examination of TDS or any of its
subsidiaries, a taxing authority asserts that the dividends payable at the end
of the term of the Convertible Preferred Stock must be accrued and taxed
currently (a "Deemed Dividend " ), then RCC shall pay to TDS a Tax Indemnity
Payment, defined and computed as set forth below, together with any interest and
penalties resulting from such assertion and contest expenses relating thereto.
RCC shall be given prompt notice of any such audit or examination and an
opportunity to participate (at its own expense) in the resolution of any issues
that would affect it, but only to the extent such issue can be separated on
audit from any other tax issues of TDS, and shall reimburse TDS
<PAGE>
for TDS's expenses relating thereto. In the event that TDS chooses not to
challenge the position of the taxing authority, RCC, at its own expense, may
elect to challenge, on behalf of TDS and itself, any adverse position taken by
an applicable taxing authority and for appealing any adverse decisions, but only
to the extent such issue can be separated on audit from any other tax issues of
TDS ; TDS shall cooperate with any such challenge by RCC, at RCC's expense.
Payment of the Tax Indemnity Payment shall be due from RCC only after a final
non-appealable determination with respect thereto or if a further contest
becomes commercially unreasonable. Following such an event (an "Adverse Tax
Determination"), TDS shall no longer be bound by the second sentence of this
section 3.
4. Tax Indemnity Payments. Following an Adverse Tax Determination , RCC
shall pay to TDS an annual Tax Indemnity Payment equal to 0.24% of the face
amount of the outstanding Convertible Preferred Stock owned by TDS for each year
covered by the Adverse Tax Determination and all future periods during which the
Convertible Preferred Stock is outstanding. The Tax Indemnity Payment shall be
paid by RCC immediately following the Adverse Tax Determination in the case of
prior periods and, in the case of future periods , on or before January 15 of
the year following the year for which each Deemed Dividend is deemed to have
accrued.
5. Confirmation of Agreement. Except as set forth in this Amendment, the
provisions of the Agreement are hereby ratified, confirmed and approved in all
respects as if fully set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by duly authorized representatives as of the day, month and year first
above written.
RURAL CELLULAR CORPORATION
By /s/ Richard P. Ekstrand
Its President
TELEPHONE & DATA SYSTEMS, INC.
By /s/ LeRoy T. Carlson
Its Chairman
Signature page to First Amendment to Recapitalization Agreement relating
to Telephone & Data Systems, Inc.'s ownership interest in Rural
Cellular Corporation
dated December 6, 1999.
2
<PAGE>
AMENDED EXHIBIT A
TERM SHEET FOR CONVERTIBLE PREFERRED STOCK
o Class: The convertible preferred stock shall be a separate class of
preferred stock. Only TDS, affiliates of TDS or TDS Owned Entities or
their respective successors and assigns shall hold such separate class of
preferred stock.
o Date of Issuance: Issuance of the convertible preferred stock shall be
conditioned upon the FCC's acceptance of the issuance of such convertible
preferred stock as a remedy for the Cross-Ownership Issues (the "FCC
Closing Date").
o Liquidation Preference: The convertible preferred stock shall have a
liquidation preference of $1,000.00 per share.
o Amount: The Excess Shares shall be exchangeable for that number of shares
of convertible preferred stock determined by dividing the product of $50
5/8 (the RCC common stock price as of October 22, 1999) times the number
of Excess Shares by $1,000.00.
o Term: The preferred stock is mandatorily redeemable by the Company for
cash on the first day following the twentieth (20th) anniversary of the
date of issuance.
o Payment of Dividends: Dividends on the convertible preferred stock shall
be cumulative, with a fixed coupon rate of four percent (4%) per annum.
Dividends would be payable at the end of the term , at which point they
would be declared and paid unless prohibited by law. In the event of
conversion prior to the end of the term , dividends would not be declared.
The convertible preferred stock will also participate on a current basis
in dividends, if any, declared with respect to the Company's Class A
Common Stock or Class B Common Stock.
o Conversion: The convertible preferred stock shall convert in the aggregate
into the same number of shares of Class A and Class B Common Stock as the
number of Excess Shares originally exchanged. Partial conversions shall be
effected on a proportionate basis. The Non-Dilution Provision shall apply.
The convertible preferred stock shall be convertible at any time prior to
the twentieth (20th) anniversary at the option of either TDS or the
Company, in whole or in part, so long as the issuance of shares of the
Company's Class A Common Stock and/or Class B Common Stock shall not
violate the then applicable FCC rules on cross-ownership.
o Subordination: The convertible preferred stock shall be subordinate, at
the option of the Company as exercised from time to time, to any or all
classes of preferred stock and debt, whether now outstanding or hereafter
issued, with respect to the liquidation preference and the payment of
dividends.
<PAGE>
o Transferability: The convertible preferred stock shall be transferable by
TDS to the extent permitted under applicable securities laws, provided
that notice of any proposed transfer must be provided to the Company at
least 30 days in advance and, if the Company so requires, an opinion of
counsel satisfactory to the Company that such transfer does not violate
the registration requirements of federal or state securities laws, and,
further provided, that such transfer shall not be in violation of any FCC
rule nor result in a Cross Ownership Issue between RCC and the transferee.
To the extent that any shares of convertible preferred stock which are
convertible into Class B Common Stock are transferred to a person that is
not an affiliate of TDS (as the term "affiliate" is defined in RCC's
Articles of Incorporation,) such share(s) of convertible preferred stock
transferred shall thereafter be convertible only into Class A Common
Stock. The conversion rights will not be transferable separate from the
convertible preferred stock.
o Registration Rights: The convertible preferred stock shall not be
registered under federal or state securities laws.
2
<PAGE>
Exhibit 4.1(c)
SECOND AMENDMENT
TO
RECAPITALIZATION AGREEMENT
This Second Amendment to Recapitalization Agreement (the "Amendment")
is made and entered into as of the 31st day of March 2000, by and between
Rural Cellular Corporation, a Minnesota corporation (including its
successors, assigns and affiliates "RCC") and Telephone and Data Systems,
Inc., a Delaware corporation, (including its successors, permitted assigns
and affiliates, "TDS").
R E C I T A L S:
A. RCC and TDS entered into that certain Recapitalization Agreement
dated the 31st day of October 1999, as amended by that certain First
Amendment to Recapitalization Agreement dated December 6, 1999
(collectively the "Agreement"); and
B. The Parties desire to further amend the Agreement for the purpose of
(i) establishing the number of shares of Class A Common Stock and
Class B Common Stock which shall constitute the Excess Shares to be
exchanged by TDS for Class T Preferred Stock, Series A and Series B
of RCC, as such securities are more fully described in the
Certificate of Designation of Voting Power thereof (herein "Class T
Preferred Stock") in consummating the FCC Recapitalization; (ii)
incorporating provisions which will ensure the parties continued
compliance with the Cross Ownership Rule, as required by the FCC in
approving the FCC Recapitalization as a remedy for the
Cross-Ownership Issues; and (iii) to provide registration rights to
TDS with respect to the shares of Class T Preferred Stock to be
issued to TDS in exchange for the Excess Shares; all on the terms
and conditions set forth in this Amendment.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
1. Defined Terms. Capitalized terms used, but not defined herein, shall
have the meaning ascribed thereto in the Agreement.
2. Shares Exchanged. Notwithstanding the provisions of the Agreement to
the contrary, the number of shares of Class A Common Stock and Class B Common
Stock to be exchanged by TDS in consummating the FCC Recapitalization shall be
43,000 shares of Class A Common Stock and 105,940 shares of the Class B Common
Stock, which shares shall be exchanged by the TDS affiliates as shown on Exhibit
A hereto.
<PAGE>
3. Continued Compliance. In addition to the provisions of Article 5 of the
Agreement, in order to further ensure continued compliance of RCC and TDS with
respect to the Cross-Ownership Rule, if, following the FCC Closing: (i) TDS and
its affiliates own Excess Shares; and (ii) as a result thereof, RCC and TDS fail
to comply with the Cross Ownership Rule, then TDS agrees to exchange the Excess
Shares for shares of Class T Preferred Stock, Series A or Series B,
respectively, as necessary to bring RCC and TDS into compliance with the
Cross-Ownership Rule. The closing of such transaction shall occur in accordance
with the provisions of the Agreement, as the same relate to the Closing of the
FCC Recapitalization. RCC's obligation to effect an Exchange of the Excess
Shares in the manner contemplated by the Agreement shall apply only to the
issued and outstanding shares of Class A Common Stock and Class B Common Stock
owned by TDS as of the date hereof, as reflected on Exhibit A.
4. Certificate of Designation. TDS hereby acknowledges that the
Certificate of Designations attached hereto as Exhibit B constitutes the terms
and relative rights and preferences of the Class T Preferred Stock in accordance
with the provisions of the Agreement. RCC shall file the Certificate of
Designations with the Minnesota Secretary of State on or prior to the FCC
Closing Date.
5. Registration Rights. RCC hereby agrees to provide TDS with registration
rights with respect to the Class T Preferred Stock in accordance with the
provisions of the Registration Agreement for Class T Preferred Stock attached
hereto as Exhibit C.
6. Confirmation of Agreement. Except as modified by this Amendment, the
provisions of the Agreement are hereby ratified, confirmed and shall remain in
full force and effect.
7. Reimbursement. Without limiting any further obligations under Section
____ of the Recapitalization Agreement, RCC confirms that it will promptly
reimburse United States Cellular Corporation in the amount of $33,455.49 for
fees and disbursements of Sidley & Austin incurred in connection herewith
through February 29, 2000.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by duly authorized representatives as of the day, month and year first
above written.
RURAL CELLUAR CORPORATION TELEPHONE AND DATA SYSTEMS, INC.
By /s/ Ann K. Newhall By /s/ LeRoy T. Carlson
Its Sr. Vice President Its Chairman
Signature page to Second Amendment to Recapitalization Agreement relating
to Telephone & Data Systems, Inc.'s ownership interest in Rural
Cellular Corporation
dated March 31, 2000.
2
<PAGE>
EXHIBIT A
- --------------------------------------------------------------------------------
BEFORE EXCHANGE AFTER
- --------------------------------------------------------------------------------
A B A B A B
================================================================================
Arvig 172,348 70,243 0 61,356 172,348 8,887
================================================================================
Mid State 74,746 31,177 0 22,292 74,746 8,885
================================================================================
MN Invco 339,705 31,177 43,000 22,292 296,705 8,885
------- ------- ------ ------- ------- ------
================================================================================
586,799 132,597 43,000 105,940 543,799 26,657
======= ======= ====== ======= ======= ======
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT B
CERTIFICATE OF DESIGNATION
CLASS T PREFERRED STOCK
[Included as Exhibit 4.1(e) to Report on Form 8-K dated April 1, 2000]
<PAGE>
EXHIBIT C
REGISTRATION AGREEMENT FOR CLASS T PREFERRED STOCK
[Included as Exhibit 4.1(d) to Report on Form 8-K dated April 1, 2000]
<PAGE>
Exhibit 4.1(d)
RURAL CELLULAR CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of March 31, 2000, between Rural Cellular
Corporation, a Minnesota corporation (the "Company"), and Telephone and Data
Systems, Inc., a Delaware corporation (together with its affiliates, "TDS").
The parties to this Agreement are parties to a Recapitalization Agreement
dated October 31, 1999, as amended effective December 6, 1999, and March 31,
2000 (as amended, the "Recapitalization Agreement"). In order to induce TDS to
enter into the Recapitalization Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the Closing under the Recapitalization
Agreement. Unless otherwise provided in this Agreement, capitalized terms used
herein shall have the meanings set forth in paragraph 8 hereof or in the
Recapitalization Agreement.
The parties hereto agree as follows:
1. DEMAND REGISTRATIONS.
(a) REQUESTS FOR REGISTRATION. At any time after the conversion of
Class T Preferred Stock into shares of Common Stock ("Registrable
Securities", as further defined in Section 8(a) hereof), TDS may request
up to three registrations under the Securities Act of 1933, as amended
(the "Securities Act") of all or any portion of its Registrable
Securities, provided that the aggregate offering value of the Registrable
Securities requested to be registered in any registration under this
paragraph 1(a) (any "Demand Registration") must equal at least $5 million.
All requests for Demand Registrations shall be made by giving
written notice thereof to the Company (a "Demand Notice"). Each Demand
Notice shall specify the number of Registrable Securities requested to be
registered.
(b) DEMAND EXPENSES. The Registration Expenses (as defined in
Section 5(a) hereof) in all Demand Registrations shall be paid by the
Company.
(c) RESTRICTIONS ON DEMAND REGISTRATIONS. The Company shall not be
obligated to effect any Demand Registration within 270 days after the
effective date of a previous Demand Registration or a previous
registration in which TDS was given piggyback rights pursuant to paragraph
2 and in which TDS was able to register and sell at least 60% of the
Registrable Securities requested to be included therein.
The Company may postpone for up to 90 days the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company's board of directors determines in its reasonable good faith
judgment that such Demand Registration could reasonably be expected to
have a material adverse effect on any activities, operations or prospects
of the Company or any of its Subsidiaries (whether or not in the ordinary
course of business); provided that in such event, TDS shall be entitled to
withdraw such
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request and, if such request is withdrawn, such Demand Registration shall
not count as one of the permitted Demand Registrations hereunder and the
Company shall pay all Registration Expenses in connection with such
registration. The Company may delay a Demand Registration hereunder only
once in any twelve-month period.
(d) SELECTION OF UNDERWRITERS. TDS shall have the right to select
the investment banker(s) and manager(s) to administer the offering,
subject to the Company's approval, which shall not be unreasonably
withheld or delayed.
2. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to register
any of its equity securities under the Securities Act other than pursuant
to a Demand Registration and the registration form to be used may be used
for the registration of Registrable Securities and is not a Form S-4 or
S-8 or a successor form (a "Piggyback Registration"), the Company shall
give prompt written notice to TDS of its intention to effect such a
registration and, subject to the terms of paragraphs 2(c) and 2(d) hereof,
shall include in such registration all Registrable Securities with respect
to which the Company has received a written request for inclusion therein
within 20 days after the receipt of the Company's notice.
(B) PIGGYBACK EXPENSES. The Registration Expenses in all Piggyback
Registrations shall be paid by the Company.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company, the Company shall include
in such registration (i) first, the securities the Company proposes to
sell, (ii) second, pro rata among the holders of the Registrable
Securities to the extent requested to be included in such registration and
the holders of securities requested to be included in such registration by
persons having registration rights under the Registration Agreement
between the Company and the purchasers of its Class M Redeemable Voting
Convertible Preferred Stock to the extent requested to be included in such
registration and (iii) third, any other securities requested to be
included in such registration, pro rata among the holders of the other
securities on the basis of the number of shares owned by each such holder.
(d) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the
Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to the
holders initially requesting such registration, the Company shall include
in such registration (i) first, the securities requested to be included
therein by the holders requesting such registration, (ii) second, pro rata
among the holders of the Registrable
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Securities to the extent requested to be included in such registration and
the holders of securities requested to be included in such registration by
persons having registration rights under the Registration Agreement among
the Company and the purchasers of its Class M Redeemable Voting
Convertible Preferred Stock to the extent requested to be included in such
registration, and (iii) third, any other securities requested to be
included in such registration, pro rata among the holders of such
securities on the basis of the number of shares owned by each such holder.
(e) SELECTION OF UNDERWRITERS. If any Piggyback Registration is an
underwritten primary offering, the selection of investment banker(s) and
manager(s) for the offering shall be made by the Company.
3. HOLDBACK AGREEMENT. TDS shall not effect any public sale or
distribution (including sales pursuant to Rule 144 promulgated under the
Securities Act) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during (i)
with respect to any underwritten Demand Registration or any underwritten
Piggyback Registration in which Registrable Securities are included, for a
period beginning seven days prior to and ending 90 days after the effective date
of such registration and (ii) upon notice from the Company of the commencement
of an underwritten distribution in connection with any registration pursuant to
Rule 415 under the Securities Act (a "Shelf Registration") for a period
beginning seven days prior to and ending 90 days after the date of commencement
of such distribution, in each case except as part of such underwritten
registration and in each case unless the underwriters managing the registered
public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever TDS has requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
shall use commercially reasonable efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
practicable:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use
commercially reasonable efforts to cause such registration statement to
become effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall
furnish to the counsel selected by TDS copies of all such documents
proposed to be filed, and the Company shall in good faith consider any
comments of such counsel);
(b) notify TDS of the effectiveness of each registration statement
filed hereunder and prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for a period of not less than
90 days (or, in the case of a Shelf Registration, a period ending on the
earlier of (i) the date on which all Registrable Securities have been sold
pursuant to the Shelf Registration or have otherwise ceased to be
Registrable Securities and (ii) the second anniversary of the effective
date of such Shelf Registration) and comply with the provisions of the
Securities Act with respect to the disposition of all
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securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof
set forth in such registration statement;
(c) furnish to TDS such number of copies of the prospectus included
in such registration statement (including each preliminary prospectus),
each amendment and supplement thereto and such other documents as TDS may
reasonably request in order to facilitate the disposition of the
Registrable Securities;
(d) use commercially reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as TDS reasonably requests and to do any and all other
acts and things which may be reasonably necessary or advisable to enable
TDS to consummate the disposition in such jurisdictions of the Registrable
Securities (provided that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this subparagraph, (ii) subject itself to
taxation in any such jurisdiction, or (iii) consent to general service of
process in any such jurisdiction);
(e) notify TDS at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein
not misleading, and the Company shall prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(f) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement
for sale in any jurisdiction, the Company shall use commercially
reasonable efforts promptly to obtain the withdrawal of such order.
5. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all
registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of custodians, and fees and disbursements
of counsel for the Company (but not fees and disbursements of counsel for
TDS) and all independent certified public accountants (excluding costs of
accountants retained to conduct any special audits required in connection
with a Demand Registration), underwriters (excluding discounts and
commissions) and other Persons retained by the Company ( and fees and
disbursements of underwriter's counsel if the underwriter is retained by
the Company )(all such expenses being herein called "Registration
Expenses"), shall be borne by the Company as provided in this Agreement,
except that the Company shall, in any event, pay its internal expenses
(including, without limitation,
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all salaries and expenses of its officers and employees performing legal
or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and fees
for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the
Nasdaq Stock Market.
(b) To the extent any expenses relating to a registration hereunder
are not required to be paid by the Company, each holder of securities
included in any registration hereunder shall pay those expenses allocable
to the registration of such holder's securities so included, including the
fees and disbursements of such holder's counsel and any expenses not so
allocable shall be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the
securities to be so registered.
(c) Any obligation to pay Registration Expenses or other expenses
provided for in this Agreement shall survive the termination of this
Agreement.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent permitted by law,
TDS, its directors, officers, employees, agents, Affiliates, and each
Person who controls TDS (within the meaning of the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) against
all losses, claims, damages, liabilities, and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus, or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the
Company by TDS expressly for use by the Company in such registration
statement or by TDS's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished TDS with such number of copies of the same as was
previously requested by TDS. In connection with an underwritten offering,
the Company shall indemnify such underwriters, their officers, directors,
employees, agents, and each Person who controls such underwriters (within
the meaning of the Securities Act and the Exchange Act) to substantially
the same extent as provided above with respect to the indemnification of
TDS.
(b) In connection with any registration statement in which TDS is
participating, TDS shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the
extent permitted by law, shall indemnify the Company, its directors,
officers, employees, agents, Affiliates, and each Person who controls the
Company (within the meaning of the Securities Act and the Exchange Act)
against any losses, claims, damages, liabilities, and expenses caused by
any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus, or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or
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necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by TDS expressly for use
by the Company in such registration statement; provided that the
obligation to indemnify shall be limited to the net amount of proceeds
received by TDS from the sale of Registrable Securities pursuant to such
registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to indemnification
hereunder to the extent such failure has not prejudiced the indemnifying
party) and (ii) unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the
indemnified party. The indemnifying party shall not be subject to any
liability for any settlement made by the indemnified party without its
consent. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between
such indemnified party and any other of such indemnified parties with
respect to such claim, in which case the indemnifying party shall be
obligated to pay the fees and expenses of counsel for the indemnified
party with whom the conflict of interest exists.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director, employee,
agent, Affiliate, or controlling Person of such indemnified party and
shall survive the transfer of securities and the termination of this
Agreement. The Company also agrees to make such provisions as are
reasonably requested by any indemnified party for contribution to such
party in the event the Company's indemnification is unavailable for any
reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may participate
in any registration hereunder that is underwritten unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; provided that TDS shall not
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding TDS and its
intended method of distribution) or to undertake any indemnification obligations
to the Company or the underwriters with respect thereto, except as otherwise
provided in paragraph 6 hereof.
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8. DEFINITIONS.
(a) "Registrable Securities" means (i) any Class A Common Stock or
Class B Common Stock issued or issuable upon the conversion of any Class T
Preferred Stock issued pursuant to the Recapitalization Agreement and (ii)
any Class A Common Stock or Class B Common Stock or other Common Stock
issued or issuable with respect to any Registrable Securities by way of a
stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization.
As to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when they have been sold, transferred or
otherwise disposed of pursuant to an offering registered under the
Securities Act, through a broker, dealer, or market maker in compliance
with Rule 144 under the Securities Act (or any similar rule then in
force), or repurchased by the Company or any Subsidiary. For purposes of
this Agreement, TDS shall be deemed to be a holder of Registrable
Securities, and the Registrable Securities shall be deemed to be in
existence, whenever TDS has the right to acquire directly or indirectly
such Registrable Securities (upon conversion or exercise in connection
with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or
not such acquisition has actually been effected, and TDS shall be entitled
to exercise the rights of a holder of Registrable Securities hereunder.
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2 under
the Exchange Act.
(c) "Person" means any individual, corporation, partnership, joint
venture, limited liability company, or other form of business entity or
any government or agency or political subdivision thereof.
(d) Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Recapitalization Agreement.
9. TERMINATION. Except as otherwise provided herein, the rights granted
herein shall terminate whenever TDS and any Affiliate with which it must
aggregate its sales of restricted securities for purposes of Rule 144
promulgated under the Securities Act may sell all of their restricted securities
during a single three-month period pursuant to the provisions of Rule 144.
Except as otherwise provided herein, this Agreement shall terminate at such time
as TDS has no rights hereunder.
10. MISCELLANEOUS.
(a) SUCCESSORS. All covenants and agreements in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors of the parties hereto. The
rights of the parties under this Agreement may not be assigned.
Telephone and Data Systems, Inc. shall be the sole party entitled to
exercise the rights of TDS hereunder on behalf of all TDS affiliates.
(b) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any
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provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
(c) COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.
(d) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a substantive part
of this Agreement. Whenever required by the context, any pronoun used in
this Agreement shall include the corresponding masculine, feminine, or
neuter forms, and the singular forms of nouns, pronouns, and verbs shall
include the plural and vice versa. Reference to any agreement, document,
certificate, or instrument means such agreement, document, certificate, or
instrument as the same is amended, waived, or otherwise modified from time
to time in accordance with the terms thereof and, if applicable, hereof.
Except as otherwise provided in this Agreement, words such as "herein,"
"hereunder," "hereof," and the like shall be deemed to refer to this
Agreement as a whole and not to any particular document or article,
Section, paragraph, or other portion of a document. The use of the words
"include" or "including" in this Agreement shall be by way of example
rather than by limitation. The use of the words "or," "either," or "any"
shall not be exclusive.
(e) GOVERNING LAW. The laws of the State of Minnesota shall govern
all issues and questions concerning the construction, validity,
interpretation, and enforcement of this Agreement, without giving effect
to any choice of law or conflict of law rules or provisions.
(f) NOTICES. All notices, demands, or other communications to be
given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, telecopied to the recipient (with hard copy
sent by overnight courier in the manner provided hereunder) if sent prior
to 5:00 p.m. Minnesota time on a business day (and otherwise, on the
immediately succeeding business day), one business day after being sent to
the recipient by reputable overnight courier service (charges prepaid), or
three business days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such
notices, demands, and other communications shall be sent to the Company
and TDS at the address indicated below:
If to RCC: Rural Cellular Corporation
3905 Dakota Street SW
Alexandria, Minnesota 56308
Attention: Chief Executive Officer
Telephone: (320) 808-2100
Telecopy: (320) 808-2120
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with a copy to: Moss & Barnett
4800 Norwest Center
90 South 7th Street
Minneapolis, Minnesota
Attention: Richard Kelber, Esq.
Telephone: (612) 347-0300
Telecopy: (612) 339-6686
If to TDS: Telephone and Data Systems, Inc.
30 North LaSalle Street
Chicago, IL 60602
Attn: LeRoy T. Carlson, Chairman
Telephone: (312) 630-1900
Telecopy: (312) 630-9299
with a copy to: Sidley & Austin
Bank One Plaza
10 South Dearborn
Chicago, Illinois 60603
Attn: William S. DeCarlo, Esq.
Telephone: (312) 853-6094
Telecopy: (312) 853-7036
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending
party.
(g) BUSINESS DAYS. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday, or legal
holiday in the State of Minnesota or the jurisdiction in which the
Company's or TDS's principal office is located, the time period shall
automatically be extended to the business day immediately following such
Saturday, Sunday, or legal holiday.
(h) DELIVERY BY FACSIMILE. This Agreement, the agreements referred
to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and
any amendments hereto or thereto, to the extent signed and delivered by
means of a facsimile machine, shall be treated in all manner and respects
as an original agreement or instrument and shall be considered to have the
same binding legal effect as if it were the original signed version
thereof delivered in person. At the request of any party hereto or to any
such agreement or instrument, each other party hereto or thereto shall
re-execute original forms thereof and deliver them to all other parties.
No party hereto or to any such agreement or instrument shall raise the use
of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated
through the use of a facsimile machine as a defense to the formation or
enforceability of a contract and each such party forever waives any such
defense.
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IN WITNESS WHEREOF, the parties have executed this Registration Agreement
as of the date first written above.
RURAL CELLULAR CORPORATION
By: /s/ Ann K. Newhall
Its: Sr. Vice President
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson
Its: Chairman
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT BETWEEN RURAL CELLULAR
CORPORATION AND TELEPHONE & DATA SYSTEMS, INC.
DATED: March 31, 2000
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Exhibit 4.1(e)
CERTIFICATE OF DESIGNATION OF VOTING POWER,
PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF
CLASS T CONVERTIBLE PREFERRED STOCK
OF
RURAL CELLULAR CORPORATION
------------------------
Pursuant to Section 302A.401 of the
Minnesota Business Corporation Act
-----------------------
Rural Cellular Corporation, a Minnesota corporation (the "Company"),
certifies that pursuant to the authority contained in its Articles of
Incorporation, as amended (the "Articles of Incorporation"), and in accordance
with the provisions of Section 302A.401 of the Minnesota Business Corporation
Act (as amended from time to time, the "MBCA"), the Board of Directors of the
Company (the "Board of Directors") at a meeting duly called and held on March
23, 2000, duly approved and adopted the following resolution, which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of Directors
by the Articles of Incorporation, the Board of Directors does hereby designate,
create, authorize and provide for the issuance of a class of preferred stock
consisting of two series, each having a par value of $.01 per share, which shall
be designated as Class T Convertible Preferred Stock - Series A, consisting of
15,000 shares (the "Class T Preferred Stock - Series A") and Class T
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Convertible Preferred Stock - Series B, consisting of 10,000 shares (the "Class
T Preferred Stock - Series B"), and shall have the voting powers, preferences
and relative participating, optional and other special rights and
qualifications, limitations and restrictions thereon as follows:
1. Certain Definitions. Unless the context otherwise requires, the terms
defined in this Section 1 shall have, for all purposes of this Certificate of
Designation, the meanings herein specified (with terms defined in the singular
having comparable meanings when used in the plural).
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Articles of Incorporation" has the meaning set forth in the introductory
paragraph in this Certificate of Designation.
"Board of Directors" has the meaning set forth in the introductory
paragraph to this Certificate of Designation.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York City or the State of
Minnesota or the State of Illinois are authorized or obligated by law or
executive order to close.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated, whether voting or nonvoting) of equity of
the Company.
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"Certificate of Designation" means this Certificate of Designation of
Voting Power, Preferences and Relative, Participating, Optional and Other
Special Rights and Qualifications, Limitations and Restrictions of Class T
Convertible Preferred Stock of the Company.
"Class A Common Stock" means the Company's Class A Common Stock, $.01 par
value per share.
"Class A Share Rights Agreement" means the Class A Share Rights Agreement,
dated as of April 30, 1999, by and among the Company and Norwest Bank Minnesota,
National Association, as Rights Agent, as amended and modified from time to
time.
"Class B Common Stock" means the Company's Class B Common Stock, $.01 par
value per share.
"Class B Share Rights Agreement" means the Class B Share Rights Agreement,
dated as of April 30, 1999, by and among the Company and Norwest Bank Minnesota,
National Association, as Rights Agent, as amended and modified from time to
time.
"Class M Preferred Stock" means the Class M Redeemable Voting Convertible
Preferred Stock, $.01 par value per share, of the Company.
"Class T Preferred Stock" means the Class T Preferred Stock - Series A and
Class T Preferred Stock - Series B, collectively.
"Common Convertible Shares" has the meaning set forth in Section 6(e) of
this Certificate of Designation.
"Common Stock" means the Class A Common Stock and Class B Common Stock,
collectively.
"Cross-Ownership Rules" mean Subpart H of Part 22 of Title 47 of the Code
of Federal Regulations, Section 22.942 entitled "Limitations on interest in
licensees for both channel blocks in an area," as amended and modified from time
to time, and all other rules of the Federal
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Communications Commission in effect from time to time applicable to the
ownership of competing channel blocks for the same cellular market.
"Diluting Event" has the meaning set forth in Section 6(e).
"Dividend Payment Date" has the meaning set forth in Section 3(a).
"Holder" means a Person in whose name a share of Class T Preferred Stock
is registered.
"Issue Date" means the time and date of the first issuance of the Class T
Preferred Stock pursuant to the Recapitalization Agreement dated as of October
31, 1999, between the Company and Telephone and Data Systems, Inc., as amended
and modified from time to time.
"Junior Exchangeable Preferred Stock" means the 12 1/4% Junior
Exchangeable Preferred Stock, $.01 par value per share, of the Company.
"Junior Stock" has the meaning set forth in Section 2(a).
"Liquidation Preference" means $1,000 per share of Class T Preferred
Stock.
"Mandatory Redemption Date" means the date which is twenty (20) years and
one (1) day after the Issue Date.
"MBCA" has the meaning set forth in the introductory paragraph to this
Certificate of Designation.
"Parity Stock" has the meaning set forth in Section 2(a).
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" means any and all shares of Capital Stock of the Company
that have preferential rights to any other Capital Stock of the Company with
respect to dividends or redemptions or upon liquidation.
"Senior Exchangeable Preferred Stock" means the 11 3/8% Senior
Exchangeable Preferred Stock, $.01 par value per share, of the Company.
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<PAGE>
"Senior Stock" has the meaning set forth in Section 2(a).
"Series A Preferred Stock" means the Company's Series A Junior
Participating Preferred Stock, $.01 par value per share, which may be issued
pursuant to the Class A Share Rights Agreement.
"Series B Preferred Stock" means the Company's Series B Junior
Participating Preferred Stock, $.01 par value per share, which may be issued
pursuant to the Class B Share Rights Agreement.
"Undesignated Shares" means the undesignated shares of the Capital Stock
of the Company which are authorized under its Articles of Incorporation.
2. Ranking.
(a) The Class T Preferred Stock shall, with respect to dividend
rights and rights upon the liquidation, winding-up and dissolution of the
Company, rank (i) junior to the Senior Exchangeable Preferred Stock (the
"Senior Stock"), (ii) senior to the Junior Exchangeable Preferred Stock,
the Class M Preferred Stock, the Series A Preferred Stock, the Series B
Preferred Stock, the Common Stock and each other class or series of
Capital Stock established after the Issue Date by the Board of Directors
the terms of which expressly provide that it ranks junior to Class T
Preferred Stock as to dividend rights and rights upon the liquidation,
winding-up and dissolution of the Company (collectively referred to as
"Junior Stock"), and (iii) subject to certain conditions, described below,
on a parity with each other class or series of Capital Stock established
after the Issue Date by the Board of Directors, the terms of which
expressly provide that it ranks on a parity with the Class T Preferred
Stock as to dividend rights and rights upon the liquidation, winding-up
and dissolution of the Company (collectively referred to as "Parity
Stock").
5
<PAGE>
(b) The Company may authorize, create and issue any new class or
series of Senior Stock, Junior Stock and/or Parity Stock without the
affirmative vote or consent of the Holders of any shares of Class T
Preferred Stock. The Holders of the Class T Preferred Stock will have no
right to dissent under Sections 302A.471 and/or 302A.473 of the MBCA in
connection with the authorization, creation and/or issuance of any new
class or series of Senior Stock and/or Parity Stock.
(c) Except as otherwise expressly provided in Section 6(d), the
Class T Preferred Stock - Series A and Class T Preferred Stock - Series B
shall have equal voting powers, preferences and relative participating,
optional and other special rights and qualifications, limitations and
restrictions thereon, and shall rank equally, share ratably, and be
identical in all respects as to all matters.
3. Dividends.
(a) The Holders of the outstanding shares of the Class T Preferred
Stock shall be entitled to receive, when declared by the Board of
Directors out of funds of the Company legally available therefor,
dividends on the Class T Preferred Stock which shall accrue at the rate of
four percent (4%) per annum. All dividends will be cumulative from the
Issue Date, and unless the Class T Preferred Stock is converted into
Common Stock pursuant to Section 6, will be declared and paid in arrears
fifteen (15) days after the Mandatory Redemption Date or, if such date is
not a Business Day, on the next succeeding Business Day (the "Dividend
Payment Date") to the Holders of record on the Mandatory Redemption Date;
provided, however, that the Board of Directors shall not be required to
declare or pay the cumulative dividend on the Class T Preferred Stock if
then prohibited by the MBCA, the terms and conditions of any Senior Stock
or Parity Stock, or any debt of the Company to which the Class T Preferred
Stock is subordinate. No
6
<PAGE>
dividends will be declared or paid pursuant to this section 3 (a) with
respect to any Class T Preferred Stock converted into Common Stock
pursuant to Section 6 hereof. Dividends payable on the Class T Preferred
Stock will be computed on the basis of a 360-day year consisting of twelve
(12) thirty (30) day months and shall be deemed to accrue on a daily
basis, commencing on the Issue Date.
(b) Dividends on the Class T Preferred Stock shall accrue whether or
not the Company has earnings or profits, whether or not there are funds
legally available for the payment of such dividends and whether or not
dividends are declared. If the cumulative dividend (or portion thereof)
payable on the Dividend Payment Date is not paid in full in cash on the
Dividend Payment Date, the amount of the accumulated but unpaid dividend
will continue to bear interest at the dividend rate on the Class T
Preferred Stock from the Dividend Payment Date until paid in full.
(c) Notwithstanding any provision of this Certificate of Designation
to the contrary, no dividends shall be declared or paid with respect to
the Class T Preferred Stock unless and until any accrued dividends due and
payable on any Senior Stock shall have been paid in full.
(d) Prior to the Mandatory Redemption Date, this Certificate of
Designation shall not impose any restrictions or limitations on the
declaration and/or payment of any dividends on any or all of the Parity
Stock and/or Junior Stock. From and after the Mandatory Redemption Date,
no full dividend or distribution shall be declared or paid or funds set
apart for the payment of dividends or distributions on any Parity Stock or
any Junior Stock for any period unless full cumulative dividends on the
Class T Preferred Stock shall have been or contemporaneously are declared
and paid in full or declared and a sum in cash sufficient for such payment
set apart for such payment. If full cumulative
7
<PAGE>
dividends on the Class T Preferred Stock are not so paid, the Class T
Preferred Stock will share dividends or distributions declared or paid on
and after the Mandatory Redemption Date pro rata with the Parity Stock.
Unless full cumulative dividends on all outstanding shares of Class T
Preferred Stock shall have been declared and paid, or declared and a
sufficient sum for the payment thereof set apart, then from and after the
Mandatory Redemption Date: (i) no dividend (other than a dividend on
Junior Stock payable solely in shares of any Junior Stock) shall be
declared or paid upon (or deemed paid), or any sum set apart for the
payment of dividends upon, any shares of Junior Stock; (ii) no other
distribution shall be declared or made upon, or any sum set apart for the
payment of any distribution upon, any shares of Junior Stock, other than a
distribution consisting solely of Junior Stock; (iii) no shares of Junior
Stock or Parity Stock shall be repurchased, redeemed or otherwise acquired
or retired by the Company; and (iv) no money shall be paid into or set
apart or made available for a sinking or other like fund for the purchase,
redemption or other acquisition or retirement for value of any shares of
Junior Stock or Parity Stock by the Company.
(e) In addition to the cumulative dividends at the rate provided for
in Section 3(a) hereof, the Holders of issued and outstanding Class T
Preferred Stock shall be entitled to receive, from time to time, out of
any funds legally available therefor, dividends and other distributions at
the same rate and at the same time as any dividends or other distributions
declared on the Common Stock of the Company (other than distributions upon
the liquidation, dissolution or winding-up of the Company), when, as and
if declared by the Board of Directors; provided that, for purposes of this
Section 3(e) only, the Holders of the Class T Preferred Stock shall be
deemed to own the number of shares of Common Stock into which such shares
of Class T Preferred Stock are
8
<PAGE>
convertible, pursuant to Section 6 herein, at the time such dividend or
other distribution is declared.
(f) The Company shall not be required to pay into or set apart or
make available for a sinking or other like fund any money for the payment
of the cumulative dividends on the Class T Preferred Stock.
4. Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, Holders of Class T Preferred Stock
shall be entitled to payment, out of the assets of the Company legally available
for distribution to stockholders, of the Liquidation Preference per share of
Class T Preferred Stock, plus, without duplication, an amount in cash equal to
all accumulated and unpaid dividends thereon to but excluding the date fixed for
liquidation, dissolution or winding-up, before any distribution is made on any
Junior Stock. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to the Class T
Preferred Stock and all other Parity Stock are not paid in full, the Holders of
the Class T Preferred Stock and the Parity Stock shall share equally and ratably
in any distribution of assets of the Company in proportion to the full
liquidation preference to which each is entitled. After payment of the full
amount of the liquidation preference and accumulated and unpaid dividends to
which they are entitled, the Holders of shares of Class T Preferred Stock shall
not be entitled to any further participation in any distribution of assets of
the Company. The Holders of shares of Class T Preferred Stock shall not be
entitled to participate in the distribution of any assets of the Company in
connection with the liquidation, dissolution or winding-up of the Company unless
and until the holders of all Senior Stock shall have received the full
liquidation preference to which they are entitled. Neither the sale, conveyance,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the
9
<PAGE>
consolidation or merger of the Company with or into one or more Persons shall be
deemed to be a liquidation, dissolution or winding-up of the Company
5. Redemption by the Company.
(a) On the Mandatory Redemption Date, the Company shall be required
to redeem all of the outstanding shares of Class T Preferred Stock at a
price in cash equal to 100% of the aggregate Liquidation Preference
thereof, plus, without duplication, all accumulated and unpaid dividends,
if any, to but excluding the Mandatory Redemption Date. Except as
contemplated by Section 5(c) below, the Company shall not be required to
pay into or set apart or make available for a sinking or other like fund
any money for the redemption of the Class T Preferred Stock.
(b) Notice of any such redemption shall be sent by or on behalf of
the Company not less than thirty (30) nor more than sixty (60) days prior
to the Mandatory Redemption Date, by first class mail, postage prepaid, to
all Holders of the Class T Preferred Stock at their registered address. In
addition to any information required by law, such notice shall state (i)
the Mandatory Redemption Date, (ii) the Liquidation Preference of, and the
accrued and unpaid dividends on, the shares of Class T Preferred Stock to
be redeemed; (iii) that on the Mandatory Redemption Date the redemption
price shall become due and payable upon each share of Class T Preferred
Stock to be redeemed; and (iv) the place or places where shares are to be
surrendered for payment of the redemption price.
(c) If a notice of redemption has been mailed in accordance with
Section 5(b) above and, provided that on or before the Mandatory
Redemption Date all funds necessary for such redemption shall have been
irrevocably set aside by the Company, separate and apart from its other
funds, in trust for the pro rata benefit of the Holders of
10
<PAGE>
the shares so called for redemption, so as to be, and to continue to be
available therefor, then, on and after the Mandatory Redemption Date,
unless the Company defaults in the payment of the applicable redemption
price, dividends on the shares of the Class T Preferred Stock so called
for redemption shall cease to accumulate and all rights of the Holders of
such shares shall terminate except for the right to receive from the
Company the redemption price, without interest. Upon surrender, in
accordance with said notice, of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Company shall
so require and the notice shall so state), such shares shall be redeemed
by the Company at the applicable redemption price. Shares of Class T
Preferred Stock issued and reacquired by the Company shall, upon
compliance with the applicable requirements of MBCA, have the status of
authorized but unissued Undesignated Shares of the Company and may, with
any and all other authorized but unissued Undesignated Shares of the
Company, be designated or redesignated, and issued or reissued, as the
case may be, as part of any class or series of Capital Stock of the
Company.
(d) Any deposit of funds with a bank or trust company for the
purpose of redeeming Class T Preferred Stock shall be irrevocable except
that:
(i) The Company shall be entitled to receive from such bank or
trust company the interest or other earnings, if any, earned on any
money deposited in trust, and the Holders of any shares redeemed
shall have no claim to such interest or other earnings; and
(ii) any balance of monies so deposited by the Company and
unclaimed by the Holders of the Class T Preferred Stock entitled
thereto at the expiration of two years from the Mandatory Redemption
Date shall be repaid, together with any interest or other earnings
earned thereon, to the Company, and
11
<PAGE>
after any such repayment, the Holders of the shares entitled to the
funds so repaid to the Company shall look only to the Company for
payment without interest or other earnings.
(e) Notwithstanding any provision of this Certificate of Designation
to the contrary, the Company shall not be required to redeem any Class T
Preferred Stock if such redemption would cause the Company to violate the
MBCA, the terms and conditions applicable to any Senior Stock or Parity
Stock or the terms and conditions of any debt of the Company to which the
Class T Preferred Stock is subordinate.
6. Conversion.
(a) At the option of each Holder, each share of Class T Preferred
Stock shall be converted, at any time after the Issue Date and before the
close of business two (2) days prior to the Mandatory Redemption Date, at
the office of the Company (or at such other office or offices, if any, as
the Company may designate), into fully paid and nonassessable shares of
Common Stock of the Company; provided, however, that no such Holder may
convert any shares of Class T Preferred Stock into Common Stock if such
conversion would directly or indirectly result in a violation of the
Cross-Ownership Rules. In order to voluntarily convert shares of Class T
Preferred Stock into shares of Common Stock, the Holder thereof shall (i)
surrender at any office hereinabove mentioned the certificate or
certificates evidencing such shares, duly endorsed to the Company or in
blank, (ii) give written notice to the Company at such office that such
Holder elects to convert such number of shares of Class T Preferred Stock
specified in the notice, and (iii) deliver to the Company at such office a
certificate of such Holder (which certificate shall be in a form
reasonably acceptable to the Company) to the effect that the conversion of
such shares into Common Stock shall not directly or indirectly
12
<PAGE>
result in a violation of the Cross-Ownership Rules. The shares of Class T
Preferred Stock voluntarily tendered by the Holder for conversion shall be
deemed to have been converted into Common Stock as provided for herein at
the close of business on the date which is three (3) Business Days after
the date the Company receives the Holder's notice of conversion together
with the duly endorsed certificates and the certificate of the Holder, and
the Person entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder of
such shares of Common Stock at such time. As soon as reasonably
practicable after the date the conversion is deemed to occur, the Company
shall provide the Holder of the Class T Preferred Stock tendered for
conversion with a newly issued certificate evidencing such Holder's
ownership of Common Stock issued upon conversion of the Class T Preferred
Stock as provided for herein, together with a certificate representing any
shares of Class T Preferred Stock which were represented by the
certificate or certificates delivered to the Company in connection with
such conversion but which were not converted.
(b) At the option of the Company, all or any part of the issued and
outstanding shares of Class T Preferred Stock held by any Holder shall be
converted, at any time after the Issue Date and prior to the close of
business two (2) days prior to the Mandatory Redemption Date, at the
office of the Company (or at such other office or offices, if any, as the
Company may designate), into fully paid and nonassessable shares of Common
Stock of the Company; provided, however, that the Company may not convert
any shares of Class T Preferred Stock into Common Stock if such conversion
would directly or indirectly result in a violation of the Cross-Ownership
Rules. In order to cause the conversion of shares of Class T Preferred
Stock into shares of Common Stock, the Company shall (i) send written
notice thereof to the Holder of the Class T Preferred Stock being
converted specifying the effective date of the conversion, the number of
shares being converted, the terms of the conversion and the place or
places where certificates evidencing the shares of Class T Preferred Stock
being converted are to be surrendered and (ii) deliver to the Holder of
the Class T Preferred
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<PAGE>
Stock being converted a certificate of the Company to the effect that the
conversion of such shares into Common Stock shall not directly or
indirectly result in a violation of the Cross-Ownership Rules. Each Holder
so notified shall be required to surrender for conversion the
certificate(s) evidencing the shares of Class T Preferred Stock being
converted, endorsed to the Company or in blank, within five (5) Business
Days of receipt of such notice from the Company. The conversion of the
Class T Preferred Stock shall be deemed to occur on the date specified in
the Company's notice regardless of whether the Holder of the Class T
Preferred Stock shall have then tendered its certificates evidencing such
shares duly endorsed, and the Person entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the recordholder of such shares of Common Stock at such time.
As soon as reasonably practicable after the date the certificates
evidencing the Class T Preferred Stock shall have been tendered to the
Company for conversion, the Company shall provide the Holders of the Class
T Preferred Stock so tendered with newly issued certificates evidencing
such Holder's ownership of Common Stock issued upon conversion of the
Class T Preferred Stock as provided herein, together with a certificate
representing any shares of Class T Preferred Stock which were represented
by the certificate or certificates delivered to the Company in connection
with such conversion but which were not converted.
(c) In connection with the conversion of Class T Preferred Stock
into Common Stock, whether initiated by the Holder thereof or the Company,
no dividends
14
<PAGE>
then accrued or cumulated on the Class T Preferred Stock pursuant to
section 3 (a) hereof shall be paid or payable by the Company in cash,
shares of Common Stock or otherwise.
(d) Except as hereinafter provided in this Section 6(d), each share
of Class T Preferred Stock - Series A shall be converted into the number
of shares of Class A Common Stock calculated by dividing the Liquidation
Preference by 50.625 and each share of Class T Preferred Stock - Series B
shall be converted into the number of shares of Class B Common Stock
calculated by dividing the Liquidation Preference by 50.625.
Notwithstanding the foregoing, if any shares of Class T Preferred Stock -
Series B are ever, voluntarily or involuntarily, sold, assigned or
otherwise transferred by the original Holder or any subsequent Holder
thereof to any Person which is not an affiliate of the original Holder
thereof, then such shares of Class T Preferred Stock - Series B shall no
longer be convertible into shares of Class B Common Stock as provided
herein but each such share of Class T Preferred Stock - Series B shall
thereafter be convertible into the number of shares of Class A Common
Stock calculated by dividing the Liquidation Preference by 50.625. If
requested by the Company at the time of the conversion of the Class T
Preferred Stock - Series B, the Holder thereof shall provide the Company
with evidence reasonably acceptable to the Company that such Holder is an
affiliate of the original Holder of such shares of Class T Preferred Stock
- Series B. For purposes of this subsection (d) only, the term "affiliate"
shall be defined as set forth in the Articles of Incorporation of the
Company.
(e) In the event that, prior to the conversion of Class T Preferred
Stock into Common Stock pursuant to Section 6(a) or Section 6(b), the
Company shall effect: (w) a dividend upon its Common Stock payable in
shares of Common Stock or other property other than cash (including common
stock, preferred stock or other securities of a
15
<PAGE>
subsidiary of the Company); (x) a combination of its Common Stock into a
smaller number of shares of such Common Stock, by reclassification or
otherwise; (y) a subdivision of its Common Stock into a larger number of
shares of such Common Stock, by reclassification or otherwise; or (z) any
reorganization or reclassification of its Common Stock, or any
liquidation, consolidation or merger with another Person, or the sale of
all or substantially all of its assets to another Person, in such a way
that the holders of Common Stock shall be entitled to receive (either
directly, or upon subsequent liquidation) common stock, preferred stock,
securities or other property (including cash) with respect to or in
exchange for such shares of Common Stock (any such event set forth in (w)
- (z) above referred to as a "Diluting Event"), then, as a condition of
such Diluting Event, lawful and adequate provisions shall be made whereby
each Holder shall, unless it results in a duplication of the dividends and
other distributions provided for in Section 3 and the other provisions of
this Certificate of Designation, be entitled to receive, (under the same
terms otherwise applicable to such Holder's receipt of Common Stock) upon
the conversion of the shares of Class T Preferred Stock held by such
Holder in accordance with the provisions of Section 6(a) or 6(b) hereof,
(hereinafter such shares are referred to as the "Common Convertible
Shares"), the following: (A) if the Diluting Event results in an exchange
of Common Stock for common stock, preferred stock, securities or other
property, each Holder shall be entitled to receive in lieu of the Common
Convertible Shares to which such Holder was entitled immediately prior to
the Diluting Event but which such Holder had not yet received, such shares
of common stock, preferred stock, securities or other property as may be
issued or payable by virtue of the Diluting Event in exchange for that
number of Common Convertible Shares to which such Holder was entitled
immediately prior to the Diluting Event but which such
16
<PAGE>
Holder had not yet received; and/or (B) if the Diluting Event results in
an issuance or payment with respect to Common Stock, such Holder shall be
entitled to receive, in addition to the Common Convertible Shares to which
such Holder was entitled immediately prior to the Diluting Event but which
it had not yet received, such shares of common stock, preferred stock,
securities or other property as may be issued or payable by virtue of the
Diluting Event with respect to that number of Common Convertible Shares to
which such Holder was entitled immediately prior to the Diluting Event but
which it had not yet received. If any Diluting Event occurs, provision
shall be made with respect to each Holder's rights and interests resulting
from the application of this Section 6(e) to ensure that this Section 6(e)
applies as well to any shares of common stock, preferred stock, securities
or other property deliverable to such Holder upon conversion as a result
of the occurrence of each such Diluting Event.
(f) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, for the purpose of
effecting the conversion of the Class T Preferred Stock, the full number
of shares of Common Stock then deliverable upon the conversion of all
shares of Class T Preferred Stock then outstanding.
(g) The number of shares of Class T Preferred Stock converted at any
time and from time to time shall be such number as will result in the
exchange therefore of a whole number of shares of Common Stock, unless the
Holders and the Company otherwise agree.
7. Voting Rights. The shares of Class T Preferred Stock shall not have any
voting rights except in such circumstances as required by the nonwaivable
provisions of the MBCA.
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<PAGE>
8. Transfer. No Holder may voluntarily or involuntarily sell, assign or
otherwise transfer any shares of Class T Preferred Stock unless such Holder
delivers to the Company at least thirty (30) days prior to the effective date of
such sale, assignment or other transfer (i) a written notice describing all of
the material terms and conditions of the proposed sale, assignment or other
transfer, including the name and address of the proposed purchaser, assignee or
other transferee, and (ii) an opinion of counsel (which opinion shall be in a
form and shall be issued by an attorney reasonably acceptable to the Company)
addressed to the Company to the effect that the proposed sale, assignment or
other transfer is exempt from the registration requirements of applicable state
and federal securities laws and that such sale, assignment or other transfer
shall not directly or indirectly cause the Company and/or any of its Affiliates
to violate the Cross-Ownership Rules.
9. Restrictions on Issuance. Shares of Class T Preferred Stock shall be a
separate class of capital stock and may be issued by the Company only to
Telephone and Data Systems, Inc., a Delaware corporation ("TDS") and/or its
Affiliates and their respective successors and assigns permitted under Section 8
hereof.
10. Amendment. This Certificate of Designation shall not be amended,
either directly or indirectly, or through merger or consolidation with another
Person, in any manner that would alter or change the powers, preferences or
special rights of the Class T Preferred Stock so as to affect them adversely
without the affirmative vote of the Holders of at least a majority of the
outstanding Class T Preferred Stock voting separately as a class.
11. Exclusion of Other Rights. Except as may otherwise be required by law,
the shares of Class T Preferred Stock shall not have any voting powers,
preferences and relative, participating, optional or other special rights, other
than those specifically set forth in this Certificate of Designation (as such
Certificate of Designation may be amended from time to time
18
<PAGE>
in accordance with the terms hereof) and in the Articles of Incorporation. The
shares of Class T Preferred Stock shall have no preemptive or subscription
rights.
12. Headings of Section. The headings of the various sections and
subsections hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.
13. Severability of Provisions. If any voting power, preference or
relative, participating, optional and other special right of the Class T
Preferred Stock or qualification, limitation or restriction thereof set forth in
this Certificate of Designation (as this Certificate of Designation may be
amended from time to time) is invalid, unlawful or incapable of being enforced
by reason of any rule of law or public policy, all other voting powers,
preferences and relative, participating, optional and other special rights of
Class T Preferred Stock and qualifications, limitations and restrictions thereof
set forth in this Certificate of Designation (as so amended) which can be given
effect without the invalid, unlawful or unenforceable voting power, preference
and relative, participating, optional or other special right of Class T
Preferred Stock or qualification, limitation or restriction thereof, shall,
nevertheless, remain in full force and effect, and no voting powers, preferences
and relative, participating, optional or other special rights of Class T
Preferred Stock and qualifications, limitations and restrictions thereof herein
set forth shall be deemed dependent upon any other such voting powers,
preferences and relative, participating, optional or other special rights of
Class T Preferred Stock and qualifications, limitations and restrictions thereof
unless so expressed herein.
19
<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed by Ann K. Newhall, the Secretary of the Company this 31st day of
March, 2000.
RURAL CELLULAR CORPORATION
By /s/ Ann K. Newhall
Name Ann K. Newhall
Title Secretary
20
<PAGE>
Exhibit 4.2(a)
PREFERRED STOCK
PURCHASE AGREEMENT
DATED APRIL 3, 2000
AMONG
RURAL CELLULAR CORPORATION,
MADISON DEARBORN CAPITAL PARTNERS III, L.P.,
MADISON DEARBORN SPECIAL EQUITY III, L.P.,
SPECIAL ADVISORS FUND I, LLC,
BOSTON VENTURES LIMITED PARTNERSHIP V,
AND
TORONTO DOMINION INVESTMENTS, INC.
<PAGE>
TABLE OF CONTENTS
PAGE
1. Authorization and Closing..................................................1
1A. Authorization of the Preferred Stock.........................1
1B. Purchase and Sale of the Preferred Stock.....................1
1C. The Closing..................................................1
2. Conditions of Each Purchaser's Obligation at the Closing...................1
2A. Representations and Warranties; Covenants....................2
2B. Certificate of Designation...................................2
2C. Articles of Incorporation....................................2
2D. Company's Bylaws.............................................2
2E. Registration Agreement.......................................2
2F. Acquisition Agreement........................................2
2G. Senior Loan Agreement........................................3
2H. Bridge Financing Agreement...................................3
2I. Class T Preferred Stock Agreement............................3
2J. Sale of Preferred Stock to Each Purchaser....................3
2K. Securities Law Compliance....................................4
2L. Compliance with Applicable Laws..............................4
2M. Opinions of the Company's Counsel............................4
2N. Expenses.....................................................4
2O. Undrawn Commitment Fee.......................................4
2P. Receipt of Necessary Approvals..............................4
2Q. Closing Documents............................................5
2R. Waiver.......................................................6
3. Covenants..................................................................6
3A. Financial Statements and Other Information...................6
3B. Restrictive Covenants........................................6
3C. Designation of Directors.....................................9
3D. Affirmative Covenants.......................................13
3E. Year 2000 (Y2K) Compliance..................................14
3F. Compliance with Agreements..................................15
3G. Regulatory Compliance Cooperation...........................15
3H. Public Disclosures..........................................15
4. Covenants of the Purchasers...............................................15
4A. Confidentiality.............................................15
4B. Purchaser Standstill........................................16
4C. FCC Compliance..............................................18
5. Transfer of Purchaser Securities..........................................18
5A. General Provisions..........................................18
5B. Legend Removal..............................................18
6. Representations and Warranties of the Company.............................18
6A. Organization; Ownership; Power; Qualification...............18
6B. Authorization; Enforceability...............................19
6C. Capital Stock and Related Matters...........................19
6D. Subsidiaries; Authorization; Enforceability.................20
6E. Compliance with Other Documents and Contemplated
Transactions..........................................21
6F. Business....................................................21
6G. Licenses, etc...............................................21
6H. Compliance with Law.........................................21
6I. Title to Assets.............................................21
6J. Litigation..................................................22
6K. Taxes.......................................................22
6L. Financial Statements........................................22
6M. No Material Adverse Change..................................22
6N. ERISA.......................................................22
6O. Investment Company Act......................................23
6P. Governmental Regulation.....................................23
6Q. Absence of Default, Etc.....................................23
6R. Accuracy and Completeness of Information....................24
- i -
<PAGE>
6S. Agreements with Affiliates..................................24
6T. Payment of Wages............................................24
6U. Indebtedness................................................24
6V. Solvency....................................................24
6W. Year 2000 Compliance........................................25
6X. Reports with the Securities and Exchange Commission.........25
7. Definitions...............................................................25
8. Miscellaneous.............................................................32
8A. Expenses....................................................32
8B. Remedies....................................................32
8C. Purchaser's Investment Representations......................33
8D. Understanding Among the Purchasers..........................35
8E. Treatment of the Preferred Stock............................35
8F. Indemnification.............................................35
8G. Consent to Amendments.......................................35
8H. Survival of Representations and Warranties..................36
8I. Successors and Assigns......................................36
8J. Severability................................................36
8K. Counterparts................................................36
8L. Descriptive Headings; Interpretation........................36
8M. No Strict Construction......................................37
8N. Complete Agreement..........................................37
8O. Schedules...................................................37
8P. Delivery by Facsimile.......................................37
8Q. Governing Law...............................................38
8R. Notices.....................................................38
SCHEDULES AND EXHIBITS
Schedule of Purchasers
List of Exhibits
List of Disclosure Schedules
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RURAL CELLULAR CORPORATION
PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of April 3, 2000, by and among Rural
Cellular Corporation, a Minnesota corporation (the "COMPANY"), and the Persons
listed on the SCHEDULE OF PURCHASERS attached hereto (collectively referred to
herein as the "PURCHASERS" and individually as a "PURCHASER"). Except as
otherwise indicated herein, capitalized terms used herein are defined in Section
7 hereof.
The parties hereto agree as follows:
Section 1. AUTHORIZATION AND CLOSING.
1A. AUTHORIZATION OF THE PREFERRED STOCK. The Company shall authorize
the issuance and sale to the Purchasers of 110,000 shares of its Class M
Redeemable Voting Convertible Preferred Stock, par value $0.01 per share (the
"PREFERRED STOCK"), having the rights and preferences set forth with respect
thereto in the Certificate of Designation attached hereto as EXHIBIT A. The
Preferred Stock is convertible into shares of the Company's Class A Common
Stock, par value $0.01 per share (the "CLASS A COMMON STOCK"), in the manner and
upon the terms and conditions set forth in the Certificate of Designation (as
defined in Section 2B below).
1B. PURCHASE AND SALE OF THE PREFERRED STOCK. At the Closing, the
Company shall sell to each Purchaser and, subject to the terms and conditions
set forth herein, each Purchaser shall purchase from the Company the number of
shares of Preferred Stock set forth opposite such Purchaser's name on the
SCHEDULE OF PURCHASERS attached hereto at a price of $1,000 per share of
Preferred Stock. The sale of the Preferred Stock to each Purchaser shall
constitute a separate sale hereunder.
1C. THE CLOSING. The closing of the separate purchases and sales of
the Preferred Stock (the "CLOSING") shall take place at the offices of Moss &
Barnett, 4800 Norwest Center, 90 South 7th Street, Minneapolis, Minnesota, at
10:00 a.m. local time on the date hereof, or at such other place or on such
other date as may be mutually agreeable to the Company and each Purchaser (the
date of the Closing, the "CLOSING DATE"). At the Closing, the Company shall
deliver to each Purchaser a stock certificate evidencing the Preferred Stock to
be purchased by such Purchaser, registered in such Purchaser's or its nominee's
name, upon payment of the purchase price thereof by delivery to the Company by
wire transfer of immediately available funds to an account designated by the
Company prior to the Closing, in the aggregate amount set forth opposite such
Purchaser's name on the SCHEDULE OF PURCHASERS. Unless otherwise waived by the
Company in its sole discretion, the Company's obligations under this Agreement,
including the issuance and sale of the Preferred Stock, are contingent upon the
receipt by the Company of the entire purchase price for the Preferred Stock from
each Purchaser, as set forth on the SCHEDULE OF PURCHASERS.
Section 2. CONDITIONS OF EACH PURCHASER'S OBLIGATION AT THE CLOSING.
The obligation of each Purchaser to purchase and pay for the Preferred Stock at
the Closing is subject to the satisfac tion as of the Closing of the following
conditions:
2A. REPRESENTATIONS AND WARRANTIES; COVENANTS. The representations and
warranties contained in Section 6 hereof shall be true and correct in all
material respects at and as of the Closing as though then made, except to the
extent of changes caused by the transactions expressly contemplated herein, and
the Company shall have performed in all material respects all of the covenants
required to be performed by it hereunder prior to the Closing.
2B. CERTIFICATE OF DESIGNATION. The Company shall have duly adopted,
executed and filed with the Secretary of State of Minnesota a Certificate of
Designation of Voting Power, Preferences and Relative, Participating, Optional
and Other Special Rights and Qualifications, Limitations and Restrictions
establishing the terms and the relative rights and preferences of the Preferred
Stock in the form set forth in EXHIBIT A hereto (the "CERTIFICATE OF
DESIGNATION"), and the Company shall not have adopted or filed any other
document designating terms, relative rights or preferences of its preferred
stock, other than the Other Preferred Stock Agreements. The Certificate of
Designation shall be in full force and effect as of the Closing under the laws
of the State of Minnesota and shall not have been amended or modified.
2C. ARTICLES OF INCORPORATION. The Company's Articles of Incorporation
shall be in form and substance as previously delivered to the Purchasers, a copy
of which is attached hereto as EXHIBIT B (the "ARTICLES OF INCORPORATION"),
shall be in full force and effect under the laws of the State of Minnesota as of
the Closing and shall not have been amended or modified.
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2D. COMPANY'S BYLAWS. The Company's bylaws shall be in form and
substance as previously delivered to the Purchasers, a copy of which is attached
hereto as EXHIBIT C (the "BYLAWS"), shall be in full force and effect as of the
Closing and shall not have been amended or modified.
2E. REGISTRATION AGREEMENT. The Company and the Purchasers shall have
entered into a registration agreement in form and substance as set forth in
EXHIBIT D attached hereto (the "REGISTRATION AGREEMENT"), and the Registration
Agreement shall be in full force and effect as of the Closing and shall not have
been amended or modified.
2F. ACQUISITION AGREEMENT. The Asset Purchase Agreement, dated as of
November 6, 1999, among the Company, Triton Cellular Partners, L.P., Triton
Communications, L.L.C., Triton Cellular Alabama License Company, L.L.C. and
certain of their affiliates (the "ACQUISITION AGREEMENT"), providing for the
purchase of substantially all of the cellular telephone operations of various
subsidiaries of Triton Cellular Partners, L.P. in the states of Alabama, Kansas,
Mississippi, Oregon and Washington (the "ACQUISITION"), shall be in form and
substance substantially as attached hereto as EXHIBIT E, shall be in full force
and effect as of the Closing and shall not have been amended or modified in any
material respect. All conditions to the obligations of the seller thereunder to
sell the assets subject to the Acquisition shall have been satisfied in full (or
duly waived without the payment of additional consideration in excess of
$5,000,000 in the aggregate, together with all other payments of additional
consideration for waivers to agreements in paragraphs 2F to 2I, inclusive, for
such waiver), and the Acquisition contemplated by the Acquisition Agreement
shall have been consummated prior to or simultaneously with the Closing
hereunder in accordance with the terms of the Acquisition Agreement.
2G. SENIOR LOAN AGREEMENT. The Senior Loan Agreement shall be in form
and substance substantially as attached hereto as EXHIBIT F, shall have been
duly authorized, executed and delivered by the Company and/or its Subsidiaries,
shall be in full force and effect as of the Closing and shall not have been
amended or modified in any material respect. All conditions to the obligations
of the Senior Lenders to make loans under the Senior Loan Agreement shall have
been satisfied in full (or duly waived without the payment of additional
consideration in excess of $5,000,000 in the aggregate, together with all other
payments of additional consideration for waivers to agreements in paragraphs 2F
to 2I, inclusive, for such waiver), and the loans to be made thereunder by the
Senior Lenders at the Closing shall have been advanced to the Company prior to
or simultaneously with the Closing hereunder in accordance with the terms of the
Senior Loan Agreement.
2H. BRIDGE FINANCING AGREEMENT. The Bridge Financing Agreement shall
be in form and substance substantially as attached hereto as EXHIBIT G, shall
have been duly authorized, executed and delivered by the Company, shall be in
full force and effect as of the Closing and shall not have been amended or
modified in any material respect. All conditions to the obligations of the
Bridge Financing Investors to purchase Company securities under the Bridge
Financing Agreement shall have been satisfied in full (or duly waived without
the payment of additional consideration in excess of $5,000,000 in the
aggregate, together with all other payments of additional consideration for
waivers to agreements in paragraphs 2F to 2I, inclusive, for such waiver), all
conditions to the release of funds held in escrow under the Escrow Agreement
entered into pursuant to the Junior Exchangeable Preferred Stock Agreement shall
have been satisfied in full (or duly waived without the payment of additional
consideration in excess of $5,000,000 in the aggregate, together with all other
payments of additional consideration for waivers to agreements in paragraphs 2F
to 2I, inclusive, for such waiver), and the purchase transactions contemplated
by the Bridge Financing Agreement shall have been consummated prior to or
simultaneously with the Closing hereunder in accordance with the terms of the
Bridge Financing Agreement.
2I. CLASS T PREFERRED STOCK AGREEMENT. The Class T Preferred Stock
Agreement shall be in form and substance substantially as attached hereto as
EXHIBIT H, shall have been duly authorized, executed and delivered by the
Company, shall be in full force and effect as of the Closing and shall not have
been amended or modified in any material respect. All conditions to the
obligations of the Class T Preferred Investors to purchase Company securities
under the Class T Preferred Stock Agreement shall have been satisfied in full
(or duly waived without the payment of additional consideration in excess of
$5,000,000 in the aggregate, together with all other payments of additional
consideration for waivers to agreements in paragraphs 2F to 2I, inclusive, for
such waiver), and the purchase transactions contemplated by the Class T
Preferred Stock Agreement shall have been consummated prior to or simultaneously
with the Closing hereunder in accordance with the terms of the Class T Preferred
Stock Agreement.
2J. SALE OF PREFERRED STOCK TO EACH PURCHASER. The Company shall have
simultaneously sold to each Purchaser the Preferred Stock to be purchased by
such Purchaser
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hereunder at the Closing and shall have received payment therefor in full in
immediately available funds as provided in paragraph 1C above; PROVIDED THAT, in
the event that any Purchaser fails to deliver its purchase price for its
Preferred Stock as provided herein, at the sole option of the Company, the
Company may terminate this Agreement as to such defaulting Purchaser and accept
the payment and delivery of each other Purchaser hereunder, and this Agreement
shall remain in full force and effect as to the Company and such non-defaulting
Purchasers.
2K. SECURITIES LAW COMPLIANCE. The Company shall have made all
necessary filings, if any required, under all applicable federal and state
securities laws in connection with the issuance of the Preferred Stock pursuant
to this Agreement.
2L. COMPLIANCE WITH APPLICABLE LAWS.
(i) The issuance and sale of the Preferred Stock to the
Purchasers pursuant to the terms hereof shall not violate, in any
material respect, any order, writ, judgment, injunction, decree,
statute, law, rule or regulation applicable to or bearing upon the
Company of any jurisdiction, court, tribunal or other governmental
entity or authority having jurisdiction over the Company or its assets.
(ii) The purchase of Preferred Stock by each Purchaser
hereunder shall not be prohibited by any applicable law or governmental
rule or regulation and shall not subject such Purchaser to any penalty,
liability or, in such Purchaser's sole judgment, other onerous
condition under or pursuant to any applicable law or governmental rule
or regulation, and the purchase of the Preferred Stock by each
Purchaser hereunder shall be permitted by laws, rules and regulations
of the jurisdictions and governmental authorities and agencies to which
such Purchaser is subject.
2M. OPINIONS OF THE COMPANY'S COUNSEL. Each Purchaser shall have
received from Moss & Barnett, counsel for the Company, an opinion with respect
to the matters set forth in EXHIBIT I attached hereto, from Mayer, Brown &
Platt, special New York counsel to the Company, an opinion with respect to the
matters set forth in EXHIBIT J attached hereto, and from Lukas, Nace, Gutierrez
& Sachs, special communications counsel to the Company, an opinion with respect
to the matters set forth in EXHIBIT K attached hereto, each of which shall be
addressed to each Purchaser, dated the date of the Closing and in form and
substance reasonably satisfactory to each Purchaser and its special counsel.
2N. EXPENSES. At the Closing, the Company shall have paid or
reimbursed the Purchasers for all fees and expenses required to be paid pursuant
to paragraph 8A hereof.
2O. UNDRAWN COMMITMENT FEE. At the Closing, the Company shall have
paid the Purchasers a fee of $1,800,000, which fee, the Purchasers hereby
consent and agree, will be allocated among the Purchasers PRO RATA according to
the number of shares of Preferred Stock purchased by each such Purchaser at the
Closing hereunder.
2P. RECEIPT OF NECESSARY APPROVALS. The Company shall have obtained
all governmental, regulatory, third party and other consents, approvals, and
filings, if any, required in connection with the consummation of the
transactions contemplated under this Agreement (including, without limitation,
all blue sky law filings and waivers of all preemptive rights and rights of
first refusal with respect to the Company's equity securities), the Acquisition
Agreement and the other agreements described herein and therein.
2Q. CLOSING DOCUMENTS. The Company shall have delivered to each
Purchaser all of the following documents:
(i) an Officer's Certificate, dated the date of the
Closing, stating that the conditions specified in Section 1, paragraphs
2A through 2L(i), inclusive, and paragraph 2P have been fully
satisfied;
(ii) certified copies of the resolutions duly adopted by
the Board authorizing (A) the execution, delivery and performance of
this Agreement, the Registration Agreement, the Senior Loan Agreement,
the Bridge Financing Agreement, the Class T Preferred Stock Agreement,
the Acquisition Agreement and each of the other agreements contemplated
hereby and thereby, (B) the filing of the Certificate of Designation
referred to in paragraph 2B, (C) the appointment to the Board of the
directors designated pursuant to paragraph 3C hereof, (D) the issuance
and sale of the Preferred Stock to the Purchasers at the Closing, (E)
the reservation for issuance upon conversion of the Preferred Stock of
an
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aggregate of 2,075,472 shares of Class A Common Stock and (F) the
consummation of all other transactions contemplated by this Agreement;
(iii) an Officer's Certificate, dated the date of the
Closing, certifying that the Company's stockholders have approved (A)
the issuance and sale of the Preferred Stock, (B) an amendment to the
Articles of Incorporation of the Company increasing the number of
authorized shares of capital stock to 300,000,000 shares, consisting of
200,000,000 shares of Class A Common Stock, 10,000,000 shares of Class
B Common Stock, and 90,000,000 undesignated shares and (C) the adoption
of an amendment to the Bylaws of the Company increasing the size of the
Board to eleven members;
(iv) certified copies of the Articles of Incorporation,
the Certificate of Designation and the Company's Bylaws, each as in
effect at the Closing;
(v) duly completed and executed copies of the
Acquisition Agreement, the Registration Agreement, the Senior Loan
Agreement, the Bridge Financing Agreement and the Class T Preferred
Stock Agreement, each as in effect at the Closing;
(vi) good standing certificates for the jurisdiction of
incorporation of the Company and each of its Subsidiaries and for each
jurisdiction in which the Company or any of its Subsidiaries is
qualified to do business; and
(vii) such other documents relating to the transactions
contemplated by this Agreement as any Purchaser or its special counsel
may reasonably request.
2R. WAIVER. Any condition specified in this Section 2 may be waived if
consented to by each Purchaser; PROVIDED THAT no such waiver shall be effective
against any Purchaser unless it is set forth in a writing executed by such
Purchaser.
Section 3. COVENANTS.
3A. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall
deliver to each holder of at least 25% of the outstanding Purchaser Securities
(and to Toronto Dominion Investments, Inc. so long as it and its Affiliates hold
at least 80% of the Purchaser Securities originally issued to Toronto Dominion
Investments, Inc. at the Closing hereunder) (each, a "QUALIFIED HOLDER"):
(i) as soon as practicable but in any event within 30
days after the end of each monthly accounting period in each fiscal
year, all of the financial information which is provided to the Board
with respect to such monthly accounting period;
(ii) within ten days after transmission thereof, copies
of all financial statements, proxy statements, reports and any other
general written communications which the Company sends to its
stockholders and copies of all registration statements and all regular,
special or periodic reports which it files, or (to its knowledge) any
of its officers or directors file with respect to the Company, with the
Securities and Exchange Commission (or any governmental authority that
may by the successor therefor) or with any securities exchange on which
any of its securities are then listed, and copies of all press releases
and other statements made available generally by the Company to the
public concerning material developments in the Company's and its
Subsidiaries' businesses; and
(iii) with reasonable promptness, such other information
and financial data concerning the Company and its Subsidiaries as any
Qualified Holder may reasonably request.
All financial statements included in the information to be provided pursuant to
paragraphs (i) and (ii) shall fairly report the financial condition and results
of operations of the Company and its Subsidiaries as of the dates and for the
periods stated therein, and shall be prepared in accordance with GAAP,
consistently applied, subject in the case of unaudited financial statements to
changes resulting from normal year-end adjustments for recurring accruals.
For purposes of this Agreement, all holdings of Purchaser Securities by Persons
who are Affiliates of each other shall be aggregated for purposes of meeting any
threshold tests under this Agreement.
3B. RESTRICTIVE COVENANTS. So long as any Preferred Stock remains
outstanding, the Company shall not, without the prior written consent of the
holders of a majority of the Preferred Stock then outstanding:
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(i) directly or indirectly declare or pay, or permit any
Subsidiary to declare or pay, any dividends or make any distributions
upon any of its capital stock or other equity securities, except for
(A) dividends payable on the Other Preferred Stock pursuant to the
terms of the Other Preferred Stock Agreements as in effect on the date
hereof, (B) dividends payable on the Preferred Stock pursuant to the
term of the Articles of Incorporation (and the Certificate of
Designation filed thereunder with respect to the Preferred Stock), (C)
dividends payable in shares of Junior Securities issued upon the
outstanding shares of Junior Securities, (D) so long as no Event of
Noncompliance then exists or would be caused thereby, dividends payable
on the Common Stock out of (1) cumulative earnings available to Common
Stock or (2) net proceeds to the Company from the issuance of Junior
Securities subsequent to the date of this Agreement and (E) dividends
payable by any Subsidiary (1) to the Company or to any of its Wholly
Owned Subsidiaries or (2) if such dividends are made on a PRO RATA
basis with respect to all of such Subsidiary's capital stock or equity
interests;
(ii) directly or indirectly redeem, purchase or otherwise
acquire, or permit any Subsidiary to redeem, purchase or otherwise
acquire, any of the Company's or any Subsidiary's capital stock or
other equity securities (including, without limitation, warrants,
options and other rights to acquire such capital stock or other equity
securities) or directly or indirectly redeem, purchase or make any
payments with respect to any stock appreciation rights, phantom stock
plans or similar rights or plans, except for (A) redemptions of the
Other Preferred Stock pursuant to the terms of the Other Preferred
Stock Agreements as in effect on the date hereof, (B) redemptions of
the Preferred Stock pursuant to the terms of the Articles of
Incorporation (and the Certificate of Designation filed thereunder with
respect to the Preferred Stock), (C) so long as no Event of
Noncompliance then exists or would be caused thereby, redemptions or
repurchases of Common Stock (or payments with respect to any stock
appreciation rights, phantom stock plans or similar rights or plans)
(1) with the net proceeds to the Company from the issuance of Junior
Securities subsequent to the date of this Agreement or (2) from
employees of the Company and its Subsidiaries pursuant to equity
subscription agreements, stock option agreements, stock appreciation
rights, phantom stock plans or similar rights or plans in effect on the
date hereof and which have been disclosed to the Purchasers on the
Schedules hereto and (D) redemptions or repurchases of the capital
stock or other equity securities of a Subsidiary (1) that are held by
the Company or any of its Wholly Owned Subsidiaries or (2) by such
Subsidiary if such redemptions or repurchases are made on a PRO RATA
basis with respect to all of such Subsidiary's capital stock or other
equity interests;
(iii) except as expressly contemplated by this Agreement,
amend, supplement, modify, terminate, waive or permit to be amended,
supplemented, modified, terminated or waived any of the provisions of
the Articles of Incorporation (including the Certificate of Designation
or any other certificate of designation setting forth the terms of any
class or series of preferred stock), the Company's Bylaws, the Other
Preferred Stock Agreements, or any other agreement entered into with
respect to the capital stock or equity securities of the Company or
file any resolution of the Board with the Minnesota Secretary of State,
in each case in any manner which would reasonably be expected to be
adverse to the holders of Preferred Stock;
(iv) except for (A) issuances of the Preferred Stock at
the Closing as contemplated under this Agreement, (B) issuances of
Other Preferred Stock as payment-in- kind dividends on the Other
Preferred Stock pursuant to the terms of the Other Preferred Stock
Agreements as in effect on the date hereof and (C) issuances of Other
Preferred Stock at the Closing as contemplated by the Bridge Financing
Agreement, authorize, issue or enter into any agreement providing for
the issuance (contingent or otherwise) of (or take any action that
would amend the terms of or reclassify any existing securities so as to
constitute) (a) any notes or debt securities containing equity features
(including, without limitation, any notes or debt securities
convertible into or exchangeable for capital stock or other equity
securities, issued in connection with the issuance of capital stock or
other equity securities or containing profit participation features) or
(b) any capital stock or other equity securities (or any securities
convertible into or exchangeable for any capital stock or other equity
securities) which are senior to or on a parity with the Preferred Stock
with respect to the payment of dividends, redemptions or distributions
upon liquidation or otherwise;
(v) effect any liquidation, dissolutions or winding up
of the Company (whether voluntary or involuntary) (a "LIQUIDATION
EVENT"), unless in connection with such Liquidation Event each holder
of the Preferred Stock receives with respect to its Preferred Stock an
amount not less than the full liquidation value of such Preferred Stock
(together with all accrued but unpaid dividends thereon) as set forth
in the Certificate of Designation,
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or effect any reorganization of the Company into a partnership, limited
liability company or other non-corporate entity which is treated as a
partnership for federal income tax purposes;
(vi) engage, or permit any Subsidiary to engage, directly
or indirectly, in any business activities other than such business
activities which are substantially of the type (or incidental to) the
business being conducted by the Company and its Subsidiaries as of the
date of the Closing;
(vii) enter into, cause, permit or otherwise suffer to
exist or permit any Subsidiary to enter into, cause, permit or
otherwise suffer to exist any agreement, transaction, commitment or
arrangement with any of its or any Subsidiary's officers, directors,
senior executives, principal stockholders (other than the Company or
another Subsidiary) or Affiliates, or with any such individual's
spouse, sibling, lineal ancestor or descendant, or spouse's sibling or
lineal ancestor or descendant, or with any entity in which any of the
foregoing owns a beneficial interest, unless such arrangement is
otherwise not expressly prohibited under this Agreement, is in the
ordinary course of the Company's or such Subsidiary's business and is
on fair and reasonable terms that are not less favorable to the Company
or such Subsidiary than those that would be obtainable at the time in
an arm's length transaction with a Person not described above; PROVIDED
THAT the following shall in any event be permitted: (A) dividends,
redemptions, stock purchases and other distributions otherwise
permitted under this Agreement, (B) the payment of reasonable fees to
directors of the Company or any Subsidiary who are not employees of the
Company or any of its Subsidiaries, (C) so long as no Event of
Noncompliance would arise therefrom, any transaction with an officer or
member of the Board or any Sub Board in the ordinary course of business
involving indemnity or expense reimbursement, (D) loans or advances to
officers, directors or employees in the ordinary court of business, (E)
customary employment arrangements and benefit programs on reasonable
terms as approved by the Board or a committee thereof and (F)
transactions and agreements in existence on the date hereof and
described with particularity in the AFFILIATED TRANSACTIONS SCHEDULE
attached hereto;
(viii) make or permit, or permit any Subsidiary to make or
permit, any change in its respective fiscal year or in any of its other
accounting principles and practices;
(ix) use the proceeds from the sale of the Preferred
Stock other than to pay a portion of the purchase price for the
Acquisition and to pay related costs, fees and expenses; or
(x) agree or commit to any of the foregoing.
3C. DESIGNATION OF DIRECTORS. Subject to the limitations set forth in
this paragraph 3C, MDP and Boston Ventures each shall have the right to
designate one representative for election to the Board (individually a "BOARD
REPRESENTATIVE" and collectively the "BOARD REPRESENTATIVES"). The terms and
conditions governing the election, term of office, filling of vacancies and
other features of such directorships shall be as follows:
(i) INTERIM APPOINTMENT OF DIRECTORS. Pursuant to
written direction delivered by MDP and Boston Ventures to the Company,
MDP and Boston Ventures have each nominated one Board Representative to
be elected to the Board. At a meeting of the Board held on March 23,
2000, in fulfillment of the Company's obligation set forth in clause
(C) of paragraph 2Q(ii), the Board, acting in accordance with authority
provided pursuant to Sections 3.02(a) and 3.02(b) of the Bylaws,
approved resolutions which: (a) increased the size of the Board from
eight members to ten members through the addition of two additional
seats for Class III directors; and (b) filled the vacancies created by
such increase in the size of the Board with the Board Representatives
nominated by MDP and Boston Ventures. The appointment of the Board
Representatives as Class III directors is effective as of the day
following the Closing Date and is contingent upon the consummation of
the transactions contemplated by this Agreement. Each Board
Representative appointed pursuant to this paragraph 3C(i) shall
continue to hold office until the first regular meeting of the
shareholders of the Company following the Closing (at which time the
term shall expire automatically), subject, however, to prior death,
resignation, retirement, disqualification or termination of term of
office as provided in this paragraph 3C.
(ii) CONTINUING DESIGNATION OF BOARD REPRESENTATIVES.
Commencing with the first regular meeting of shareholders of the
Company following the Closing, the term of the Board Representatives
appointed to the Board as provided for in paragraph 3C(i) shall expire
and, thereafter, the Board Representatives designated by MDP and Boston
Ventures
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shall be elected in accordance with the following provisions of
paragraph 3C(ii)(A) or (B), as applicable:
(A) Subject to the provisions of paragraph
3C(iii), so long as any Preferred Stock remains issued and
outstanding, the Board Representative(s) designated by MDP
and/or Boston Ventures shall be elected to the Board by the
affirmative vote of the holders of all of the issued and
outstanding shares of Preferred Stock, voting separately as a
class, at a regular or special meeting of the shareholders of
the Company. The Board Representative(s) elected by the
holders of Preferred Stock shall not be divided into classes
and shall be in addition to the maximum number of directors
who may be elected by the holders of the Company's Common
Stock. Subject to the provisions of paragraph 3C(iii), all
holders of Preferred Stock shall vote their shares of
Preferred Stock in such a manner to effect the election of the
Board Representative(s) designated by MDP and/or Boston
Ventures pursuant to this paragraph. A Board Representative
elected pursuant to this paragraph 3C(ii)(A) shall hold office
until his successor is duly qualified and elected, subject to
prior death, resignation, retirement, disqualification, there
being no Preferred Stock remaining issued and outstanding (at
which time the term shall expire automatically) or termination
of term of office pursuant to the provisions of paragraph
3C(iii) or paragraph 3C(iv).
(B) Commencing at such time as no shares of
Preferred Stock remain issued and outstanding, the term of the
Board Representatives designated by MDP and Boston Ventures as
provided for in paragraph 3C(ii)(A) will expire automatically,
and thereafter the Company shall, subject to the provisions of
paragraph 3C(iii), nominate the Board Representative(s)
designated by MDP and/or Boston Ventures for election to the
Board by the holders of Common Stock and solicit proxies from
the Company's shareholders in favor of the election of such
Board Representative(s) provided written notice is delivered
to the Secretary of the Company in the manner provided in the
Bylaws for the nomination of directors, generally. Subject to
the provisions of paragraph 3C(iii), the Company shall use
commercially reasonable efforts to cause such Board
Representative(s) to be elected to the Board (including voting
all unrestricted proxies in favor of the election of such
board Representative(s)) and shall not take any action which
would diminish the prospects of such Board Representative(s)
being elected to the Board. Board Representatives elected as
directors pursuant to this paragraph 3C(ii)(B) shall be
divided into classes and shall be included in the maximum
number of directors who may be elected by the holders of the
Company's Common Stock in accordance with the provisions of
Section 3.02(a) and (b) of the Bylaws.
(iii) TERMINATION OF BOARD REPRESENTATIVE DESIGNATION
RIGHTS. The right of MDP to designate a Board Representative pursuant
to this paragraph 3C shall terminate at such time as MDP ceases to hold
Purchaser Securities equal to at least 50% of the amount of Purchaser
Securities initially issued to MDP on closing. The right of Boston
Ventures to designate a Board Representative pursuant to this paragraph
3C shall terminate at such time as Boston Ventures ceases to hold at
least 50% of the amount of Purchaser Securities initially issued to MDP
on Closing. If the rights of MDP and/or Boston Ventures, as the case
may be, to designate a Board Representative cease under either of the
two immediately preceding sentences, then (1) the Board may terminate
the term of the Board Representative of the Person as to which such
rights have ceased (MDP or Boston Ventures, as the case may be) by the
affirmative vote of the Board (in which vote the Board Representative
whose term of office the Board seeks to terminate shall not
participate) if such director was designated pursuant to paragraph
3C(ii)(A) or (2) the Company may use commercially reasonable efforts to
effect the removal of such director if such director was designated
pursuant to paragraph 3C(ii)(B). The loss of a Board Representative by
MDP or Boston Ventures shall not, in and of itself, cause the loss of
the other Person's Board Representative designation rights.
(iv) QUALIFICATIONS; DISQUALIFICATION; RESIGNATION;
TERMINATION OF TERM; REMOVAL; AND VACANCIES.
(A) QUALIFICATIONS; DISQUALIFICATION. Any
candidate designated by MDP or Boston Ventures as a Board
Representative may not be, in the Company's sole but
reasonable judgment, a representative of a competitor of the
Company. The Board may, at any time, terminate the term of
office of any Board Representative designated pursuant to
paragraph 3C(ii)(A) who, in the Company's sole but reasonable
judgment, becomes a representative of a competitor of the
Company after the date of such Board Representative's
election, upon the affirmative vote of a
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majority of the Board determined without regard to the vote of
the Board Representative or Representatives who are deemed to
be disqualified from serving based on the criteria hereinabove
described. The Company may, at any time, use commercially
reasonable efforts to effect the removal of any Board
Representative who, in the Company's sole but reasonable
judgment, becomes a representative of a competitor of the
Company after the date of such Board Representative's
election.
(B) RESIGNATION. An elected Board
Representative may resign from the Board at any time by giving
written notice to the Company at its principal executive
office. The resignation is effective without acceptance when
the notice is given to the Company, unless a later effective
time is specified in the notice.
(C) TERMINATION OF TERM OF OFFICE. So long
as any Preferred Stock remains outstanding, the term of office
of any Board Representative designated pursuant to paragraph
3C(ii)(A) may be terminated only in the following
circumstances (and may not otherwise be removed): (1) so long
as MDP or Boston Ventures retain the right to designate a
Board Representative pursuant to paragraph 3C(ii)(A), by the
Person (MDP or Boston Ventures, as the case may be) which
designated such Board Representative to the Board; (2) by the
Board in accordance with the provisions of paragraph 3C(iii);
or (3) by the Board in accordance with the provisions of
paragraph 3C(iv)(A).
(D) REMOVAL. So long as MDP or Boston
Ventures retains the right to designate a director pursuant to
paragraph 3C(ii)(B), the Company shall use commercially
reasonable efforts to remove any such director in the
following circumstances (and only in such circumstances): (1)
if so directed by the Person (MDP or Boston Ventures, as the
case may be) who designated such director; (2) in accordance
with the provisions of paragraph 3C(iii); and (3) at the
Company's option, in accordance with the provisions of
paragraph 3C(iv)(A).
(E) VACANCIES. In the event of a vacancy on
the Board resulting from the death, disqualification,
resignation, retirement or termination of term of office of
the Board Representative designated by MDP or Boston Ventures,
(1) if such Person (MDP or Boston Ventures, as the case may
be) retains the right to designate a director pursuant to
paragraph 3C(ii)(A), then the resulting vacancy shall be
filled by a representative designated by MDP or Boston
Ventures, as the case may be, as provided hereunder, or (2) if
such Person (MDP or Boston Ventures, as the case may be)
retains the right to designate a director pursuant to
paragraph 3C(ii)(B), then the Company shall use commercially
reasonable efforts to fill such vacancy with a representative
designated by MDP or Boston Ventures, as the case may be, as
provided hereunder, in either case to serve until the next
annual or special meeting of the shareholders (and at such
meeting, such representative, or another representative
designated by such Person (MDP or Boston Ventures, as the case
may be), will be elected to the Board in the manner described
in paragraph 3C(ii)). If MDP or Boston Ventures, as the case
may be, fails or declines to fill the vacancy, then the
directorship shall remain open until such time as MDP or
Boston Ventures, as the case may be, elects to fill it with a
representative designated hereunder. During any such period
that MDP or Boston Ventures, as the case may be, is entitled
to, but has failed or declined to, designate a Board
Representative, such Person (MDP or Boston Ventures, as the
may be) shall have the right to designate one representative
to attend all Board meetings as a non-voting observer. The
observer shall be entitled to notice of all Board meetings in
the manner that notice is provided to members of the Board,
shall be entitled to receive all materials provided to members
of the Board, shall be entitled to attend (whether in person,
by telephone, or otherwise) all meetings of the Board as a
non-voting observer, and shall be entitled to fees and
expenses paid to Board Representatives pursuant to paragraph
3C(v).
(v) FEES & EXPENSES. Board Representatives shall be
entitled to fees, other compensation and reimbursement of expenses paid
to Board members who are not employees of the Company or its
Subsidiaries.
(vi) REPORTING INFORMATION. With respect to each Board
Representative designated pursuant to the provisions of paragraph
3C(ii), MDP and Boston Ventures shall provide the Company with all
necessary assistance and information related to such Board
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Representative that is required (or would be required if the Company
were subject to Regulation 14A under the Securities Exchange Act of
1934, as amended) to be disclosed in solicitations of proxies or
otherwise, including such person's written consent to being named in
the proxy statement (if applicable) and to serving as a director if
elected.
(vii) VOTING AGREEMENT. The Purchasers intend the
provisions of this paragraph 3C to be enforceable as a shareholder
voting agreement in accordance with the provisions of Section 302A.455
of the Minnesota Business Corporations Act. In addition to the
limitations on transfer contained in Section 5 hereof, no Purchaser
shall sell, transfer, assign or otherwise dispose of any Preferred
Stock to any Person, other than another Purchaser or pursuant to the
provisions of clauses (iii) through (vii), inclusive, of paragraph 5A,
unless and until such Person shall agree in writing to take such
Preferred Stock subject to, and shall agree in writing to be bound by
the terms and conditions of, this Agreement. The certificates
evidencing the Preferred Stock shall contain a legend referring to the
shareholder voting agreement provisions of this Agreement.
3D. AFFIRMATIVE COVENANTS. So long as any Preferred Stock remains
outstanding, the Company shall, and shall cause each Subsidiary to, unless it
has received the prior written waiver of the holders of a majority of the
outstanding Preferred Stock:
(i) at all times cause to be done all things necessary
to maintain, preserve and renew its corporate existence and all
material licenses (including FCC licenses), authorizations, orders,
permits and other governmental approvals necessary to the conduct of
its businesses, and qualify and remain qualified as a foreign
corporation, except where the failure to do so would not reasonably be
expected to result in a Material Adverse Effect;
(ii) comply with all obligations that it incurs pursuant
to any contract or agreement, whether oral or written, express or
implied, as such obligations become due, unless and to the extent that
(A) the failure to so comply would not (either individually or in the
aggregate) reasonably be expected to result in a Material Adverse
Effect, or (B) the same are being contested in good faith and by
appropriate proceedings and adequate reserves or other provisions (as
determined in accordance with GAAP, consistently applied) have been
made and recorded on the Company's financial records with respect
thereto;
(iii) comply with the applicable requirements of all laws,
rules, regulations and orders of all governmental authorities
(including, but not limited to, ERISA and the rules, regulations and
orders promulgated thereunder and all rules, regulations and orders
promulgated by the FCC), except where the failure to comply would not
(either individually or in the aggregate) reasonably be expected to
result in a Material Adverse Effect;
(iv) maintain and keep its properties in good repair,
working order and condition (ordinary wear and tear excepted), and from
time to time make all necessary or desirable repairs, renewals and
replacements, so that its businesses may be properly and advantageously
conducted at all times, except where the failure to do so would not
(either individually or in the aggregate) reasonably be expected to
result in a Material Adverse Effect;
(v) possess and maintain all material Intellectual
Property Rights necessary to the conduct of their respective businesses
and own all right, title and interest in and to, or have a valid
license for, all such Intellectual Property Rights, except where the
failure to do so would not (either individually or in the aggregate)
reasonably be expected to result in a Material Adverse Effect;
(vi) maintain proper records and books of account which
present fairly in all material respects the financial condition,
results of operations and financial transactions of the Company and its
Subsidiaries, and make provisions on its financial statements for all
such proper reserves as in each case are required in accordance with
GAAP, consistently applied;
(vii) maintain insurance on its properties and businesses
with financially sound and reputable insurance companies in such
amounts, of such types and covering such casualties, risks and
contingencies as is ordinarily carried by companies engaged in similar
businesses and owning similar properties in the same general locations
in which the Company and its Subsidiaries operate; and
(viii) pay and discharge when payable all taxes,
assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it (in each
case prior to the date on which the same becomes delinquent and before
penalties accrue thereon), and all lawful claims which, if unpaid,
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would by law become a Lien upon any of the properties of the Company
or its Subsidiaries, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate
reserves or other provisions (as determined in accordance with GAAP,
consistently applied) have been made and recorded on the Company's
financial records with respect thereto and except where failure to do
so would not reasonably be expected to result in a Material Adverse
Effect.
3E. YEAR 2000 (Y2K) COMPLIANCE.
(i) So long as any Preferred Stock remains outstanding,
the Company and its Subsidiaries shall continue to conduct assessments
and tests of all software, computers, network equipment, technical
infrastructure, production equipment and other equipment and systems
that are material to the operation of its business and that rely or
utilize date or time processing ("SYSTEMS") and shall ensure that all
of such Systems are Year 2000 Compliant. The Company and its
Subsidiaries shall comply with all applicable laws and regulations
relating to Year 2000 compliance, including, without limitation, making
disclosures required by the federal securities laws.
(ii) For purposes of this Purchase Agreement, "YEAR 2000
COMPLIANT" means a System or product will at all times (i) consistently
and accurately handle and process date and time information and data
with values before, during and after January 1, 2000, including,
without limitation, accepting date input, providing date output, and
performing calculations on or utilizing dates or portions of dates;
(ii) function accurately and in accordance with its specifications
without interruption, abnormal endings, degradation, change in
operation or other impact, or disruption of the other parts of the
Company's and its Subsidiaries' Systems, resulting from processing data
or time data with values, before, during and after January 1, 2000;
(iii) respond to and process two-digit date input in a way that
resolves any ambiguity as to century; and (iv) store and provide output
of date information in ways that are unambiguous as to century, except
in any case, as would not result (either individually or in the
aggregate) in a Material Adverse Effect.
3F. COMPLIANCE WITH AGREEMENTS. So long as any Preferred Stock
remains outstanding, the Company shall perform and observe (i) all of its
obligations to each holder of Purchaser Securities set forth in the Articles of
Incorporation, the Certificate of Designation and the Company's Bylaws and (ii)
all of its obligations to each holder of Registrable Securities (as defined in
the Registration Agreement) set forth in the Registration Agreement.
3G. REGULATORY COMPLIANCE COOPERATION. If the Company proposes
or plans to redeem, purchase or otherwise acquire, directly or indirectly, or
convert or take any action with respect to the voting rights of, any shares of
any class of its capital stock or any securities convertible into or
exchangeable for any shares of any class of its capital stock (other than a
redemption or conversion of the Preferred Stock) that would reasonably be
expected to cause a Regulatory Problem for any Purchaser (or other holder of
Purchaser Securities) that is subject to regulation under the Bank Holding
Company Act or any similar law then in force (each, a "REGULATED PURCHASER"),
then the Company shall give written notice of such pending action to each
Purchaser at least 30 days prior to such action. For purposes of this paragraph,
a Person shall be deemed to have a "REGULATORY PROBLEM" when such Person and
such Person's Affiliates would own, control or have power over a greater
quantity of securities of any kind issued by the Company or any other entity
than are permitted under any requirement of any governmental authority.
3H. PUBLIC DISCLOSURES. After the date hereof, the Company
shall not, nor shall it permit any Subsidiary to, disclose any Purchaser's name
or identity as an investor in the Company in any press release or other public
announcement or in any document or material filed with any governmental entity,
without the prior written consent of such Purchaser, unless such disclosure is
required by applicable law or governmental regulations or by order of a court of
competent juris diction, in which case, unless otherwise prohibited by
Applicable Law, prior to making such disclosure the Company shall give written
notice to such Purchaser describing in reasonable detail the proposed content of
such disclosure and shall permit the Purchaser to review and comment upon the
form and substance of such disclosure.
Section 4. COVENANTS OF THE PURCHASERS.
4A. CONFIDENTIALITY.
(i) Each Purchaser will hold, and will use its commercially
reasonable efforts to cause its officers, directors, shareholders,
employees, accountants, counsel, consultants, advisors, financing
sources, financial institutions and agents (its "REPRESENTATIVES") to
hold,
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in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law or national
stock exchange, all confidential documents and information concerning
the Company or any of its Affiliates furnished to the Purchaser, except
to the extent that such information can be shown to have been (a)
previously known on a non- confidential basis by the Purchaser or such
Representatives, (b) in the public domain through no fault of the
Purchaser or such Representatives (acting in their capacity as such or
with respect to information received in their capacity as such) or (c)
later acquired by the Purchaser or such Representatives from sources
other than the Company or any of its Affiliates not known by the
Purchaser or such Representatives, as applicable, to be bound by any
confidentiality obligation; PROVIDED THAT the Purchaser may disclose
such information to any of the Representatives in connection with the
transactions contemplated by this Agreement so long as such Persons are
informed by the Purchaser of the confidential nature of such
information and are directed by the Purchaser to treat such information
confidentially; AND PROVIDED FURTHER that the Purchaser may disclose
such information in connection with a sale or transfer permitted by
paragraph 5A of any Purchaser Securities if such Purchaser's transferee
agrees to be bound by the provisions of this paragraph. Each Purchaser
shall be responsible for any failure of it or any of its
Representatives to treat such information confidentially. Each
Purchaser agrees that it shall not and it shall cause each of its
Representatives not to use any confidential documents or information
for any purpose other than monitoring and evaluating its investment in
the Company and in connection with the transactions contemplated by
this Agreement. If this Agreement is terminated, then upon written
request from the Company each Purchaser will, and will use its best
efforts to cause its Representatives to, destroy or deliver to the
Company all documents and other materials, and all copies thereof,
obtained by such Purchaser or on its behalf from the Company, or any of
its Representatives, in connection with this Agreement that are subject
to such confidence.
(ii) In the event any of the Purchasers or anyone to whom any
of the Purchasers transmit confidential information is requested or
required (by oral questions, interrogatories, requests for information
or documents, subpoenas, civil investigative demand or similar process)
to disclose any such information, such Purchaser will provide the
Company with prompt notice so that the Company may seek a protective
order or other appropriate remedy and/or waive such Purchaser's
compliance with the provisions of this paragraph. In the event that
such protective order or other remedy is not obtained sufficiently
promptly so as not to adversely affect such Purchaser or those of its
officers, directors, employees, accountants, counsel, consultants,
advisors and agents as to whom the information has been requested or
required, or the Company waives such Purchaser's compliance with the
provisions of this Agreement, such Purchaser will furnish only that
portion of such information that such Purchaser is advised by counsel
is legally required and will, at the Company's expense and direction,
exercise its reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information.
4B. PURCHASER STANDSTILL.
(i) Except with the prior approval of the Board (as
evidenced by a duly adopted resolution), each Purchaser and each holder
of Purchaser Securities covenants and agrees that until the seventh
anniversary of the date of this Agreement it will not, and will not
cause or permit its Affiliates, directly or indirectly, either
individually or together with any other Persons acting in concert, to
(A) acquire, or offer or agree to acquire,
or become the beneficial owner of or obtain any rights in
respect of any capital stock of the Company, except for any
shares of Class A Common Stock that may be issuable upon the
conversion of the Preferred Stock or otherwise as permitted
pursuant to this Agreement, PROVIDED THAT the foregoing
limitation shall not prohibit the acquisition of securities of
the Company or any of its successors issued as dividends or as
a result of stock splits and similar reclassifications or
received in a merger or other business combination of
Preferred Stock or Purchaser Securities held by the Purchasers
or any of their Affiliates at the time of such dividend, split
or reclassification or merger or business combination;
(B) grant or solicit proxies or consents or
become a "participant" in a "solicitation" (as such terms are
defined or used in Regulation 14A under the Securities
Exchange Act) of proxies or consents with respect to any
securities of the Company or any of its successors having
current or contingent voting power or initiate or become a
participant in any stockholder proposal or "election contest"
(as such term is defined or used in Rule 14a-11 under the
Securities Exchange Act) with respect to the Company or any of
its successors or facilitate or induce others in the
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initiation of the same, or otherwise seek to advise or
influence any Person with respect to the voting of any
voting securities of the Company or any of its successors
(except for activities undertaken by the Purchasers or the
directors elected by MDP and Boston Ventures pursuant to
paragraph 3C in connection with solicitations by the Board);
(C) publicly or privately propose,
encourage, solicit or participate in the solicitation of any
Person to acquire, offer to acquire or agree to acquire, by
merger, tender offer, purchase or otherwise, the Company or a
substantial portion of its assets or more than 5% of the
outstanding capital stock (except in connection with the
registration of securities pursuant to the Registration
Agreement or a sale of Purchaser Securities);
(D) directly or indirectly join in or in any
way participate in a pooling agreement, syndicate, voting
trust or other arrangement with respect to any of the
Company's securities having current or contingent voting power
or otherwise act in concert with any other Person (other than
controlled Affiliates), for the purpose of acquiring, holding,
voting or disposing of any such securities of the Company
except agreements or arrangements related to the voting of
securities for the election of the directors to be designated
by MDP and Boston Ventures pursuant to paragraph 3C;
(E) seek, alone or in concert with others,
representation on the Board except as specifically set forth
in paragraph 3C hereof, or seek the removal or termination of
term of office of any member of the Board;
(F) make any proposal, statement or inquiry,
or disclose any intention, plan or arrangement (whether
written or oral) inconsistent with the foregoing; or
(G) have any discussions or communications,
or enter into any arrangements, understandings or agreements
(whether written or oral) with, or advise, finance, assist or
encourage, any other Person in connection with any of the
foregoing.
(ii) Each holder of Purchaser Securities agrees that, in the
event of any breach of the provisions of this paragraph 4B, the Company
shall in addition to any right at law to damages be deemed irreparably
harmed and entitled to equitable relief (without the posting of any
bond or other security), including injunctive relief requiring prompt
disposition of securities acquired contrary to this Agreement in a
manner which is calculated to cause wide distribution of the shares and
which is agreeable to the Company.
4C. FCC COMPLIANCE. Each Purchaser covenants and agrees that
it will not acquire any interest in a Commercial Mobile Radio Service ("CMRS")
licensee that would cause the Company to be in violation of the FCC's Cellular
Cross Ownership Rules or the FCC's CMRS Spectrum Cap Rules then in effect
(collectively, the "FCC'S CROSS OWNERSHIP RULES"). Each Purchaser further
covenants and agrees that, in the event it does acquire such an interest, it
will use commercially reasonable efforts to dispose promptly of sufficient
interests (either by sale of stock or by divesting business segment(s)) in
either (i) the competing CMRS channel block(s) or (ii) the Company, to the
extent necessary to once again be compliant with the FCC's Cross Ownership
Rules.
Section 5. TRANSFER OF PURCHASER SECURITIES.
5A. GENERAL PROVISIONS. Purchaser Securities are not
transferable by any Purchaser except (i) to the Company or a Person approved by
the Company, (ii) to an Affiliate, (iii) pursuant to a merger or plan of
liquidation of the Company, (iv) in response to an offer to purchase voting
securities which is made by the Company or any third party not opposed by the
Board, (v) pursuant to an open-market sale under Rule 144 of the Securities and
Exchange Commission (or any similar rule or rules then in force) if such rule is
available, (vi) pursuant to a public offering registered under the Securities
Act and (vii) by way of an in-kind distribution by any Purchaser that is an
investment fund to its partners or members in connection with a distribution of
freely tradeable securities.
5B. LEGEND REMOVAL. If any Purchaser Securities become
eligible for sale pursuant to Rule 144(k), the Company shall, upon the request
of the holder of such Purchaser Securities, remove the legend set forth in
paragraph 8C from the certificates for such Purchaser Securities; PROVIDED THAT
such Purchaser Securities shall remain subject to paragraph 5A.
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Section 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Preferred Stock hereunder, the Company hereby represents and warrants at and
as of the Closing Date, after giving effect to the transactions contemplated by
this Agreement (including the Acquisition), that:
6A. ORGANIZATION; OWNERSHIP; POWER; QUALIFICATION. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota. The Company 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 Company 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 Company 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.
6B. AUTHORIZATION; ENFORCEABILITY. The Company has the
corporate power and has taken all necessary corporate action to authorize it to
execute, deliver and perform this Agreement, the Registration Agreement and all
other documents contemplated hereby 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 Company
and is, and each of the other documents referred to herein to which the Company
is a party is, a legal, valid and binding obligation of the Company enforceable
against the Company 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 Company); 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.
6C. CAPITAL STOCK AND RELATED MATTERS.
(i) As of the Closing and immediately thereafter, the
authorized capital stock of the Company shall consist of (a) 90,000,000
undesignated shares, of which 110,000 shares shall be designated as
Class M Redeemable Voting Convertible Preferred Stock (of which 110,000
shall be issued and outstanding), 15,000 shares shall be designated as
Class T Preferred Stock, Series A (of which 2,176.875 shall be issued
and outstanding), 10,000 shares shall be designated as Class T
Preferred Stock, Series B (of which 5,363.214 shall be issued and
outstanding), 450,000 shares shall be designated as Senior Exchangeable
Preferred Stock (of which 177,046 shall be issued and outstanding),
400,000 shares shall be designated as Junior Exchangeable Preferred
Stock (of which 140,000 shall be issued and outstanding), 200,000
shares shall be designated as Series A Junior Participating Preferred
Stock (of which none shall be issued and outstanding) and 50,000 shares
shall be designated as Series B Junior Participating Preferred Stock
(of which none shall be issued and outstanding); (b) 200,000,000 shares
of Class A Common Stock, of which 10,879,160 shares shall be issued and
outstanding, 2,075,472 shares shall be reserved for issuance upon
conversion of the Preferred Stock, 296,297 shares shall be reserved for
issuance upon conversion of the Class T Preferred Stock, Series A,
2,348,197 shares shall be reserved under the Company's stock option
plans (of which options for 1,218,497 shares of Class A Common Stock
shall have been granted) and 188,418 shares shall be reserved for
issuance under the Company's Employee Stock Purchase Plan; and (c)
10,000,000 shares of Class B Common Stock, of which 888,543 shares
shall be issued and outstanding and 197,531 shares shall be reserved
for issuance upon conversion of the Class T Preferred Stock, Series B.
As of the Closing, neither the Company nor any Subsidiary shall have
outstanding any stock or securities convertible or exchangeable for any
shares of its capital stock or containing any profit participation
features, nor shall they have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock or
any stock appreciation rights or phantom stock plans, except for the
Preferred Stock and except as set forth on the attached "CAPITALIZATION
SCHEDULE." As of the Closing, neither the Company nor any Subsidiary
shall be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital
stock or any warrants, options or other rights to acquire its capital
stock, except as set forth on the Capitalization Schedule and except
pursuant to the Articles of Incorporation. As of
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the Closing, all of the outstanding shares of the Company's capital
stock shall be validly issued, fully paid and nonassessable.
(ii) Except as set forth on the Capitalization
Schedule, there are no statutory or, to the best of the Company's
knowledge, contractual stockholders preemptive rights or rights of
refusal with respect to the issuance of the Preferred Stock hereunder
or the issuance of the Class A Common Stock upon conversion of the
Preferred Stock. The Company has complied with all applicable federal
or state securities laws in connection with the offer, sale or issuance
of any of its capital stock, and the offer, sale and issuance of the
Preferred Stock hereunder do not require registration under the
Securities Act or any applicable state securities laws. To the best of
the Company's knowledge, there are no agreements between the Company's
stockholders with respect to the voting or transfer of the Company's
capital stock.
6D. SUBSIDIARIES; AUTHORIZATION; ENFORCEABILITY. The Company's
Subsidiaries and the Company's direct and indirect ownership thereof as of the
date of this Agreement are as set forth on the SUBSIDIARY SCHEDULE attached
hereto, and to the extent such Subsidiaries are corporations, the Company 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 Company has the corporate or partnership power and has taken all necessary
corporate or partnership action to authorize it to execute, deliver and perform
any documents contemplated hereby to which it is a party in accordance with
their respective terms and to consummate the transactions contemplated by this
Agreement and such other documents. Each such document to which any Subsidiary
of the Company 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 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 Company'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.
6E. COMPLIANCE WITH OTHER DOCUMENTS AND CONTEMPLATED
TRANSACTIONS. The execution, delivery and performance, in accordance with their
respective terms, by the Company of this Agreement, and by the Company and its
Subsidiaries of each of the other documents contemplated hereby 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 Company or any of its Subsidiaries, (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 Company or any of its Subsidiaries, or under any material
indenture, agreement, or other instrument, including, without limitation, the
Licenses, to which the Company 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 Company or any of its
Subsidiaries, except for Permitted Liens.
6F. BUSINESS. The Company, together with its Subsidiaries, is
engaged in the business of owning, constructing, managing, operating and
investing in Cellular Systems and other wireless communications and related
businesses.
6G. LICENSES, ETC. The Licenses, all of which are set forth on
the LICENSES SCHEDULE, have been duly issued and are in full force and effect.
The Company and its Subsidiaries are in compliance in all material respects with
all of the provisions thereof. The Company and its Subsidiaries have secured all
Necessary Authorizations and all such Necessary Authorizations are in full force
and effect. Except as set forth in the POTENTIAL REVOCATIONS OF LICENSES
SCHEDULE attached hereto, neither any License nor any Necessary Authorization is
the subject of any pending or, to the best of the Company's or any of its
Subsidiaries' knowledge, threatened revocation.
6H. COMPLIANCE WITH LAW. The Company and its Subsidiaries are
in compliance with all Applicable Laws in all material respects, except where
the failure to be in compliance would not, individually or in the aggregate,
have a Material Adverse Effect.
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6I. TITLE TO ASSETS. As of the date of this Agreement, the
Company and its Subsidiaries have good, legal and marketable title to, or a
valid leasehold interest in, all of its material assets. None of the properties
or assets of the Company 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 Company or any of its
Subsidiaries as debtor or which covers or purports to cover any of the assets of
the Company or any of its Subsidiaries is currently effective and on file in any
state or other jurisdiction, and neither the Company 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.
6J. LITIGATION. There is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Company, threatened
against or in any other manner relating adversely to, the Company 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 the LITIGATION SCHEDULE attached hereto. No such action, suit, proceeding or
investigation (i) calls into question the validity of this Agreement or (ii)
individually or collectively involves the possibility of any judgment or
liability not fully covered by insurance which, if determined adversely to the
Company or any of its Subsidiaries, would have a Material Adverse Effect.
6K. TAXES. All federal, state and other tax returns of the
Company 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 Company or any of its Subsidiaries or imposed upon the Company
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 Company 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 Company or its
Subsidiaries 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 Company and its Subsidiaries
in respect of taxes are, in the judgment of the Company, adequate.
6L. FINANCIAL STATEMENTS. The Company has furnished or caused
to be furnished to the Purchasers as of the date of this Agreement, audited
financial statements of the Company and audited financial statements of the
Subsidiaries of the Company on a consolidated basis for the fiscal years ended
December 31, 1998, and December 31, 1999, and unaudited financial statements of
the Company and its Subsidiaries on a consolidated basis for the two month
period ended February 29, 2000, all of which have been prepared in accordance
with GAAP and present fairly in all material respects the financial position of
the Company 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 Company 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 Company or any of its Subsidiaries and no material anticipated losses of the
Company or any of its Subsidiaries, other than as set forth on the attached
CONTINGENT LIABILITIES SCHEDULE.
6M. NO MATERIAL ADVERSE CHANGE. There has occurred no event
since December 31, 1999, which has or which could reasonably be expected to have
a Material Adverse Effect.
6N. ERISA. The Company and each of its Subsidiaries and each
of their respective Plans are in material compliance with ERISA and the IRC.
Neither the Company 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 IRC. Neither the Company 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 Company's employee handbook and memoranda to employees.
Neither the Company 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 IRC; 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 IRC. 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
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<PAGE>
termination. No Reportable Event which would cause a Material 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 IRC) which would subject such Plan or any other Plan of the
Company 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 IRC which would cause a Material
Adverse Effect. Neither the Company nor any of its ERISA Affiliates, including
its Subsidiaries, is or has been obligated to make any payment to a
Multiemployer Plan.
6O. INVESTMENT COMPANY ACT. Neither the Company 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 Company and its Subsidiaries of this Agreement and any other documents
contemplated hereby violate 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.
6P. GOVERNMENTAL REGULATION. Neither the Company 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 agreements contemplated hereby. Neither the Company 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
agreements contemplated hereby.
6Q. ABSENCE OF DEFAULT, ETC. The Company 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 which has not
been remedied or waived, the occurrence or non-occurrence of which constitutes a
material default by the Company or any of its Subsidiaries under any indenture,
agreement or other instrument relating to Indebtedness of the Company 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 Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of their respective properties may be bound or affected. Neither the Company
nor any of its Subsidiaries is a party to or bound by any contract or agreement
continuing after the Closing Date, where the compliance therewith or the
performance thereof would reasonably be expected to have a Material Adverse
Effect or result in the loss of any License issued by the FCC.
6R. ACCURACY AND COMPLETENESS OF INFORMATION. All information,
reports, prospectuses and other papers and data relating to the Company or any
of its Subsidiaries and furnished by or on behalf of the Company or any of its
Subsidiaries to the Purchasers were, at the time furnished, true, complete and
correct in all material respects to the extent necessary to give the Purchasers
true and accurate knowledge of the subject matter, and all projections (i)
disclose all assumptions made with respect to costs, general economic
conditions, and financial and market conditions formulating the Projections;
(ii) are based on reasonable estimates and assumptions; and (iii) reflect, as of
the date prepared, and continue to reflect, as of the date hereof, the
reasonable estimate of Company of the results of operations and other
information projected therein for the periods covered thereby.
6S. AGREEMENTS WITH AFFILIATES. Except for agreements or
arrangements with Affiliates wherein the Company or one or more of its
Subsidiaries provides services to such Affiliates for fair consideration or
which are set forth on the AFFILIATED TRANSACTIONS SCHEDULE attached hereto,
neither the Company 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.
6T. PAYMENT OF WAGES. The Company 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 Company and each of its Subsidiaries, such
Persons have paid all minimum and overtime wages required by law to be paid to
their respective employees.
6U. INDEBTEDNESS. Except as shown on the financial statements
of the Company for the fiscal year ended December 31, 1999, and the Subordinated
Notes and the Other Preferred
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Stock, neither the Company nor any of its Subsidiaries has outstanding, as of
the date of this Agreement, any Indebtedness other than pursuant to the Senior
Loan Agreement.
6V. SOLVENCY. As of the date of this Agreement and after
giving effect to the transactions contemplated hereby (i) the property of the
Company, at a fair valuation, will exceed its debt; (ii) the capital of the
Company will not be unreasonably small to conduct its business; (iii) the
Company 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 Company 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 paragraph, "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.
6W. YEAR 2000 COMPLIANCE. The Company (i) has completed a
review and assessment of all areas within its and each of its Subsidiaries'
businesses and operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the "YEAR 2000 PROBLEM" (that is,
the risk that computer applications used by the Company or any of its
Subsidiaries (or suppliers, vendors and customers) may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) has developed a plan and timeline
for ensuring Year 2000 Compliance on a timely basis and (iii) is implementing
that plan in accordance with that timetable. Based on the foregoing, the Company
believes that all Systems (including those of its suppliers, vendors and
customers) that are material to its or any of its Subsidiaries' businesses and
operations are reasonably expected on a timely basis to be Year 2000 Compliant,
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect.
6X. REPORTS WITH THE SECURITIES AND EXCHANGE COMMISSION. The
Company's annual report on Form 10-K for its two most recent fiscal years, all
other reports or documents required to be filed by the Company pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act since the filing of the
most recent annual report on Form 10-K, its most recent annual report to its
stockholders and the solicitation of proxy statements delivered to the Company's
stockholders regarding the Acquisition and the issuance of the Preferred Stock
and the Other Preferred Stock in connection therewith (in each case, together
with all amendments thereof and notices or updates with respect thereto) do not
contain any material false statements or any misstatement of any material fact
and do not omit to state any fact necessary to make the statements set forth
therein not misleading. The Company has made all filings with the Securities and
Exchange Commission which it is required to make, and the Company has not
received any request from the Securities and Exchange Commission to file any
amendment or supplement to any of the reports described in this paragraph.
Section 7. DEFINITIONS.
For the purposes of this Agreement, the following terms have
the meanings set forth below:
"AFFILIATE" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise. With respect to the Company, "control"
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.
"APPLICABLE LAW" means, 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.
"BOARD" means the Company's board of directors.
"BOSTON VENTURES" means Boston Ventures Limited Partnership V
and any of its Affiliates.
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<PAGE>
"BRIDGE FINANCING AGREEMENT" means the Junior Exchangeable
Preferred Stock Agreement and the Senior Exchangeable Preferred Stock Agreement
(to the extent relating to the issuance of Senior Exchangeable Preferred Stock
in connection with the Acquisition).
"BRIDGE FINANCING INVESTORS" means the purchasers of Junior
Exchangeable Preferred Stock and Senior Exchange Preferred Stock pursuant to the
Bridge Financing Agreement.
"CELLULAR SYSTEMS" means cellular mobile radio telephone
systems constructed and operated, or a PCS System constructed and operated 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.
"CLASS T PREFERRED STOCK" means up to $15 million aggregate
liquidation value of the Company's Class T Convertible Preferred Stock, par
value $.01 per share, issued to Telephone & Data Systems, Inc. pursuant to the
Class T Preferred Stock Agreement in connection with the Acquisition.
"CLASS T PREFERRED STOCK AGREEMENT" means that certain
Recapitalization Agreement, dated as of October 31, 1999, by and between the
Company and Telephone & Data Systems, Inc., as amended on December 6, 1999, as
such agreement may be further amended or otherwise modified from time to time,
the other agreements and instruments entered into by the parties thereto in
connection therewith, and the certificate of designation filed with the
Secretary of State of Minnesota setting forth the rights and preferences of the
Class T Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
"CLASS T PREFERRED INVESTORS" means the purchasers of Class T
Preferred Stock pursuant to the Class T Preferred Stock Agreement.
"COMMITMENT LETTER" means the letter, dated as of November 5,
1999, from several of the Purchasers to the Company.
"COMMON STOCK" means the Company's Class A Common Stock and
the Company's Class B Common Stock, par value $0.01 per share.
"COMMUNICATIONS ACT" means 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.
"EMPLOYEE PENSION PLAN" means any Plan which is (a) maintained
by the Company, any of its Subsidiaries or any of its ERISA Affiliates and (b)
subject to Part 3 of Title I of ERISA.
"ENVIRONMENTAL LAWS" means 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. ss. 9601 et seq.), or the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. ss. 6901 et seq.).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATES" means any Person, including a Subsidiary or
an Affiliate of the Company, that is a member of any group of organizations
(within the meaning of Code Sections 414(b), (c), (m) or (o)) of which the
Company is a member.
"EVENT OF NONCOMPLIANCE" has the meaning set forth in the
Certificate of Designation.
"FCC" means the Federal Communications Commission and any
governmental body or agency succeeding to the functions thereof.
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<PAGE>
"GAAP" means the generally accepted accounting principles in
the United States, as in effect from time to time, applied on a consistent basis
both as to classification of items and amounts.
"INDEBTEDNESS" means, with respect to any Person and without
duplication, (i) 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
for money borrowed 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 Persons, (ii) 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, (iii) 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, (iv) all
reimbursement obligations with respect to outstanding letters of credit, (v) to
the extent not otherwise included, all obligations subject to guaranties of such
Person or its Subsidiaries and (vi) all obligations of such Person under
interest hedge agreements in respect of any of the foregoing.
"INTELLECTUAL PROPERTY RIGHTS" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"INVESTMENT" means, with respect to the Company or any of its
Subsidiaries, (i) 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, (ii) any acquisition by the Company or any of its Subsidiaries of
any assets relating to the wireless communications business and (iii) all
expenditures by the Company or any of its Subsidiaries relating to the
foregoing. "Investment" also shall include the total cost of any future
commitment or other obligation binding on any Person to make an Investment or
any subsequent Investment.
"IRC" means the Internal Revenue Code of 1986, as amended, and
any reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"IRS" means the United States Internal Revenue Service and any
governmental body or agency succeeding to the functions thereof.
"JUNIOR EXCHANGEABLE PREFERRED STOCK" means up to $140 million
aggregate liquidation value of the Company's 12 1/4% Junior Exchangeable
Preferred Stock, par value $.01 per share.
"JUNIOR EXCHANGEABLE PREFERRED STOCK AGREEMENT" means that
certain Underwriting Agreement, dated as of February 8, 2000, by and among the
Company, TD Securities (USA) Inc., First Union Securities, Inc. and The
Robinson-Humphrey Company, as Qualified Independent Underwriter, the other
agreements and instruments entered into by the parties thereto in connection
therewith, and the certificate of designation filed with the Secretary of State
of Minnesota setting forth the rights and preferences of the Junior Exchangeable
Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
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<PAGE>
"JUNIOR SECURITIES" shall have the meaning set forth in the
Certificate of Designation.
"knowledge" or "aware" in respect of the Company shall mean
and include (i) the actual knowledge or awareness of the chief executive
officer, the chief financial officer, the general counsel or any vice president
of the Company, and (ii) with respect to each of the Persons identified in
clause (i) above, the knowledge or awareness which a prudent business person
would have obtained in the conduct of his business after making reasonable
inquiry and reasonable diligence with respect to the particular matter in
question.
"LICENSES" means 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 Company or any
of its Subsidiaries, all of which are listed as of the date of this Agreement on
the LICENSES SCHEDULE hereto.
"LIENS" means 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.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means,
any change that, individually or in the aggregate with all other related changes
or effects, is materially adverse to the business, financial condition,
operating results, assets, value, customer or employee relations, operations or,
except to the extent affected by general economic condition, business prospects
of the Company and its Subsidiaries taken as a whole.
"MDP" means Madison Dearborn Partners III, L.P. and any of its
Affiliates.
"MULTIEMPLOYER PLAN" means a multiemployer pension plan as
defined in Section 3(37) of ERISA to which the Company, any of its Subsidiaries,
or any of its ERISA Affiliates is or has been required to contribute subsequent
to September 25, 1980.
"NECESSARY AUTHORIZATIONS" means all approvals and licenses
from, and all filings and registrations with, any governmental or other
regulatory authority, including, without limitation, the Licenses and all
approvals, licenses, filings and registrations under the Communications Act,
necessary in order to enable the Company 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.
"OFFICER'S CERTIFICATE" means a certificate signed by the
Company's president or its chief financial officer (in his capacity as an
officer of the Company and not in his personal or any other capacity), stating
that (i) the officer signing such certificate has made or has caused to be made
such investigations as are necessary in order to permit him to verify the
accuracy of the information set forth in such certificate and (ii) to the best
of such officer's knowledge, such certificate does not misstate any material
fact and does not omit to state any fact necessary to make the certificate not
misleading.
"OTHER PREFERRED STOCK" means, collectively, the Senior
Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock, and the
Class T Preferred Stock.
"OTHER PREFERRED STOCK AGREEMENTS" means, collectively, the
Senior Exchangeable Preferred Stock Agreement, the Junior Exchangeable Preferred
Stock Agreement, and the Class T Preferred Stock Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCS SYSTEM" means any broad band personal communications
services telecommunications system operating on radio spectrum in a "basic
trading area" (as defined and modified from time to time by the FCC) or a
License to operate such a system.
"PERMITTED LIENS" shall have the meaning set forth in the
Senior Loan Agreement.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a trust or estate, a joint venture,
an unincorporated organization, a government or any agency or political
subdivision thereof or any other entity.
- 20 -
<PAGE>
"PLAN" means an employee benefit plan within the meaning of
Section 3(3) of ERISA or any other employee benefit plan maintained for
employees of the Company or any ERISA Affiliate of the Company, including the
Subsidiaries.
"PURCHASER SECURITIES" means (i) the Preferred Stock issued to
the Purchasers hereunder, (ii) any Class A Common Stock issued or issuable upon
conversion of the Preferred Stock referred to in clause (i) and (iii) any
securities issued directly or indirectly with respect to any of the foregoing
securities by way of a stock split, stock dividend or other division of
securities, or in connection with a combination of securities, recapitalization,
merger, consolidation or other reorganization. As to any particular securities
constituting Purchaser Securities, such securities shall cease to be Purchaser
Securities when they have been (a) effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them,
(b) distributed to the public through a broker, dealer or market maker pursuant
to Rule 144 under the Securities Act (or any similar provision then in force) or
(c) repurchased or otherwise acquired by the Company. Any reference herein to a
"majority of the Purchaser Securities" or the "number of Purchaser Securities"
or words of like effect for purposes of comparison or calculation shall refer,
with respect to any particular Purchaser Securities, to the number shares of
Class A Common Stock (or equivalent common equity securities of the Company)
then represented by such Purchaser Securities (on a fully diluted,
as-if-converted basis).
"REPORTABLE EVENT" means, with respect to any Employee Pension
Plan, an event described in Section 4043(b) of ERISA.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" includes any governmental
body or agency succeeding to the functions thereof.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SENIOR EXCHANGEABLE PREFERRED STOCK" means up to $150 million
aggregate liquidation value of the Company's 11 3/8% Senior Exchangeable
Preferred Stock, par value $.01 per share.
"SENIOR EXCHANGEABLE PREFERRED STOCK AGREEMENT" means that
certain Purchase Agreement, dated as of May 7, 1998, by and among the Company,
TD Securities (USA) Inc., NationsBanc Montgomery Securities LLC and BancBoston
Securities Inc., the other agreements and instruments entered into by the
parties thereto in connection therewith, that certain Underwriting Agreement,
dated as of February 8, 2000, by and among the Company, TD Securities (USA)
Inc., First Union Securities, Inc. and The Robinson-Humphrey Company, as
Qualified Independent Underwriter, the other agreements and instruments entered
into by the parties thereto in connection therewith, and the certificate of
designation filed with the Secretary of State of Minnesota setting forth the
rights and preferences of the Senior Exchangeable Preferred Stock, all as
originally executed and delivered and, except as otherwise provided herein, as
such agreements or instruments may be amended or modified from time to time in
accordance with their respective terms.
"SENIOR LENDERS" means the financial institutions whose names
appear as Lenders on the signature pages to the Senior Loan Agreement.
"SENIOR LOAN AGREEMENT" means that certain Second Amended and
Restated Loan Agreement, dated as of April 3, 2000, among Rural Cellular
Corporation, as Borrower, the lenders parties thereto; Toronto Dominion (Texas),
Inc., as Administrative Agent; TD Securities (USA), Inc., as Book Runner and
Lead Arranger; First Union Securities, Inc. and PNC Bank, National Association,
as Co-Syndication Agents; and Bank of America Securities, LLC, as Documentation
Agent, all notes issued thereunder, and all other agreements and instruments
entered into by the parties thereto in connection therewith, all as originally
executed and delivered and, except as otherwise provided herein, as such
agreements or instruments may be amended or modified from time to time in
accordance with their respective terms.
"SUB BOARD" means the board of directors of any of the
Company's Subsidiaries.
"SUBORDINATED NOTES" means the Company's 9 5/8% Senior
Subordinated Notes in the amount of $125,000,000 due 2008.
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<PAGE>
"SUBSIDIARY" means, as applied to any Person, (i) 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
(ii) 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. For purposes of
this Agreement, if the context does not otherwise specify in respect of which
Person the term "Subsidiary" is used, the term "Subsidiary" shall refer to a
Subsidiary of the Company. Notwithstanding the foregoing, Subsidiary shall not
include Wireless Alliance, L.L.C., a Minnesota limited liability company.
Section 8. MISCELLANEOUS.
8A. EXPENSES. The Company shall pay, and hold each Purchaser
and all holders of Purchaser Securities harmless against liability for the
payment of, their reasonable out-of-pocket costs and expenses (including
reasonable attorney's fees and expenses for one counsel selected by the
Purchasers) arising in connection with: (i) the negotiation and execution of the
Commitment Letter, this Agreement, and the other agreements contemplated hereby
and the consummation of the transac tions contemplated hereby or thereby, (ii)
any amendments or waivers (whether or not the same become effective) under or in
respect of this Agreement, any of the agreements contemplated hereby, the
Articles of Incorporation or the Certificate of Designation (including, without
limitation, in connection with any proposed merger, sale or recapitalization of
the Company), (iii) stamp and other taxes which may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery or
acquisition of any shares of Preferred Stock at the Closing or any shares of
Common Stock issuable upon conversion of the Preferred Stock, (iv) the
enforcement of the rights granted under this Agreement, any of the agreements
contemplated hereby, the Articles of Incorporation and the Certificate of
Designation and (v) any filing with any governmental agency with respect to its
investment in the Company or in any other filing with any governmental agency
with respect to the Company which mentions such Person.
8B. REMEDIES. Each holder of Purchaser Securities shall have
all rights and remedies set forth in this Agreement, the Articles of
Incorporation and the Certificate of Designation and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law or at
equity. Any Person having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law or at equity.
8C. PURCHASER'S INVESTMENT REPRESENTATIONS. Each of the
Purchasers hereby represents and warrants for itself, severally and ratably and
not jointly, that:
(i) ORGANIZATION, GOOD STANDING, POWER, AUTHORITY,
ETC. Such Purchaser is validly organized and existing and in good
standing under the laws of its jurisdiction of organization and has
full power and authority to execute and deliver this Agreement, the
Registration Agreement and all other agreements contemplated hereby or
thereby to which such Purchaser is a party, and to perform its
obligations hereunder or thereunder. Such Purchaser has taken all
necessary corporate or other organizational action in order to
authorize the execution and delivery of this Agreement, the
Registration Agreement and each other agreement contemplated hereby or
thereby to which such Purchaser is a party and the consummation of the
transactions contemplated hereby or thereby, and each such agreement is
a valid and binding obligation of such Purchaser, enforceable in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, similar laws affecting
creditors' rights generally or general principles of equity.
(ii) NO CONFLICTS; NO CONSENTS. Neither the execution
nor delivery of this Agreement, the Registration Agreement and all
other agreements contemplated hereby or thereby to which such Purchaser
is a party nor the consummation by such Purchaser of the purchase of
the Preferred Stock contemplated hereby will conflict with, or result
in any violation of, or constitute any default under, any provision of
such Purchaser's organizational documents.
(iii) OWNERSHIP OF SECURITIES. As of immediately
prior to the date hereof, such Purchaser does not own any debt or
equity securities issued by the Company.
- 22 -
<PAGE>
(iv) INVESTOR SUITABILITY. Such Purchaser is an
"accredited investor" as such term is defined in Rule 501 promulgated
under the Securities Act.
(v) DISCLOSURE OF INFORMATION. Such Purchaser
acknowledges that it or its representatives have been furnished with
all information regarding the Company and its business, assets, results
of operations and financial condition that such Purchaser has
requested. Each Purchaser further represents that it has had an
opportunity to ask questions of and receive answers from the Company
regarding the Company and its business, assets, results of operations,
and financial condition and the terms and conditions of the issuance of
the Securities; however, no representations or warranties have been
made by the Company to the Purchasers in their capacity as Purchasers
except as are set forth in this Agreement. NOTHING CONTAINED IN THIS
PARAGRAPH 8C(V) AND NO INVESTIGATION, OR NEGLIGENCE OF THE PURCHASERS
IN CONNECTION THEREWITH, BY PURCHASERS SHALL IN ANY WAY AFFECT THE
PURCHASERS' RIGHT TO RELY UPON THE COMPANY'S REPRESENTATIONS AND
COVENANTS CONTAINED IN THIS AGREEMENT.
(vi) INVESTMENT EXPERIENCE. Each Purchaser represents
that it has such knowledge, experience and skill in evaluating and
investing in common and preferred stocks and other securities, based on
actual participation in financial, investment and business matters, so
that each is capable of evaluating the merits and risks of an
investment in the Preferred Stock and has such knowledge, experience
and skill in financial and business maters that each is capable of
evaluating the merits and risks of the investment in the Company and
the suitability of the Preferred Stock as an investment and can bear
the economic risk of an investment in the Preferred Stock . No
guarantees have been made or can be made with respect to the future
value, if any, of the Preferred Stock, or the profitability or success
of the Company's business.
(vii) BROKERAGE. No broker, finder or other party is
entitled to receive from such Purchaser, any brokerage or finder's fee
or any other fee, commission or payment as a result of the transactions
contemplated by this Agreement for which the Company could have any
liability or responsibility.
(viii) PURCHASE FOR OWN ACCOUNT. Such Purchaser is
acquiring the Purchaser Securities purchased hereunder or acquired
pursuant hereto for its own account with the present intention of
holding such securities for purposes of investment, and that it has no
intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state
securities laws; PROVIDED THAT nothing contained herein shall prevent
any Purchaser and subsequent holders of Purchaser Securities from
transferring such securities in compliance with the provisions of
Section 5 hereof.
(ix) FCC CONCERNS. Each Purchaser represents that, at
and as of the Closing, it holds no direct or indirect interest in any
CMRS licensee that would violate Section 22.942 or Section 20.6 of the
FCC's Cross Ownership Rules if the purchase of the Preferred Stock were
consummated on the terms and subject to the conditions set forth in
this Agreement.
(x) RESTRICTIVE LEGENDS. Each certificate or
instrument representing Purchaser Securities shall be imprinted with a
legend in substantially the following form:
"The securities represented by this certificate were originally issued
on April 3, 2000, and have not been registered under the Securities Act
of 1933, as amended. The securities represented by this certificate are
subject to the restrictions on transfer, voting agreement and other
provisions set forth in the Preferred Stock Purchase Agreement, dated
as of April 3, 2000, and as amended and modified from time to time,
between the issuer (the "Company") and certain investors, and the
Company reserves the right to refuse the transfer of such securities
until such provisions have been complied with in respect of such
transfer. A copy of such provisions shall be furnished by the Company
to the holder hereof upon written request and without charge."
8D. UNDERSTANDING AMONG THE PURCHASERS. The determination of
each Purchaser to purchase the Preferred Stock pursuant to this Agreement has
been made by such Purchaser independent of any other Purchaser and independent
of any statements or opinions as to the advisability of such purchase or as to
the properties, business, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries which may have been made or given by any other
Purchaser or by any agent or employee of any other Purchaser. In addition, it is
acknowledged by
- 23 -
<PAGE>
each of the other Purchasers that MDP has not acted as an agent of such
Purchaser in connection with making its investment hereunder and that MDP shall
not be acting as an agent of such Purchaser in connection with monitoring its
investment hereunder.
8E. TREATMENT OF THE PREFERRED STOCK. The Company covenants
and agrees that (i) so long as federal income tax laws prohibit a deduction for
distributions made by the Company with respect to preferred stock, it shall
treat all distributions paid by it on the Preferred Stock as non-deductible
dividends on all of its tax returns and (ii) it shall treat the Preferred Stock
as preferred stock in all of its financial statements and other reports and
shall treat all distributions paid by it on the Preferred Stock as dividends on
preferred stock in such statements and reports.
8F. INDEMNIFICATION. In consideration of the Purchaser's
execution and delivery of this Agreement and acquiring the Preferred Stock
hereunder and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless each
Purchaser and each other holder of Purchaser Securities and all of their
officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"INDEMNIFIED LIABILITIES"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Preferred Stock, (b) the execution, delivery, performance or
enforcement of this Agreement and any other instrument, document or agreement
executed pursuant hereto by any of the Indemnitees or (c) any breach of any
covenant, agreement, representation or warranty of the Company under this
Agreement or any other instrument, document or agreement contemplated hereby to
which the Company is a party. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
8G. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or modified and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of a majority of the Purchaser Securities
outstanding at the time the amendment or waiver becomes effective or, in the
case of any provision requiring the consent of the holders of a majority of the
Preferred Stock, only if the Company has obtained the written consent of the
holders of a majority of the Preferred Stock outstanding at the time the
amendment or waiver becomes effective; PROVIDED THAT if any such amendment,
modification or waiver would adversely affect any holder of Purchaser Securities
or Preferred Stock, as the case may be, relative to the holders of Purchaser
Securities or Preferred Stock voting in favor of such amendment, modification,
or waiver, such amendment, modification or waiver shall also require the written
consent of the holders of a majority of the outstanding Purchaser Securities or
Preferred Stock, as the case may be, held by all holders so adversely affected;
PROVIDED FURTHER that if any such amendment, modification or waiver is to a
provision in this Agreement that requires a specific vote to take an action
thereunder or to take an action with respect to the matters described therein,
such amendment, modification or waiver shall not be effective unless such vote
is obtained with respect to such amendment, modification or waiver. No other
course of dealing between the Company and the holder of any Purchaser Securities
or Preferred Stock or any delay in exercising any rights hereunder or under the
Articles of Incorporation shall operate as a waiver of any rights of any such
holders. For purposes of this Agreement, Purchaser Securities or Preferred Stock
held by the Company or any Subsidiaries shall not be deemed to be outstanding.
8H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by any Purchaser or on its behalf.
8I. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not other than any transferee pursuant to clause (iii), (iv), (v), (vi) or
(vii) of Section 5A hereof. In addition, and whether or not any express
assignment has been made, the provisions of this Agreement which are for any
Purchaser's benefit as a purchaser or holder of Purchaser Securities are also
for the benefit of, and enforceable by, any subsequent holder of such Purchaser
Securities other than any transferee pursuant to clause (iii), (iv), (v), (vi)
or (vii) of Section 5A hereof.
- 24 -
<PAGE>
8J. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
8K. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
8L. DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, certificate, or instrument means such agreement, document, certificate
or instrument as the same is amended, waived or otherwise modified from time to
time in accordance with the terms thereof and, if applicable, hereof. Words such
as "herein," "hereunder," "hereof" and the like shall be deemed to refer to this
Agreement as a whole and not to any particular document or article, Section,
paragraph or other portion of a document. The use of the words "include" or
"including" in this Agreement shall be by way of example rather than by
limitation. The use of the words "or," "either" or "any" shall not be exclusive.
The "knowledge" or "awareness" of a Person means the actual knowledge of such
Person (which includes the actual knowledge of all officers, directors and
executive employees of such Person after reasonable inquiry).
8M. NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
8N. COMPLETE AGREEMENT. Except as otherwise expressly set
forth herein, this Agreement and the other agreements, certificates and
instruments expressly required to be delivered hereby embody the complete
agreement and understanding of the parties hereto and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
whether written or oral, which may have related to the subject matter hereof in
any way, and such agreements may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral discussions or understandings of the
parties. The parties hereto acknowledge and agree there are no oral
understandings or agreements between them with respect to the subject matter
hereof.
8O. SCHEDULES. Nothing in any Schedule attached hereto shall
be adequate to disclose an exception to a representation or warranty made in
this Agreement unless such Schedule identifies the exception with particularity
and describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be adequate to disclose an exception to a
representation or warranty made in this Agreement, unless the representation or
warranty has to do with the existence of such document or such other item
itself.
8P. DELIVERY BY FACSIMILE. This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute original forms thereof and deliver
them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforeceability of a contract and each such party forever waives
any such defense.
8Q. GOVERNING LAW. The corporate law of the State of Minnesota
shall govern all issues and questions concerning the relative rights and
obligations of the Company and its stockholders. All other issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other juris-
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<PAGE>
diction) that would cause the application of the laws of any jurisdiction other
than the State of New York.
8R. NOTICES. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, telecopied to the recipient (with hard copy sent by
overnight courier in the manner provided hereunder) if sent prior to 4:00 p.m.
New York time on a business day (and otherwise, on the immediately succeeding
business day), one business day after being sent to the recipient by reputable
overnight courier service (charges prepaid) or three business days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to each Purchaser at the address indicated on the SCHEDULE OF
PURCHASERS and to the Company at the address indicated below:
Rural Cellular Corporation
3905 Dakota Street SW
Alexandria, Minnesota 56308
Attention: Chief Executive Officer
Telephone: (320) 762-2000
Telecopy: (320) 808-2120
WITH COPIES TO:
Moss & Barnett
4800 Norwest Center
90 South 7th Street
Minneapolis, Minnesota 55402-4129
Attention: Richard Kelber, Esq.
Telephone: (612) 347-0300
Telecopy: (612) 339-6686
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski, Esq.
Telephone: (212) 506-2500
Telecopy: (212) 262-1910
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Stock Purchase Agreement on the date first written above.
COMPANY: RURAL CELLULAR CORPORATION
By: /s/ Wesley E. Schultz
---------------------------------------------
Name: Wesley E. Schultz
-------------------------------------------
Its: Sr. Vice President and CFO
-------------------------------------------
PURCHASERS: MADISON DEARBORN CAPITAL
PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/ Paul J. Finnegan
---------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
MADISON DEARBORN SPECIAL
EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/ Paul J. Finnegan
---------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P.,
its Manager
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/ Paul J. Finnegan
---------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
(Continuation of Signature Page to Preferred Stock Purchase Agreement)
<PAGE>
BOSTON VENTURES LIMITED
PARTNERSHIP V
By Boston Ventures Company V, L.L.C.
its General Partner
By: /s/ Anthony J. Bolland
---------------------------------------------
Name: Anthony J. Bolland
-------------------------------------------
Its: Managing Director
--------------------------------------------
TORONTO DOMINION INVESTMENTS,
INC.
By: /s/ Martha L. Gariepy
---------------------------------------------
Name: Martha L. Gariepy
-------------------------------------------
Its Vice President
(Continuation of Signature Page to Preferred Stock Purchase Agreement)
<PAGE>
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
Total
No. of Purchase
Shares Price
of for
Names and Preferred Preferred
ADDRESSES STOCK STOCK
--------- --------- ---------
<S> <C> <C>
Madison Dearborn Capital Partners III, L.P. 53,658.55 $53,658,550
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Madison Dearborn Special Equity III, L.P. 1,191.45 $1,191,450
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Special Advisors Fund I, L.P. 150 $150,000
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
EACH WITH A COPY TO:
Kirkland & Ellis
200 East Randolph Drive, Suite 5400
Chicago, Illinois 60601
Attention: Edward T. Swan
Telephone: (312) 861-2000
Telecopy: (312) 861-2200
Boston Ventures Limited Partnership V 36,666.67 $36,666,670
One Federal Street
Boston, MA 02110
Attention: John Hunt
Telephone: (617) 350-1599
Telecopy: (617) 350-1574
Toronto Dominion Investments, Inc. 18,333.33 $18,333,330
909 Fannin, Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Telephone: (713) 653-8225
Telecopy: (713) 652-2647
WITH A COPY TO:
TD Capital
31 West 52nd Street
New York, NY 10019-6101
Attention: Chris Shipman
Telephone: (212) 827-7733
Telecopy: (212) 974-8429
-------------- -------------
TOTAL 110,000 $110,000,000
</TABLE>
<PAGE>
LIST OF EXHIBITS
Exhibit A - Certificate of Designation
Exhibit B - Articles of Incorporation
Exhibit C - Company's Bylaws
Exhibit D - Registration Agreement
Exhibit E - Acquisition Agreement
Exhibit F - Senior Loan Agreement
Exhibit G - Bridge Financing Agreement
Exhibit H - Class T Preferred Stock Agreement
Exhibit I - Opinion of Moss & Barnett
Exhibit J - Opinion of Mayer, Brown & Platt
Exhibit K - Opinion of Lukas, Nace, Gutierrez & Sachs
LIST OF DISCLOSURE SCHEDULES
Affiliated Transactions Schedule
Capitalization Schedule
Subsidiary Schedule
Licenses Schedule
Potential Revocations of Licenses Schedule
Litigation Schedule
Contingent Liabilities Schedule
<PAGE>
Exhibit 4.2(b)
CERTIFICATE OF DESIGNATION OF VOTING POWER,
PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF
CLASS M REDEEMABLE VOTING CONVERTIBLE PREFERRED STOCK
OF
RURAL CELLULAR CORPORATION
Pursuant to Section 302A.401 of the
Minnesota Business Corporation Act
Rural Cellular Corporation, a Minnesota corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article 3.03 of its
Articles of Incorporation, as amended (the "Articles of Incorporation"), and in
accordance with the provisions of Sections 302A.401 and 302A.239 of the
Minnesota Business Corporation Act, the Board of Directors of the Corporation
(the "Board of Directors"), pursuant to minutes of action effective March 23,
2000, duly approved and adopted the following resolution which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of Directors
by the Articles of Incorporation, the Board of Directors does hereby designate,
create, authorize and provide for the issuance of preferred stock having a par
value of $.01 per share, which shall be designated as Class M Redeemable Voting
Convertible Preferred Stock Preferred Stock, consisting of 110,000 shares, and
shall have the voting powers, preferences and relative participating, optional
and other special rights, and qualifications, limitations, and restrictions
thereon as follows:
Section 1. Dividends.
1A. General Obligation. When and as declared by the Corporation's
Board of Directors and to the extent permitted under the laws of Minnesota, the
Corporation shall pay preferential dividends in cash to the holders of the Class
M Redeemable Voting Convertible Preferred Stock (the "Class M Preferred Stock")
as provided in this Section 1. Except as otherwise provided herein, dividends on
each share of the Class M Preferred Stock (a "Share") shall accrue on
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a daily basis at the rate of 8% per annum on the sum of the Liquidation Value
thereof plus all Accumulated Dividends (as defined in Section 1B) thereon from
and including the date of issuance of such Share to and including the first to
occur of (i) the date on which the Liquidation Value of such Share (plus all
accrued and unpaid dividends thereon) is paid to the holder thereof in
connection with the liquidation of the Corporation or the redemption of such
Share by the Corporation, (ii) the date on which such Share is converted into
shares of Conversion Stock hereunder or (iii) the date on which such Share is
otherwise acquired by the Corporation. Such dividends shall accrue whether or
not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
The date on which the Corporation initially issues any Share shall be deemed to
be its "date of issuance" regardless of the number of times transfer of such
Share is made on the stock records maintained by or for the Corporation and
regardless of the number of certificates which may be issued to evidence such
Share.
1B. Dividend Reference Dates. To the extent not paid on March 31,
June 30, September 30 and December 31 of each year, beginning June 30, 2000 (the
"Dividend Reference Dates"), all dividends which have accrued on each Share
outstanding during the three-month period (or other period in the case of the
initial Dividend Reference Date) ending upon each such Dividend Reference Date
shall be accumulated (and shall be referred to herein as "Accumulated
Dividends") and shall remain Accumulated Dividends with respect to such Share
until paid to the holder thereof.
1C. Distribution of Partial Dividend Payments. Except as otherwise
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Class M Preferred Stock, such
payment shall be distributed pro rata among the holders thereof based upon the
aggregate accrued but unpaid dividends on the Shares held by each such holder.
1D. Participating Dividends. In the event that the Corporation
declares or pays any dividends upon the Common Stock (whether payable in cash,
securities or other property) other than dividends payable solely in shares of
Common Stock, the Corporation shall also declare and pay to the holders of the
Class M Preferred Stock at the same time that it declares and pays such
dividends to the holders of the Common Stock, the dividends which would have
been declared and paid with respect to the Common Stock issuable upon conversion
of the Class M Preferred Stock had all of the outstanding Class M Preferred
Stock been converted immediately prior to the record date for such dividend, or
if no record date is fixed, the date as of which the record holders of Common
Stock entitled to such dividends are to be determined.
Section 2. Liquidation.
Upon any liquidation, dissolution or winding-up of the Corporation
(whether voluntary or involuntary) (a "Liquidation Event"), each holder of Class
M Preferred Stock shall be entitled to be paid, before any distribution or
payment is made upon any Junior Securities, an amount in cash equal to the
greater of (i) the aggregate Liquidation Value of all Shares held by such holder
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(plus all accrued and unpaid dividends thereon) and (ii) the aggregate amount
that would be paid in connection with such Liquidation Event with respect to the
Common Stock issuable upon conversion of all Shares held by such holder had all
of the outstanding Class M Preferred Stock been converted immediately prior to
such Liquidation Event, and the holders of Class M Preferred Stock shall not be
entitled to any further payment. If upon any such Liquidation Event the
Corporation's assets to be distributed among the holders of the Class M
Preferred Stock are (after satisfaction of the aggregate liquidation preference
of all Senior Preferred Securities pursuant to the terms of the Senior Preferred
Securities Agreements as in effect on the date of the Purchase Agreement)
insufficient to permit payment to such holders of the aggregate amount which
they are entitled to be paid under this Section 2, then the entire assets
available to be distributed to the Corporation's stockholders (after
satisfaction of the aggregate liquidation preference of all Senior Preferred
Securities pursuant to the terms of the Senior Preferred Securities Agreements
as in effect on the date of the Purchase Agreement) shall be distributed pro
rata among such holders based upon the aggregate Liquidation Value (plus all
accrued and unpaid dividends) of the Class M Preferred Stock held by each such
holder. Not less than 60 days prior to the payment date stated therein, the
Corporation shall mail written notice of any such Liquidation Event to each
record holder of Class M Preferred Stock, setting forth in reasonable detail the
amount of proceeds to be paid with respect to each Share and each share of
Common Stock in connection with such Liquidation Event. Neither the
consolidation or merger of the Corporation into or with any other entity or
entities (whether or not the Corporation is the surviving entity), nor the sale
or transfer by the Corporation of all or any part of its assets, nor the
reduction of the capital stock of the Corporation nor any other form of
recapitalization or reorganization affecting the Corporation shall be deemed to
be a Liquidation Event within the meaning of this Section 2.
Section 3. Redemptions.
3A. Scheduled Redemption. On April 3, 2012 (the "Scheduled
Redemption Date"), the Corporation shall redeem all Shares of Class M Preferred
Stock at a price per Share equal to the Liquidation Value thereof (plus all
accrued and unpaid dividends thereon) (the "Scheduled Redemption").
3B. Optional Redemptions.
(i) At any time and from time to time after April 3, 2005, the
Corporation may redeem all or any portion of the Shares of Class M Preferred
Stock then outstanding. Upon any such redemption, the Corporation shall pay a
price per Share equal to the Liquidation Value thereof (plus all accrued and
unpaid dividends thereon).
(ii) If, at any time and from time to time after April 3, 2003, the
closing price for the Corporation's Class A Common Stock on the principal
securities market on which it is traded has equaled or exceeded 175% of the
Class M Preferred Stock's Conversion Price for the 30 consecutive trading days
immediately preceding the notice delivered pursuant to paragraph 3F, then the
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Corporation may redeem all or any portion of the Shares of Class M Preferred
Stock then outstanding. Upon any such redemption, the Corporation shall pay a
price per Share equal to the Liquidation Value thereof (plus all accrued and
unpaid dividends thereon).
(iii) If at any time less than $25 million of Class M Preferred
Stock remains outstanding (determined based on the then aggregate Liquidation
Value thereof plus all accrued and unpaid dividends thereon), then the
Corporation may at any time redeem all, but not less than all, of the Shares of
Class M Preferred Stock then outstanding. Upon any such redemption, the
Corporation shall pay a price per Share equal to the Liquidation Value thereof
(plus all accrued and unpaid dividends thereon).
3C. Optional Clawback Redemption.
(i) During the 90-day period commencing on April 3, 2000, the
Corporation may at any time and from time to time redeem all or any portion of
up to an aggregate of $25 million of the Shares of Class M Preferred Stock then
outstanding (determined based on the Liquidation Value thereof, without regard
to any accrued dividends); provided that after any such redemption under this
paragraph 3C, at least $110 million of the Shares of Class M Preferred Stock
must remain outstanding (determined based on the Liquidation Value thereof,
without regard to any accrued dividends).
(ii) For any redemption under this paragraph 3C, the redemption
price paid by the Corporation for the repurchased Shares shall be the sum of (x)
102% of the Liquidation Value thereof plus (y) accrued and unpaid dividends
thereon; provided that, solely for purposes of this subparagraph 3C(ii),
dividends shall be deemed to have accrued from the date of issuance of such
shares at an annual rate of 600 basis points over the three-month LIBOR
(determined as of the date of issuance of such Shares).
3D. Change of Control Put Redemptions.
(i) Upon the occurrence of a Change of Control, the Corporation
shall be required to make an offer to each holder of shares of Class M Preferred
Stock to redeem all or any part of such holder's shares of Class M Preferred
Stock at a cash purchase price equal to the greater of (a) 101% of the
Liquidation Value thereof, plus accrued and unpaid dividends thereon or (b) the
Fair Market Value of the total consideration that the holder of Class M
Preferred Stock to be redeemed would have received in connection with such
Change of Control had such holder converted its Class M Preferred Stock to be
redeemed into Class A Common Stock immediately prior to such Change of Control
(the "Change of Control Payment").
(ii) Within 30 days following any Change of Control, the Corporation
shall mail a notice to such holder stating: (A) that the offer to redeem is
being made pursuant to this Certificate of Designation and that, to the extent
lawful, all shares of Class M Preferred Stock tendered will be
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accepted for payment; (B) the purchase price and the purchase date, which shall
be no earlier than 30 days nor later than 40 days from the date such notice is
mailed (the "Change of Control Payment Date"); (C) that any shares of Class M
Preferred Stock not tendered will continue to accrue dividends in accordance
with the terms of this Certificate of Designation; (D) that, unless the
Corporation defaults in the payment of the Change of Control Payment, all shares
of Class M Preferred Stock accepted for payment pursuant to the offer to redeem
shall cease to accrue dividends on and after the Change of Control Payment Date
and all rights of the holders of such Class M Preferred Stock shall terminate on
and after the Change of Control Payment Date; and (E) a description of the
procedures to be followed by such holder in order to have its shares of Class M
Preferred Stock repurchased.
(iii) On the Change of Control Payment Date, (A) the Corporation
shall (1) accept for payment shares of Class M Preferred Stock tendered pursuant
to the offer to redeem and (2) promptly mail to each holder of shares Class M
Preferred Stock so accepted payment in an amount equal to the Change of Control
Payment for such shares and (B) unless the Corporation defaults in the payment
for the shares of Class M Preferred Stock tendered pursuant to the Offer to
Purchase, dividends shall cease to accrue with respect to the shares of Class M
Preferred Stock tendered and all rights of holders of such tendered shares shall
terminate, except for the right to receive payment therefor, on the Change of
Control Payment Date. The Corporation shall publicly announce the results of the
offer to redeem on or as soon as practicable after the Change of Control Payment
Date.
(iv) The Corporation shall comply with Rule 14e-1 under the
Securities Exchange Act of 1934, as amended, and any securities laws and
regulations to the extent such laws and regulations are applicable to the
repurchase of shares of the Class M Preferred Stock in connection with a Change
of Control.
3E. Redemption Payments. For each Share which is to be redeemed
hereunder, the Corporation shall be obligated on the Redemption Date to pay to
the holder thereof (upon surrender by such holder at the Corporation's principal
office of the certificate representing such Share) an amount in cash equal to
the Liquidation Value of such Share (plus all accrued and unpaid dividends
thereon) (or, in the case of a redemption pursuant to paragraph 3C or 3D, the
redemption price specified in such paragraph); provided that, in the case of a
scheduled redemption pursuant to paragraph 3A above, the Corporation may, at its
option, pay the redemption price for such redemption in cash or in shares of
Class A Common Stock (valued at the Market Price for such Class A Common Stock).
If the funds of the Corporation legally available for redemption of Shares on
any Redemption Date are insufficient to redeem the total number of Shares to be
redeemed on such date, those funds which are legally available shall be used to
redeem the maximum possible number of Shares pro rata among the holders of the
Shares to be redeemed based upon the aggregate Liquidation Value of such Shares
held by each such holder (plus all accrued and unpaid dividends thereon). At any
time thereafter when additional funds of the Corporation are legally available
for the redemption of Shares, such funds shall immediately be used to redeem the
balance of the Shares
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which the Corporation has become obligated to redeem on any Redemption Date but
which it has not redeemed.
3F. Notice of Redemption. Except as otherwise provided herein, the
Corporation shall mail written notice of each redemption of any Class M
Preferred Stock to each record holder thereof not more than 60 nor less than 30
days prior to the date on which such redemption is to be made. Upon mailing any
notice of redemption which relates to a redemption at the Corporation's option,
the Corporation shall become obligated to redeem the total number of Shares
specified in such notice at the time of redemption specified therein. In case
fewer than the total number of Shares represented by any certificate are
redeemed, a new certificate representing the number of unredeemed Shares shall
be issued to the holder thereof without cost to such holder as soon as
practicable after surrender of the certificate representing the redeemed Shares.
3G. Determination of the Number of Each Holder's Shares to be
Redeemed. Except as otherwise provided herein, the number of Shares of Class M
Preferred Stock to be redeemed from each holder thereof in redemptions by the
Corporation under this Section 3 shall be the number of Shares determined by
multiplying the total number of Shares of Class M Preferred Stock to be redeemed
times a fraction, the numerator of which shall be the total number of Shares
then held by such holder and the denominator of which shall be the total number
of Shares then outstanding.
3H. Dividends After Redemption. No Share shall be entitled to any
dividends accruing after the date on which the Liquidation Value of such Share
(plus all accrued and unpaid dividends thereon) (or, in the case of a redemption
pursuant to paragraph 3C or 3D, the redemption price specified in such
paragraph) is paid to the holder of such Share. On such date, all rights of the
holder of such Share shall cease, and such Share shall no longer be deemed to be
issued and outstanding.
3I. Redeemed or Otherwise Acquired Shares. Any Shares which are
redeemed or otherwise acquired by the Corporation shall be canceled and retired
to authorized but unissued shares and shall not be reissued, sold or
transferred.
3J. Other Redemptions or Acquisitions. The Corporation shall not,
nor shall it permit any Subsidiary to, redeem or otherwise acquire any Shares of
Class M Preferred Stock, except as expressly authorized herein or pursuant to a
purchase offer made pro rata to all holders of Class M Preferred Stock on the
basis of the number of Shares owned by each such holder.
Section 4. Voting Rights.
4A. Election of Directors. In the election of directors of the
Corporation, the holders of the Class M Preferred Stock, voting separately as a
class to the exclusion of all other classes of the Corporation's capital stock
and with each Share of Class M Preferred Stock entitled
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to one vote, shall be entitled at an annual or special meeting of the
shareholders to elect up to two directors to serve as members of the
Corporation's Board of Directors, each until his successor is duly elected by
the holders of the Class M Preferred Stock, subject to prior death, resignation,
retirement, disqualification, or removal or termination of term of office in
accordance with the terms of the Purchase Agreement. The directors so elected
shall be in addition to the directors elected by the holders of the Common Stock
of the Corporation, and shall increase the maximum number of directors otherwise
permitted pursuant to the Corporation's bylaws. Any directors so elected shall
not be divided into classes. Said right of election, term of office, filling
vacancies and other features of such directorships shall be governed by and are
subject to the applicable terms and conditions set forth in the Purchase
Agreement, which contains, inter alia, provisions which constitute a voting
agreement among the holders of the Class M Preferred Stock. The provisions of
paragraph 3C of the Purchase Agreement are hereby incorporated into this
Certificate of Designation by this reference as though fully set forth herein.
The Corporation shall retain a copy of the Purchase Agreement at its principal
executive office.
4B. Other Voting Rights. The holders of the Class M Preferred Stock
shall be entitled to notice of all shareholders' meetings in accordance with the
Corporation's bylaws, and, except as otherwise required by applicable law, the
holders of the Class M Preferred Stock shall be entitled to vote on all matters
submitted to the shareholders for a vote together with the holders of the Class
A Common Stock voting together as a single class with each share of Class A
Common Stock entitled to one vote per share and each Share of Class M Preferred
Stock entitled to one vote for each share of Class A Common Stock issuable upon
conversion of the Class M Preferred Stock as of the record date for such vote
or, if no record date is specified, as of the date of such vote.
Section 5. Conversion.
5A. Conversion Procedure.
(i) At any time and from time to time, any holder of Class M
Preferred Stock may convert all or any portion of the Class M Preferred Stock
(including any fraction of a Share) held by such holder into a number of shares
of Conversion Stock computed by multiplying the number of Shares to be converted
by $1,000.00 and dividing the result by the Conversion Price then in effect.
(ii) Except as otherwise provided herein, each conversion of Class M
Preferred Stock shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates representing the
Class M Preferred Stock to be converted have been surrendered for conversion at
the principal office of the Corporation. At the time any such conversion has
been effected, the rights of the holder of the Shares converted as a holder of
Class M Preferred Stock shall cease and the Person or Persons in whose name or
names any certificate or certificates for shares of Conversion Stock are to be
issued upon such conversion shall be deemed to have become the holder or holders
of record of the shares of Conversion Stock represented thereby.
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(iii) The conversion rights of any Share subject to redemption
hereunder shall terminate on the Redemption Date for such Share unless the
Corporation has failed to pay to the holder thereof the Liquidation Value of
such Share (plus all accrued and unpaid dividends thereon) (or, in the case of a
redemption pursuant to paragraph 3C or 3D, the redemption price specified in
such paragraph).
(iv) Notwithstanding any other provision hereof, if a conversion of
Class M Preferred Stock is to be made in connection with a Public Offering, a
Change of Control or other transaction affecting the Corporation, the conversion
of any Shares of Class M Preferred Stock may, at the election of the holder
thereof, be conditioned upon the consummation of such transaction, in which case
such conversion shall not be deemed to be effective until such transaction has
been consummated.
(v) As soon as practicable after a conversion has been effected, the
Corporation shall deliver to the converting holder:
(a) a certificate or certificates representing the number of
shares of Conversion Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified;
(b) payment in an amount equal to the amount payable under
subparagraph (ix) below with respect to such conversion; and
(c) a certificate representing any Shares of Class M Preferred
Stock which were represented by the certificate or certificates delivered
to the Corporation in connection with such conversion but which were not
converted.
(vi) The issuance of certificates for shares of Conversion Stock
upon conversion of Class M Preferred Stock shall be made without charge to the
holders of such Class M Preferred Stock for any issuance tax in respect thereof
or other cost incurred by the Corporation in connection with such conversion and
the related issuance of shares of Conversion Stock; provided, however, that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the holder of the Class M Preferred Stock to be
converted and that no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid. Upon conversion of each Share of Class M Preferred
Stock, the Corporation shall take all such actions as are necessary in order to
insure that the Conversion Stock issuable with respect to such conversion shall
be validly issued, fully paid and nonassessable, free and clear of all taxes,
liens, charges and encumbrances with respect to the issuance thereof.
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(vii) The Corporation shall not close its books against the transfer
of Class M Preferred Stock or of Conversion Stock issued or issuable upon
conversion of Class M Preferred Stock in any manner which interferes with the
timely conversion of Class M Preferred Stock. The Corporation shall assist and
cooperate with any holder of Shares required to make any governmental filings or
obtain any governmental approval prior to or in connection with any conversion
of Shares hereunder (including, without limitation, making any filings required
to be made by the Corporation); provided, however, that any such holder of
Shares requesting such assistance or cooperation shall bear all expenses,
including reasonable attorney fees, incurred by the Corporation if such filings
or approvals are not required to be made by the Corporation.
(viii) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Conversion Stock, solely for the
purpose of issuance upon the conversion of the Class M Preferred Stock, the
number of shares of Conversion Stock issuable upon the conversion of all
outstanding Class M Preferred Stock. All shares of Conversion Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Conversion Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Conversion Stock may be listed (except for official notice
of issuance which shall be immediately delivered by the Corporation upon each
such issuance). The Corporation shall not take any action which would cause the
number of authorized but unissued shares of Conversion Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
conversion of the Class M Preferred Stock.
(ix) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be delivered upon any
conversion of the Class M Preferred Stock, the Corporation, in lieu of
delivering the fractional share therefor, shall pay an amount to the holder
thereof equal to the Market Price of such fractional interest as of the date of
conversion.
5B. Conversion Price.
(i) The initial Conversion Price shall be $53.00. In order to
prevent dilution of the conversion rights granted under this Section 5, the
Conversion Price shall be subject to adjustment from time to time pursuant to
this paragraph 5B.
(ii) If and whenever the Corporation issues or sells, or in
accordance with paragraph 5C is deemed to have issued or sold, any shares of its
Common Stock for a consideration per share less than the Market Price of the
Common Stock determined as of the date of such issue or sale, then immediately
upon such issue or sale or deemed issue or sale the Conversion Price shall be
reduced to the Conversion Price determined by multiplying the Conversion Price
in effect immediately prior to such issue or sale by a fraction, the numerator
of which shall be the sum of (1) the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue
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or sale multiplied by the Market Price of the Common Stock determined as of the
date of such issuance or sale, plus (2) the consideration, if any, received by
the Corporation upon such issue or sale, and the denominator of which shall be
the product derived by multiplying the Market Price of the Common Stock by the
number of shares of Common Stock Deemed Outstanding immediately after such issue
or sale.
(iii) Notwithstanding the foregoing, there shall be no adjustment to
the Conversion Price hereunder with respect to issuances of Common Stock (or of
securities exchangeable or exercisable for or convertible into Common Stock) (A)
to officers, directors, employees, or consultants of the Corporation and its
Subsidiaries pursuant to compensation arrangements approved by the Corporation's
board of directors, (B) to suppliers, lessors, or lenders of the Corporation and
its Subsidiaries issued in the ordinary course of business in connection with
(as applicable) their supply arrangements or lease arrangements with, or loans
to, the Corporation or any of its Subsidiaries, or (C) upon the conversion of
any Convertible Securities (including the Class M Preferred Stock and Class T
Preferred Stock).
5C. Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under paragraph 5B, the following
shall be applicable:
(i) Issuance of Rights or Options. If the Corporation in any manner
grants or sells any Options and the price per share for which Common Stock is
issuable upon the exercise of such Options, or upon conversion or exchange of
any Convertible Securities issuable upon exercise of such Options, is less than
the Market Price of the Common Stock determined as of such time, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to be outstanding and to have been issued and sold by the Corporation at
the time of the granting or sale of such Options for such price per share. For
purposes of this paragraph, the "price per share for which Common Stock is
issuable" shall be determined by dividing (A) the total amount, if any, received
or receivable by the Corporation as consideration for the granting or sale of
such Options, plus the minimum aggregate amount of additional consideration
payable to the Corporation upon exercise of all such Options, plus in the case
of such Options which relate to Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable to the Corporation upon the
issuance or sale of such Convertible Securities and the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock issuable upon
the exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options. No further
adjustment of the Conversion Price shall be made when Convertible Securities are
actually issued upon the exercise of such Options or when Common Stock is
actually issued upon the exercise of such Options or the conversion or exchange
of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Corporation in any
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon
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conversion or exchange thereof is less than the Market Price of the Common Stock
determined as of such time, then the maximum number of shares of Common Stock
issuable upon conversion or exchange of such Convertible Securities shall be
deemed to be outstanding and to have been issued and sold by the Corporation at
the time of the issuance or sale of such Convertible Securities for such price
per share. For the purposes of this paragraph, the "price per share for which
Common Stock is issuable" shall be determined by dividing (A) the total amount
received or receivable by the Corporation as consideration for the issue or sale
of such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price shall be made when Common Stock is
actually issued upon the conversion or exchange of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Conversion Price had been
or are to be made pursuant to other provisions of this Section 5, no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.
(iii) Change in Option Price or Conversion Rate. If the purchase
price provided for in any Options, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities or the rate at
which any Convertible Securities are convertible into or exchangeable for Common
Stock changes at any time, the Conversion Price in effect at the time of such
change shall be immediately adjusted to the Conversion Price which would have
been in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed purchase price, additional consideration
or conversion rate, as the case may be, at the time initially granted, issued or
sold; provided that if such adjustment would result in an increase of the
Conversion Price then in effect, such adjustment shall not be effective until 30
days after written notice thereof has been given by the Corporation to all
holders of the Class M Preferred Stock. For purposes of paragraph 5C, if the
terms of any Option or Convertible Security which was outstanding as of the date
of issuance of the Class M Preferred Stock are changed in the manner described
in the immediately preceding sentence, then such Option or Convertible Security
and the Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such change;
provided that no such change shall at any time cause the Conversion Price
hereunder to be increased.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; provided that if such expiration or termination would result
in an increase in the Conversion Price then in effect, such increase shall not
be effective until 30 days after written notice thereof has been given to all
holders of the Class M Preferred Stock. For purposes of paragraph 5C, the
expiration or termination
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of any Option or Convertible Security which was outstanding as of the date of
issuance of the Class M Preferred Stock shall not cause the conversion Price
hereunder to be adjusted unless, and only to the extent that, a change in the
terms of such Option or Convertible Security caused it to be deemed to have been
issued after the date of issuance of the Class M Preferred Stock.
(v) Calculation of Consideration Received. If any Common Stock,
Option or Convertible Security is issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor (net of discounts, commissions and
related expenses). If any Common Stock, Option or Convertible Security is issued
or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Corporation shall be the fair value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Corporation shall be the Market
Price thereof as of the date of receipt. If any Common Stock, Option or
Convertible Security is issued to the owners of the non-surviving entity in
connection with any merger in which the Corporation is the surviving
corporation, the amount of consideration therefor shall be deemed to be the fair
value of such portion of the net assets and business of the non-surviving entity
as is attributable to such Common Stock, Option or Convertible Security, as the
case may be. The fair value of any consideration other than cash and securities
shall be determined in the reasonable good faith judgment of the board of
directors of the Corporation.
(vi) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.
(vii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.
(viii) Record Date. If the Corporation takes a record of the holders
of Common Stock for the purpose of entitling them (a) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (b) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or upon the making of such other distribution or
the date of the granting of such right of subscription or purchase, as the case
may be.
5D. Subdivision or Combination of Common Stock. If the Corporation
at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion
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Price in effect immediately prior to such subdivision shall be proportionately
reduced, and if the Corporation at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased.
5E. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change." Prior to the
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance satisfactory to the holders of a majority of
the Class M Preferred Stock then outstanding) to insure that each of the holders
of Class M Preferred Stock shall thereafter have the right to acquire and
receive, in lieu of or in addition to (as the case may be) the shares of
Conversion Stock immediately theretofore acquirable and receivable upon the
conversion of such holder's Class M Preferred Stock, such shares of stock,
securities or assets as such holder would have received in connection with such
Organic Change if such holder had converted its Class M Preferred Stock
immediately prior to such Organic Change. In each such case, the Corporation
shall also make appropriate provisions (in form and substance satisfactory to
the holders of a majority of the Class M Preferred Stock then outstanding) to
insure that the provisions of this Section 5 and Section 6 hereof shall
thereafter be applicable to the Class M Preferred Stock (including, in the case
of any such consolidation, merger or sale in which the successor entity or
purchasing entity is other than the Corporation, an immediate adjustment of the
Conversion Price, and a corresponding immediate adjustment in the number of
shares of Conversion Stock acquirable and receivable upon conversion of Class M
Preferred Stock, if the value so reflected is less than the Market Price of the
Common Stock determined as of the date of such consolidation, merger or sale).
The Corporation shall not effect any such consolidation, merger or sale, unless
prior to the consummation thereof, the successor entity (if other than the
Corporation) resulting from consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance satisfactory to
the holders of a majority of the Class M Preferred Stock then outstanding), the
obligation to deliver to each such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.
5F. Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 5 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Corporation's Board of Directors shall make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of Class M Preferred
Stock; provided that no such adjustment shall increase the Conversion Price as
otherwise determined pursuant to this Section 5 or decrease the number of shares
of Conversion Stock issuable upon conversion of each Share of Class M Preferred
Stock.
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5G. Notices.
(i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Class M
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders of
Class M Preferred Stock as specified in Section 2 for any liquidation and in
paragraph 3D or paragraph 3F for any redemption.
5H. No Avoidance. If the Corporation shall enter into any
transaction for the purpose of avoiding the application of the provisions of
this Section 5, the benefits of such provisions shall nevertheless apply and be
preserved.
Section 6. Events of Noncompliance.
6A. Definition. An Event of Noncompliance shall have occurred if:
(i) the Corporation fails to make any redemption payment with
respect to the Class M Preferred Stock which it is required to make hereunder,
whether or not such payment is legally permissible or is prohibited by any
agreement to which the Corporation is subject;
(ii) the Corporation materially breaches or otherwise fails to
perform or observe any other covenant or agreement set forth herein or in the
Purchase Agreement, and such breach or failure continues for a period of 30
days; or
(iii) the Corporation or any Subsidiary makes an assignment for the
benefit of creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is entered
adjudicating the Corporation or any Subsidiary bankrupt or insolvent; or any
order for relief with respect to the Corporation or any Subsidiary is entered
under the Federal Bankruptcy Code; or the Corporation or any Subsidiary
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Corporation or any Subsidiary or of any
substantial part of the assets of the Corporation or any Subsidiary, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of a Subsidiary) relating to the Corporation or any Subsidiary
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or any such petition
or application is filed, or any such proceeding is commenced, against the
Corporation or any Subsidiary and either (a) the Corporation or any such
Subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein or (b) such petition, application or proceeding is not
dismissed within 60 days.
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6B. Consequences of Events of Noncompliance.
(i) If an Event of Noncompliance (other than an Event of
Noncompliance of the type described in subparagraphs 6A(ii) or 6A(iii)) has
occurred and is continuing, the holder or holders of a majority of the Class M
Preferred Stock then outstanding may demand (by written notice delivered to the
Corporation) immediate redemption of all or any portion of the Class M Preferred
Stock owned by such holder or holders at a price per Share equal to the
Liquidation Value thereof (plus all accrued and unpaid dividends thereon). The
Corporation shall give prompt written notice of such election to the other
holders of Class M Preferred Stock (but in any event within five days after
receipt of the initial demand for redemption, and each such other holder may
demand immediate redemption of all or any portion of such holder's Class M
Preferred Stock by giving written notice thereof to the Corporation within seven
days after receipt of the Corporation's notice. The Corporation shall redeem all
Class M Preferred Stock as to which rights under this paragraph have been
exercised within 15 days after receipt of the initial demand for redemption.
(ii) If an Event of Noncompliance (other than an Event of
Noncompliance of the type described in subparagraphs 6A(i) or 6A(ii)) has
occurred, all of the Class M Preferred Stock then outstanding shall be subject
to immediate redemption by the Corporation (without any action on the part of
the holders of the Class M Preferred Stock) at a price per Share equal to the
Liquidation Value thereof (plus all accrued and unpaid dividends thereon). The
Corporation shall immediately redeem all Class M Preferred Stock upon the
occurrence of such Event of Noncompliance.
(iii) If any Event of Noncompliance exists, each holder of Class M
Preferred Stock shall also have any other rights which such holder is entitled
to under any contract or agreement at any time and any other rights which such
holder may have pursuant to applicable law.
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Section 7. Exchange of Shares.
(i) The Corporation, at its option, may at any time exchange all or
any portion of the Shares (including any fraction of a Share) of the Class M
Preferred Stock (the "Exchange Option") for junior subordinated debentures (the
"Exchange Debentures"); provided that before exercising the Exchange Option the
Corporation will deliver to each holder of Class M Preferred Stock an opinion of
legal counsel reasonably satisfactory to the holders of a majority of the Class
M Preferred Stock that the exercise of the Exchange Option, in and of itself,
will not trigger the recognition of any material income (including, without
limitation, dividend income or original issue discount to be included in income
in subsequent periods) by such holder for any U.S. federal or state income tax
purpose. The Exchange Debentures shall mature on April 3, 2012, and shall have
other terms, including but not limited to coupons or discounts equivalent to the
dividends on the Class M Preferred Stock, put rights, redemption rights and
options and convertibility into Class A Common Stock with anti-dilution
protections, substantively equivalent to the terms herein, in the Purchase
Agreement, the Registration Agreement and in the other agreements entered into
by and among the Corporation and the holders of Class M Preferred Stock with
respect to it. If at any time the Corporation exchanges less than all of the
Shares outstanding, then such exchange shall be made ratably among the holders
thereof based upon the aggregate Liquidation Value plus all accrued and unpaid
dividends thereon of the Shares of each such holder and the aggregate
Liquidation Value plus all accrued and unpaid dividends thereon of all Shares
then issued and outstanding.
(ii) The Corporation shall mail written notice of its proposed
exercise of an Exchange Option to each holder of Class M Preferred Stock no more
than 60 nor less than 30 days prior to the date on which such Exchange Option is
to be made.
(iii) Upon exercise of the Exchange Option, each holder of
outstanding Shares shall receive Exchange Debentures in an aggregate principal
amount equal to the Liquidation Value of all Shares held by such holder to be
exchanged by the Corporation (together with all accrued and unpaid dividends
thereon) as of the date such exchange is effective. The Exchange Debentures
shall be duly executed and authenticated as of the date on which such exchange
is effective.
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Section 8. Registration of Transfer.
The Corporation shall keep at its principal office a register for
the registration of Class M Preferred Stock. Upon the surrender of any
certificate representing Class M Preferred Stock at such place, the Corporation
shall, at the request of the record holder of such certificate, execute and
deliver (at the Corporation's expense) a new certificate or certificates in
exchange therefor representing in the aggregate the number of Shares represented
by the surrendered certificate. Each such new certificate shall be registered in
such name and shall represent such number of Shares as is requested by the
holder of the surrendered certificate and shall be substantially identical in
form to the surrendered certificate, and dividends shall accrue on the Class M
Preferred Stock represented by such new certificate from the date to which
dividends have been fully paid on such Class M Preferred Stock represented by
the surrendered certificate.
Section 9. Replacement.
Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder shall be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
Shares of Class M Preferred Stock, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
shall accrue on the Class M Preferred Stock represented by such new certificate
from the date to which dividends have been fully paid on such lost, stolen,
destroyed or mutilated certificate.
Section 10. Definitions.
"Acquisition" means the acquisition of substantially all of the
cellular telephone operations of various subsidiaries of Triton Cellular
Partners, L.P. pursuant to the Acquisition Agreement.
"Acquisition Agreement" means that certain Asset Purchase Agreement,
dated as of November 6, 1999, among the Corporation, Triton Cellular Partners,
L.P., Triton Communications, L.L.C., Triton Cellular Alabama License Company,
L.L.C. and certain of their affiliates.
"Change of Control" means (a) any transaction or event (including,
without limitation, any sale, transfer or issuance or series of sales, transfers
and/or issuances of Common Stock by the Corporation or any holders thereof)
which results in any Person or group of Persons (as the term "group" is used
under the Securities Exchange Act of 1934), other than the holders of Common
Stock and Class M Preferred Stock as of the date of the Purchase Agreement,
acquiring
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"beneficial ownership" (as that term is used under the Securities Exchange Act
of 1934) of more than 50% of the Common Stock outstanding at the time of such
transaction or event, or of capital stock of the Corporation possessing the
voting power (under ordinary circumstances) to elect a majority of the
Corporation's board of directors, or (b) (i) any sale or transfer of all or
substantially all of the assets of the Corporation and its Subsidiaries on a
consolidated basis (measured either by book value in accordance with generally
accepted accounting principles consistently applied or by fair market value
determined in the reasonable good faith judgment of the Corporation's board of
directors) in any transaction or series of transactions (other than sales in the
ordinary course of business) and (ii) any merger or consolidation to which the
Corporation is a party, except for a merger in which the Corporation is the
surviving corporation, the terms of the Class M Preferred Stock are not changed
and the Class M Preferred Stock is not exchanged for cash, securities or other
property, and after giving effect to such merger no Person or group of Persons
(as the term "group" is used under the Securities Exchange Act of 1934), other
than the holders of Common Stock and Class M Preferred Stock as of the date of
the Purchase Agreement, has "beneficial ownership" (as that term is used under
the Securities Exchange Act of 1934) of more than 50% of the outstanding Common
Stock or of capital stock of the Corporation possessing the voting power (under
ordinary circumstances) to elect a majority of the Corporation's board of
directors.
"Class T Preferred Stock" means up to $15 million aggregate
liquidation value of the Corporation's Class T Convertible Preferred Stock, par
value $.01 per share, issued to Telephone & Data Systems, Inc. pursuant to the
Class T Preferred Stock Agreement in connection with the Acquisition.
"Class T Preferred Stock Agreement" means that certain
Recapitalization Agreement, dated as of October 31, 1999, by and between the
Corporation and Telephone & Data Systems, Inc., as amended on December 6, 1999,
as such agreement may be further amended or otherwise modified from time to
time, the other agreements and instruments entered into by the parties thereto
in connection therewith, and the certificate of designation filed with the
Secretary of State of Minnesota setting forth the rights and preferences of the
Class T Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
"Common Stock" means, collectively, the Corporation's Class A Common
Stock, par value $.01 per share, the Corporation's Class B Common Stock, par
value $.01 per share, and any capital stock of any class of the Corporation
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding-up of the Corporation.
"Common Stock Deemed Outstanding" means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common
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Stock deemed to be outstanding pursuant to subparagraphs 5C(i) and 5C(ii) hereof
whether or not the Options or Convertible Securities are actually exercisable at
such time.
"Conversion Stock" means shares of the Corporation's Class A Common
Stock, par value $0.01 per share; provided that if there is a change such that
the securities issuable upon conversion of the Class M Preferred Stock are
issued by an entity other than the Corporation or there is a change in the type
or class of securities so issuable, then the term "Conversion Stock" shall mean
one share of the security issuable upon conversion of the Class M Preferred
Stock if such security is issuable in shares, or shall mean the smallest unit in
which such security is issuable if such security is not issuable in shares.
"Convertible Securities" means any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock.
"Fair Market Value" means (a) with respect to cash, the amount
thereof, (b) with respect to securities, their Market Price and (c) with respect
to any consideration other than cash or securities, its fair value as determined
by the reasonable good faith judgment of the board of directors of the
Corporation.
"Junior Exchangeable Preferred Stock" means up to $140 million
aggregate liquidation value of the Corporation's 12 1/4% Junior Exchangeable
Preferred Stock, par value $.01 per share.
"Junior Exchangeable Preferred Stock Agreement" means that certain
Underwriting Agreement, dated as of February 8, 2000, by and among the
Corporation, TD Securities (USA) Inc., First Union Securities, Inc. and The
Robinson-Humphrey Company, as Qualified Independent Underwriter, the other
agreements and instruments entered into by the parties thereto in connection
therewith, and the certificate of designation filed with the Secretary of State
of Minnesota setting forth the rights and preferences of the Junior Exchangeable
Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
"Junior Securities" means any capital stock or other equity
securities of the Corporation, except for the Class M Preferred Stock and the
Senior Preferred Securities.
"LIBOR" means the average (rounded upward to the nearest
one-hundredth (1/100th) of one percent (1%)) of the interest rates per annum at
which deposits in United States Dollars for a three-month period are offered to
The Toronto-Dominion Bank, in the London interbank borrowing market at
approximately 11:00 a.m. (London, England time), for the three-month period
following the Issue Date, in an amount approximately equal to the Issue Price of
the shares to be redeemed.
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"Liquidation Value" of any Share as of any particular date shall be
equal to $1,000.
"Market Price" of any security means the average, over a period of
15 days consisting of the day as of which "Market Price" is being determined and
the 14 consecutive trading days prior to such day, of the closing prices of such
security's sales on the principal securities exchange on which such security may
at the time be listed, or, if there has been no sales on such exchange on any
day, the average of the highest bid and lowest asked prices on such exchange at
the end of such day, or, if on any day such security is not so listed, the
average of the representative bid and asked prices quoted in the Nasdaq National
Market System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the Nasdaq National Market System, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization. If at any time such security is not listed on any
securities exchange or quoted in the Nasdaq National Market System or the
over-the-counter market, the "Market Price" shall be the fair value thereof as
determined by the reasonable good faith judgment of the board of directors of
the Corporation.
"Options" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
"Person" means an individual, a partnership, a corporation, a
limited liability company, a limited liability, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.
"Public Offering" means any offering by the Corporation of its
capital stock or equity securities to the public pursuant to an effective
registration statement under the Securities Act of 1933, as then in effect, or
any comparable statement under any similar federal statute then in force.
"Purchase Agreement" means the Preferred Stock Purchase Agreement,
dated as of April 3, 2000, by and among the Corporation and certain purchasers,
as such agreement may from time to time be amended in accordance with its terms.
"Redemption Date" as to any Share means the date specified in the
notice of any redemption at the Corporation's option or at the holder's option
or the applicable date specified herein in the case of any other redemption;
provided that no such date shall be a Redemption Date unless the Liquidation
Value of such Share is actually paid in full on such date, and if not so paid in
full, the Redemption Date shall be the date on which such amount is fully paid.
"Registration Agreement" means the Registration Agreement, dated as
of April 3, 2000, by and among the Corporation and certain investors, as such
agreement may be amended from time to time in accordance with its terms.
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"Senior Exchangeable Preferred Stock" means up to $150 million
aggregate liquidation value of the Corporation's 11 3/8% Senior Exchangeable
Preferred Stock, par value $.01 per share.
"Senior Exchangeable Preferred Stock Agreement" means that certain
Purchase Agreement, dated as of May 7, 1998, by and among the Corporation, TD
Securities (USA) Inc., NationsBanc Montgomery Securities LLC and BancBoston
Securities Inc., the other agreements and instruments entered into by the
parties thereto in connection therewith, that certain Underwriting Agreement,
dated as of February 8, 2000, by and among the Corporation, TD Securities (USA)
Inc., First Union Securities, Inc. and The Robinson-Humphrey Company, as
Qualified Independent Underwriter, the other agreements and instruments entered
into by the parties thereto in connection therewith, and the certificate of
designation filed with the Secretary of State of Minnesota setting forth the
rights and preferences of the Senior Exchangeable Preferred Stock, all as
originally executed and delivered and, except as otherwise provided herein, as
such agreements or instruments may be amended or modified from time to time in
accordance with their respective terms.
"Senior Preferred Securities" means, collectively, the Senior
Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock, and the
Class T Preferred Stock.
"Senior Preferred Securities Agreements" means, collectively, the
Senior Exchangeable Preferred Stock Agreement, the Junior Exchangeable Preferred
Stock Agreement, and the Class T Preferred Stock Agreement.
"Subsidiary" means, as applied to any Person, (i) 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 (ii)
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. For purposes of this
Certificate of Designation, if the context does not otherwise specify in respect
of which Person the term "Subsidiary" is used, the term "Subsidiary" shall refer
to a Subsidiary of the Corporation. Notwithstanding the foregoing, Subsidiary
shall not include Wireless Alliance, L.L.C., a Minnesota limited liability
company.
Section 11. Amendment and Waiver.
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No amendment, modification or waiver shall be binding or effective
with respect to any provision of Sections 1 to 13 hereof without the prior
written consent of the holders of a majority of the Class M Preferred Stock
outstanding at the time such action is taken; provided that if any such
amendment, modification or waiver would adversely affect any holder of Class M
Preferred Stock relative to the holders of Class M Preferred Stock voting in
favor of such amendment, modification, or waiver, such amendment, modification
or waiver shall also require the written consent of the holders of a majority of
the outstanding Class M Preferred Stock held by all holders so adversely
affected; provided further that if any such amendment, modification or waiver is
to a provision in this Certificate of Designation that requires a specific vote
to take an action thereunder or to take an action with respect to the matters
described therein, such amendment, modification or waiver shall not be effective
unless such vote is obtained with respect to such amendment, modification or
waiver; and provided further that no change in the terms hereof may be
accomplished by merger or consolidation of the Corporation with another
corporation or entity unless the Corporation has obtained the prior written
consent of the holders of the applicable percentage of the Class M Preferred
Stock then outstanding. No other course of dealing between the Corporation and
the holder of any Class M Preferred Stock or any delay in exercising any rights
hereunder shall operate as a waiver of any rights of any such holders. For
purposes of this Certificate of Designation, Class M Preferred Stock held by the
Corporation or any Subsidiaries shall not be deemed to be outstanding.
Section 12. Notices.
All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Certificate of
Designation shall be in writing and shall be deemed to have been given when
delivered personally to the recipient, telecopied to the recipient (with hard
copy sent by overnight courier in the manner provided hereunder) if sent prior
to 4:00 p.m. New York time on a business day (and otherwise, on the immediately
succeeding business day), one business day after being sent to the recipient by
reputable overnight courier service (charges prepaid) or three business days
after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent (i) to the Corporation, at its principal executive
offices and (ii) to any stockholder, at such holder's address as it appears in
the stock records of the Corporation (unless otherwise indicated by any such
holder).
Section 13. Effective Date.
The effective date of this Certificate of Designation shall be April
3, 2000.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be duly executed by the Sr. Vice President and CFO of the
Corporation this 30th day of March, 2000.
RURAL CELLULAR CORPORATION
By: /s/ Wesley E. Schultz
Name: Wesley E. Schultz
Title: Sr. V.P. & CFO
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Exhibit 4.2(c)
RURAL CELLULAR CORPORATION
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT is made as of April 3, 2000,
between Rural Cellular Corporation, a Minnesota corporation (the "COMPANY"), and
the Investors listed on the SCHEDULE OF INVESTORS attached hereto.
The parties to this Agreement are parties to a Preferred Stock
Purchase Agreement of even date herewith (the "PURCHASE AGREEMENT"). In order to
induce the Investors to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the Closing under the
Purchase Agreement. Unless otherwise provided in this Agreement, capitalized
terms used herein shall have the meanings set forth in paragraph 8 hereof.
The parties hereto agree as follows:
1. DEMAND REGISTRATIONS.
1A. REQUESTS FOR REGISTRATION. At any time after the third
anniversary of the Closing under the Purchase Agreement, the holders of a
majority of the Registrable Securities then outstanding may request up to three
registrations under the Securities Act of all or any portion of their
Registrable Securities on Form S-1 or any similar long-form registration as the
Company may elect ("LONG-FORM REGISTRATIONS"), and the holders of at least
one-third of the Registrable Securities then outstanding may request
registration under the Securities Act of all or any portion of their Registrable
Securities on Form S-3 or any similar short-form registration as the Company may
elect ("SHORT-FORM REGISTRATIONS"), if available; PROVIDED THAT the aggregate
offering value of the Registrable Securities requested to be registered in any
registration under this paragraph 1(a) (any "DEMAND REGISTRATION") must equal at
least $25 million in any Long-Form Registration and at least $5 million in any
Short-Form Registration.
All requests for Demand Registrations shall be made by giving
written notice thereof to the Company (a "DEMAND NOTICE"). Each Demand Notice
shall specify the number of Registrable Securities requested to be registered.
Within ten business days after receipt of any Demand Notice, the Company shall
give written notice of such requested registration to all other holders of
Registrable Securities and, subject to the terms of paragraph 1(e) hereof, shall
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 15
business days after the delivery of the Company's notice in accordance with
Section 10(k) hereof.
1B. DEMAND EXPENSES. The Registration Expenses (as defined in
Section 5(a) hereof) in all Demand Registrations shall be paid by the Company.
1C. LONG-FORM REGISTRATIONS. A registration shall not count as
one of the permitted Long-Form Registrations until it has become effective;
PROVIDED THAT in any event the Company shall pay all Registration Expenses in
connection with any registration initiated as a Demand Registration whether or
not it has become effective and whether or not such registration has counted as
one of the permitted Long-Form Registrations, but solely to the extent provided
in Section 5(b) below. All Long-Form Registrations shall be underwritten
registrations unless otherwise requested by the holders of a majority of the
Registrable Securities included in the applicable Long- Form Registration.
1D. SHORT-FORM REGISTRATIONS. Demand Registrations shall be
Short-Form Registrations whenever the Company is permitted to use any applicable
short form and if the managing underwriters (if any) agree to the use of a
Short-Form Registration, and the Company shall use commercially reasonable
efforts to make Short-Form Registrations on Form S-3 available for the sale of
Registrable Securities. The holders of a majority of the Registrable Securities
then outstanding may, in connection with any Demand Registration requested by
such holders that is a Short-Form Registration, require the Company to file such
Short-Form Registration with the Securities and Exchange Commission in
accordance with and pursuant to Rule 415 promulgated under the Securities Act
(or any successor rule then in effect) (a "SHELF REGISTRATION").
1E. PRIORITY ON DEMAND REGISTRATIONS. The Company shall not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within
<PAGE>
a price range acceptable to the holders of a majority of the Registrable
Securities requested to be included in such offering, the Company shall include
in such registration prior to the inclusion of any securities which are not
Registrable Securities the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold in an orderly
manner within the price range of such offering, pro rata among the respective
holders thereof on the basis of the amount of Registrable Securities owned by
each such holder.
1F. RESTRICTIONS ON DEMAND REGISTRATIONS. The Company shall
not be obligated to effect any Demand Registration within 365 days after the
effective date of a previous Demand Registration or a previous registration in
which the holders of Registrable Securities were given piggyback rights pursuant
to paragraph 2 and in which such holders were able to register and sell at least
80% of the Registrable Securities requested to be included therein.
The Company may postpone for up to 180 days the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company's board of directors determines in its reasonable good faith judgment
that such Demand Registration could reasonably be expected to have a material
adverse effect on any activities, operations or prospects of the Company or any
of its Subsidiaries (whether or not in the ordinary course of business);
PROVIDED THAT in such event, the holders of Registrable Securities initially
requesting such Demand Registration shall be entitled to withdraw such request
and, if such request is withdrawn, such Demand Registration shall not count as
one of the permitted Long-Form Registrations hereunder and the Company shall pay
all Registration Expenses in connection with such registration. The Company may
delay a Demand Registration hereunder only once in any twelve-month period.
1G. SELECTION OF UNDERWRITERS. The holders of a majority of
the Registrable Securities included in any Demand Registration shall have the
right to select the investment banker(s) and manager(s) to administer the
offering, subject to the Company's approval which shall not be unreasonably
withheld or delayed.
1H. OTHER REGISTRATION RIGHTS. The Company represents and
warrants that it is not a party to, or otherwise subject to, any other agreement
granting registration rights to any other Person with respect to any securities
of the Company, except as set forth on the attached SCHEDULE OF OTHER
REGISTRATION RIGHTS. Except as provided in this Agreement, the Company shall not
grant to any Person the right to request the Company to register any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the prior written consent of the
holders of a majority of the Registrable Securities; PROVIDED THAT the Company
may grant rights to other Persons to (i) participate in Piggyback Registrations
so long as such rights are subordinate to or pari passu with the rights of the
holders of Registrable Securities with respect to such Piggyback Registrations
as provided in paragraphs 2(c) and 2(d) below and (ii) request registrations so
long as the holders of Registrable Securities are entitled to participate in any
such registrations in the manner described in Section 2 below. Any securities
(other than Registrable Securities) as to which the Company has granted
contractual registration rights shall be referred to as "OTHER SECURITIES."
2. PIGGYBACK REGISTRATIONS.
2A. RIGHT TO PIGGYBACK. Whenever the Company proposes to
register any of its equity securities under the Securities Act other than
pursuant to a Demand Registration and the registration form to be used may be
used for the registration of Registrable Securities and is not in Form S-4 or
S-8 or a successor form (a "PIGGYBACK REGISTRATION"), the Company shall give
prompt written notice to all holders of Registrable Securities of its intention
to effect such a registration and, subject to the terms of paragraphs 2(c) and
2(d) hereof, shall include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within 20 days after the receipt of the Company's notice.
2B. PIGGYBACK EXPENSES. The Registration Expenses in all
Piggyback Registrations shall be paid by the Company.
2C. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company, the Company shall include in
such registration (i) first, the securities the Company proposes to sell, and
(ii) second, the Registrable Securities requested to be included in such
registration and the Other Securities requested to be included in such
registration, pro rata among the holders of any such securities on the basis of
the number of shares requested to be included therein by each such holder.
<PAGE>
2D. PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company shall include in such registration (i)
first, the securities requested to be included therein by the holders requesting
such registration, and (ii) second, the Registrable Securities requested to be
included in such registration and the Other Securities requested to be included
in such registration, pro rata among the holders of any such securities on the
basis of the number of shares requested to be included therein by each such
holder.
2E. SELECTION OF UNDERWRITERS. If any Piggyback Registration
is an underwritten offering, the selection of investment banker(s) and
manager(s) for the offering shall be made by the Company after consulting in
good faith with the holders of a majority of the Registrable Securities included
in such Piggyback Registration.
2F. OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4, Form S-8 or any successor form), whether
on its own behalf or at the request of any holder or holders of such securities,
until a period of at least 90 days has elapsed from the effective date of such
previous registration.
3. HOLDBACK AGREEMENTS.
3A. HOLDERS OF REGISTRABLE SECURITIES. Each holder of
Registrable Securities shall not effect any public sale or distribution
(including sales pursuant to Rule 144 promulgated under the Securities Act) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during (i) with respect to any
underwritten Demand Registration or any underwritten Piggyback Registration in
which Registrable Securities are included, the seven days prior to and the
90-day period beginning on the effective date of such registration and (ii) upon
notice from the Company of the commencement of an underwritten distribution in
connection with any Shelf Registration, the seven days prior to and the 90-day
period beginning on the date of commencement of such distribution, in each case
except as part of such underwritten registration and in each case unless the
underwriters managing the registered public offering otherwise agree.
3B. The Company (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities (except pursuant to registration
on Form S-4, Form S-8 or any successor form), during (A) with respect to any
underwritten Demand Registration or any underwritten Piggyback Registration in
which Registrable Securities are included, the seven days prior to and the
90-day period beginning on the effective date of such registration and (B) upon
notice from any holder(s) of Registrable Securities subject to a Shelf
Registration that such holder(s) intend to effect a distribution of Registrable
Securities pursuant to such Shelf Registration (upon receipt of which, the
Company will promptly notify all other holders of Registrable Securities of the
date of commencement of such distribution), the seven days prior to and the
90-day period beginning on the date of commencement of such distribution and
(ii) shall cause each holder of its Common Stock, or any securities convertible
into or exchangeable or exercisable for Common Stock, purchased from the Company
at any time after the date of this Agreement (other than in a registered public
offering or pursuant to Rule 144 or pursuant to equity subscription agreements,
stock option agreements, stock appreciation rights, phantom stock plans or
similar rights or plans in effect on the date of this Agreement) to agree not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
any such securities during such period, in each case except as part of such
underwritten registration and in each case unless the underwriters managing the
registered public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use commercially
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Company shall as expeditiously as practicable:
4A. prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and use commercially reasonable efforts to
<PAGE>
cause such registration statement to become effective (PROVIDED THAT before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company shall furnish to the counsel selected by the holders of a
majority of the Registrable Securities covered by such registration statement
copies of all such documents proposed to be filed, and the Company shall in good
faith consider any comments of such counsel);
4B. notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 90 days (or, in the case of a Shelf Registration, a period
ending on the earlier of (i) the date on which all Registrable Securities have
been sold pursuant to the Shelf Registration or have otherwise ceased to be
Registrable Securities and (ii) the second anniversary of the effective date of
such Shelf Registration) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
4C. furnish to each seller of Registrable Securities such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus), each amendment and supplement thereto
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller;
4D. use commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and to do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (PROVIDED THAT the Company shall not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
4E. notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
4F. cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use commercially
reasonable efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 of the Securities and Exchange
Commission or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register as such with respect to such Registrable
Securities with the NASD;
4G. provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
4H. enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including preparing for and
participating in such number of "road shows" as the underwriters managing such
offering may reasonably request);
4I. make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
<PAGE>
4J. otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
4K. permit any holder of Registrable Securities which holder,
in its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included; PROVIDED THAT such holder
shall indemnify and hold harmless the Company from any liability arising from
the inclusion of such material or the receiving or incurring thereof in the
manner and on the term set forth in Section 6(b);
4L. in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use commercially reasonable efforts promptly to
obtain the withdrawal of such order;
4M. use commercially reasonable efforts to cause such
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition of such
Registrable Securities; and
4N. in the case of an underwritten offering, and if required
by the underwriting agreement with respect thereto, obtain a cold comfort letter
from the Company's independent public accountant in the form and covering such
matters as may be required by such underwriting agreement.
5. REGISTRATION EXPENSES.
5A. All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company (but except
as provided in paragraph (b) not fees and disbursements of counsel for any
holder of Registrable Securities) and all independent certified public
accountants (excluding costs of accountants retained to conduct any special
audits required in connection with a Demand Registration), underwriters
(excluding discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called "REGISTRATION EXPENSES"), shall be borne
by the Company as provided in this Agreement, except that the Company shall, in
any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASD automated
quotation system.
5B. In connection with (i) each registration initiated as a
Long-Form Registration (whether or not such registration is declared effective
or counts as one of the permitted Long-Form Registrations) until the Company has
consummated a Demand Registration that counts as one of the permitted Long-Form
Registrations hereunder and (ii) the first Demand Registration the Company
consummates that counts as one of the permitted Long-Form Registrations
hereunder, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration. Notwithstanding the foregoing, the Company shall
not be required to reimburse the holders of Registrable Securities for any fees
or disbursements of counsel with respect to any registration terminated by the
holders due to unacceptable pricing or underwriter cutbacks.
5C. To the extent any expenses relating to a registration
hereunder are not required to be paid by the Company, each holder of securities
included in any registration hereunder shall pay those expenses allocable to the
registration of such holder's securities so included, and any expenses not so
allocable shall be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the securities to
be so registered.
<PAGE>
5D. Any obligation to pay Registration Expenses or other
expenses provided for in this Agreement shall survive the termination of the
rights of any particular holder of Registrable Securities and the termination of
this Agreement.
6. INDEMNIFICATION.
6A. The Company agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities, its officers, directors,
employees, agents, Affiliates and each Person who controls such holder (within
the meaning of the Securities Act and the Securities Exchange Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with such number of copies of the same as was
previously requested by such holder. In connection with an underwritten
offering, the Company shall indemnify such underwriters, their officers,
directors, employees, agents and each Person who controls such underwriters
(within the meaning of the Securities Act and the Securities Exchange Act) to
substantially the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
6B. In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall indemnify the Company,
its directors, officers, employees, agents, Affiliates and each Person who
controls the Company (within the meaning of the Securities Act and the
Securities Exchange Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder; PROVIDED THAT the obligation to indemnify shall be
individual and ratable, not joint and several, for each holder and shall be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
6C. Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party) and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
6D. The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director, employee, agent,
Affiliate or controlling Person of such indemnified party and shall survive the
transfer of securities, the termination of the rights of any particular holder
of Registrable Securities and the termination of this Agreement. The Company
also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder that is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; PROVIDED THAT no
holder of Registrable Securities included
<PAGE>
in any underwritten registration shall be required to make any representations
or warranties to the Company or the underwriters (other than representations and
warranties regarding such holder, such holder's title to the securities and such
holder's intended method of distribution) or to undertake any indemnification
obligations to the Company or the underwriters with respect thereto, except as
otherwise provided in paragraph 6 hereof.
8. DEFINITIONS.
8A. "REGISTRABLE SECURITIES" means (i) any Class A Common
Stock issued upon the conversion of any Preferred Stock issued pursuant to the
Purchase Agreement and (ii) any Class A Common Stock or other Common Stock
issued or issuable with respect to any Registrable Securities by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when they have been sold, transferred or otherwise disposed of
pursuant to an offering registered under the Securities Act, through a broker,
dealer or market maker in compliance with Rule 144 under the Securities Act (or
any similar rule then in force) or repurchased by the Company or any Subsidiary.
For purposes of this Agreement, including exercising any rights or meeting any
threshold tests hereunder, a Person shall be deemed to hold any Registrable
Securities issuable upon conversion of any Preferred Stock on an as-if-converted
basis, and such Registrable Securities shall be deemed to be in existence
without taking into account any restriction or limitation on the conversion
thereof.
8B. Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Purchase Agreement.
9. TERMINATION. Except as otherwise provided herein, the
rights granted to any particular holder of Registrable Securities herein shall
terminate whenever such holder and any Affiliate with which it must aggregate
its Registrable Securities for purposes of Rule 144 promulgated under the
Securities Act may sell all of their Registrable Securities during a single
three-month period pursuant to the provisions of Rule 144. Except as otherwise
provided herein, this Agreement shall terminate at such time as no holder of
Registrable Securities has any rights hereunder.
10. MISCELLANEOUS.
10A. NO INCONSISTENT AGREEMENTS. The Company shall not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
10B. CURRENT PUBLIC INFORMATION. The Company shall file all
reports required to be filed by it under the Securities Act and the Securities
Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder and shall take such further action as any holder
or holders of Registrable Securities may reasonably request, all to the extent
required to enable such holders to sell Registrable Securities pursuant to Rule
144 adopted by the Securities and Exchange Commission under the Securities Act
(as such rule may be amended from time to time) or any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission. Upon
request, the Company shall deliver to any holder of Registrable Securities a
written statement as to whether it has complied with such requirements. The
Company shall at all times cause the Class A Common Stock into which the
Preferred Stock is convertible to be listed on one or more of the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market System.
10C. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. Except for
actions taken by the Company or its board of directors in the exercise of their
fiduciary duties and prudent business judgment, the Company shall not take any
action, or permit any change to occur, with respect to its securities which
would materially and adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in a registration undertaken
pursuant to this Agreement or which would materially and adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
10D. REMEDIES. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that, in addition to any other rights and
remedies existing in its favor, any party shall be entitled to specific
performance and/or other injunctive relief
<PAGE>
from any court of law or equity of competent jurisdiction (without posting any
bond or other security) in order to enforce or prevent violation of the
provisions of this Agreement.
10E. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or modified and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of a majority of the Registrable Securities
outstanding at the time the amendment or waiver becomes effective; PROVIDED THAT
if any such amendment, modification or waiver would adversely affect any holder
of Registrable Securities relative to the holders of Registrable Securities
voting in favor of such amendment, modification, or waiver, such amendment,
modification or waiver shall also require the written consent of the holders of
a majority of the outstanding Registrable Securities held by all holders so
adversely affected; PROVIDED FURTHER that if any such amendment, modification or
waiver is to a provision in this Agreement that requires a specific vote to take
an action thereunder or to take an action with respect to the matters described
therein, such amendment, modification or waiver shall not be effective unless
such vote is obtained with respect to such amendment, modification or waiver. No
other course of dealing between the Company and the holder of any Registrable
Securities or any delay in exercising any rights hereunder shall operate as a
waiver of any rights of any such holders. For purposes of this Agreement,
Registrable Securities held by the Company or any Subsidiaries shall not be
deemed to be outstanding.
10F. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities. Notwithstanding
the foregoing, the registration rights granted to the Investors pursuant to this
Agreement may be transferred to a party that is not an Affiliate of such
Investor only if (i) as a result of such transfer such party and its Affiliates
acquire at least 25% of the Registrable Securities held by such Investor as of
the date hereof, (ii) the transfer of the Registrable Securities complies with
all restrictions on the transfer of such securities found in the Purchase
Agreement and any other agreement contemplated thereby and (iii) the Investor
provides written notice to the Company of such assignment no less than ten
business days prior to the transfer of the Registrable Securities.
10G. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
10H. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
10I. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. Whenever required by the context, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns, pronouns, and verbs shall include the
plural and vice versa. Reference to any agreement, document, certificate, or
instrument means such agreement, document, certificate or instrument as the same
is amended, waived or otherwise modified from time to time in accordance with
the terms thereof and, if applicable, hereof. Except as otherwise provided in
this Agreement, words such as "herein," "hereunder," "hereof" and the like shall
be deemed to refer to this Agreement as a whole and not to any particular
document or article, Section, paragraph or other portion of a document. The use
of the words "include" or "including" in this Agreement shall be by way of
example rather than by limitation. The use of the words "or," "either" or "any"
shall not be exclusive.
10J. GOVERNING LAW. The corporate law of the State of
Minnesota shall govern all issues and questions concerning the relative rights
of the Company and its stockholders. All other issues and questions concerning
the construction, validity, interpretation and enforcement of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
New York or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York.
<PAGE>
10K. NOTICES. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, telecopied to the recipient (with hard copy sent by
overnight courier in the manner provided hereunder) if sent prior to 4:00 p.m.
New York time on a business day (and otherwise, on the immediately succeeding
business day), one business day after being sent to the recipient by reputable
overnight courier service (charges prepaid) or three business days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to each Investor at the address indicated on the SCHEDULE OF
INVESTORS and to the Company at the address indicated below:
Rural Cellular Corporation
3905 Dakota Street SW
Alexandria, Minnesota 56308
Attention: chief executive officer
Telephone: (320) 762-2000
Telecopy: (320) 808-2120
WITH COPIES TO:
Moss & Barnett
4800 Norwest Center
90 South 7th Street
Minneapolis, Minnesota 55402-4129
Attention: Richard Kelber, Esq.
Telephone: (612) 347-0300
Telecopy: (612) 339-6686
and
Mayer Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski, Esq.
Telephone: (212) 506-2500
Telecopy: (212) 262-1910
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
10L. BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or legal
holiday in the State of Minnesota or the jurisdiction in which the Company's
principal office is located, the time period shall automatically be extended to
the business day immediately following such Saturday, Sunday or legal holiday.
10M. DELIVERY BY FACSIMILE. This Agreement, the agreements
referred to herein and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute originals forms thereof and
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Registration Agreement as of the date first written above.
THE COMPANY: RURAL CELLULAR CORPORATION
By: /s/ Wesley E. Schultz
---------------------------------------------
Name: Wesley E. Schultz
-------------------------------------------
Its: Sr. Vice President and CFO
-------------------------------------------
INVESTORS: MADISON DEARBORN CAPITAL
PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/ Paul J. Finnegan
---------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
MADISON DEARBORN SPECIAL
EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/ Paul J. Finnegan
---------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P.,
its Manager
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/ Paul J. Finnegan
---------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
BOSTON VENTURES LIMITED
PARTNERSHIP V
By Boston Ventures Company V, L.L.C.
its General Partner
By: /s/ Anthony J. Bolland
---------------------------------------------
Name: Anthony J. Bolland
-------------------------------------------
Its: Managing Director
--------------------------------------------
(Continuation of Signature Page to Registration Agreement)
<PAGE>
TORONTO DOMINION INVESTMENTS,
INC.
By: /s/ Martha L. Gariepy
---------------------------------------------
Name: Martha L. Gariepy
-------------------------------------------
Its Vice President
(Continuation of Signature Page to Registration Agreement)
<PAGE>
SCHEDULE OF INVESTORS
NAME AND ADDRESS
Madison Dearborn Capital Partners III, L.P.
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Madison Dearborn Special Equity III, L.P.
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Special Advisors Fund I, L.P.
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
EACH WITH A COPY TO:
Kirkland & Ellis
200 East Randolph Drive, Suite 5400
Chicago, Illinois 60601
Attention: Edward T. Swan
Telephone: (312) 861-2000
Telecopy: (312) 861-2200
Boston Ventures Limited Partnership V
One Federal Street
Boston, MA 02110
Attention: John Hunt
Telephone: (617) 350-1599
Telecopy: (617) 350-1574
TD Investments Inc.
909 Fannin, Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Telephone: (713) 652-8225
Telecopy: (713) 652-2647
WITH A COPY TO:
TD Capital
31 West 52nd Street
New York, NY 10019-6101
Attention: Chris Shipman
Telephone: (212) 827-7733
Telecopy: (212) 974-8429
<PAGE>
SCHEDULE OF OTHER REGISTRATION RIGHTS
Registration rights granted to Telephone & Data Systems, Inc. pursuant to that
certain Registration Rights Agreement, dated as of March 31, 2000, by and
between Rural Cellular Corporation, a Minnesota corporation, and Telephone &
Data Systems, Inc., a Delaware corporation.
<PAGE>
Exhibit 10.1(a)
SECOND
AMENDED AND RESTATED LOAN AGREEMENT
AMONG
RURAL CELLULAR CORPORATION;
THE FINANCIAL INSTITUTIONS WHOSE NAMES
APPEAR AS LENDERS ON THE SIGNATURE PAGES HEREOF;
AND
TORONTO DOMINION (TEXAS), INC.
AS ADMINISTRATIVE AGENT
WITH
TD SECURITIES (USA) INC.,
AS BOOK RUNNER AND LEAD ARRANGER;
FIRST UNION NATIONAL BANK
AND PNC BANK, NATIONAL ASSOCIATION
AS CO-SYNDICATION AGENTS
AND
BANK OF AMERICA SECURITIES, LLC
AS DOCUMENTATION AGENT
DATED AS OF APRIL 3, 2000
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
ATLANTA, GEORGIA
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.................................................3
ARTICLE 2 LOANS......................................................22
SECTION 2.1 THE LOANS..................................................22
SECTION 2.2 MANNER OF BORROWING AND DISBURSEMENT.......................23
SECTION 2.3 INTEREST...................................................25
SECTION 2.4 COMMITMENT FEES............................................28
SECTION 2.5 MANDATORY COMMITMENT REDUCTIONS............................28
SECTION 2.6 VOLUNTARY COMMITMENT REDUCTIONS............................30
SECTION 2.7 PREPAYMENTS AND REPAYMENTS.................................31
SECTION 2.8 NOTES; LOAN ACCOUNTS.......................................36
SECTION 2.9 MANNER OF PAYMENT..........................................37
SECTION 2.10 REIMBURSEMENT..............................................38
SECTION 2.11 PRO RATA TREATMENT.........................................38
SECTION 2.12 CAPITAL ADEQUACY...........................................39
SECTION 2.13 LENDER TAX FORMS...........................................40
SECTION 2.14 INCREMENTAL FACILITY ADVANCES..............................40
SECTION 2.15 REPLACEMENT OF LENDERS.....................................41
ARTICLE 3 CONDITIONS PRECEDENT.......................................42
SECTION 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT.........42
SECTION 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE.......................44
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.............................45
SECTION 4.1 REPRESENTATIONS AND WARRANTIES.............................45
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC............51
ARTICLE 5 GENERAL COVENANTS..........................................51
SECTION 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS..............51
SECTION 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW...................52
SECTION 5.3 MAINTENANCE OF PROPERTIES..................................52
SECTION 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS...................52
SECTION 5.5 INSURANCE..................................................52
SECTION 5.6 PAYMENT OF TAXES AND CLAIMS................................52
SECTION 5.7 COMPLIANCE WITH ERISA......................................53
SECTION 5.8 VISITS AND INSPECTIONS.....................................54
SECTION 5.9 PAYMENT OF INDEBTEDNESS; LOANS.............................55
SECTION 5.10 USE OF PROCEEDS............................................55
SECTION 5.11 REAL ESTATE................................................55
SECTION 5.12 INDEMNITY..................................................56
SECTION 5.13 INTEREST RATE HEDGING......................................57
SECTION 5.14 COVENANTS REGARDING FORMATION OF SUBSIDIARIES AND
ACQUISITIONS; PARTNERSHIP, SUBSIDIARIES....................57
SECTION 5.15 PAYMENT OF WAGES...........................................58
SECTION 5.16 FURTHER ASSURANCES.........................................58
ARTICLE 6 INFORMATION COVENANTS......................................58
SECTION 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION.............58
SECTION 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION................59
SECTION 6.3 PERFORMANCE CERTIFICATES...................................59
SECTION 6.4 COPIES OF OTHER REPORTS....................................59
<PAGE>
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS.....................60
ARTICLE 7 NEGATIVE COVENANTS.........................................61
SECTION 7.1 INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES..........61
SECTION 7.2 LIMITATION ON LIENS........................................62
SECTION 7.3 AMENDMENT AND WAIVER.......................................62
SECTION 7.4 LIQUIDATION, MERGER, OR DISPOSITION OF ASSETS..............62
SECTION 7.5 LIMITATION ON GUARANTIES...................................63
SECTION 7.6 INVESTMENTS AND ACQUISITIONS...............................63
SECTION 7.7 RESTRICTED PAYMENTS AND PURCHASES..........................65
SECTION 7.8 TOTAL LEVERAGE RATIO.......................................65
SECTION 7.9 SENIOR LEVERAGE RATIO......................................66
SECTION 7.10 ANNUALIZED OPERATING CASH FLOW TO PRO FORMA DEBT...........66
SECTION 7.11 ANNUALIZED OPERATING CASH FLOW TO INTEREST EXPENSE.........67
SECTION 7.12 FIXED CHARGE COVERAGE RATIO................................67
SECTION 7.13 AFFILIATE TRANSACTIONS.....................................67
SECTION 7.14 REAL ESTATE................................................68
SECTION 7.15 ERISA LIABILITIES..........................................68
ARTICLE 8 DEFAULT....................................................68
SECTION 8.1 EVENTS OF DEFAULT..........................................68
SECTION 8.2 REMEDIES...................................................71
SECTION 8.3 PAYMENTS SUBSEQUENT TO DECLARATION OF EVENT OF DEFAULT.....72
ARTICLE 9 THE AGENTS.................................................73
SECTION 9.1 APPOINTMENT AND AUTHORIZATION..............................73
SECTION 9.2 INTEREST HOLDERS...........................................73
SECTION 9.3 CONSULTATION WITH COUNSEL..................................73
SECTION 9.4 DOCUMENTS..................................................73
SECTION 9.5 ADMINISTRATIVE AGENT AND AFFILIATES........................73
SECTION 9.6 RESPONSIBILITY OF THE ADMINISTRATIVE AGENT.................74
SECTION 9.7 COLLATERAL.................................................74
SECTION 9.8 ACTION BY ADMINISTRATIVE AGENT.............................74
SECTION 9.9 NOTICE OF DEFAULT OR EVENT OF DEFAULT......................74
SECTION 9.10 RESPONSIBILITY DISCLAIMED..................................75
SECTION 9.11 INDEMNIFICATION............................................75
SECTION 9.12 CREDIT DECISION............................................76
SECTION 9.13 SUCCESSOR ADMINISTRATIVE AGENT.............................76
SECTION 9.14 DELEGATION OF DUTIES.......................................77
SECTION 9.15 NO RESPONSIBILITIES OF AGENTS..............................77
ARTICLE 10 CHANGE IN CIRCUMSTANCES AFFECTING LIBOR ADVANCES...........77
SECTION 10.1 LIBOR BASIS DETERMINATION INADEQUATE OR UNFAIR.............77
SECTION 10.2 ILLEGALITY.................................................77
SECTION 10.3 INCREASED COSTS............................................78
SECTION 10.4 EFFECT ON OTHER ADVANCES...................................79
ARTICLE 11 MISCELLANEOUS..............................................79
SECTION 11.1 NOTICES....................................................79
SECTION 11.2 EXPENSES...................................................81
SECTION 11.3 WAIVERS....................................................81
SECTION 11.4 SET-OFF....................................................82
SECTION 11.5 ASSIGNMENT.................................................82
SECTION 11.6 ACCOUNTING PRINCIPLES......................................85
SECTION 11.7 COUNTERPARTS...............................................85
- ii -
<PAGE>
SECTION 11.8 GOVERNING LAW..............................................85
SECTION 11.9 SEVERABILITY...............................................86
SECTION 11.10 INTEREST...................................................86
SECTION 11.11 TABLE OF CONTENTS AND HEADINGS.............................86
SECTION 11.12 AMENDMENT AND WAIVER.......................................86
SECTION 11.13 ENTIRE AGREEMENT...........................................87
SECTION 11.14 OTHER RELATIONSHIPS........................................87
SECTION 11.15 DIRECTLY OR INDIRECTLY.....................................87
SECTION 11.16 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS.............87
SECTION 11.17 SENIOR DEBT................................................88
SECTION 11.18 OBLIGATIONS SEVERAL........................................88
SECTION 11.19 CONFIDENTIALITY............................................88
ARTICLE 12 WAIVER OF JURY TRIAL.......................................88
SECTION 12.1 WAIVER OF JURY TRIAL.......................................88
- iii -
<PAGE>
EXHIBITS
Exhibit A - Form of Borrower's Pledge Agreement
Exhibit B - Form of Certificate of Financial Condition
Exhibit C - Form of Notice of Incremental Facility Commitment
Exhibit D - Form of Request for Advance
Exhibit E - Form of Revolving Loan Note
Exhibit F - Form of Security Agreement
Exhibit G - Form of Subsidiary Guaranty
Exhibit H - Form of Subsidiary Pledge Agreement
Exhibit I - Form of Subsidiary Security Agreement
Exhibit J - Form of Term Loan A Note
Exhibit K - Form of Term Loan B Note
Exhibit L - Form of Term Loan C Note
Exhibit M - Form of Incremental Facility Note
Exhibit N - Form of Borrower's Loan Certificate
Exhibit O - Form of Subsidiary Loan Certificate
Exhibit P - Form of Opinion of FCC Counsel to the Borrower
Exhibit Q - Form of Opinion of General Counsel to the Borrower
Exhibit R - Form of Performance Certificate
Exhibit S - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Liens Existing on the Agreement Date
Schedule 3 - Subsidiaries
Schedule 4 - Permitted Exceptions
Schedule 5 - Litigation
Schedule 6 - Affiliate Agreements
Schedule 7 - Addresses of Lenders
- iv -
<PAGE>
SECOND
AMENDED AND RESTATED LOAN AGREEMENT
AMONG
RURAL CELLULAR CORPORATION, AS BORROWER;
THE FINANCIAL INSTITUTIONS WHOSE NAMES
APPEAR AS LENDERS ON THE SIGNATURE PAGES HEREOF;
TORONTO DOMINION (TEXAS), INC.,
AS ADMINISTRATIVE AGENT
WITH
TD SECURITIES (USA) INC.,
AS BOOK RUNNER AND LEAD ARRANGER;
AND
FIRST UNION NATIONAL BANK
AND PNC BANK, NATIONAL ASSOCIATION
AS CO-SYNDICATION AGENTS
AND
BANK OF AMERICA SECURITIES, LLC
AS DOCUMENTATION AGENT
W I T N E S S E T H:
WHEREAS, the Borrower, the financial institutions whose names appeared as
Lenders on the signature pages thereof and the Administrative Agent are all
parties to that certain Amended and Restated Loan Agreement dated as of July 1,
1998 (the "PRIOR LOAN AGREEMENT"); and
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders consent to certain amendments to the Prior Loan Agreement, as more fully
set forth in this Second Amended and Restated Loan Agreement; and
WHEREAS, the Administrative Agent and the Lenders have agreed to amend and
restate the Prior Loan Agreement in its entirety as set forth herein; and
<PAGE>
WHEREAS, the Borrower acknowledges and agrees that the security interest
granted to the Administrative Agent, for itself and on behalf of the Lenders
pursuant to the Prior Loan Agreement and the Loan Documents (as defined in the
Prior Loan Agreement) executed in connection therewith shall remain outstanding
and in full force and effect in accordance with the Prior Loan Agreement and
shall continue to secure the Obligations (as defined therein); and
WHEREAS, the Borrower acknowledges and agrees that (i) the Obligations (as
defined herein) represent, among other things, the amendment, restatement,
renewal, extension, consolidation and modification of the Obligations (as
defined in the Prior Loan Agreement) arising in connection with the Prior Loan
Agreement and the other Loan Documents (as defined in the Prior Loan Agreement)
executed in connection therewith; (ii) the parties hereto intend that the Prior
Loan Agreement and the other Loan Documents (as defined in the Prior Loan
Agreement) executed in connection therewith and the collateral pledged
thereunder shall secure, without interruption or impairment of any kind, all
existing Indebtedness under the Prior Loan Agreement and the other Loan
Documents (as defined in the Prior Loan Agreement) executed in connection
therewith as so amended, restated, restructured, renewed, extended, consolidated
and modified hereunder, together with all other Obligations hereunder; (iii) all
Liens evidenced by the Prior Loan Agreement and the other Loan Documents (as
defined in the Prior Loan Agreement) executed in connection therewith are hereby
ratified, confirmed and continued; and (iv) the Loan Documents (as defined
herein) are intended to restructure, restate, renew, extend, consolidate, amend
and modify the Prior Loan Agreement and the other Loan Documents (as defined in
the Prior Loan Agreement) executed in connection therewith; and
WHEREAS, the parties hereto intend that (i) the provisions of the Prior
Loan Agreement and the other Loan Documents (as defined in the Prior Loan
Agreement) executed in connection therewith, to the extent restructured,
restated, renewed, extended, consolidated, amended and modified hereby, are
hereby superseded and replaced by the provisions hereof and of the Loan
Documents (as defined herein); and (ii) the Notes (as hereinafter defined)
amend, renew, extend, modify, replace, are substituted for and supersede in
their entirety, but do not extinguish the indebtedness arising under the
promissory notes issued pursuant to the Prior Loan Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby amend and restate the Prior Loan Agreement as follows:
- 2 -
<PAGE>
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement:
"2000 SENIOR PREFERRED STOCK" shall mean those 25,000 shares of 11 3/8%
Senior Exchangeable Preferred Stock of the Borrower, together with any
additional Senior Preferred Stock issued as payment in kind dividends thereon.
"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 Lenders 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 Lenders 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.
"AGENTS" shall mean, collectively, the Administrative Agent, the Lead
Arranger, the Co-Syndication Agents and the Documentation Agent.
"AGREEMENT" shall mean this Second Amended and Restated Loan Agreement, as
amended, supplemented, restated or otherwise modified from time to time.
"AGREEMENT DATE" shall mean April 3, 2000.
"ANNUALIZED OPERATING CASH FLOW" shall mean, as of any date, the Operating
Cash Flow for the immediately preceding two (2) fiscal quarters multiplied by
two (2); PROVIDED THAT, for all
- 3 -
<PAGE>
calculations of Annualized Operating Cash Flow (a) from and including the
Agreement Date through the date on which the Borrower files its Form 10-Q for
the quarter ended March 31, 2000 (the "10-Q DATE"), Annualized Operating Cash
Flow shall be Operating Cash Flow for the quarters ended September 30, 1999 and
December 31, 1999 (after giving pro forma effect to the Triton Acquisition)
multiplied by two (2), (b) from the 10-Q Date through June 29, 2000, Annualized
Operating Cash Flow shall be Operating Cash Flow for the four (4) quarters ended
March 31, 2000 (after giving effect to the Triton Acquisition) and (c) from and
including June 30, 2000 through September 29, 2000, Annualized Operating Cash
Flow shall be Operating Cash Flow for the quarter ended June 30, 2000,
multiplied by four (4).
"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.
"APPLICABLE MARGIN" shall mean the interest rate margin applicable to Base
Rate Advances and LIBOR Advances under the applicable Loans, as the case may be,
in each case determined in accordance with Section 2.3(f) hereof (or, with
respect to Incremental Facility Advances, as set forth in the Notice of
Incremental Facility Commitment).
"APPROVED FUND" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"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.
"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" and (b) the sum of (i)
the Federal Funds Rate and (ii) 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 Converted to 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 with
respect to the applicable Loans. 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 adjusted to
reflect changes in the Applicable Margin applicable to Base Rate Advances.
- 4 -
<PAGE>
"BORROWER" shall mean Rural Cellular Corporation, a Minnesota corporation.
"BORROWER'S PLEDGE AGREEMENT" shall mean that certain Second Amended and
Restated 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, for itself and on behalf of the Lenders, 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.
"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, New York, New York and London, England, as relevant to the
determination to be made or the action to be taken.
"CAPITAL EXPENDITURES" shall mean for any period, expenditures (including,
without limitation, the aggregate amount of Capitalized Lease Obligations
required to be paid during such period) incurred by any Person to acquire or
construct fixed assets, plant and equipment (including, without limitation,
renewals, improvements and replacements, but excluding repairs and maintenance)
during such period, that would be required to be capitalized on the balance
sheet of such Person in accordance with GAAP on a consolidated basis for the
Borrower and its Subsidiaries; PROVIDED, THAT for all calculations hereunder
which include periods prior to the Agreement Date, Capital Expenditures
hereunder shall include Capital Expenditures by Triton with respect to the
assets acquired from Triton during such period.
"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.
"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 (or 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.
"CLASS M STOCK" shall mean those 110,000 shares of Convertible Voting
Preferred Stock of the Borrower issued on the Agreement Date in connection with
the Triton Acquisition.
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"CLASS T STOCK" shall mean those (a) 2,176,875 Class A shares and (b)
5,363,214 Class B shares, in each case of Preferred Stock of the Borrower issued
on April 3, 2000 to Telephone & Data Systems, Inc. in exchange for certain of
their Class A and Class B Common Stock of the Borrower issued, together with any
additional stock of this class issued as payment in kind dividends thereon.
"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.
"COMMITMENTS" shall mean, collectively, the Revolving Loan Commitments,
the Term Loan A Commitments, the Term Loan B Commitments, the Term Loan C
Commitments and, as applicable, the Incremental Facility Commitments; and
"COMMITMENT" shall mean any of the foregoing Commitments.
"COMMITMENT RATIOS" shall mean the percentages in which the Lenders are
severally bound to fund their respective portion of Advances to the Borrower
under the Commitments set forth on Schedule 7, attached hereto, (together with
dollar amounts) as of the Agreement Date (and which may change from time to time
in accordance with Sections 2.15 and 11.5 hereof).
"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.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall mean the continuation
pursuant to Article 2 hereof of a LIBOR Advance as a LIBOR Advance from one
Interest Period to a different Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall mean a conversion pursuant
to Article 2 hereof of a LIBOR Advance into a Base Rate Advance or of a Base
Rate Advance into a LIBOR Advance, as applicable.
"COOPERATIVE LENDER" shall mean CoBank, ACB.
"CO-SYNDICATION AGENTS" shall mean First Union National Bank and PNC Bank,
National Association.
"DEBT SERVICE" shall mean, with respect to the Borrower and its
Subsidiaries, for any period, the sum of (a) Scheduled Loan Payments with
respect to the Revolving Loans during such period; (b) scheduled payments of
principal on all Indebtedness for Money Borrowed (other than the Revolving
Loans) during such period and (c) Interest Expense during such period.
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"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, as of any date, a simple per annum interest
rate equal to the sum of (a) the Base Rate, (b) the Applicable Margin for Base
Rate Advances (calculated using the highest Applicable Margin for Base Rate
Advances for the applicable Loans as set forth in Section 2.3(f) hereof without
giving effect to the Total Leverage Ratio then in effect), and (c) two percent
(2%).
"DEPOSIT ACCOUNT" shall have the meaning ascribed thereto in Section
2.11(c) hereof.
"DOCUMENTATION AGENT" shall mean Bank of America Securities, LLC.
"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.
"EMPLOYEE PENSION PLAN" shall mean any Plan which is (a) maintained by the
Borrower, any of its Subsidiaries or any of its ERISA Affiliates and (b) 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. ss. 9601 et seq.), or the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. ss. 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), (c), (m) or (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
("REGULATION D"), as the maximum reserve
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requirement applicable with respect to Eurocurrency Liabilities (as that term is
defined in Regulation D), whether or not any Lender 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 (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 in respect
of Indebtedness for Money Borrowed (other than with respect to the Revolving
Loans) paid by the Borrower and its Subsidiaries during such year and (vi)
$1,000,000.
"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 Administrative Agent.
"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 those certain Mortgages in favor of
the Administrative Agent (on behalf of the Lenders) and pertaining to the
Borrower's headquarter's properties located in Alexandria, Minnesota.
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"INCREMENTAL FACILITY ADVANCE" shall mean an Advance made by any Lender
holding an Incremental Facility Commitment pursuant to Section 2.14 hereof.
"INCREMENTAL FACILITY COMMITMENT" shall mean the commitment of any Lender
or Lenders to make advances to the Borrower in accordance with Section 2.14
hereof (the Borrower may obtain Incremental Facility Commitments from more than
one Lender, which commitments shall be several obligations of each such Lender);
and "INCREMENTAL FACILITY COMMITMENTS" shall mean the aggregate of the
Incremental Facility Commitments of each Lender.
"INCREMENTAL FACILITY COMMITMENT RATIOS" shall mean percentages in which
the Lenders holding an Incremental Facility Commitment are severally bound to
fund their respective portions of Advances to the Borrower under the Incremental
Facility Commitments which are set forth in the Notice of Incremental Facility
Commitment.
"INCREMENTAL FACILITY LOANS" shall mean the amounts advanced by the
Lenders holding an Incremental Facility Commitment to the Borrower as
Incremental Facility Loans under the Incremental Facility Commitment, and
evidenced by the Incremental Facility Notes.
"INCREMENTAL FACILITY MATURITY DATE" shall mean that date specified in the
Notice of Incremental Facility Commitment as the maturity date of an Incremental
Facility Advance.
"INCREMENTAL FACILITY NOTES" shall mean those certain Incremental Facility
Notes described in Section 2.14 hereof.
"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,
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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, purchase
money indebtedness and, without duplication, Guaranties of any of the foregoing
but excluding Preferred Stock. 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.
"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 (including, without
limitation, all cash interest paid on any Subordinated Indebtedness) and
dividends paid in cash with respect to the Preferred Stock; PROVIDED, HOWEVER,
that for all calculations of Interest Expense (a) from and including the
Agreement Date through June 29, 2000 shall be calculated with respect to the
Loans assuming that the Loans advanced on the Agreement Date were outstanding
for the relevant period at the interest rates in effect for such Loans (and
giving effect to Advances made subsequent to the Agreement Date, if applicable),
(b) from and including June 30, 2000 through September 29, 2000, shall be
Interest Expense for the quarter ended June 30, 2000, multiplied by four (4),
(c) from and including September 30, 2000, through December 30, 2000, shall be
Interest Expense for the two quarter period ended September 30, 2000 multiplied
by two (2), and (d) from and including December 31, 2000 through March 30, 2001,
shall be Interest Expense for the three (3) quarters ending December 31, 2000
multiplied by 4/3.
"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,
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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 Revolving Loan Maturity Date, Term Loan
A Maturity Date, Term Loan B Maturity Date, Term Loan C Maturity Date or
Incremental Facility Maturity Date, as applicable or such earlier date as would
interfere with the Borrower's repayment obligations under Section 2.4, 2.6 or
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.
"JUNIOR PREFERRED STOCK" shall mean those 140,000 shares of 12 1/4% Junior
Exchangeable Preferred Stock of the Borrower issued February 11, 2000, together
with any additional Junior Preferred Stock issued as payment in kind dividends
thereon.
"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).
"LEAD ARRANGER" shall mean TD Securities (USA) Inc.
"LENDERS" shall mean the Persons whose names appear as "Lenders" on the
signature pages hereof and any other Person which becomes a "Lender" hereunder
after the Agreement Date; and "Lender" shall mean any one of the foregoing
Lenders; and for the purposes of the Security Documents, "Lenders" shall include
other holders of Obligations hereunder.
"LIBOR" shall mean, for any Interest Period, the average (rounded upward
to the nearest one-hundredth (1/100th) of one percent (1%)) 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, England time), two (2)
Business Days before the first day of such Interest Period, in an amount
approximately equal
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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, Converted to or Continued 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 $1,000,000 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 (1) MINUS the Eurodollar
Reserve Percentage, if any, stated as a decimal, PLUS (b) the Applicable Margin
for LIBOR Advances for the applicable Loans. 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.
"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 Security
Documents, all fee letters, all Requests for Advance, all Interest Hedge
Agreements between the Borrower, on the one hand, and the Administrative Agent
or any of the Lenders (or any of their Affiliates) on the date such Interest
Hedge Agreement was entered into, or any of them, on the other hand, all Notices
of Incremental Facility Commitments, and all other certificates, documents,
instruments and agreements executed or delivered in connection with or
contemplated by this Agreement or any other Loan Document.
"LOANS" shall mean, collectively, the Term Loans, the Revolving Loans,
and, if applicable, the Incremental Facility Loans; and "LOAN" shall mean any
one of the foregoing Loans.
"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
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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 Lenders in and to
the Loans or the rights of the Administrative Agent and the Lenders 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.
"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 of
its ERISA Affiliates 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 limitation, 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, or insurance or condemnation proceedings with
respect to the assets of the Borrower or any of its Subsidiaries, the aggregate
amount of cash received for such assets (including, without limitation, any
payments received by the Borrower or any of its Subsidiaries 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 (assuming
application, to the extent permitted by Applicable Law, first to such reserves)
of any available losses, credits or other offsets), (ii) reasonable and
customary transaction costs properly attributable to such transaction or
proceeding and payable by the Borrower or any of its Subsidiaries (other than to
an Affiliate) in connection with such transaction or proceeding, including,
without limitation, commissions, and (iii) until actually received by the
Borrower or any of its Subsidiaries, any portion of the amount (x) received held
in escrow or (y) evidenced by a promissory note or other evidence of
Indebtedness issued by a purchaser or non-compete agreement or covenant or (z)
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."
"NON-U.S. BANK" shall have the meaning ascribed thereto in Section 2.8(a)
hereof.
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"NOTES" shall mean, collectively, the Term Loan Notes, the Revolving Loan
Notes, if applicable, the Incremental Facility Notes, and any other promissory
note issued by the Borrower to evidence the Term Loans or Revolving Loans
pursuant to this Agreement, and any extensions, renewals, or amendments to, or
replacements of, the foregoing; and "NOTE" shall mean any one of the foregoing
Notes.
"NOTICE OF INCREMENTAL FACILITY COMMITMENT" shall mean the notice by the
Borrower of the Incremental Facility Commitment, which notice shall be
substantially in the form of EXHIBIT C attached hereto and shall be delivered to
the Administrative Agent and the Lenders.
"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 Lenders, the Administrative Agent, or any of them, under this
Agreement and the other Loan Documents (including, without limitation, 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 Lenders 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, without limitation, 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 (which shall
include non-cash interest expense, if any), minus (c) the sum of (i) non-cash
credits to Net Income and (ii) 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, TIMES
(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 Required
Lenders 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 and shall exclude any dispositions of assets
during the same period.
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"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.
"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(g) and (i) hereof;
(h) Liens reflected by Uniform Commercial Code financing statements
filed in respect of Capitalized Lease Obligations permitted pursuant to Section
7.1(i) hereof and true leases of the Borrower or any of its Subsidiaries; and
(i) Liens set forth on SCHEDULE 2 attached hereto.
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"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.
"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.
"PREFERRED STOCK" shall mean the Previous Senior Preferred Stock, the 2000
Senior Preferred Stock, the Junior Preferred Stock, the Class M Stock and the
Class T Stock.
"PREVIOUS SENIOR PREFERRED STOCK" shall mean those 125,000 shares of 11
3/8% Senior Exchangeable Preferred Stock of the Borrower, issued on May 14,
1998, together with additional 11 3/8% Senior Exchangeable Preferred Stock of
the Borrower issued as payment in kind dividends thereon.
"PRO FORMA DEBT SERVICE" shall mean, with respect to the Borrower and its
Subsidiaries, for any period, the sum of (a) Pro Forma Scheduled Principal
Payments with respect to the Revolving Loans during such period, (b) scheduled
payments of principal with respect to the Term Loans during such period, and (c)
scheduled payments on all other Indebtedness for Money Borrowed during such
period.
"PRO FORMA SCHEDULED PRINCIPAL PAYMENTS" shall mean for any period (a) the
outstanding principal amount of the Revolving Loans on the date of determination
minus (b) the Revolving Loan Commitment scheduled to be available on the last
day of such period after giving effect to the reductions set forth in Section
2.5(a) hereof.
"REFINANCING DATE" shall mean that date six months prior to the May 2008
maturity date of the Subordinated Notes.
"REGISTER" shall have the meaning ascribed to such term in Section 11.5(g)
hereof.
"REGISTERED NOTEHOLDER" shall mean each Non-U.S. Bank that requests or
holds a Registered Note pursuant to Section 2.8(a) hereof or registers its Loans
pursuant to Section 11.5(g) hereof.
"REGISTERED NOTES" shall mean, collectively, those certain Notes that have
been issued in registered form in accordance with Sections 2.8(a) and 11.5(g)
hereof and each of which bears the following legend: "This is a Registered Note,
and this Registered Note and the Loans evidenced hereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer on the Register and in compliance with all other
requirements provided for in the Loan Agreement."
"REGULATIONS" shall have the meaning ascribed thereto in Section 4.1(n)
hereof.
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"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, (iii) the Applicable Margin, and (iv)
designate the amount of the Revolving Loan Commitments and, if applicable, the
Term Loan A Commitments, Term Loan B Commitments, Term Loan C Commitments and
the Incremental Facility Commitments, being drawn.
"REQUIRED LENDERS" shall mean collectively, (a) if there are no Loans
outstanding, Lenders the total of whose Commitment Ratios equals or exceeds
fifty-one percent (51%) of the Commitment Ratios of all Lenders entitled to vote
hereunder or (b) if there are any Loans outstanding, Lenders the total of whose
Commitment Ratios for Revolving Loans (and Incremental Facility Commitment
Ratios as applicable) and Term Loans A Loans, Term Loan B Loans and Term Loan C
Loans outstanding equals or exceeds fifty-one percent (51%) of the Commitment
Ratios for Revolving Loans (and Incremental Facility Commitment Ratios as
Applicable) and Term Loan A Loans, Term Loan B Loans, and Term Loan C Loans of
all Lenders entitled to vote hereunder.
"RESTRICTED PAYMENT" shall mean any direct or indirect cash distribution,
dividend, cash interest payment or other payment to any Person (other than to
the Borrower or any majority-owned Subsidiary of the Borrower) on account of (a)
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 and (b)
Subordinated Indebtedness.
"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.
"REVOLVING LOAN COMMITMENTS" shall mean the several obligations of the
Lenders to advance to the Borrower an aggregate amount of up to $275,000,000 at
any one time
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outstanding, in accordance with their respective Commitment Ratios for Revolving
Loans as set forth in the definition of "Commitment Ratios" pursuant to the
terms hereof, and as such obligations may be reduced from time to time pursuant
to the terms hereof.
"REVOLVING LOAN MATURITY DATE" shall mean April 3, 2008, or as the case
may be, such earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitments to zero or otherwise); PROVIDED,
HOWEVER, that if the Subordinated Notes are not repaid or refinanced prior to
the Refinancing Date, the Revolving Loan Maturity Date shall accelerate to that
Refinancing Date.
"REVOLVING LOAN NOTES" shall mean, collectively, those certain revolving
promissory notes in the aggregate original principal amount of the Revolving
Loan Commitment and one issued by the Borrower to each of the Lenders holding a
Revolving Loan Commitments, each substantially in the form of EXHIBIT E attached
hereto, and any extensions, modifications, renewals or replacements of, or
amendments to, any of the foregoing.
"REVOLVING LOANS" shall mean the amounts advanced by each Lender having a
Revolving Loan Commitment to the Borrower as Revolving Loans, and evidenced by
the Revolving Loan Notes.
"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, with respect to the
Revolving Loans, the excess, if any, of (i) the highest amount of the Revolving
Loans outstanding at any time during such period, over (ii) the amount of the
Revolving Loan Commitment on the last day of such period (after giving effect to
any reduction in the Revolving Loan Commitment on such date pursuant to Section
2.5 hereof).
"SECURITY AGREEMENT" shall mean that certain Second Amended and Restated
Security Agreement dated as of the Agreement Date by and between the Borrower
and the Administrative Agent, for itself and on behalf of the Lenders,
substantially in the form of EXHIBIT F attached hereto.
"SECURITY DOCUMENTS" shall mean the Borrower's Pledge Agreement, the
Security Agreement, each Subsidiary Guaranty, each Subsidiary Pledge Agreement,
each Subsidiary Security Agreement, the Headquarter's Mortgage, 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 Lenders, 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 Lenders, created
hereunder or under any of the Security Documents to secure the Obligations.
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"SUBORDINATED INDEBTEDNESS" shall mean Indebtedness for Money Borrowed of
the Borrower which is subordinated to the Obligations on terms and conditions
acceptable to the Required Lenders and shall include, without limitation, the
Subordinated Notes.
"SUBORDINATED NOTES" shall mean those $125,000,000 (9 5/8%) Senior
Subordinated Notes due 2008 of the Borrower.
"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 Second Amended and Restated
Master Subsidiary Guaranty dated as of the Agreement Date in substantially the
form of EXHIBIT G attached hereto in favor of the Administrative Agent and the
Lenders, 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 Second Amended and
Restated Master Subsidiary Pledge Agreement dated as of the Agreement Date in
substantially the form of EXHIBIT F attached hereto by and between each
Subsidiary of the Borrower having one or more of its own Subsidiaries, on the
one hand, and the Administrative Agent, for itself and on behalf of the Lenders,
on the other hand, and shall include any similar agreements executed pursuant to
Section 5.14 hereof.
"SUBSIDIARY SECURITY AGREEMENT" shall mean that certain Second Amended and
Restated Master Subsidiary Security Agreement dated as of the Agreement Date in
substantially the form of EXHIBIT G attached hereto by and between each of the
Borrower's Subsidiaries, on the one hand, and the Administrative Agent, for
itself and on behalf of the Lenders, on the other hand, and shall include any
similar agreements executed pursuant to Section 5.14 hereof.
"TERM LOAN A COMMITMENTS" shall mean the several obligations of the
Lenders having a Term Loan A Commitment to advance to the Borrower an aggregate
amount of up to $450,000,000 at any one time outstanding, in accordance with
their respective Commitment Ratios for Term Loan A Loans, and as such
obligations may be reduced from time to time in each case, pursuant to the terms
hereof; and "TERM LOAN A COMMITMENT" shall mean the individual commitment of
each such Lender to advance Term Loan A Loans hereunder.
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"TERM LOAN A LOANS" shall mean the amounts advanced by the Lenders holding
a Term Loan A Commitment to the Borrower as Term Loan A Loans and evidenced by
the Term Loan A Notes.
"TERM LOAN A MATURITY DATE" shall mean April 3, 2008, or as the case may
be, such earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitments to zero or otherwise); PROVIDED,
HOWEVER, that if the Subordinated Notes are not repaid or refinanced prior to
the Refinancing Date, the Term Loan A Maturity Date shall accelerate to that
Refinancing Date.
"TERM LOAN A NOTES" shall mean, collectively, those certain term
promissory notes in the aggregate original principal amount of the Term Loan A
Commitments, and one issued by the Borrower to each of the Lenders having a Term
Loan A Commitment, each substantially in the form of EXHIBIT J attached hereto,
and any extensions, modifications, renewals or replacements of, or amendments
to, any of the foregoing.
"TERM LOAN B COMMITMENTS" shall mean the several obligations of the
Lenders having a Term Loan B Commitment to advance to the Borrower an aggregate
amount of up to $237,500,000 at any time outstanding, in accordance with their
respective Commitment Ratios for Term Loan B Loans pursuant to the terms hereof,
and as such obligations may be reduced from time to time pursuant to the terms
hereof; and "TERM LOAN B COMMITMENT" shall mean the individual commitment of
each such Lender to advance Term Loan B Loans hereunder.
"TERM LOAN B LOANS" shall mean the amounts advanced by the Lenders holding
a Term Loan B Commitment to the Borrower as Term Loan B Loans and evidenced by
the Term Loan B Notes.
"TERM LOAN B MATURITY DATE" shall mean October 3, 2008, or as the case may
be, such earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitments to zero or otherwise).
"TERM LOAN B NOTES" shall mean, collectively, those certain term
promissory notes in the aggregate original principal amount of Term Loan B
Commitment, and one issued by the Borrower to each of the Lenders having a Term
Loan B Commitment, each substantially in the form of EXHIBIT K attached hereto,
and any extensions, modifications, renewals or replacements of, or amendments
to, any of the foregoing.
"TERM LOAN C COMMITMENTS" shall mean the several obligations of the
Lenders having a Term Loan Commitment to advance to the Borrower an aggregate
amount of up to $237,500,000 at any one time outstanding, in accordance with
their respective Commitment Ratios for Term Loan C Loans pursuant to the terms
hereof; and as such obligations may be reduced from time to time pursuant to the
terms hereof; and "TERM LOAN C COMMITMENT" shall mean the individual commitment
of each such Lender to advance Term Loan C Loans hereunder.
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"TERM LOAN C LOANS" shall mean the amounts advanced by the Lenders holding
a Term Loan C Commitment to the Borrower as Term Loan C Loans and evidenced by
the Term Loan C Notes.
"TERM LOAN C MATURITY DATE" shall mean April 3, 2009, or as the case may
be, such earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitments to zero or otherwise).
"TERM LOAN C NOTES" shall mean, collectively, those certain term
promissory notes in the aggregate original principal amount of the Term Loan C
Commitments, and one issued by the Borrower to each of the Lenders having a Term
Loan C Commitment, each substantially in the form of EXHIBIT L attached hereto,
and any extensions, modifications, renewals or replacements of, or amendments
to, any of the foregoing.
"TERM LOAN NOTES" shall mean, collectively, the Term Loan A Notes, the
Term Loan B Notes and the Term Loan C Notes.
"TERM LOANS" shall mean, collectively, Term Loan A Loans, Term Loan B
Loans and Term Loan C Loans.
"TOTAL DEBT" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis as of any date, the sum of (without duplication) (i) the
outstanding principal amount of the Loans, (ii) the aggregate amount of
Capitalized Lease Obligations and Indebtedness for Money Borrowed of such
Persons, and (iii) the aggregate amount of all Guarantees of Indebtedness for
Money Borrowed by such Persons.
"TOTAL LEVERAGE RATIO" shall mean, as of any date, the ratio of (a) the
Total Debt (for purposes hereof, Total Debt shall not include the principal
amount of any Indebtedness for Money Borrowed equal to the amount of any cash
balance maintained by the Borrower in a segregated deposit account or escrow
account which is designated solely for repayments of such Indebtedness for Money
Borrowed) 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 as of 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.
"TRITON ACQUISITION" shall mean the Acquisition by the Borrower of
substantially all of the assets of Triton Cellular Partners, L.P.
"TRITON ASSET PURCHASE AGREEMENT" shall mean that certain Asset Purchase
Agreement dated as of November 6, 1999 among Triton Communications L.L.C., the
Other Triton Parties and the Borrower.
"TRITON KANSAS PROPERTIES" shall mean all assets acquired in Kansas RSA's
1, 2, 6, 7, 11, 12 and 13.
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"UNREINVESTED NET PROCEEDS" shall mean the aggregate Net Proceeds from the
sale, transfer or other disposition of an asset in the ordinary course for the
Borrower or any of its Subsidiaries with respect to which (a) the Borrower has
notified the Administrative Agent in writing that the Borrower intends to use
any or all of such Net Proceeds to acquire or purchase an asset as a substitute
or replacement of the asset disposed of within twelve (12) months of the date of
the sale or disposition of the assets (so long as the Borrower is in compliance
with all terms and conditions of this Agreement) and (b) the Borrower uses or
irrevocably commits to be used within such twelve (12) month period; PROVIDED,
HOWEVER, that once applied to reduce the Commitments or repay Loans hereunder,
such Unreinvested Net Proceeds shall cease to be Unreinvested Net Proceeds.
"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.
(a) REVOLVING LOAN COMMITMENT. The Lenders having Revolving Loan
Commitments agree, severally, in accordance with their respective Commitment
Ratios for Revolving Loans, and not jointly, upon the terms and subject to the
conditions of this Agreement, to lend and relend to the Borrower from time to
time, amounts which do not exceed, in the aggregate, at any one time outstanding
the amount of the Revolving Loan Commitment as in effect from time to time.
Subject to the terms and conditions hereof, Advances under the Revolving Loan
Commitment may be repaid and reborrowed from time to time on a revolving basis.
(b) TERM LOAN A LOANS. The Lenders having Term Loan A Commitments
agree severally, and not jointly, upon the terms and subject to the conditions
of this Agreement to lend to the Borrower, on the Agreement Date, amounts which
do not exceed, (i) in the aggregate at any one time outstanding, the Term Loan A
Commitments and, (ii) individually, such Lender's Term Loan A Commitment, in
each case, as in effect from time to time; PROVIDED, HOWEVER that amounts repaid
under the Term Loan A Commitments may not be reborrowed.
(c) TERM LOAN B LOANS. The Lenders having Term Loan B Commitments
agree severally, and not jointly, upon the terms and subject to the conditions
of this Agreement to lend to the Borrower on the Agreement Date amounts which do
not exceed, (i) in the aggregate at any one time outstanding, the Term Loan B
Commitments and, (ii) individually, such Lender's Term Loan B Commitment;
PROVIDED, HOWEVER, that amounts repaid under the Term Loan B Commitments may not
be reborrowed.
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(d) TERM LOAN C LOANS. The Lenders having Term Loan C Commitments
agree severally, and not jointly, upon the terms and subject to the conditions
of this Agreement to lend to the Borrower on the Agreement Date amounts which do
not exceed, (i) in the aggregate at any one time outstanding, the Term Loan C
Commitments and, (ii) individually, such Lender's Term Loan C Commitment;
PROVIDED, HOWEVER, that amounts repaid under the Term Loan C Commitments may not
be reborrowed.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) CHOICE OF INTEREST RATE, ETC. Any Advance 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 or Continue
a LIBOR Advance or to Convert a Base Rate Advance to 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, New York time) in order for such Business Day to count toward the minimum
number of Business Days required.
(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.
(ii) CONVERSIONS. The Borrower may, without regard to the
applicable Payment Date and upon at least three (3) Business Days'
irrevocable prior telephonic notice followed by a Request for Advance,
Convert all or a portion of the principal of a Base Rate Advance to a
LIBOR Advance. On the date indicated by the Borrower, such Base Rate
Advance shall be so Converted. 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.
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(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.
(ii) CONVERSIONS AND CONTINUATIONS. At least three (3)
Business Days prior to the Payment Date for each LIBOR Advance, the
Borrower shall give the Administrative Agent telephonic notice followed by
written notice specifying whether all or a portion of such LIBOR Advance
(A) is to be Continued in whole or in part as one or more LIBOR Advances,
(B) is to be Converted in whole or in part to a Base Rate Advance, or (C)
is to be repaid. The failure to give such notice shall preclude the
Borrower from Continuing such Advance as a LIBOR Advance on its Payment
Date and shall be considered a request to Convert such Advance to a Base
Rate Advance. Upon such Payment Date such LIBOR Advance will, subject to
the provisions hereof, be so Continued, Converted or repaid, as
applicable.
(d) NOTIFICATION OF LENDERS. Upon receipt of a Request for Advance,
or a notice from the Borrower with respect to any outstanding Advance (including
a notice of Conversion or Continuation) 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 Lender (or, in the case of an
Advance under the Incremental Facility Commitment, each Lender having an
Incremental Facility Commitment) by telephone or telecopy of the contents
thereof and the amount of such Lender's portion of the Advance. Each Lender (or,
in the case of an Advance under the Incremental Facility Commitment, each Lender
having an Incremental Facility Commitment) shall, not later than 1:00 p.m. (New
York, 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, 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 Lenders 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.
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(ii) Unless the Administrative Agent shall have received
notice from a Lender prior to 12:00 noon (New York, New York time) on the
date of any Advance that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Advance, the
Administrative Agent may assume that such Lender 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 Lender does not make such
ratable portion available to the Administrative Agent, such Lender 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 Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such
Lender's portion of the applicable Advance for purposes of this Agreement.
If such Lender 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 interest at the
Federal Funds Rate. The failure of any Lender to fund its portion of any
Advance shall not relieve any other Lender of its obligation, if any,
hereunder to fund its respective portion of the Advance on the date of
such borrowing, but no Lender shall be responsible for any such failure of
any other Lender.
(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 Lender 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 Lender has funded its
portion of such Advance (which late funding shall not absolve such Lender
from any liability it may have to the Borrower), or all other Lenders 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 Lender 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 Lender's portion of the
Loans shall not be counted as outstanding for purposes of determining
"Required Lenders" hereunder, and (B) to receive payments of principal,
interest or fees from the Borrower, the Administrative Agent or the other
Lenders 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 (or, to the extent based on
the Federal Funds Rate, 360 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 Revolving Loan Maturity Date,
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Term Loan A Maturity Date, Term Loan B Maturity Date, Term Loan C Maturity Date
and Incremental Facility Maturity Date, as applicable.
(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 Revolving Loan Maturity Date, Term Loan A Maturity Date,
Term Loan B Maturity Date, Term Loan C Maturity Date and Incremental Facility
Maturity Date, as applicable.
(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 Default Rate. Such interest shall be payable on demand by
the Required Lenders and shall accrue until the earlier of (i) waiver or cure of
the applicable Event of Default, (ii) agreement by the Required Lenders (or, if
applicable to the underlying Event of Default, the Lenders) 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 eight (8). For
the purposes of this Section 2.3(e), all outstanding Base Rate Advances shall be
deemed to be a single Base Rate Advance.
(f) APPLICABLE MARGIN.
(i) REVOLVING LOANS AND TERM LOAN A LOANS. With respect to any
Advance under the Revolving Loan Commitments or the Term Loan A
Commitments, 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 Total Leverage Ratio for the most
recent fiscal quarter end for which financial statements are furnished by
the Borrower to the Administrative Agent and each Lender as follows:
- 26 -
<PAGE>
<TABLE>
<CAPTION>
BASE RATE ADVANCE LIBOR ADVANCE
TOTAL LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE MARGIN
-------------------- ----------------- -----------------
<S> <C> <C>
A. Greater than 7.50:1.00 1.750% 2.750%
B. Greater than 7.00:1.00, but 1.625% 2.625%
less than or equal to
7.50:1.00
C. Greater than 6.50:1.00, but 1.500% 2.500%
less than or equal to
7.00:1.00
D. Greater than 6.00:1.00, but 1.250% 2.250%
less than or equal to
6.50:1.00
E. Greater than 5.00:1.00, but 1.000% 2.000%
less than or equal to
6.00:1.00
F. Greater than 4.00:1.00, but 0.750% 1.750%
less than or equal to
5.00:1.00
G. Less than or equal to 0.500% 1.500%
4.00:1.00
</TABLE>
(ii) TERM LOAN B LOANS. With respect to any Advance under the
Term Loan B Commitments, 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 Total Leverage Ratio for the most
recent fiscal quarter end for which financial statements are furnished by
the Borrower to the Administrative Agent and each Lender as follows:
<TABLE>
<CAPTION>
BASE RATE ADVANCE LIBOR ADVANCE
TOTAL LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE MARGIN
-------------------- ----------------- -----------------
<S> <C> <C>
A. Greater than 7.00:1.00 2.000% 3.000%
B. Less than or equal to 1.750% 2.750%
7.00:1.00
</TABLE>
(iii) TERM LOAN C LOANS. With respect to any Advance under the
Term Loan C Commitments, 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 Total Leverage Ratio for the most
recent fiscal quarter end for which financial statements are furnished by
the Borrower to the Administrative Agent and each Lender as follows:
<TABLE>
<CAPTION>
BASE RATE ADVANCE LIBOR ADVANCE
TOTAL LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE MARGIN
-------------------- ----------------- -----------------
<S> <C> <C>
A. Greater than 7.00:1.00 2.250% 3.250%
B. Less than or equal to 2.000% 3.000%
7.00:1.00
</TABLE>
- 27 -
<PAGE>
(iv) The Applicable Margin on the Agreement Date shall be
based on the Annualized Operating Cash Flow on the Agreement Date (with
appropriate adjustment for any Acquisitions or dispositions as provided in
the definition of "Operating Cash Flow") for the Borrower and the Total
Debt as of the Agreement Date.
(v) Subject to the last sentence hereof, with respect to
Section 2.3(f)(i), (ii) and (iii), changes to the Applicable Margin shall
be effective as of the second (2nd) Business Day after the day on which
the financial statements are delivered to the Administrative Agent and the
Lenders pursuant to Section 6.1 or 6.2 hereof, as the case may be. Upon
the occurrence and during the continuance 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, (A) with
respect to Section 2.3(f)(i), part A of the table in Section 2.3(f)(i)
above, (B) with respect to Section 2.3(f)(ii), part (A) of Section
2.3(f)(ii) above and (C) with respect to Section 2.3(f)(iii), part A of
Section 2.3(f)(iii) above, in each case, until such time as such Event of
Default is cured or waived.
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 Lenders having Revolving Loan Commitments in accordance
with their respective Commitment Ratios for Revolving Loans, a commitment fee on
the aggregate unborrowed balance of the Revolving Loan Commitments for each day
from the Agreement Date until the Revolving Loan Maturity Date, (a) at all times
that the Total Leverage Ratio is greater than 6.50 to 1.00, at a rate of
one-half of one percent (0.500%) per annum and (b) at all times that Total
Leverage Ratio is equal to or less than 6.50 to 1.00, at a rate of three-eighths
of one percent (0.375%) per annum. 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 non-refundable when paid. A final payment of any
commitment fee then payable shall also be due and payable on the Revolving Loan
Maturity Date.
Section 2.5 MANDATORY REVOLVING LOAN COMMITMENT REDUCTIONS.
(a) SCHEDULED REDUCTIONS OF REVOLVING LOAN COMMITMENTS. Commencing
on June 30, 2003, and on the last day of each calendar quarter ending during the
periods set forth below, the Revolving Loan Commitments as of June 29, 2003
shall be automatically and permanently reduced by the percentage amount set
forth below (which reductions are in addition to those set forth in Sections
2.5(b) and (c) and 2.6 hereof):
<TABLE>
<CAPTION>
QUARTERLY PERCENTAGE FOR
REDUCTION OF REVOLVING
LOAN COMMITMENTS AS OF
DATES OF REVOLVING LOAN COMMITMENT REDUCTION JUNE 29, 2003
- -------------------------------------------- -------------
<S> <C>
June 30, 2003, September 30, 2003, December 31, 2003
and March 31, 2004 3.125%
</TABLE>
- 28 -
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY PERCENTAGE FOR
REDUCTION OF REVOLVING
LOAN COMMITMENTS AS OF
DATES OF REVOLVING LOAN COMMITMENT REDUCTION JUNE 29, 2003
- -------------------------------------------- -------------
<S> <C>
June 30, 2004, September 30, 2004, December 31, 2004
and March 31, 2005 4.375%
June 30, 2005, September 30, 2005, December 31, 2005
and March 31, 2006 5.000%
June 30, 2006, September 30, 2006, December 31, 2006
and March 31, 2007 6.250%
June 30, 2007, September 30, 2007, December 31, 2007
and March 31, 2008 6.250%
</TABLE>
(b) REDUCTION FROM EXCESS CASH FLOW. On or prior to March 31, 2004,
and on or prior to each March 31st thereafter during the term of this Agreement,
the Revolving Loan Commitments shall be automatically and permanently reduced by
an amount equal to the repayment of Revolving Loans (and, if applicable, the
Incremental Facility Loans) required under Section 2.7(b)(v) hereof; PROVIDED,
HOWEVER, that if there are no Loans then outstanding or if fifty percent (50%)
of Excess Cash Flow for such period exceeds the Loans then outstanding, the
Revolving Loan Commitments (and, if applicable, the Incremental Facility
Commitments) shall be reduced by an aggregate amount equal to fifty percent
(50%) of Excess Cash Flow for such period, or the excess of fifty percent of the
Excess Cash Flow for such period over the Loans, which reduction shall be in
addition to the reduction set forth in the first part of this Section 2.5(b), as
applicable, regardless of any repayment of the Revolving Loans. Reductions under
this Section 2.5(b) to the Revolving Loan Commitments shall be applied to the
reductions set forth in Section 2.5(a) hereof (and, if applicable, to the
Incremental Facility Commitments shall be applied to the reductions set forth in
the Notice of Incremental Facility Commitments) in inverse order of the
reductions set forth therein.
(c) REDUCTIONS FROM PERMITTED ASSET SALES. At any time after the
aggregate Unreinvested Net Proceeds from all sales, transfers or other
dispositions of assets of the Borrowers and their Subsidiaries, or from any
insurance or condemnation proceeding in respect of such assets, after the
Agreement Date exceeds $15,000,000, the Revolving Loan Commitments and, if
applicable, the Incremental Facility Commitments shall be automatically and
permanently reduced by an amount equal to the repayment of Revolving Loans and,
if applicable, the Incremental Facility Loans required under Section 2.7(b)(vi)
hereof; PROVIDED, HOWEVER, that if there are no Loans then outstanding, or if
the Unreinvested Net Proceeds exceeds the Loans then outstanding, the Revolving
Loan Commitments and, if applicable, the Incremental Facility Commitments shall
be reduced on a pro rata basis by an aggregate amount equal to such Unreinvested
Net Proceeds, or the excess of such Unreinvested Net Proceeds over the Loans
(which reduction shall be in addition to the reduction set forth in the first
part of this Section 2.5(c)), as applicable, regardless of any repayment of the
Revolving Loans (or, if applicable, the Incremental Facility Loans); PROVIDED
FURTHER, HOWEVER, that, prior to the occurrence or continuance of a Default of
Event or Default, there shall be no reduction of the
- 29 -
<PAGE>
Revolving Loan Commitments hereunder with respect to a disposition of assets (i)
the Net Proceeds of which do not exceed (A) $5,000,000 for any single
transaction (or series of related transactions), and (B) $15,000,000 in the
aggregate during the term hereof, (ii) 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 its Subsidiaries for any sale/leaseback or similar
arrangement involving the cellular towers owned by the Borrower or its
Subsidiaries, (iii) to the extent that the Total Leverage Ratio is less than 6.0
to 1.0 (before and after giving effect to the application to such proceeds), and
the after-tax Net Proceeds of which are used to retire in whole or in part the
Junior Preferred Stock or (iv) the Net Proceeds of which were realized from the
sale of the Triton Kansas Properties in excess of 7.00 times EBITDA of such
properties, provided that such sale is consummated within twelve (12) months of
the acquisition of the Triton Kansas Properties. Reductions under this Section
2.5(c) to the Revolving Loan Commitments shall be applied to the reductions set
forth in Section 2.5(a) hereof (and, if applicable, to the Incremental Facility
Commitments shall be applied to the reductions set forth in the Notice of
Incremental Facility Commitments) in inverse order of the reductions set forth
therein.
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 Revolving Loan Maturity Date, Term Loan A Maturity Date, Term Loan B
Maturity Date, Term Loan C Maturity Date and Incremental Facility Maturity Date,
as applicable, 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 Revolving Loan Commitment (or the
Incremental Facility Commitment) on the basis of the respective Revolving Loan
Commitment Ratios (or the Incremental Facility Commitment Ratios) of the Lenders
applicable to the Revolving Loan Commitment (or the Incremental Facility
Commitment); PROVIDED, HOWEVER, that the Borrower shall reimburse the Lenders
and the Administrative Agent, on demand by the applicable Lender or the
Administrative Agent, for any loss or out-of-pocket expense incurred by any
Lender or the Administrative Agent in connection with such prepayment, as set
forth in Section 2.10 hereof; PROVIDED FURTHER, HOWEVER, that Borrower's failure
to confirm any telephonic notice with a written notice, shall not invalidate any
notice so given if acted upon by the Administrative Agent; PROVIDED FURTHER,
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 Revolving Loan
Commitments (or the Incremental Facility Commitments) 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 Lenders the
amount necessary to reduce the principal amount of the Revolving Loans (or
Incremental Facility Loans) then outstanding under the Revolving Loan Commitment
(or the Incremental Facility Commitments) to not more than the amount of the
Revolving Loan Commitment (or the Incremental Facility 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 Revolving Loan Commitment pursuant to this Section
shall be applied pro rata to the then remaining reductions set forth in Section
2.5(a) hereof in inverse order of the reductions set forth therein.
- 30 -
<PAGE>
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, or telephonic notice followed immediately by written notice, to the
Administrative Agent; PROVIDED, HOWEVER, that the Borrower shall reimburse the
Lenders and the Administrative Agent, on demand by the applicable Lender or the
Administrative Agent, for any loss or out-of-pocket expense incurred by any
Lender or the Administrative Agent in connection with such prepayment, as set
forth in Section 2.10 hereof; PROVIDED FURTHER, HOWEVER, that Borrower's failure
to confirm any telephonic notice with a written notice, shall not invalidate any
notice so given if acted upon by the Administrative Agent. Any prepayment
hereunder shall be in amounts of not less than $500,000 and in integral
multiples of $100,000. Amounts prepaid pursuant to this Section 2.7 may be
reborrowed, subject to the terms and conditions hereof. Amounts prepaid shall be
paid 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.
Amounts prepaid pursuant to this Section 2.7(a) shall be applied to Term Loan A
Loans, Term Loan B Loans, Term Loan C Loans or Revolving Loans as the Borrower
may direct; PROVIDED, THAT, if the Borrower shall direct amounts prepaid
pursuant to this Section 2.7(a) to be applied to Term Loan A Loans, Term Loan B
Loans or Term Loan C Loans, such amount shall be applied to the scheduled
payments for such Loans in Section 2.7(b) hereof in inverse order of maturity.
(b) REPAYMENTS.
(i) SCHEDULED REPAYMENTS OF THE TERM LOAN A LOANS. Commencing
June 30, 2003, the principal balance of the Term Loan A Loans outstanding
on June 29, 2003 shall be repaid in consecutive quarterly installments on
the last day of each calendar quarter ending during the periods set forth
below until paid in full in such amounts as follows:
- 31 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF PRINCIPAL OF
TERM LOAN A LOANS OUTSTANDING
ON JUNE 29, 2003 DUE ON LAST
REPAYMENT DATES DAY OF EACH QUARTER
--------------- -------------------
<S> <C>
June 30, 2003, September 30, 2003,
December 31, 2003 and March 31, 2004 3.125%
June 30, 2004, September 30, 2004,
December 31, 2004 and March 31, 2005 4.375%
June 30, 2005, September 30, 2005,
December 31, 2005 and March 31, 2006 5.000%
June 30, 2006, September 30, 2006,
December 31, 2006 and March 31, 2007 6.250%
June 30, 2007, September 30, 2007,
December 31, 2007 and March 31, 2008 6.250%
</TABLE>
(ii) SCHEDULED REPAYMENTS OF TERM LOAN B LOANS. Commencing June 30,
2003, the principal balance of the Term Loan B Loans outstanding on June
29, 2003 shall be repaid in consecutive quarterly installments on the last
day of each calendar quarter ending during the periods set forth below
until paid in full in such amounts as follows:
- 32 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF PRINCIPAL OF
TERM LOAN B LOANS OUTSTANDING
ON JUNE 29, 2003 DUE ON LAST
REPAYMENT DATES DAY OF EACH QUARTER
--------------- -------------------
<S> <C>
June 30, 2003, September 30, 2003,
December 31, 2003 and March 31, 2004 0.250%
June 30, 2004, September 30, 2004,
December 31, 2004 and March 31, 2005 0.250%
June 30, 2005, September 30, 2005,
December 31, 2005 and March 31, 2006 0.250%
June 30, 2006, September 30, 2006,
December 31, 2006 and March 31, 2007 0.250%
June 30, 2007, September 30, 2007,
December 31, 2007 and March 31, 2008 0.250%
June 30, 2008 and September 30, 2008 47.50%
</TABLE>
- 33 -
<PAGE>
(iii) SCHEDULED REPAYMENTS OF TERM LOAN C LOANS. Commencing June 30,
2003, the principal balance of the Term Loan C Loans outstanding on June
29, 2003 shall be repaid in consecutive quarterly installments on the last
day of each calendar quarter ending during the periods set forth below
until paid in full in such amounts as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF PRINCIPAL OF
TERM LOAN C LOANS OUTSTANDING
ON JUNE 29, 2003 DUE ON LAST
REPAYMENT DATES DAY OF EACH QUARTER
--------------- -------------------
<S> <C>
June 30, 2003, September 30, 2003
December 31, 2003 and March 31, 2004 0.250%
June 30, 2004, September 30, 2004
December 31, 2004 and March 31, 2005 0.250%
June 30, 2005, September 30, 2005
December 31, 2005 and March 31, 2006 0.250%
June 30, 2006, September 30, 2006
December 31, 2006 and March 31, 2007 0.250%
June 30, 2007, September 30, 2007
December 31, 2007 and March 30, 2008 0.250%
June 30, 2008, September 30, 2008
December 31, 2008 and March 31, 2009 23.75%
</TABLE>
(iv) LOANS IN EXCESS OF REVOLVING LOAN COMMITMENTS (AND/OR
INCREMENTAL FACILITY COMMITMENTS). If, at any time, the amount of the
Revolving Loans (or the Incremental Facility Loans) then outstanding shall
exceed the Revolving Loan Commitment (or the Incremental Facility
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 Revolving
Loans (or the Incremental Facility Loans) in an amount equal to such
excess, together with any accrued interest and fees with respect thereto.
(v) EXCESS CASH FLOW. On March 31, 2004, and on each March
31st thereafter, the Borrower shall make a repayment of the Loans then
outstanding in an amount equal to fifty percent (50%) of the Borrower's
Excess Cash Flow for the immediately preceding calendar year. Subject to
Section 2.7(b)(xii) hereof, the amount of the Excess Cash Flow required to
be repaid under this Section 2.7(b)(v) shall be applied first to the Term
Loans then outstanding (on a pro rata basis for all Term Loans) in inverse
order of maturity for each Term Loan, second to the Revolving Loans and
then, if applicable, to the Incremental Facility Loans. Accrued interest
on the principal
- 34 -
<PAGE>
amount of the Loans being prepaid pursuant to this Section 2.7(b)(iii) to
the date of such prepayment will be paid by the Borrower concurrently with
such principal prepayment.
(vi) ASSET SALES. On the twelve (12) calendar month
anniversary of the date of any disposition or sale of any assets by the
Borrower or any of its Subsidiaries in accordance with 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 prior to the
occurrence or continuance of a Default of Event or Default, the Borrower
shall not be required to make a repayment hereunder with respect to a sale
of assets (i) in the ordinary course of the Borrower's or its
Subsidiaries' businesses the Net Proceeds of which have been used by the
Borrower or its Subsidiaries to acquire or purchase an asset as a
substitute or replacement of the asset disposed of within twelve (12)
months of the date of such asset disposition so long as the Borrower is in
compliance with all terms and conditions of this Agreement, (ii) the Net
Proceeds of which do not exceed (A) $5,000,000 for any single transaction
(or series of related transactions), and (B) $15,000,000 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 its Subsidiaries for any sale/leaseback
or similar arrangement involving the Borrower's towers, (iv) to the extent
that the Total Leverage Ratio is less than 6.0 to 1.0 (before and after
giving effect to the application of such proceeds), and the after-tax Net
Proceeds of which are used to retire in whole or in part the Junior
Preferred Stock or (v) the Net Proceeds of which were realized from the
sale of the to-be-acquired Triton Kansas Properties in excess of 7.00 to
1.00 EBITDA, provided that such sale is consummated within twelve (12)
months of the acquisition of such properties. Subject to Section
2.7(b)(xii) hereof, the amount of the Net Proceeds required to be repaid
under this Section 2.7(b)(vi) shall be applied to the Term Loans then
outstanding (on a pro rata basis for all Term Loans) in inverse order of
maturity for each Term Loan, second to the Revolving Loans and then, if
applicable, to the Incremental Facility Loans. Accrued interest on the
principal amount of the Loans being prepaid pursuant to this Section
2.7(b)(iv) to the date of such prepayment will be paid by the Borrower
concurrently with such principal prepayment.
(vii) REVOLVING LOAN MATURITY DATE. In addition to the
foregoing, a final payment of all Revolving Loans, together with accrued
interest and fees with respect thereto, shall be due and payable on the
Revolving Loan Maturity Date.
(viii) TERM LOAN A MATURITY DATE. In addition to the
foregoing, a final payment of the Term Loan A Loans, together with accrued
interest and fees with respect thereto, shall be due and payable on the
Term Loan A Maturity Date.
(ix) TERM LOAN B MATURITY DATE. In addition to the foregoing,
a final payment of Term Loan B Loans, together with accrued interest and
fees with respect thereto, shall be due and payable on the Term Loan B
Maturity Date.
(x) TERM LOAN C MATURITY DATE. In addition to the foregoing, a
final payment of Term Loan C Loans, together with accrued interest and
fees with respect
- 35 -
<PAGE>
thereto and all other Obligations then outstanding, other than the
Incremental Facility Loans, if any, shall be due and payable on the Term
Loan C Maturity Date.
(xi) INCREMENTAL FACILITY MATURITY DATE. If applicable, in
addition to the foregoing, a final payment of the Incremental Facility
Loans, together with accrued interest and fees with respect thereto, shall
be due and payable on the Incremental Facility Maturity Date.
(xii) PREPAYMENTS UPON DEFAULT OR EVENT OF DEFAULT. After the
occurrence of and during the continuation of any Default or an Event of
Default, all amounts received from the Borrower under Sections 2.7(b)(v)
and (vi) hereunder shall be applied as set forth in Section 8.3 hereunder.
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 (and, if
applicable, the Incremental Facility Notes). One (1) Term Loan A Note, one (1)
Term Loan B Note, one (1) Term Loan C Note, one (1) Revolving Loan Note and, if
applicable, one (1) Incremental Facility Note shall be payable to the order of
each Lender, in accordance with such Lender's applicable Commitment Ratio for
Term Loan A Loans, Term Loan B Loans, Term Loan C Loans, Revolving Loans and, if
applicable, the Incremental Facility Loans, as the case may be. The Notes shall
be issued by the Borrower to the Lenders and shall be duly executed and
delivered by one or more Authorized Signatories. Any Lender (i) which is not a
U.S. Person (a "NON-U.S. BANK") and (ii) which could become completely exempt
from withholding of United States federal income taxes in respect of payment of
any obligations due to such Lender hereunder relating to any of its Loans if
such Loans were in registered form for United States federal income tax purposes
may request the Borrower (through the Administrative Agent), and the Borrower
agrees thereupon, to register such Loans as provided in Section 11.5(g) hereof
and to issue to such Lender Notes evidencing such Loans as Registered Notes or
to exchange Notes evidencing such Loans for new Registered Notes, as applicable.
Registered Notes may not be exchanged for Notes that are not in registered form.
(b) Each Lender 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 Lender 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
Lender 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 Lender 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.
- 36 -
<PAGE>
Section 2.9 MANNER OF PAYMENT.
(a) Each payment (including, without limitation, 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 Lenders 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, 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 Lenders 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, New York
time) shall be deemed received on the next Business Day. Receipt by the
Administrative Agent of any payment intended for any Lender or Lenders hereunder
prior to 1:00 p.m. (New York, New York time) on any Business Day shall be deemed
to constitute receipt by such Lender or Lenders on such Business Day. In the
case of a payment for the account of a Lender, 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 Lender. If the Administrative Agent shall not have received any payment
from the Borrower as and when due, the Administrative Agent will promptly notify
the Lenders accordingly. In the event that the Administrative Agent shall fail
to make distribution to any Lender as required under this Section 2.9, the
Administrative Agent agrees to pay such Lender 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 or the other Loan Documents
without set-off or counterclaim or any deduction whatsoever, including
withholding taxes, excluding, (i) in the case of each Lender and the
Administrative Agent taxes measured by its net income, and franchise taxes
imposed on it by the jurisdiction under the laws of which it is organized or any
political subdivision thereof, (ii) in the case of each Lender, taxes
(including, but not limited to, the Branch Profits Tax under Section 884 of the
Code) measured by its net income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's applicable lending office or any political
subdivision thereof and (iii) in the case of any Lender organized under the laws
of a jurisdiction outside the United States, United States federal withholding
tax payable with respect to payments by the Borrower which would not have been
imposed had such Lender, to the extent then required thereunder, delivered to
the Borrower and the Administrative Agent the forms prescribed by Section 2.13
hereof.
(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 Lenders: (i) to the payment on a pro rata basis of any
fees or expenses then due and payable to the Administrative Agent, the Lenders,
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
Lenders, 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.
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(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 Lender shall sustain or incur any losses or
reasonable out-of-pocket expenses in connection with (i) failure by the Borrower
to borrow, Convert or Continue any LIBOR Advance after having given notice of
its intention to borrow, Convert or Continue 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 hereof), 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
Lender, upon such Lender's demand, an amount sufficient to compensate such
Lender for all such losses and out-of-pocket expenses. Such Lender'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
Lender or any participant of such Lender 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 Revolving Loan Maturity Date,
Term Loan A Maturity Date, Term Loan B Maturity Date, Term Loan C Maturity Date
and Incremental Facility Maturity Date, as applicable is changed by virtue of an
amendment hereto (unless such amendment expressly waives such payment) or as a
result of acceleration of the Obligations.
Section 2.11 PRO RATA TREATMENT.
(a) ADVANCES. Each Advance under the Revolving Loan Commitments from
the Lenders hereunder shall be made pro rata on the basis of the applicable
Commitment Ratios of the Lenders having a Revolving Loan Commitment. Each
Advance under the Term Loan A Commitment shall be made pro rata on the basis of
the applicable Commitment Ratios of the Lenders having Term Loan A Commitments.
Each Advance under the Term Loan B Commitment shall be made pro rata on the
basis of the applicable Commitment Ratios of the Lenders having Term Loan B
Commitments. Each Advance under the Term Loan C Commitment shall be made pro
rata on the basis of the applicable Commitment Ratios of the Lenders having Term
Loan C Commitments.
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(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 Lenders having interest in the Loans
being paid pro rata on the basis of their respective unpaid principal amounts
outstanding under the Notes (including, if applicable, the Incremental Facility
Notes) immediately prior to such payment or prepayment. If any Lender 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 Lender shall forthwith purchase from
the other Lenders such participations in the portion of the Loans made by them
as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; PROVIDED, HOWEVER, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery. The
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.11(b) may, to the fullest extent permitted by
law, exercise all its rights of payment (including, without limitation, the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
(c) At the election of the Borrower, amounts to be applied, pursuant
to Sections 2.7(b)(iv), (v) or (vi) 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)(iv),(v) or (vi) 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)(iv),(v) or (vi) 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.
(d) COMMITMENT REDUCTIONS. Any reduction of the Revolving Loan
Commitments required or permitted hereunder shall reduce, as applicable, the
Revolving Loan Commitment of each Lender having such a commitment on a pro rata
basis based on the Commitment Ratio of such Lender for such commitment.
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 bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender (or the
bank holding company of such Lender) with any directive regarding capital
adequacy (whether or not having the force of law) of any such governmental
authority, central
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bank or comparable agency, has or would have the effect of reducing the rate of
return on any Lender'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 Lender's policies with respect to capital adequacy
immediately before such adoption, change or compliance and assuming that such
Lender's capital was fully utilized prior to such adoption, change or
compliance) by an amount reasonably deemed by such Lender to be material, then,
if such Lender exercises its capital adequacy protection rights (if any)
generally for borrowers situated similarly to the Borrower and upon demand by
such Lender, the Borrower shall promptly pay to such Lender such additional
amounts as shall be sufficient to compensate such Lender for such reduced
return, together with interest on such amount from the fourth (4th) Business Day
after the date of demand or the Revolving Loan Maturity Date, Term Loan A
Maturity Date, Term Loan B Maturity Date, Term Loan C Maturity Date and
Incremental Facility Maturity Date, as applicable, until payment in full thereof
at the Default Rate. A certificate of such Lender setting forth the amount to be
paid to such Lender 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 LENDER TAX FORMS. On or prior to the Agreement Date or on or
prior to the date such Lender becomes a party hereto pursuant to Section 11.5
hereof, and on or prior to the first Business Day of each calendar year
thereafter, each Lender which is organized in a jurisdiction other than the
United States or state thereof shall provide each of the Administrative Agent
and the Borrower with a properly executed originals of Form 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/or properly
executed Internal Revenue Service Form W-8 or W-9, as the case may be, to the
extent permitted under Applicable Law, certifying (i) as to such Lender's status
for purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such Lender hereunder and under the Notes
or (ii) that all payments to be made to such Lender hereunder and under the
Notes are subject to such taxes at a rate reduced to zero by an applicable tax
treaty. Each such Lender 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.
Section 2.14 INCREMENTAL FACILITY ADVANCES.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may request the Incremental Facility Commitment on any Business Day;
PROVIDED, HOWEVER, that the Borrower may not request the Incremental Facility
Commitment or an Incremental Facility Advance after the occurrence and during
the continuance of a Default, including, without limitation, any Event of
Default that would result after giving effect to any Incremental Facility
Advance; and provided, further, that the Borrower may request only one (1)
Incremental Facility Commitment (although such commitment may be from more than
one Lender). The aggregate amount of the Incremental Facility Commitment and
outstanding Incremental Facility Advances shall not exceed $175,000,000. The
maturity date for the Incremental Facility Advances shall be no earlier than
twelve (12) calendar months after the Revolving Loan Maturity Date, Term Loan
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A Maturity Date, Term Loan B Maturity Date and Term Loan C Maturity Date, as
applicable. The decision of any Lender to make an Incremental Facility
Commitment to the Borrower shall be at such Lender's sole discretion and shall
be made in writing. The Incremental Facility Commitment (x) may be in the form
of a revolving credit facility, (y) must not require principal repayment
earlier, or in amount larger (or percentage greater), than those set forth in,
the repayment schedule for the Term Loans or the Revolving Loans as set forth in
Section 2.7(b) hereof and (z) must be governed by this Agreement and the other
Loan Documents and be on terms and conditions no more restrictive than those set
forth herein and therein. Each Lender shall have the right, but not the
obligation, to participate in any Incremental Facility Commitment on a pro rata
basis.
(b) Prior to the effectiveness of the Incremental Facility
Commitment, the Borrower shall (i) deliver to the Administrative Agent and the
Lenders a Notice of Incremental Facility Commitment in substantially the form of
EXHIBIT C attached hereto; and (ii) provide revised projections to the
Administrative Agent and the Lenders, which shall be in form and substance
reasonably satisfactory to the Administrative Agent and which shall demonstrate
the Borrower's ability to timely repay such Incremental Facility Commitment and
any Incremental Facility Advances thereunder and to comply with the covenants
contained in Sections 7.8, 7.9, 7.10, 7.11 and 7.12 hereof.
(c) No Incremental Facility Commitment shall by itself result in any
reduction of the Commitment or of the Commitment Ratio of the Lender making such
Incremental Facility Commitment.
(d) Incremental Facility Advances (i) shall bear interest at the
Base Rate Basis or the LIBOR Basis; (ii) subject to Section 2.14(a) hereof,
shall be repaid as agreed to by the Borrower and the Lender making such
Incremental Facility Advances; (iii) shall for all purposes be Loans and
Obligations hereunder and under the Loan Documents; (iv) shall be represented by
an Incremental Facility Note in substantially the form of EXHIBIT M attached
hereto; and (v) shall rank pari passu with the other Loans for purposes of
Sections 2.9 and 8.2 hereof.
(e) Incremental Facility Advances shall be requested by the Borrower
pursuant to a request (which shall be in substantially the form of a Request for
Advance) delivered in the same manner as a Request for Advance, but shall be
funded pro rata only by those Lenders holding the Incremental Facility
Commitment.
Section 2.15 REPLACEMENT OF LENDERS. The Borrower shall have the right, if
no Default then exists, to replace any Lender (the "REPLACED Lender") with one
or more other assignees permitted under Section 11.5 hereof reasonably
acceptable to the Administrative Agent (the "REPLACEMENT LENDER") if (x) such
Lender is charging the Borrower increased costs pursuant to Section 10.3 hereof
in excess of those being charged generally by the other Lenders or such Lender
becomes incapable of making LIBOR Advances as provided in Section 10.3 hereof
and/or (y) such Lender fails to fund a properly requested Advance at a time when
there does not exist a Default or Event of Default; PROVIDED, HOWEVER, that (i)
at the time of any replacement pursuant to this Section 2.15, the Replacement
Lender and the Replaced Lender shall enter into one or more assignment
agreements (and with all fees payable pursuant to said Section 11.5
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hereof to be paid by the Replacement Lender) pursuant to which the Replacement
Lender shall acquire all of the Commitments and outstanding Loans of the
Replaced Lender and, in connection therewith, shall pay to (x) the Replaced
Lender, an amount equal to the sum of (A) the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, and (B) all accrued,
but theretofore unpaid, fees, owing to the Replaced Lender pursuant to Section
2.4 hereof, and (ii) all obligations of the Borrower owing to the Replaced
Lender (other than those specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being, paid,
but including any amounts which would be paid to a Lender pursuant to Section
2.7 hereof if Borrower were prepaying a LIBOR Advance) shall be paid in full to
such Replaced Lender concurrently with such replacement. Upon the execution of
the respective assignment agreement, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of Notes executed by Borrower, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder and be released of all its obligations as
a Lender, except with respect to indemnification provisions applicable to the
Replaced Lender under this Agreement, which shall survive as to such Replaced
Lender.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. The
obligation of the Lenders to undertake the Commitments, 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 Lenders 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 N,
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 O
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
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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) duly executed Security Documents;
(v) 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;
(vi) legal opinions of (A) Lukas, Nace, Gutierrez & Sachs
Chartered, FCC counsel to the Borrower and its Subsidiaries, and (B) Moss
& Barnett, special counsel to the Borrower and its Subsidiaries, in
substantially the forms attached hereto as EXHIBIT P and EXHIBIT Q,
respectively, each as counsel to the Borrower and its Subsidiaries,
addressed to each Lender and the Administrative Agent, and dated as of the
Agreement Date;
(vii) duly executed Certificate of Financial Condition in
substantially the form attached hereto as EXHIBIT B for the Borrower and
its Subsidiaries on a consolidated and consolidating basis;
(viii) any required FCC consents or other required consents to
the closing of this Agreement and the Triton 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 Lenders;
(ix) 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 Triton
Acquisition; and
(x) all such other documents as either the Administrative
Agent or any Lender may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if so requested.
(b) The Administrative Agent and the Lenders shall have received
evidence satisfactory to them that all Necessary Authorizations, including,
without limitation, 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,
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threatened reversal or cancellation, and the Administrative Agent and the
Lenders shall have received a certificate of an Authorized Signatory so stating.
(c) The Borrower shall have paid to the Administrative Agent for
itself and for the account of each Lender, as applicable, the fees set forth in
those certain fee letter agreements dated the Agreement Date in favor of the
Administrative Agent and each Lender, as the case may be.
(d) The Administrative Agent and the Lenders shall have received
evidence, in form and substance satisfactory to them, that all conditions
precedent to the closing of the Triton Acquisition have been or will be
satisfied contemporaneously.
(e) The Borrower shall have provided to the Administrative Agent a
duly executed certificate, in form and substance satisfactory to the
Administrative Agent, setting forth the Total Leverage Ratio of the Borrower on
the Agreement Date, which Total Leverage Ratio shall not exceed 8.0 to 1.0 as
calculated on the Agreement Date after giving effect to any Advances made
hereunder on the Agreement Date.
Section 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE. The obligation of the
Lenders 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:
(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
Lenders in accordance with the terms of such representations and warranties, and
no Default hereunder shall then exist or be caused thereby;
(b) 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, 7.10, 7.11
and 7.12 hereof;
(c) Each of the Administrative Agent and the Lenders 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 Lender 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 Lenders 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
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(e) No Materially Adverse Effect shall have occurred and no event
shall have occurred which, in the reasonable opinion of the Required Lenders,
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 Lender that:
(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 3 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
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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
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 of its Subsidiaries, (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 any of its Subsidiaries, 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 and other wireless communications and related
businesses.
(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 4
attached hereto, neither any License nor any Necessary Authorization is the
subject of any pending or, to the best of the Borrower's or any of its
Subsidiaries' knowledge, threatened revocation.
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(g) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries are in
compliance with all Applicable Laws in all material respects, except where the
failure to be in compliance would not, individually or in the aggregate, have a
Materially Adverse Effect.
(h) TITLE TO ASSETS. As of the Agreement Date, the Borrower and its
Subsidiaries have good, legal and marketable title to, or a valid leasehold
interest in, all of 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 5 attached hereto (as such schedule may be updated with the consent
of the Required Lenders 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 its
Subsidiaries 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 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 Lenders as of the Agreement Date,
audited financial statements of the Borrower and audited financial statements of
the Subsidiaries of the Borrower on a consolidated basis for the fiscal year
ended December 31, 1999, and unaudited financial statements of the Borrower and
its Subsidiaries on a consolidated basis for the fiscal
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quarter ended September 30, 1999, 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 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) writeoffs of the
Borrower's unamortized costs in connection with the Prior Loan Agreement and
(ii) those which have been previously disclosed in writing to the Administrative
Agent and the Lenders and identified as such.
(l) NO MATERIAL ADVERSE CHANGE. There has occurred no event
since December 31, 1999 which has or which could reasonably be expected to
have a Materially Adverse Effect.
(m) ERISA. The Borrower and each of its Subsidiaries 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 T, U AND X. Neither the Borrower nor
any of its 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 "margin security" or
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"margin stock" as defined in Regulations T, U, and X (12 C.F.R. Parts 220, 221
and 224) (the "REGULATIONS") 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 the Regulations. Neither the Borrower nor any of its Subsidiaries has
taken, caused or authorized to be taken, and will not take any action which
might cause this Agreement or the Notes to violate any of the Regulations or any
other regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, 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 Form U-1 or
G-3 referred to in Regulation 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
any of the Regulations.
(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, other
than filing of appropriate UCC financing statements.
(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, 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
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respective properties may be bound or affected. The Loans are "Senior
Indebtedness" as defined under the terms of the Subordinated Indebtedness.
(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 Lenders were, at the time
furnished, true, complete and correct in all material respects to the extent
necessary to give the Administrative Agent and the Lenders true and accurate
knowledge of the subject matter, and all projections, consisting of a statement
of operating statistics, an income statement summary, a debt repayment schedule
and pro forma compliance calculations (the "PROJECTIONS") (i) disclose all
assumptions made with respect to costs, general economic conditions, and
financial and market conditions formulating the Projections; (ii) are based on
reasonable estimates and assumptions; and (iii) reflect, as of the date
prepared, and continue to reflect, as of the date hereof, the reasonable
estimate of Borrower of the results of operations and other information
projected therein for the periods covered thereby.
(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 6 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, upon filing of
appropriate UCC financing statements or taking of possession, if applicable,
perfected first priority security interest in the Collateral in favor of the
Administrative Agent, for the benefit of itself and the Lenders, 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).
(v) INDEBTEDNESS. Except as shown on the financial statements of the
Borrower for the fiscal year ended December 31, 1998 and the Subordinated
Indebtedness, neither the Borrower nor any of its Subsidiaries has outstanding,
as of the Agreement Date, and
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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 Lenders and the Administrative Agent, any
investigation or inquiry by any Lender 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 Lenders
have an obligation to fund Advances hereunder (whether or not the conditions to
borrowing have been or can be fulfilled), and unless the Required Lenders, or
such greater number of Lenders 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:
(a) preserve and maintain (i) its existence, and (ii) 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.
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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 each of its
Subsidiaries will maintain a fiscal year ending on December 31st.
Section 5.5 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to:
(a) Maintain insurance, including, without limitation, 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, 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,
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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 will, and will 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 will, and will 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 will 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, 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, other than as described in
subsection (c) above, 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.
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(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;
(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 Lenders, upon
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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 will, and will cause each of its Subsidiaries to, also permit
representatives of the Administrative Agent and any of the Lenders to discuss
with their respective accountants the Borrower's and its 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;
(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 Triton Acquisition in an aggregate amount not to
exceed $1,240,000,000 on substantially the terms and conditions set forth in the
Triton Asset Purchase Agreement and the fees and expenses incurred by the
Borrower in connection with the Triton Acquisition;
(d) to fund Acquisitions as permitted under Section 7.6(e)
hereof;
(e) to make Restricted Payments as permitted under Section 7.7
hereof; and
(f) to refinance the Borrower's existing bank debt.
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 the Regulations.
Section 5.11 REAL ESTATE. Subject to Section 7.14 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
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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 $5,000,000 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 $20,000,000. The Borrower will, and will
cause its Subsidiaries to, deliver to the Administrative Agent all
documentation, including, without limitation, 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 Required Lenders. The Borrower and the Lenders 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 Required Lenders
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 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 Lender and the Administrative Agent, and each of their respective
affiliates, employees, representatives, shareholders, officers, directors,
trustees and advisors (any of the foregoing shall be an "INDEMNITEE") from and
against any and all claims, liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable attorneys', experts',
agents', consultants' fees and expenses (as such fees and expenses are incurred)
and demands by any party, including, without limitation, the costs of
investigating and defending such claims, whether or not the Borrower, any of its
Subsidiaries or the Person seeking indemnification is the prevailing party (a)
resulting from any breach or alleged breach by the Borrower or any of its
Subsidiaries of any representation or warranty made hereunder or under any other
Loan Document; 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 Lenders 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 Lenders or the Administrative Agent,
or any of them, by any shareholder or other investor in or lender to the
Borrower or any Subsidiary of the Borrower, 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
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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 and forty-five (45) days after each Advance, the Borrower shall
enter into (and shall at all times thereafter maintain) one or more Interest
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 International Swap Dealers Association 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 later of the Revolving Loan
Maturity Date, Term Loan A Maturity Date, Term Loan B Maturity Date, Term Loan C
Maturity Date or Incremental Facility 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 Lenders (or any of their Affiliates) 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 up to the
then effective amount of the Commitments; 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 I 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 G
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 O 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 H 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 Revolving Loan Maturity
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Date, Term Loan A Maturity Date, Term Loan B Maturity Date, Term Loan C Maturity
Date and Incremental Facility Maturity Date, as applicable 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 will, and will cause each of
its Subsidiaries to, at all times comply in all material respects with the
requirements of the Fair 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, without limitation,
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 Lenders, or cause to be executed and delivered to the
Administrative Agent and the Lenders, 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 Lenders
have an obligation to fund Advances hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Required Lenders shall
otherwise consent in writing, the Borrower will furnish or cause to be furnished
to each Lender 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 March
31, 2000, 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
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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, the president or the chief operating 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.
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 opinion 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 R:
(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, 7.10, 7.11 and 7.12 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,
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including, without limitation, any management report prepared in connection with
the annual audit referred to in Section 6.2 hereof.
(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 Lender 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 31st of each year, the annual budget for the
Borrower and the Borrower's Subsidiaries, including, without limitation,
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 or any of its Subsidiaries:
(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 or any of
its Subsidiaries, in any other way relating materially adversely to the Borrower
or any of its Subsidiaries, 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 of its Subsidiaries 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 and other changes in the industry
in which either the Borrower or any of its Subsidiaries operate which 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 Lenders by the Borrower;
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<PAGE>
(d) any Default or the occurrence or non-occurrence 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 of its Subsidiaries under any
material agreement other than this Agreement and the other Loan Documents to
which the Borrower or any of its Subsidiaries 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 a detailed description 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)
hereof.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations is outstanding and unpaid or the Lenders
have an obligation to fund Advances hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Required Lenders, or
such greater number of Lenders 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;
(c) Indebtedness secured by Permitted Liens;
(d) obligations under Interest Hedge Agreements with respect to
the Loans;
(e) Indebtedness of the Borrower, or of any of its Subsidiaries to
the Borrower or any other Subsidiary, so long as the corresponding debt
instruments are pledged to the
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Administrative Agent as security for the
Obligations and Indebtedness expressly permitted pursuant to Section 7.5 hereof;
(f) the Incremental Facility;
(g) (i) secured Indebtedness of the Borrower which does not exceed
$10,000,000 in the aggregate at any one time outstanding, and/or (ii) unsecured
Indebtedness of the Borrower which does not exceed $25,000,000 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 $25,000,000 in the aggregate at
any one time outstanding, on terms and conditions reasonably satisfactory to the
Administrative Agent;
(h) Subordinated Indebtedness and Preferred Stock;
(i) Indebtedness which does not exceed $5,000,000 in the aggregate
at any one time outstanding; PROVIDED, HOWEVER, that such 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.
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, without the consent of the Required Lenders,
enter into any amendment of, or agree to or accept or consent to any waiver of
any of the material provisions of, as applicable, (a) its articles or
certificate of incorporation or partnership agreement, (b) its by-laws or
membership agreement, (c) the membership agreement of Wireless Alliance (d) the
Subordinated Notes (or the related indenture) or (e) the Preferred Stock (or the
related indentures).
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 Lenders; PROVIDED,
HOWEVER, that the prior written consent of the Lenders shall not be required for
(i) the transfer of assets (including, without limitation, cash or cash
equivalents) among the Borrower and its Subsidiaries (excluding Wireless
Alliance) or for the transfer of assets (including, without limitation, cash or
cash equivalents, but excluding the Licenses) between or
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among Subsidiaries (excluding Wireless Alliance) of the Borrower, (ii)
dispositions of assets the proceeds of which are applied pursuant to Section
2.5(c) or 2.7(b)(vi) hereof (PROVIDED, HOWEVER, that, with respect to such sales
under Section 2.5(c) or 2.7(b)(vi), the Borrower provides to the Administrative
Agent and the Lenders on the date of such sale a certificate reflecting
compliance with the terms and provisions of Sections 7.8, 7.9, 7.10, 7.11 and
7.12 hereof both before and after giving effect to such sale or transfer) or
(iii) the Borrower or any of its Subsidiaries may enter into sale/leaseback
transactions with respect to its cellular towers so long as the documentation
for any such sale/ leaseback or similar arrangement is approved as to form by
the Administrative Agent (such approval not to be unreasonably withheld).
(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, HOWEVER, that 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 of the Borrower 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 (other than Section 7.1(h) 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; PROVIDED, HOWEVER, that:
(a) The Borrower or any of 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, money-market funds and business savings accounts issued by corporations,
each of which shall have a combined net worth of at least $100,000,000 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
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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 $100,000,000 and rated "A" or better by Moody's
Investors Service, Inc. or Standard and Poor's Ratings Group, a division of
McGraw-Hill, Inc.;
(b) So long as no Default then exists or would be caused thereby,
and subject to compliance with Section 5.14 hereof, the Borrower or any of its
Subsidiaries may complete the following Acquisitions: (i) the Triton
Acquisition; and (ii) Acquisitions in the aggregate not to exceed $100,000,000
(including reasonable and customary costs and expenses related to such
Acquisitions) 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;
(c) So long as no Default then exists or would be caused thereby,
the Borrower or any of its Subsidiaries may make Investments in an aggregate
amount not to exceed $50,000,000, 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 Lenders; PROVIDED, HOWEVER,
that (i) prior to making such Investment, the Borrower shall deliver to the
Administrative Agent and the Lenders a certificate reflecting pro forma
projections and compliance with the terms and conditions of this Agreement from
the date of such Acquisition through the Revolving Loan Maturity Date, Term Loan
A Maturity Date, Term Loan B Maturity Date, Term Loan C Maturity Date and
Incremental Facility Maturity Date, as applicable after giving effect to such
Investment and using reasonable assumptions in the opinion of the Required
Lenders; (ii) in the case of any equity investment, any equity interests
received in connection with such Investment are pledged as Collateral for the
Obligations; and (iii) 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;
(d) So long as no Default then exists or would be caused thereby,
the Borrower or any of its Subsidiaries may make Investments in Wireless
Alliance in an aggregate amount not to exceed $50,000,000 (which amount shall
include, without limitation, any Investment in Wireless Alliance made prior to
the Agreement Date, but exclude Acquisitions made pursuant to Section 7.6(b)
hereof and Investments made pursuant to Section 7.6(e) hereof); PROVIDED,
HOWEVER, 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;
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(e) except so long as no Default then exists or would be caused
thereby, 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 HOWEVER 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; and
(f) During such time as any Cooperative Lender shall be a Lender,
the Borrower may purchase such non-voting equity interests in such Cooperative
Lender represented by participation certificates of such Cooperative Lender as
such Cooperative Lender may from time to time require in accordance with such
Cooperative Lender's bylaws and "Loan-Based Capital Plan." Each Cooperative
Lender shall have a statutory first Lien on the equity in such Cooperative
Lender to secure all obligations of the Borrower to such Cooperative Lender, and
such Lien shall be deemed to constitute a Permitted Lien hereunder. No
Cooperative Lender shall be obligated to set off or otherwise apply such
equities to the Borrower's obligations to the Cooperative Lender.
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; PROVIDED, HOWEVER, that so
long as no Default hereunder then exists or would be caused thereby, (a) and so
long as a Subsidiary of the Borrower is not obligated on any Indebtedness to the
Borrower or any of its Subsidiaries, 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, (ii) the Borrower or any of its Subsidiaries, (b) the Borrower may
make scheduled interest payments, when such payments are due and payable, on any
Subordinated Indebtedness to the extent such Subordinated Indebtedness has
scheduled payments permitted hereunder in accordance with any subordination
provisions thereunder, (c) the Borrower may make scheduled dividend payments,
when such payments are due and payable on any Preferred Stock to the extent such
Preferred Stock has scheduled dividend payments permitted hereunder in
accordance with any subordination provisions thereunder and (d) the Borrower may
repay in whole or in part the Junior Preferred Stock pursuant to Section
2.7(b)(vi) hereunder.
Section 7.8 TOTAL 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 Total Leverage Ratio to exceed
the ratios set forth below during the periods indicated:
<TABLE>
<CAPTION>
PERIOD TOTAL LEVERAGE RATIO
------ --------------------
<S> <C>
Agreement Date through 8.50:1.00
June 30, 2000
July 1, 2000 through 7.50:1.00
December 31, 2000
</TABLE>
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<TABLE>
<S> <C>
January 1, 2001 through 7.25:1.00
June 30, 2001
July 1, 2001 through 6.50:1.00
December 31, 2001
January 1, 2002 through 6.00:1.00
December 31, 2002
January 1, 2003 and thereafter 5.00:1.00
</TABLE>
Notwithstanding anything herein to the contrary, the Total Leverage
Ratio on the Agreement Date shall (after giving effect to the initial Advances
hereunder) be less than or equal to 8.00 to 1.00.
Section 7.9 SENIOR 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 the ratio of (i) the principal
amount of the Loans outstanding on such date to (ii) its Annualized Operating
Cash Flow (as of the calendar quarter end being tested, 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) to exceed the ratios set forth below during the periods indicated:
<TABLE>
<CAPTION>
PERIOD SENIOR LEVERAGE RATIO
------ ---------------------
<S> <C>
Agreement Date through 7.50:1.00
June 30, 2000
July 1, 2000 through 7.00:1.00
December 31, 2000
January 1, 2001 through 6.25:1.00
June 30, 2001
July 1, 2001 through 5.50:1.00
December 31, 2001
January 1, 2002 through
December 31, 2002 5.00:1.00
January 1, 2003 and thereafter 4.50:1.00
</TABLE>
Section 7.10 ANNUALIZED OPERATING CASH FLOW TO PRO FORMA DEBT SERVICE. (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
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Flow (as of the calendar quarter end being tested, 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) to
(ii) the sum of (A) its Pro Forma Debt Service for the four (4) calendar
quarters immediately following the calculation date and (B) Interest Expense for
the four (4) calendars quarters immediately preceding the calculation date, to
be less than 1.20 to 1.00.
Section 7.11 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, 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) to (ii) its Interest Expense for the twelve
(12) calendar months immediately preceding the calculation date to be less than
the ratios set forth below for the periods indicated:
<TABLE>
<CAPTION>
ANNUALIZED OPERATING CASH
PERIOD FLOW TO INTEREST EXPENSE
------ ------------------------
<S> <C>
Agreement Date through 1.25:1.00
June 30, 2000
July 1, 2000 through 1.50:1.00
June 30, 2001
July 1, 2001 and 2.00:1.00
thereafter
</TABLE>
Section 7.12 FIXED CHARGE COVERAGE 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) its Annualized
Operating Cash Flow (as of the calendar quarter end being tested, 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 maybe) to (ii) the sum of, without duplication, for the twelve (12)
calendar months preceding the calculation date (A) Capital Expenditures made
during such period PLUS (B) Debt Service for such period PLUS (C) Restricted
Payments made during such period to be less than 1.00:1.00.
Section 7.13 AFFILIATE TRANSACTIONS. Except as specifically provided
herein and as may be described on SCHEDULE 6 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.
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Section 7.14 REAL ESTATE. The Borrower shall not, and shall cause each of
its Subsidiaries not to, purchase real estate; PROVIDED, HOWEVER, that subject
to Section 5.11 hereof, the Borrower and each of its Subsidiaries may purchase
real estate solely for use in the business of the Borrower and its Subsidiaries.
Section 7.15 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 Incremental Facility Notes) or fees or other amounts
payable to the Lenders 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 (or Incremental Facility 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, 7.2
(if the event causing such default is consensual in nature), 7.4, 7.5, 7.6, 7.7,
7.8, 7.9, 7.10, 7.11, and 7.12 hereof; or (ii) in providing any financial
statement or report under Article 6 hereof, 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 this Section 8.1) by the
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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 its 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 its 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 its Subsidiaries; or an involuntary petition
shall be filed against the Borrower or any of its 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 its 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 its 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 its Subsidiaries or of any substantial part of their
respective properties, or the Borrower or any of its 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 its 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 preferential transfer under any applicable fraudulent conveyance
or bankruptcy law, or the Borrower or any of its 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 its 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 its
Subsidiaries which, together with all other such property of the Borrower or any
of its 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
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<PAGE>
(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 Required Lenders 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 or any
of its Subsidiaries;
(k) There shall occur (i) any acceleration of the maturity of any
Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal 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.
ss. 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
Required Lenders, 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
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<PAGE>
(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 fifty percent (50%) 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
its Subsidiaries or by any governmental authority having jurisdiction over the
Borrower or any of its Subsidiaries seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or the Borrower or any of its 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; or
(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.
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 (g) hereof) shall have occurred and
shall be continuing, the Administrative Agent, at the request of the Required
Lenders subject to Section 9.8(a) hereof, shall (i) terminate the Commitment and
the Incremental Facility Commitment, and/or (ii) declare the principal of and
interest on the Loans and the Notes and the Incremental Facility Notes, and all
other amounts owed to the Lenders and the Administrative Agent under this
Agreement, the Notes and the Incremental Facility 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 and the Incremental Facility Notes, or any other
Loan Document to the contrary notwithstanding, and the Commitment and the
Incremental Facility Commitment shall thereupon forthwith terminate.
(b) Upon the occurrence and continuance of an Event of Default
specified in Section 8.1(f) or (g) hereof, all principal, interest and other
amounts due hereunder and under the Notes and the Incremental Facility Notes,
and all other Obligations, shall thereupon and concurrently therewith become due
and payable and the Commitment and the Incremental Facility 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, the Lenders, or the Required Lenders, 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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<PAGE>
(c) Upon acceleration of the Notes and, if applicable, the
Incremental Facility Notes as provided in subsection (a) or (b) of this Section
8.2, above, the Administrative Agent and the Lenders 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 and the Incremental Facility
Notes, as provided in subsection (a) or (b) of this Section 8.2, the
Administrative Agent, upon request of the Required Lenders, 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 of its Subsidiaries may have thereto or
the right to have a bond or other security posted by the Administrative Agent on
behalf of the Lenders, in connection therewith. The rights of the Administrative
Agent under this Section 8.2(d) 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
Lenders hereunder shall be cumulative, and not exclusive.
Section 8.3 PAYMENTS SUBSEQUENT TO DECLARATION OF EVENT OF Default.
After the occurrence of and during the continuation of any Default or Event of
Default, payments and prepayments under this Agreement made to any of the
Administrative Agent and the Lenders 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 Lenders 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) hereof; SECOND, to the Lenders and the Administrative Agent for
any fees hereunder or under any of the other Loan Documents then due and
payable; THIRD, to the Lenders pro rata on the basis of their respective unpaid
principal amounts (except as provided in Section 2.2(e) hereof), to the payment
of any unpaid interest which may have accrued on the Obligations; FOURTH, to the
Lenders pro rata until all Loans (amounts applied to the Revolving Loans
hereunder shall permanently reduce the Revolving Loan Commitments in such
amounts) and, if applicable, the Incremental Facility Loans, have been paid in
full (and, for purposes of this clause, obligations under Interest Hedge
Agreements with the Lenders or any of them shall be paid on a pro rata basis
with the Loans to the extent such payments are proceeds of Collateral and, if
applicable, the Incremental Facility Loans); FIFTH, to the Lenders 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 AGENTS
Section 9.1 APPOINTMENT AND AUTHORIZATION. Each Lender 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
Lender, or the Person designated in the last notice filed with the
Administrative Agent, as the holder of all of the interests of such Lender in
its portion of the Loans and in its Note until written notice of transfer,
signed by such Lender (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 LLP, 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 Required Lenders 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
Commitments, the Incremental Facility Commitment and the Loans, the
Administrative Agent shall have the same rights and powers hereunder as any
other Lender, and the Administrative Agent 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 obligation to account therefor. The
foregoing sentence shall apply with equal force to the Administrative Agent.
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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 Lender in writing that
such Lender considers that a Default or an Event of Default has occurred and is
continuing, and such Lender 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 Lender with
copies of such documents received from the Borrower as such Lender may
reasonably request.
Section 9.7 COLLATERAL. The Administrative Agent is hereby authorized to
act on behalf of the Lenders, in its own capacity and through other agents and
sub-agents appointed by it, under the Security Documents; PROVIDED, HOWEVER,
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 it by, and with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, this Agreement,
unless the Administrative Agent shall have been instructed by the Required
Lenders to exercise or refrain from exercising such rights or to take or refrain
from taking such action; PROVIDED, HOWEVER, that the Administrative Agent shall
not exercise any rights under Section 8.2(a) hereof without the request of the
Required Lenders (or, where expressly required, all the Lenders) unless time is
of the essence, in which case, such action can be taken at the request of the
Administrative Agent. 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 Lenders or
to any Lender 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 Required Lenders (or, where expressly
required, all the Lenders), and any action taken or failure to act pursuant to
such instructions shall be binding on all Lenders. The Administrative 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 Lender shall acquire actual knowledge, or shall have
been notified, of any Default or Event of Default, the Administrative Agent or
such Lender shall promptly notify the Lenders
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and the Administrative Agent, as applicable (PROVIDED, HOWEVER, that failure to
give such notice shall not result in any liability on the part of such Lender 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
Required Lenders shall request in writing, and the Administrative Agent shall
not be subject to any liability by reason of its acting pursuant to any such
request. If the Required Lenders 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 Lender, 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 Lenders, except that, if the Required Lenders 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 Lender or Lenders of
any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, 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 Lender or Lenders, 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
(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 Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios and Incremental Facility
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, without limitation,
reasonable 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
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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 Lender 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 Lender 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 Lenders); and
(b) So long as any portion of the Loans remains outstanding or such
Lender 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 Lenders and the Borrower and may be removed at any time for cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
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 appointed by the Required Lenders 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
Required Lenders removed the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be any Lender 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.
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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 THE AGENTS. The Agents (except for the
Administrative Agent) shall have no responsibilities hereunder or under any of
the other Loan Documents in their respective capacities.
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 Lenders that
deposits in dollars (in the applicable amount) are not being offered to each of
the Lenders in the relevant market for such Interest Period, the Administrative
Agent shall forthwith give notice thereof to the Borrower and the Lenders,
whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
any affected Lender 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), 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 Lender
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 Lender to make, maintain or fund its portion of LIBOR
Advances, such Lender shall so notify the Administrative Agent, and the
Administrative Agent shall forthwith give notice thereof to the other Lenders
and the Borrower. Before giving any notice to the Administrative Agent pursuant
to this Section 10.2, such Lender 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 Lender, be otherwise materially disadvantageous to such
Lender. 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 Lender'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
Lender may lawfully continue to maintain and fund its portion of such LIBOR
Advance to such day or (b) immediately if such Lender 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 Lender, and such Lender shall
make such Advance, if so requested, in an amount such that the outstanding
principal amount of the affected Note held by
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such Lender 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 Lender
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(1) shall subject any Lender 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 Lender 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 Lender); 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 assets of, deposits
with or for the account of, or commitments or credit extended by, any
Lender or shall impose on any Lender 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 Lender of
making or maintaining any of its portion of LIBOR Advances, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement or
under its Note with respect thereto, then, if such Lender exercises comparable
rights (if any) for borrowers situated similarly to the Borrower, within ten
(10) days after demand by such Lender, the Borrower agrees to pay to such Lender
such additional amount or amounts as will compensate such Lender for such
increased costs. Each Lender 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 Lender 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 Lender made in good faith, be otherwise
disadvantageous to such Lender.
(b) Any Lender 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 Lender may use
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any reasonable averaging and attribution methods. If any Lender demands
compensation under this Section 10.3, the Borrower may at any time, upon at
least five (5) Business Days' prior notice to such Lender, prepay in full such
Lender'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 Lender, and such Lender 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 Lender 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 hereof suspending the obligation of any Lender to
make its portion of any type of LIBOR Advance, or requiring such Lender's
portion of LIBOR Advances to be repaid or prepaid, then, unless and until such
Lender notifies the Borrower that the circumstances giving rise to such
repayment no longer apply, all amounts which would otherwise be made by such
Lender 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) hereof.
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, 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:
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(1) If to the Borrower, to it at:
Rural Cellular Corporation
3905 Dakota Street, S.W.
Alexandria, Minnesota 56308
Attn: Wesley Schultz,
Vice President
Finance and CFO
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
(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 Lenders, to them at the addresses set forth
on SCHEDULE 7 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.
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(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, without limitation, the
reasonable fees and disbursements of Powell, Goldstein, Frazer & Murphy LLP,
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 Lenders, or any of them, relating to this Agreement
or the other Loan Documents, including, but not 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 Lenders, and during the
occurrence and continuance of an Event of Default a law firm for Administrative
Agent and a single law firm for the Lenders; and
(c) all out-of-pocket costs and expenses of the Administrative Agent
and the Lenders in connection with the restructuring and "workout" of the
transactions contemplated in this Agreement or other Loan Documents or 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 Lenders.
Section 11.3 WAIVERS. The rights and remedies of the Administrative Agent
and the Lenders 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 Required
Lenders, or the Lenders, or any of them, in exercising any right, shall operate
as a waiver of such right. The Administrative Agent and the Lenders 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
Lenders 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
Lenders shall not be deemed to constitute an undertaking by the Lenders to fund
any further Request for Advance or preclude the Lenders 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
Lenders, or the Required Lenders, 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
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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 Lenders 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, without limitation, 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 Lender 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 Lenders
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 Lender or the Administrative Agent shall have made any demand hereunder
or (b) any Lender 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 hereof 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 Lenders, each Lender 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, the Incremental Facility Notes or under
any other Loan Document without the prior written consent of each Lender.
(b) Each Lender may at any time sell assignments or participations
of up to one hundred percent (100%) of its interest hereunder to (A) one (1) or
more wholly-owned Affiliates of such Lender or Approved Funds (PROVIDED,
HOWEVER, that if such Affiliate is not a financial institution, such Lender
shall be obligated to repurchase such assignment if such Affiliate is unable to
honor its obligations hereunder), (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
(PROVIDED, HOWEVER, that no such assignment shall relieve such Lender from its
obligations hereunder) or (C) any Lender.
(c) Each Lender may at any time enter into assignment agreements or
participations with one or more other banks or other Persons pursuant to which
each Lender 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, HOWEVER, that (i) all assignments (other than
assignments described in clause (b) hereof) shall be in minimum principal
amounts of the lesser of (X) (1) $5,000,000 for the Revolving Commitments and
Term Loan A Loans, and if applicable, the Incremental Facility Commitments (in a
single assignment
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only) and (2) $1,000,000 for the Term Loan B Loans and Term Loan C Loans, and
(Y) the amount of such Lender's Commitment or Incremental Facility Commitment
(in a single assignment only), and (ii) 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 or delayed;
(2) Any Person purchasing a participation or an assignment of
any portion of the Loans from any Lender shall be required to represent
and warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 4.1(m) hereof);
(3) The Borrower, the Lenders, and the Administrative Agent
agree that assignments permitted hereunder (including the assignment of
any Advance or portion thereof) shall be made with all voting rights, and
shall be made pursuant to an Assignment and Assumption Agreement
substantially in the form of EXHIBIT S attached hereto. An administrative
fee of $3,500 shall be payable to the Administrative Agent by the
assigning Lender at the time of any assignment under Section 11.5(c)
hereof;
(4) No participation agreement shall confer any rights under
this Agreement or any other Loan Document to any purchaser thereof, or
relieve any issuing Lender 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 Revolving Loan Maturity Date, Term Loan A Maturity Date, Term Loan
B Maturity Date, Term Loan C Maturity Date and Incremental Facility
Maturity Date, as applicable or other principal payment date for the Loans
or of the scheduled reduction of the Commitment and releases of
Collateral;
(5) Each Lender 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 (A) 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
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"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) or (B) any fund unless such fund invests in
commercial loans; and
(8) If applicable, each Lender 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 Lender's or assignee's
position that no withholding by the Borrower or the Administrative Agent
for U.S. income tax payable by such Lender 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 Connected with the Conduct of a Trade or Business in
the United States), and/or properly executed Internal Revenue Service Form
W-8 or W-9, as applicable, 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 Lenders pursuant to Section 2.11 hereof.
(g) The Administrative Agent, acting, for this purpose only, as
agent of the Borrower shall maintain, at no extra charge to the Borrower, a
register (the "REGISTER") at the address to which notices to the Administrative
Agent are to be sent under Section 11.1 hereof on which Register the
Administrative Agent shall enter the name, address and taxpayer identification
number (if provided) of the registered owner of the Loans evidenced by a
Registered Note or, upon the request of the registered owner, for which a
Registered Note has been requested. A Registered Note and the Loans evidenced
thereby may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer of such Registered Note and the
Loans evidenced thereby on the Register. Any assignment or transfer of all or
part of such Loans and the Registered Note evidencing the same shall be
registered on the Register only upon compliance with the other provisions of
this Section 11.5 and surrender for registration of assignment or transfer of
the Registered Note evidencing such Loans, duly endorsed by (or accompanied by a
written instrument of assignment or transfer duly executed by) the Registered
Noteholder thereof, and thereupon one or more new Registered Notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s) and, if less than the aggregate principal amount of such
Registered Notes is thereby
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transferred, the assignor or transferor. Prior to the due presentment for
registration of transfer of any Registered Note, the Borrower and the
Administrative Agent shall treat the Person in whose name such Loans and the
Registered Note evidencing the same is registered as the owner thereof for the
purpose of receiving all payments thereon and for all other purposes,
notwithstanding any notice to the contrary.
(h) The Register shall be available for inspection by the Borrower
and any Lender at any reasonable time during the Administrative Agent's regular
business hours upon reasonable prior notice.
(i) Notwithstanding any other provision in this Agreement, any
Lender that is a fund that invests in bank loans may, without the consent of the
Administrative Agent or the Borrower, pledge all or any portion of its rights
under, and interest in, this Agreement and the Notes to any trustee or to any
other representative of holders of obligations owed or securities issued, by
such fund as security for such obligations or securities; provided, HOWEVER,
that any transfer to any Person upon the enforcement of such pledge or security
interest may only be made subject to the assignment provisions of this Section
11.5.
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 Lenders 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 Required Lenders 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 Required Lenders 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 the State of New
York. If any action or proceeding shall be brought by the Administrative Agent
or any Lender hereunder or under any other Loan Document in order to enforce any
right or remedy under this Agreement or under any Note 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
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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 Lender,
then such excess sum shall be credited as a payment of principal, unless the
Borrower shall notify the Administrative Agent or such Lender, 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 Lenders
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 Lenders of the Base Rate and
LIBOR as reference rates for the determination of interest on the Loans, the
Lenders 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 written direction of the Required Lenders and, in
the case of an amendment, by the Borrower, except that in the event of (a) any
increase in the amount of any Lender's portion of the Commitments or Commitment
Ratios or any reduction or postponement of the reductions to the Revolving Loan
Commitments set forth in Section 2.5(a) hereof, (b) any reduction (without a
corresponding payment) or postponement of the repayments of the principal amount
of the Loans provided in Section 2.5 or
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2.7 (b)(i), (ii) or (iii) hereof, and, during the continuance of an Event of
Default, Section 2.7(b)(v) or (vi) hereof, (c) any reduction or postponement in
interest or fees due hereunder without a corresponding payment of such interest
or fee amount by the Borrower, (d) any release of any material portion of the
Collateral for the Loans except as otherwise provided in Section 7.4 hereof, (e)
any waiver of any Default due to the failure by the Borrower to pay any sum due
to any of the Lenders hereunder, (f) any release of any material Guarantor to a
Guaranty from its 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 Lenders), (g) any
amendment to the pro rata treatment of the Lenders set forth in Section 2.11
hereof, or (h) any amendment of this Section 11.12, of the definition of
Required Lenders, or of any Section herein to the extent that such Section
requires action by all Lenders or (i) subordinate the Loans in full or in part
to any Indebtedness, any amendment or waiver or consent may be made only by an
instrument in writing signed by each of the Lenders 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 Lenders. For purposes hereof, "material
Guarantor" shall mean any Guarantor having assets in excess of $500,000.00
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 Lender 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 Lenders 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, 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.
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<PAGE>
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 Lenders hereunder are several, not joint.
Section 11.19 CONFIDENTIALITY. All information furnished to the
Administrative Agent or the Lenders 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 Lenders 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 lending practices; however,
the Lenders may make disclosure of any such information to their examiners,
Affiliates, outside auditors, counsel, consultants, appraisers, other
professional advisors and any direct or indirect contractual counterparty in
swap agreements or such counterparty's professional advisor 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 (including, without limitation, the National Association
of Insurance Commissioners or any similar organization or requlators or
quasi-regulatory authority having jurisdiction over any Lender 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 Lenders so long as any such
recipient is advised of the non-public, proprietary or confidential nature of
the information and of the Lender's obligations under this Section. Unless
specifically requested by the Borrower, no Lender shall be obligated or required
to return any materials furnished to it by the Borrower and no Lender may be
obligated to return such materials (a) unless (i) such Lender ceases to be a
Lender hereunder or (ii) such material was inadvertently provided to such Lender
by the Borrower or (b) at any time when there exists a Default or Event of
Default. The foregoing provisions shall not apply to a Lender with respect to
information that (i) is or becomes generally available to the public (other than
through such Lender), or (ii) is already in the possession of such Lender 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 EACH OF ITS SUBSIDIARIES, AND THE ADMINISTRATIVE AGENT AND EACH OF THE
LENDERS, 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 LENDERS, THE ADMINISTRATIVE AGENT, OR
ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS
- 88 -
<PAGE>
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 NOR ATTORNEY OF
THE ADMINISTRATIVE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER 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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<PAGE>
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/ Wesley E. Schultz
-------------------------------------
Its: Sr. Vice President and CFO
-------------------------------------
ADMINISTRATIVE AGENT
AND LENDERS: TORONTO DOMINION (TEXAS), INC., as
Administrative Agent and a Lender
By: /s/ Jano Mott
-------------------------------------
Its: Vice President
-------------------------------------
<PAGE>
Exhibit 99.1
RURAL CELLULAR CORPORATION COMPLETES FINANCING AND
ACQUISITION OF TRITON CELLULAR PARTNERS, L.P.
===============================================================================
FOR IMMEDIATE RELEASE
APRIL 3, 2000 - Alexandria, MN - Rural Cellular Corporation ("RCC") (Nasdaq/NMS:
RCCC) today announced that its subsidiary, RCC Holdings, Inc., has completed its
$1.256 billion acquisition of the licenses, operations, and related assets of
Triton Cellular Partners, L.P. ("Triton Cellular"). All of the properties are
100% owned and the 20 rural service areas ("RSAs") are contiguous within their
respective geographic regions. In addition, the acquisition includes unbuilt PCS
licenses in four basic trading areas in Oregon.
The cellular regions acquired by RCC Holdings include the following RSAs:
SOUTH REGION
Alabama (AL-3, AL-4, AL-5, AL-7)
Northern Mississippi (MS-1, MS-3, MS-4)
Western Kansas (KS-1, KS-2, KS-6, KS-7, KS-11, KS-12, KS-13)
NORTHWEST REGION
Oregon (OR-3, OR-4, OR-6)
Washington (WA-2, WA-3, WA-8)
The new regions will be managed through their operational headquarters located
in Enterprise, Alabama and Bend, Oregon, respectively.
In conjunction with the acquisition, RCC has entered into a new $1.2 billion
credit facility arranged by TD Securities (USA) Inc., which replaces the
previously existing $300 million credit facility. In addition, RCC has issued
110,000 shares of redeemable voting convertible preferred stock for
consideration of $110 million. The purchasers included Madison Dearborn Capital
Partners III, L.P., Madison Dearborn Special Equity III, L.P., Special Advisors
Fund I, LLC ("Madison Dearborn") and including Boston Ventures Limited
Partnership V ("Boston Ventures") and Toronto Dominion Investments, Inc. ("TD
Investments"). Madison Dearborn, Boston Ventures and TD Investments have
significant collective experience investing in wireless communication companies.
In order to comply with the FCC's rules regarding cross-ownership of cellular
licensees within a given market, the Company also issued shares of Class T
convertible preferred stock to Telephone & Data Systems, Inc. ("TDS") in
exchange for 43,000 shares of Class A Common Stock and 105,940 shares of Class B
Common Stock owned by TDS. An affiliate of TDS operates the competing cellular
licensee in two of the RSAs acquired by the Company from Triton Cellular. TDS or
the Company can convert the Class T preferred stock to Class A or Class B Common
Stock in the future if ownership by TDS of the Common Stock would then be
permissible under FCC rules. Under current FCC rules, TDS is not allowed to own
more than 5% of the outstanding Class A or Class B Common Stock.
Richard P. Ekstrand, RCC's president and chief executive officer, said: "We are
pleased to close this acquisition early in 2000, allowing us to complete the
integration of the South and Northwest Regions into RCC. RCC's doubling in size
sets the stage for a strong 2000."
Rural Cellular Corporation provides wireless communication services through its
ownership, operation and management of cellular, paging and Personal
Communication Services systems. These systems are concentrated in the Upper
Midwest, New England, South and Northwest regions of the United States.
Statements about RCC's anticipated performance are forward looking and therefore
involve certain risks and uncertainties, including but not limited to:
competitive considerations, success of customer enrollment initiatives, the
ability to increase wireless usage and reduce customer acquisition costs, the
successful integration of newly acquired operations with RCC's existing
operations, the ability to service debt incurred in connection with expansion,
and other factors discussed from time to time in RCC's filings with the
Securities and Exchange Commission.
Contact: Wesley Schultz, Senior V.P. and CFO (320) 762-2000
Chris Boraas, Investor Relations Manager (320) 808-2451
<PAGE>
Exhibit 99.2
RURAL CELLULAR CORPORATION BOARD APPOINTMENTS
===============================================================================
APRIL 4, 2000--ALEXANDRIA, MN - Rural Cellular Corporation (RCC) (Nasdaq/NMS:
RCCC) announced the appointment of Paul Finnegan and John Hunt to its Board of
Directors. These appointments increase the size of the Board to ten members.
Paul Finnegan, age 46, is a Managing Director of Madison Dearborn Partners,
where he concentrates on investments in the communications industry. Mr.
Finnegan has been with Madison Dearborn Partners since he co-founded that
company in 1993. Prior to that time, Mr. Finnegan worked at First Chicago
Venture Capital for ten years. Mr. Finnegan serves on the boards of directors
of Allegiance Telecom, Inc., @link Networks, Inc., Comple Tel Europe LLC,
Enews.com, Focal Communications Corporation, Madison River Telephone Company,
LLC, Reiman Holding Company, LLC, Spectrum Healthcare Services, Inc., and
Wireless One Network, L.P. He also serves on the board of trustees of The
Skyline Fund, a small cap mutual fund. Mr. Finnegan received his B.A. from
Harvard College and an M.B.A. from the Harvard Graduate School of Business
Administration.
John Hunt, age 34, is a director of Boston Ventures Management, Inc., where he
focuses on telecommunications investments. He joined Boston Ventures in 1990 as
an Associate, was promoted to Associate Director in 1996, and was named to his
current position in 1998. Prior to joining Boston Ventures, Mr. Hunt was an
investment analyst at Bear Stearns & Co., Inc. Mr. Hunt also serves on the board
of directors of Integra Telecom, Inc., a competitive local exchange carrier, and
on the board of managers of Sports Trend Info, LLC. Mr. Hunt received a
bachelor's degree in finance from the University of Massachusetts at Amherst in
1988.
Richard P. Ekstrand, RCC's president and chief executive officer, said: "Paul
Finnegan and John Hunt are a welcome addition to our board. Their broad
experience will be a valuable asset to Rural Cellular as we continue to expand
our presence within the wireless industry."
The appointment of Mr. Finnegan and Mr. Hunt to the Board is required under the
terms of the Class M Preferred Stock issued to Madison Dearborn Partners and
Boston Ventures as part of the financing for the Company's acquisition of the
assets of Triton Cellular Partners, L.P. Madison Dearborn and Boston Ventures
each has the right to designate a member of the Company's Board of Directors so
long as it holds a specified number of shares of the Class M Preferred Stock or
the number of shares of Class A Common Stock into which that number of shares of
Class M can be converted.
Rural Cellular Corporation provides wireless communication services through its
ownership, operation and management of cellular, paging and Personal
Communications Services systems. These systems are concentrated in the Upper
Midwest, New England, South and Northwest regions of the United States.
Statements about RCC's anticipated performance are forward looking and therefore
involve certain risks and uncertainties, including but not limited to:
competitive considerations, success of customer enrollment initiatives, the
ability to increase wireless usage and reduce customer acquisition costs, the
successful integration of newly acquired operations with RCC's existing
operations, the ability to service debt incurred in connection with expansion,
and other factors discussed from time to time in RCC's filings with the
Securities and Exchange Commission.
Contact: Wesley Schultz, Senior V.P. Finance and CFO (320) 762-2000
Chris Boraas, Investor Relations Manager (320) 808-2451
World Wide Web address: http://www.rccwireless.com
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